Leave under s 451(2) of the Companies Act 2016 is mandatory for actions against companies in liquidation, ensuring judicial oversight and preventing multiplicity of actions.

Moses Susayan JC:

Introduction

[1] This judgment pertains to the defendant's application in encl 11 to strike out the plaintiff's originating summons filed against the defendant in his capacity as Liquidator of Lohman Holdings Sdn Bhd (in Members' Voluntary Liquidation). The defendant asserts that the plaintiff's action is frivolous, vexatious, and an abuse of court process due to procedural non-compliance and lack of merit. The defendant moves the court under O 18 r 19(1)(a), (b), (c), and/or (d) and the court's discretionary powers under O 92 r 4 of the Rules of court 2012, read together with ss 451(2), 456, 458(1)(a), Eleventh Schedule, and Twelfth Schedule of the Companies Act 2016 , s 145A of the Companies Act 1965 , as well as rr 114 and 118 of the Companies (Winding- Up) Rules 1972.

Background Facts

[2] The plaintiff, a contributory of Lohman Holdings Sdn Bhd, has raised objections concerning the manner in which a General Meeting of the company was conducted on October 14, 2024. The meeting was convened by the defendant, the appointed Liquidator, and held online via Zoom. The defendant justified this mode of conducting the meeting, citing reasons of efficiency and the benefits of leveraging technological advancements to facilitate participation.

[3] However, the plaintiff contends that the meeting violated arts 57 and 60 of the Company's Memorandum and Articles of Association (M&A). Article 57 requires the physical presence of members to constitute a quorum, while art 60 stipulates that the chairman of the directors, or a director chosen by the members, should preside over general meetings. The plaintiff alleges that these provisions were not adhered to in the online meeting. Consequently, the plaintiff seeks relief for the general meeting to be reconvened and held physically, in compliance with the M&A, and for the defendant to be barred from chairing future meetings.

[4] In response, the defendant filed an application to strike out the plaintiff's originating summons. The defendant argues that the plaintiff's claims are procedurally flawed due to non-compliance with legal requirements, particularly the failure to obtain leave to commence action against a company in liquidation. The defendant also asserts that the issues raised by the plaintiff lack substantive merit and do not warrant further judicial intervention. This striking- out application forms the central dispute in the present proceedings.

Plaintiff's Submissions

[5] The plaintiff contends that leave under s 451(2) of the Companies Act 2016 is not required for a member's voluntary liquidation, distinguishing it from a creditors' voluntary liquidation. She further argues that the defendant breached arts 57 and 60 of the Company's Memorandum and Articles of Association (M&A) by conducting the meeting online and assuming the role of chairman. The plaintiff claims that the online virtual meeting prejudiced her rights due to technical difficulties and limited engagement. As the reliefs sought to extend to future meetings, the plaintiff asserts that the issue remains live and is not merely academic.

Section 451 (2) of the Companies Act 2016 provides:

"451(2). After the commencement of the winding up, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose."

Defendant's Submission

[6] The defendant contends that leave under s 451(2) of the Companies Act 2016 is a mandatory prerequisite for any action against a company in liquidation. In addition, r 118 of the Companies (Winding-Up) Rules 1972 empowers the liquidator to chair meetings he convenes. The defendant further submits that s 327 of the allows meetings to be held online, and the General Meeting that was held on 14 October 2024, was lawfully conducted. The plaintiff's participation in the Zoom meeting estops her from later disputing its validity. Plaintiff's actions are seen as an attempt to obstruct th