Liquidators cannot sanction creditors to initiate claims on behalf of a company in liquidation without explicit authority.

[1] This appeal is lodged by the First Defendant UMMC against the decision of the learned High Court Judge at Kuala Lumpur, who had dismissed its application for striking out under O 18 r 19 of the Rules of 2012. We have heard the appeal and have allowed the appeal of the First Defendant for the claim of the Plaintiff against the First Defendant be struck out.

[2] We note that the contractual relationship between the parties in this suit are these. The First Defendant UMMC, appointed the Second Defendant Technitium Sdn Bhd as the main contractor to supply, deliver, install, test and commission Total Hospital Information System (THIS) at University Malaya Medical Centre (UMMC). This was made pursuant to a written contract dated 8 April 2006 (the Principal Agreement).

[3] The Second Defendant subsequently appointed the Plaintiff FBSM Ctech Sdn Bhd, as its subcontractor pursuant to a Letter of Award dated 28 April 2006. Under this Letter of Award, a back to back payment arrangement was made between the Second Defendant and the Plaintiff where any payment due to the Plaintiff under the Letter of Award would only be paid to the Plaintiff, upon the Second Defendant's receipt of payment from the First Defendant UMMC.

[4] The Plaintiff subcontractor, thereafter entered into agreements with various other sub-contractors namely; IBA Health (Malaysia) Sdn Bhd, Agfa Healthcare Corporation, Century Software and, TOMMS, to undertake the performance under the Letter of Award.

[5] The First Defendant UMMC, terminated the Principal Agreement with the Second Defendant as its main contractor by a letter dated 1 January 2010 which led to the termination of the Letter of Award by the Second Defendant with the Plaintiff subcontractor on 5 April 2010.

[6] The Plaintiff subcontractor meanwhile filed a Civil Suit No D- 22NCC-1017-2010 against the Second Defendant main contractor, for payment under the Letter of Award. The Plaintiff obtained judgment against the Second Defendant which resulted in the latter's subsequent winding up vide a winding up O dated 18 June 2012.

[7] The Plaintiff commenced this action against both the First Defendant UMMC as well as the Second Defendant, main contractor Technitium (in Liquidation). From the pleadings it appears that the claim made by the Plaintiff against the First Defendant is purely on the basis that the Plaintiff has obtained sanction to represent the Second Defendant to sue and recover monies payable by the First Defendant to the Second Defendant, then in liquidation.

[8] The First Defendant UMMC filed an application in the High Court Enclosure 6, under O 18 r 19(b) and (d) of the Rules of 2012, to strike out the Plaintiff's claim against it. The learned High Court Judge dismissed the application on the following grounds. According to Her Ladyship there was sufficient privity of interest between the Plaintiff and the First Defendant UMMC, following the First Defendant's execution of the Principal Agreement with the Second Defendant; that the nexus and the parties' privity of interest' disclose some causes of action which raise questions fit to be decided in a full hearing.

[9] On appeal against that decision the First Defendant UMMC, raised two main grounds. First there is no privity of contract between the First Defendant UMMC with the Plaintiff and secondly the Liquidator of the Second Defendant cannot sanction the Plaintiff as a creditor, to initiate a legal a