A wound-up company lacks locus standi to institute legal actions without appropriate prior sanction from the liquidator.

[1] This is an appeal by the defendant, who is the appellant here, against the decision of the learned High Court Judge who had dismissed the notice of application by the defendant to strike out the plaintiffs' (who are the respondents here) Writ and Statement of Claim dated 15 April 2015 pursuant to O 18 r 19(1)(b), (c) and /or (d) of the Rules of 2012.

Parties will be referred to, as they were in the Court below.

[2] After hearing submissions from both parties we allowed the appeal with costs. Herein below are our grounds.

Background

[3] The 1st plaintiff was appointed as the main contractor for Pembinaan BLT Sdn Bhd for the construction and completion of a Royal Marine base at Tanjung Pelepas, Johor Bahru for a contract sum of RM125 million (hereinafter referred to as "the project").

[4] To undertake the construction of the project, the 1st plaintiff had obtained banking facilities from the defendant. As security, the 1st plaintiff executed the following documents:

(i) Facility Agreement dated 6 September 2007;

(ii) Deed of Assignment of contract proceeds dated 6 September 2007 (Deed of Assignment).

[5] At the same time, a joint and several Guarantee and Indemnity dated 6 September 2007 was provided by the 2nd to 4th plaintiffs (Guarantee).

[6] Pursuant to the banking facilities, on 20 October 2009, the 1st plaintiff applied to the defendant to pay the 1st plaintiff's sub-contractor, Forest Point Sdn Bhd the sum of RM250,000.00 directly.

[7] However the defendant failed to pay Forest Point Sdn Bhd as directed. The reason being, due to a disputed deduction of legal fees which was incurred by the defendant as a result of an earlier civil litigation which involved the 1st plaintiff, 2nd plaintiff and the defendant against Asian Minerals & Ores Pte Ltd

[8] Due to the non-payment, the 1st plaintiff was wound up by Forest Point Sdn Bhd pursuant to Shah Alam High Court Winding Up Petition No: 28-3232010.

[9] Consequently, Pembinaan BLT Sdn Bhd terminated the 1st plaintiff as the main contractor for the project.

[10] At the same time, the defendant also terminated the banking facilities which were granted to the 1st plaintiff.

[11] Thereafter, the defendant commenced Civil Suit No: 22NCVC-915-2011, at the Shah Alam Court, against the 2nd to 4th plaintiffs pursuant to the Guarantee (hereinafter referred to as "the Guarantee Action"). There was a full trial in respect of the Guarantee Action and judgment was subsequently entered in favour of the defendant on 30 May 2014 by Yaacob Sam J. Following thereto, the defendant filed bankruptcy proceedings against the 2nd to 4th plaintiffs. These bankruptcy proceedings are still ongoing.

[12] The plaintiffs then filed a Civil Suit (22NCVC-207-2015) against the defendant on 15 April 2015, ie the present civil suit (hereinafter referred to as "Suit 207"). A Notice of Application to strike out under O 18 r 19(1) of the Rules of 2012 was filed by the defendant, which is the subject of the present appeal before us. Sanction from the Official Receiver was obtained by the plaintiffs on 3 June 2015 to proceed with this civil suit.

Basis Of The Notice Of Application To Strike Out By The Defendant

[13] The defendant premised its application for the striking out of Suit 207 on the following grounds:

(1) that the 1st plaintiff, being a wound-up company, does not have the capacity or the locus standi to institute Suit 207; and

(ii) that the plaintiffs are estopped from pursuing Suit 207 by reason