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2020 MarsdenLR 2114

FEDERAL COURT PUTRAJAYA
LAI KING LUNG & ANOR – Appellant
Versus
MERAIS SDN BHD – Respondent


Petitioner Advocates:Gopal Sri Ram,Justin Voon,Chiam Jia Yann & Marcus Lee ,Respondent Advocate: Gabriel Daniel,Melissa Chan Shyuk Wern

Judgement Key Points

Key Points: - The Federal Court answered Question 1 in the negative, holding that retrospective sanction by the liquidator alone does not confer locus standi without court leave nunc pro tunc, and declined to answer Question 2 as it did not arise (!) . - The plaintiff company was wound up in 2015; liquidator sanctioned High Court proceedings in 2016, but notice of appeal filed on 22 December 2017 before retrospective sanction granted on 2 February 2018 effective from 21 December 2017 (!) (!) . - Court of Appeal dismissed defendants' strike-out motion, finding liquidator could grant retrospective sanction and no prejudice, distinguishing prior cases (!) - (!) . - Liquidator lacks statutory authority under Companies Act 2016 s 236/486 to grant retrospective sanction without express provision, rendering notice of appeal void ab initio (!) (!) . - Federal Court endorsed Hup Lee and Winstech, holding sanctions under s 236(2)(a) 1965 Act / s 486 2016 Act have no retrospective effect absent court leave nunc pro tunc via formal application (!) (!) (!) - (!) . - Principles require liquidator sanction for wound-up company to bring/continue actions to protect creditors; retrospective validation needs court discretion under s 236(3)/486(2) (!) (!) . - Reebok distinguished; filing notice of appeal not covered by prior High Court sanction, requires fresh sanction for appeal (!) (!) . - Appeal allowed, Court of Appeal order set aside with costs; plaintiff lacked locus standi at filing (!) (!) .

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? [p_7][p_9]

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? [p_10][p_11]


JUDGMENT

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

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