A liquidator is not bound to inform creditors about asset sales, and prior court orders affecting taxation claims must be adhered to.

JUDGMENT

(Enclosure 16)

Nadzarin Wok Nordin J:

Motion

[1] In the matter before me, the Applicant has applied to this Court vide the Amended Notice of Motion dated 10 December 2021 in encl 16 (Motion) for an order inter alia that the decision of the Liquidator, Chong Chuan Long (Liquidator) in rejecting the Applicant's Proof of Debt dated 6 July 2018 (POD) to the extent of RM7,438,542.85 be reversed and /or varied.

Applicant's Case

[2] From the documents before me, the following are in brief the Applicant's case in support of the Motion:

2.1 the Respondent herein, Patent View Development Sdn Bhd, was wound up on 15 March 2016 and pursuant thereto, Mr Chong Chuan Long was appointed as the Liquidator of the Respondent

2.2 thereafter on 6 July 2018, the Applicant submitted 2 proof of debts (POD's) duly affirmed by the Applicant for a sum of RM7,438,542.85?

2.3 on 18 July 2018 a Creditors Meeting was held to discuss the process and any other pertinent issues with regards the liquidation of the Respondent

2.4 during the said meeting, deliberations were made on the sale of 6 condominiums located at Menara Bukit Ceylon, No 2 Jalan Ceylon, 50200 Kuala Lumpur

2.5 At the said meeting a total of five creditors including the Applicant attended the said Creditors Meeting ("Creditors Meeting"). It was alleged that the Liquidator duly acknowledged at the said Creditors Meeting that there is a total debt of RM11,337,240.61 including the Applicant's debt of RM7,438,542.85

2.6 However, during the period starting from 18 July 2018 to 20 September 2021, it was alleged that there was no update forthcoming from the Liquidator to the Applicant being the creditor on the liquidation of the Company.

2.7 It was further alleged that based on the search conducted by the Applicant, that the Liquidator at all times failed to include and inform the Applicant of the status of the sale of the said condominium despite having full knowledge that the Applicant is one of the unsecured creditors of the Respondent and that such conduct clearly shows that the Liquidator had at all times acted in bad faith which was prejudicial against the Applicant's interest and right

2.8 Thereafter on 21 September 2021, the Applicant received a letter from the Liquidator enclosing the Notice of Rejection of Proof of Debt. Based on the letter dated 21 September 2021, wherein it was mentioned that the rejection of Proof of Debt was made in light of:

"the Federal Court order dated 3 March 2020 which has set aside the Kuala Lumpur High Court Order dated 19 June 2017 granting leave to the Applicant to tax Applicant's bills against Lim Kian Peet, Lim Kian Seng and the Respondent which formed the basis of the Applicant's claim against the Respondent".

and based on the Notice of Rejection of Proof of Debt, the only ground mentioned is that:

"(i) That the Federal Court by an order dated 3 March 2020 has set aside the Kuala Lumpur High Court Order dated 19 June 2017 granting leave to you to tax your bills against Lim Kian Peet, Lim Kian Seng and the Company which formed the basis of your claim against the company".

2.9 Based on the above, the Applicant contends that such simplistic approach taken by the Liquidator in rejecting the Proof of Debt dated 6 July 2018 clearly demonstrates a misconceived and ignorant attitude on the part of the Liquidator as to the law.

2.10 It is the Applicant's main bone of contention is that the Federal Court decision is in truth and in fact premised on a taxation proceeding which is a procedural safeguard pertaining to the quantum of the amount of costs sought to be recovered by the advocate and solicitor namely the Applicant in this case.

2.11 The taxation proceedings concerned merely the issue on the quantum of costs and liability was not an issue for determination of the Court, which was well within the Liquidator's knowledge who had deposed and admitted in and affidavit filed in the very taxation proceedings vide Civil Suit WA-71D-47-11/2016, that the Applicant is at liberty to