James Foong J:

This is an application (Enclosure 46) by two opposing creditors for an order that costs awarded in a Judgement Order dated 10 December 1990 be costs due and paid by the liquidator personally. The costs as taxed by the Registrar amounts to RM10,222.50 inclusive of the allocature fee of RM764.00. This matter arose from a petition brought by the petitioner to wind up the respondent. At that material time, the petitioners themselves were in liquidation and therefore their actions were carried out by the liquidator. On 10 December 1990 justice Datuk L.C. Vohrah dismissed the winding up petition of the petitioner and awarded costs in the manner as contained in the Judgment Order:

It is ordered that the winding up petition presented by the liquidator of the petitioner on 25 February 1990 herein be dismissed with costs to be paid by the liquidator of the petitioner to the respondent and the opposing creditors.

Counsel for the liquidator of the petitioner now argued that the liquidator should not be personally liable to costs as an he acted as officer of the Court in the capacity as liquidator for the petitioner when the winding up petition was brought. To support his contention, Counsel for the liquidator quoted a passage in Buckley on them Companies Acts Vol. 1, 14th Edn. at p. 600 that:

... when the liquidator does not sue or defend in his own name but in that of the company, there is no jurisdiction to order the liquidator who is not a party litigant to pay costs, any more than directors of a going company could be ordered to pay costs.

Further, I am informed by the liquidator's Counsel that the petitioner is in no position to pay anyone any costs due to a lack of funds.

Counsel for the opposing creditors who are now claiming for costs from the liquidator personally, submitted to me a number of authorities, two of which I find some assistance to the issue in this case.

The first is the Supreme Court decision in Zainal Abidin Putih & Anor. v. Che Wan Development Sdn. Bhd. [1992] 2 MLJ 233 where Justice Tan Sri Gunn Chit Tuan (as he then was) ruled that the High Court has a discretionary power to grant costs. To this he states as follows:

We would agree therefore that Bacal Contracting Ltd v. Modern Engineering (Bristol) Ltd. & Ors. [1980] 2 All ER 655 is the modern illustration of the general principle that courts could use the sanction of an adverse order in costs against a receiver. But our present case was not one of which the appellants, as receivers, had caused unnecessary proceedings or litigious expenses.

Though the aforesaid case involves a receiver and not a liquidator, I find that the principles enunciated therein can similarly be applied to a liquidator.

An English authority more directly on point which relates to whether a liquidator is liable to costs personally is Re Wilson & Sons Ltd. [1977] 1 All ER 274. Oliver J. after examining a whole series of authorities then existing, ruled that the liquidator was personally liable to pay the costs. In Re Wilson & Sons Ltd., the liquidator acting as liquidator for a company in liquidation brought an action against its former directors and a bank on charges of fraud. Part of the claim was abandoned midway through the hearing while the remainder was finally dismissed. Oliver J. has this to say when awarding costs against the liquidator personally:

It seems to me to be quite wrong now that he should then turn round and say I have agreed to pay costs on a common fund basis but I only agreed to pay them out of assets which I have not got. That seems to be a total negation of justice even were I convinced, which I am certainly not, that the rule is as Counsel for the liquidator suggest that it is.

After careful perusal of the authorities cited, I am of the opinion that the law as it now stands is that when a liquidator who does not sue or defend in his own name but that of a company, any costs awarded should be that of the company. However, as justi