Zakaria Sam JC:

Background

On 14 June 1997, judgment in default was entered by the plaintiff against the 2nd defendant (the appellant herein) for the sum of RM130,000, of which RM100,000 being money paid to the 2nd defendant as a deposit for a proposed joint - venture which did not materialise and the sum of RM30,000 being the expenses incurred by the plaintiff for the benefit and on behalf of the 2nd defendant.

The 2nd defendant then on 29 June 2000 filed an application to set aside the said judgment in default on the grounds that:

(a) the said judgment in default of appearance is irregular as a winding-up order had been made against the 2nd defendant on 6 December 1996 and the official assignee Malaysia was appointed as the official receiver of the company; and

(b) the plaintiff did not obtain the leave of court under s. 226(3) of the Companies Act 1965, to proceed or continue the action against the 2nd defendant.

However, for the purpose of this application, consent has been given by the official receiver to M/s Battenberg & Talma through a letter dated 25 June 1999 to defend this action on behalf of the 2nd defendant.

At the hearing of the said application on 9 November 2000 the plaintiff (the respondent herein) raised the following preliminary objections:

(a) That M/s Battenberg & Talma has no locus standiin respect of the 2nd defendant's said notice of application;

(b) That Mr Stanley Eddy has no authority to make the affidavit on behalf of the 2nd defendant.

The learned sessions court judge in upholding the plaintiff's objection dismissed the 2nd defendant's application on 9 November 2000. Against the said order, the 2nd defendant filed this notice of appeal.

The only issue in this appeal is whether the appointment of M/s Battenberg & Talma by the official receiver to defend the 2nd defendant, without the authorisation of the court or the committee of inspection as stipulated under s. 236(1) of the Act was a valid appointment.

The learned counsel for the plaintiff submitted that M/s Battenberg & Talma were appointed without the proper authority of the court or the committee of inspection. Therefore, the said appointment was in breach of s. 236(1)(e) of the Act which provides that:

The liquidator may with the authority either of the Court or of the committee of inspection appoint an advocate to assist him in his duties.

It was further explained that s. 236(2)(a) must be taken to mean that the decision to institute or defend any suit is the discretion of the liquidator. The liquidator cannot unilaterally delegate this discretion. However, if the liquidator propose to delegate or appoint an advocate to assist him, he must obtain the sanction of the court or the committee of inspection under s. 236(1)(e).

The learned counsel for the 2nd defendant in his submission urged this court to refer to s. 236(2)(a) of the Act which read:

The liquidator may bring or defend any action or other legal proceedings in the name and on behalf of the company.

and proceeded to submit that the power of the liquidator under s. 236(2)(a) of the Act to bring or defend an action on behalf of a company in liquidation must necessarily include the power to appoint an advocate for that purpose.

In my opinion s. 236(1)(e) talks about the liquidator appointing an advocate to assist him running the businessof a company in liquidation (emphasis added). Assisting a liquidator in his duties here, to my mind, is to assist the liquidator in running the day to day management of the company. Appointing an advocate to defend an action or other legal proceedings in the name and on behalf of the company as enunciated under s. 236(2)(a) does not fall under the category of assisting a liquidator in his duties. The appointment of an advocate to defend the company in court is not considered as assisting the liquidator in the running or managing the company. A liquidator by himself cannot bring or defend any action or other legal proceedings in the name and on