A wound-up company cannot sue or defend legal actions without prior sanction from its liquidator or the court.

Abang Iskandar Abang Hashim JCA:

Brief Facts Of The Case

[1] By virtue of letters dated 6 September 2000, and 14 November 2000, the plaintiff had been appointed as a sub-contractor to supply electrical equipment and for electrical works valued at RM16,700,000 for the defendant's project known as Tanjung Malim Polytechnic Complex ("the contract work").

[2] The plaintiff's claim as per the Statement of Claim dated and filed on 2 March 2007 is for a sum of RM3,580,842.49, being the amount due and payable by the defendant, for the work done by the plaintiff based on a Variation Order in relation to the contract work.

[3] It is an undisputed fact that the plaintiff was wound up pursuant to a court order on 6 July 2009 and no sanction has been obtained by the plaintiff to continue with the civil suit from the Insolvency Department as required under s 236 of the Companies Act .

[4] The defendant, vide a Notice of Motion marked as encl 62, had applied to the High court of Ipoh to strike out the plaintiff's Writ of Summon and Statement of Claim dated 2 March 2007 pursuant to O 18 r 19(b) and (d) Rules of 2012 on the basis that as the plaintiff had been wound up in 2009, it had no capacity to act on its own unless a sanction had been obtained from the Insolvency Department or from the court. On account of that, the defendant had contended that the plaintiff's suit that was pending in the court an abuse of the process of court and therefore deserved to be struck out.

[5] The application in encl 62 was allowed by the learned Judicial Commissioner ['the JC'] with cost of RM 2,000 on 2 April 2013. Thus, this appeal by the aggrieved plaintiff. For convenience, both parties will be referred to in their respective capacity in the court below.

The Appeal Before Us

[6] Before us, the following issues were raised and argued by learned counsel for both parties.

[7] For the avoidance of doubt, it is beyond dispute that the plaintiff, having been wound up, had not obtained any sanction from the Official Receiver from the Insolvency Department.

[8] As a statement of general principle that pertains to a situation involving a wound-up company, it is trite that its subsequent affairs would be in the hands of its liquidator. In matters pertaining to its legal affairs, such as a civil litigation, either as a plaintiff in pursuing a legal right or as a defendant in opposing a liability suit, it must first obtain a prior sanction from the liquidator or from the court. This must necessarily include it maintaining a suit that is pending in the court, namely a suit that was filed in the court before the winding-up order was issued against it but which suit had not been finally disposed of. The legal position thus appears to be rather mundane and straight-forward. In fact, the Federal court case of Zaitun Marketing Sdn Bhd v. Boustead Aldred Sdn Bhd , 2004 MarsdenLR 2614 learned Justice Gopal Sri Ram FCJ had succinctly described the position of a company that has been wound-up as follows:

"Once a company is wound up, its assets and liabilities vest in the liquidator. It is up to him to decide whether to institute, continue the prosecution of or defend legal proceedings."

[9] In short, a prior consent is needed even to continue the prosecution of a legal proceeding, such as what obtained in the case before us.

[10] Coming back to this appeal before us, the plaintiff, being the wound-up company, had argued that in the circumstances of this case, the application by the defendant in encl 62 before the High court for striking out of its suit premised