JUDGMENT

Ramly Ali J:

Enclosure 19 is an application pursuant to s. 279 of the Companies Act 1965 by the applicant, a contributory of the respondent company, being aggrieved by the decision of the liquidator, Mr. Lim Thin Huat in refusing to bring an action against Hong Leong Bank Malaysia Bhd (HSBC) on behalf of the respondent company for breach of contract.

The applicant has sought, through the filing of the application, for, inter alia:

(i) an order pursuant to s. 279 of the Companies Act 1965 that the act or decision of the liquidator in not commencing proceedings against HSBC be reversed or set aside; and

(ii) an order that the liquidator be directed to commence proceedings against HSBC or alternatively, the liquidator to authorise the applicant to commence proceedings against HSBC on such terms as the court deems fit.

The applicant sought that an action be brought by the respondent against HSBC for an alleged breach of contract (proposed proceedings). The crux of the applicant's proposed proceedings is set out in paras. 13 to 21 of the applicant's first affidavit. From what the applicant has provided for the proposed proceedings, it appears that the respondent and HSBC were purportedly jointly acting together to perform a contract to develop and construct office space on a piece of land whereupon HSBC had confirmed its acceptance of the respondent's offer to sell to HSBC, 147,958 net square feet of office space with 240 car parks at a price of RM83,500,000. The applicant thereafter alleged that HSBC had terminated this development contract, inferred from it's conduct of joining in support of the petitioner's winding-up petition against the respondent company. In the applicant's former solicitors letter dated 2 December 2003 the proposed proceedings were stated as proceedings "against Hong Kong Bhd (HSBC) to recover damages which would be beneficial to the company, its creditors and contributions."

The applicant is a contributory in the respondent company holding 50% of the paid-up capital. He is also a director in the respondent company. In his affidavit in support of the application, the applicant says that the respondent company has a good cause of action against HSBC. He is alleging that the decision of the liquidator not to pursue with a claim against HSBC is not in the interest of the respondent company and/or the contributors and/or its creditors. The applicant also alleged that the decision appeared to benefit HSBC at whose instance the liquidator was appointed.

The Liquidator's Petition Vis-a-vis The Application

At all material times, the liquidator has kept an open mind to the applicant's proposed proceedings and to the possibility of commencing such an action in the name of the respondent company. The applicant first posed his intention that the proposed proceedings be commenced via a letter dated 18 September 2003 from the applicant's former solicitors, addressed to the liquidator. A meeting was called by the liquidator on 22 October 2003 and attended by the applicant and discussion, inter alia, pertained to the possibility that sanction may be given to the applicant to use the name of the respondent company to initiate the proposed proceedings. However, after obtaining legal advice, the liquidator caused the issuance of another letter through his solicitors, informing the applicant that the liquidator was "unable, as a matter of law, to sanction the commencement of the action." Consequently the applicant then sought that the liquidator himself proceed with the proposed proceedings via the letter dated 2 December 2003 from the applicant's former solicitors. Thereafter, as the liquidator was still deliberating and obtaining advice on the matter, further extensions were sought but no decision was made as to whether the liquidator himself would initiate the proceedings. In the mean time, this application was filed and fixed for hearing on 16 July 2004.

Nevertheless, another meeting between the applicant and the l