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 Novembe