A liquidator lacks statutory authority to grant retrospective sanctions for appeals in winding-up cases, rendering such actions void ab initio.

Vernon Ong FCJ:

Introduction

[1] The facts giving rise to this appeal are relatively straightforward. In 2013, the plaintiff, a private limited company initiated a suit against the defendants at the High Court; the defendants filed a counterclaim against the plaintiff company. While the suit was ongoing, the plaintiff was wound up by an order of the winding-up Court on 1 September 2015; the Official Receiver was appointed as the liquidator of the plaintiff company.

[2] On 18 January 2016, the liquidator gave sanction to the plaintiff's contributory and its solicitors to proceed with the suit in the High Court against the defendants. On 28 November 2017, the High Court dismissed the claims by both parties.

[3] Acting on instructions of the contributory, the solicitors filed a Notice of Appeal on 22 Deemeber 2017. On even date, the solicitors acting on the instructions of the contributory, also applied to the liquidator for sanction to file the Notice of Appeal and to proceed with the appeal in the Court of Appeal. On 2 February 2018, the liquidator gave its sanction, which sanction was stated to take effect retrospectively from 21 December 2017.

[4] The defendants took issue with the validity of the retrospective sanction and filed a motion to strike out the plaintiff's appeal at the Court of Appeal. It was contended that "retrospective sanction" cannot be validly given in law and that the Court of Appeal did not grant any leave nunc pro tunc. The Court of Appeal dismissed the defendants' motion for striking out and the defendants obtained leave to appeal to the Federal Court on the following questions of law:

Question 1

Whether retrospective sanction from the official receiver/liquidator of a wound - up plaintiff/applicant in Court by itself can sufficiently clothe the plaintiff and/or its solicitors with locus standi to proceed with the appeal/proceeding in question without leave nunc pro tunc obtained from the Court?

Question 2

If the answer to Question 1 is NO, whether the application for leave nunc pro tunc to the Court must be made by way of a formal application pursuant to s 486(2) of the Companies Act 2016 ?

[5] After reading the written submissions and hearing of oral submissions of counsel for the defendants and plaintiff, we answered Question 1 in the negative. We declined to answer Question 2 as the issue contained therein did not arise within the factual matrix of this appeal. Consequently, we allowed the appeal with costs and set aside the order of the Court of Appeal. We now set out the reasons for our decision.

Findings Of The Court Of Appeal

[6] The key findings of the Court of Appeal for holding that the steps taken and the sanction secured by the plaintiff were proper and valid may be summarised as follows:

(i) The official receiver as the liquidator of the plaintiff company has the necessary authority to consider and grant a sanction which is effective on a date other than the date it was made;

(ii) Unlike s 68 of the Courts of Judicature Act 1964 (CJA 1964) where no appeal may be brought in certain matters unless there is leave from the Court of Appeal, s 483 and or 486 of the Companies Act 2016 read together with Part I of the Twelfth Schedule or otherwise, do not contain the same prohibitory terms. This suggests that these provisions are more directory in nature as opposed to the mandatory terms of the CJA and the Court of Appeal Rules;

(iii) If an application for retrospective leave or leave nunc pro tunc may be sought from the Court and the Court may, in appropriate circumstances, grant such leave or sanction, there is no reason why the liquidator, may not likewise do the same ( Re Saunders (A bankrupt), Re Bearman (a Bankrupt), Re Bristol & West Building Society v. Saunders [1997] Ch 60; [1997] 3 All ER 992);

(iv) Since the official receiver had seen it fit, after it had been appropriately satisfied and had imposed conditions, to grant the sanction sought retrospectively to the date of the Notice of Appeal