JUDGMENT

Hasnah Mohammed Hashim CJM:

[1] These are the appeals by the appellants arising from the winding up of London Biscuits Berhad (LBB). The core issue before this court concerns the scope of liquidators' powers and liabilities under the Companies Act 2016 (CA 2016), specifically whether one joint liquidator may act alone if the other is conflicted, and the extent to which creditors' wishes must guide the court in appointing liquidators.

[2] There are four (4) appeals before this court, namely: Appeal 61 (Victor Saw's appeal on the authority of joint liquidators where one is conflicted), Appeal 62 (LBB's appeal on the role of creditors' wishes in the appointment of joint liquidators), and Appeals 63 and 64 (Lim San Peen's appeals on whether termination benefits and indemnity in lieu of notice constitute costs and expenses of winding up, and whether payments made in good faith but in breach of s 527 of the CA 2016 can justify removal or proceedings against a liquidator).

[3] We heard oral submissions by all learned counsel representing the respective parties, and at the end of those submissions, we indicated that we needed time to consider the respective submissions. We have now reached our decision. What follows below are our deliberations on the issues raised and our reasons as to why we have so decided.

Questions of Law

[4] On 9 December 2024, leave to appeal was granted to the appellants on the following Questions of Law (QOL):

Victor Saw's Appeal (Appeal 61)

Bearing in mind the principle of nemo judex in re sua (a man should not be a judge in his own cause), in the event a joint liquidator is in a position of conflict of interest, whether direct or indirect, in a subject matter, can the other non-conflicted joint liquidators act pursuant to s 478(2) of the Companies Act 2016, without reference to or concurrence of the conflicted joint liquidator?

LBB's Appeal (Appeal 62)

(a) Whether the court must take into account the wishes of a majority of creditors and/or contributories, in number and/or in value, in deciding on the appointment of an additional liquidator as joint liquidator?

(b) Whether the court's appointment of an additional liquidator as joint liquidator is appropriate and/or suitable in circumstances where a majority of the creditors and/or contributories, in number and/or in value, of the said company have voted in favour of a single liquidator candidate, and a joint appointment was never contemplated and voted on?

(c) Whether it is desirable and/or beneficial that, before the court considers appointing a joint liquidator in addition to an existing sole liquidator, prior notice be given to the creditors and contributories for them to be heard and/or to seek their views in that regard; and

(d) Whether in a case where the court is considering appointing a joint liquidator in addition to an existing sole liquidator whose appointment was made after the views of the creditors and contributories have been sought pursuant to s 521 of the Companies Act 2016, the same mechanism should be resorted to.

Lim San Peen's Appeal (Appeals 63 and 64)

(i) Where a liquidator has obtained authority of court under Schedule 12 Part II para 1(a) to carry on the business of the company, whether "costs and expenses of winding up" under limb 1(a) of s 527 of the Companies Act 2016 can include Termination Benefits and Indemnity in lieu of Notice payable to employees who are continued to be employed post winding up of a company as part of the carrying on of the business of the company?

(ii) Whether the making of a payment by a liquidator of a company in good faith but which might be in breach of s 527 of the Companies Act 2016 can constitute a ground on which the liquidator can be removed for cause?

(iii) Whether the making of a payment by a liquidator of a company in good faith but which might be in breach of s 527 of the Companies Act 2016 can constitute a ground on which leave to commence legal proceedings can be granted against the liquidator?

Facts

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