JUDGMENT

Ramly Ali J:

[1] This grounds of judgment are in respect of the notice of motion dated 27 December 2005 (encl. 37) filed by one Ong Weng Seng @ Ong Say Lan (applicant) a contributory and former director of the 1st respondent (the company under liquidation).

[2] By encl. 37, the applicant seeks the following prayers:

(a) an order that the sale of the land held under Lot. No. 726 P.N. No. 7225 and Lot No. 727, P.N. No. 7224, Section 8, Petaling Jaya (collectively referred to hereinafter as the "said land") by the liquidator to Idaman Harmoni Sdn. Bhd (the 2nd respondent) be set aside; and

(b) alternatively, that the applicant be given leave to commence proceedings to set aside the sale of the said land.

Background Facts

[3] The 1st respondent is a company incorporated in Malaysia, and was in the principal activity of property development.

[4] On 27 July 1999, the 1st respondent was wound-up by this court, pursuant to a winding-up petition presented by Abric Project Management Sdn. Bhd. ("petitioner") in respect of a debt of RM2,000,000.

[5] Pursuant to the winding-up order, one Lim Tian Huat was appointed as the liquidator over the 1st respondent ("the liquidator").

[6] The 1st respondent had no assets of realisable value at the date of the winding-up order other than two (2) pieces of immovable properties, namely:

(a) the said land; and

(b) a single storey terrace house located at No. 1, Jalan 8/18, Taman Toman, Petaling Jaya, Selangor Darul Ehsan, situated beside the said land.

[7] The said land was subject to a registered legal charge in favour of HSBC totaling RM33,000,000 as security for a term loan facility of RM28,000,000 and an overdraft facility of RM5,000,000 granted by HSBC to the 1st respondent.

[8] On 3 August 1999, the liquidator notified the applicant of his appointment and requested for the applicant to furnish the statement of affairs. The statement of affairs was never provided. As part of the liquidator's duties, the liquidator began the process of realising the assets of the 1st respondent by taking steps to sell the properties. Eventually, on or about 3 June 2003, the said land and single storey terrace property were sold to the 2nd respondent for purchase prices of RM17,900,000 and RM100,000 respectively. The sale and purchase agreement ("SPA") for the sale and purchase of the said land and the single storey terrace property respectively, became absolute and binding upon the 1st respondent on or about 27 August 2003.

[9] The sale and transfer was eventually completed on or about 24 November 2003 wherein the discharge of charge dated 24 November 2003 was released by HSBC in return for the payment of the full RM17,900,000 directly to HSBC. The said land was registered in the 2nd respondent's name on 27 November 2003.

[10] On 18 September 2003, the applicant's solicitors wrote to the liquidator with a proposal that a suit be instituted against HSBC for an alleged breach of contract. No query made as to the status of the said land.

[11] On 22 October 2003, the liquidator's representatives met with the applicant and his solicitors to discuss the proposed cause of action against HSBC for a claim in damages for breach of contract. No query was raised as to the status of the said land. On 25 May 2004, the applicant instituted proceedings inter alia, for this court to allow the applicant to use the name of the 1st respondent to institute a suit against HSBC. On 26 October 2004, this court allowed the applicant to use the name of the 1st respondent to initiate a suit against HSBC subject to certain express order.

[12] On 14 March 2005, the writ of summons and statement of claim was filed claiming damages against HSBC vide the Kuala Lumpur High Court Civil Suit No. D5-22-343-2005.

[13] On 27 December 2005, encl. 37 was filed by the applicant.

Chronology Of Steps Taken By The Liquidator Leading To The Sale Of The Said Land

[14] A summary of the steps undertaken by the liquidator leading to the sale of the said