Joint liquidators must act together; unilateral actions by one liquidator violate established legal principles protecting creditor interests.

JUDGMENT

Azimah Omar JCA:

A. Introduction

[1] This decision is in respect of one of the Respondent's Liquidator's Notice of Motion ("Enclosure 48") dated 8 December 2023. In encl 48, the Respondent's Liquidator prayed, inter alia, that:

1) "Bahawa Encik Victor Saw Seng Kee, menurut s 69(4) Akta Mahkamah Kehakiman 1964, dibenarkan untuk memfailkan dan memberi arahan berhubung dengan permohonan ini dan permohonan dalam Notis Usul Mahkamah Persekutuan No. 08(f)-381-11/2023(W) untuk kebenaran merayu kepada Mahkamah Persekutuan berhubung dengan Perintah Mahkamah Rayuan bertarikh 30 Oktober 2023 ("Perintah Mahkamah Rayuan"), dan apa-apa rayuan kepada Mahkamah Persekutuan, tanpa memerlukan kelulusan dan/atau persetujuan pelikuidasi bersesama, Encik Gabriel Teo Chun, yang dilantik oleh Perintah Mahkamah Rayuan tersebut;

2) Bahawa Perintah Mahkamah Rayuan yang diberikan pada 30 Oktober 2023 ditangguh sementara menunggu pendengaran dan penentuan penuh dan muktamad Notis Usul Mahkamah Persekutuan No. 08(f)-38111/2023(W) bagi kebenaran merayu kepada Mahkamah Persekutuan, dan jika kebenaran itu diberikan, apa-apa rayuan kepada Mahkamah Persekutuan;

3) Kos mengikut kausa rayuan; dan

4) Apa-apa relif lanjutan atau lain yang dianggap sesuai oleh Mahkamah Yang Mulia ini."

[2] The English Translation of prayers in encl 48 reads as follows:

1) That Mr Victor Saw Seng Kee, pursuant to s 69(4) of the Courts of Judicature Act 1964 , be allowed to file and give instructions in relation to this application and the application in the Federal Court Notice of Motion No. 08(f)-381-11/2023(W) for leave to appeal to the Federal Court in relation to the Court of Appeal's Order dated 30 October 2023 ("COA Order"), and in any appeal to the Federal Court , without requiring the approval and/or consent of the joint liquidator, Mr Gabriel Teo Chun, appointed by the COA Order itself;

2) That the COA Order granted on 30 October 2023 be stayed pending the hearing and full and final determination of the Federal Court Notice of Motion No. 08(f)-381-11/2023(W) for leave to appeal to the Federal Court , and if such leave is granted, any appeal to the Federal Court ;

3) Costs be in the cause of the appeal; and

4) Such further or other relief as deemed appropriate by this Honourable Court .

[3] Enclosure 48 was filed by the Respondent's Liquidator supposedly as a matter of 'honest prudence' so that one of the two co-liquidators can 'solidify' the legitimacy and competency of its unilateral actions and motion to appeal to the Federal Court . But it appears to us that the intentions of the Respondent's Liquidator in filing encl 48 are to:

a. Unlawfully and unilaterally invoke the Board of Directors' postwinding up residuary power (as sole liquidator) on behalf of the Respondent company; and

b. Unlawfully and unilaterally act as a sole liquidator (without the consent and mutual agreement of the other Court appointed joint co-liquidator).

[4] The Respondent (or more accurately the liquidator-Victor) knew of (and had full knowledge of) the legal impediment to his actions. Thus, the liquidator pre-emptively filed encl 48 in an attempt to stretch and skew the law so as to legitimise the liquidator's actions (which in reality were in breach of Order of the Court of Appeal and prevailing laws governing a company's residuary powers post-winding up).

[5] The Respondent (liquidator) also applied for a stay of the Court of Appeal's decision ordering the liquidation process of Respondent Company ("London Biscuits Berhad") to proceed with the appointment of a joint liquidator. On one hand the liquidator insisted on 'preserving the status quo'. But on the other hand the liquidator also insisted on NOT preserving the status quo and having the liquidation to proceed in the liquidator's 'preferred' configuration of a sole liquidator (and not a joint liquidator). The liquidator's prayers and contentions, in our view, are confusing and self-contradictory.

[6] Before proceeding any further,