A wound-up company must obtain prior leave from its liquidator or the court to validly initiate legal proceedings, as failing to do so renders any action invalid.

[1] This is an appeal by the 2nd plaintiff (the appellant) against the decision of the Kuala Lumpur High Court dated 1 July 2011 in allowing the defendant's (respondent's) application vide encl 18 to strike out the appellant's claim under O 18 r 19(1)(b) and (d) of the Rules of the High (RHC) 1980.

Facts Of The Case

[2] The appellant together with the 1st plaintiff were the wholly owned subsidiaries of Kiara Emas Asia Industries Berhad.Their main businesses are manufacturing, fabrication and assembly of body parts for buses, trucks, coaches, and sale and purchase of engine chassis.

[3] The new shareholders of Kiara Emas Asia Industries Berhad found out that there were sum of monies paid to the respondent based on issuance of false invoices.Therefore on 26 June 2009 the present suit was commenced against the respondent.The 1st plaintiff 's claim is for the sum of RM8,127,559.00 and the appellant's (the 2nd plaintiff) claim is for the sum of RM11,524,080.49. At the time of filing the suit, the 2nd plaintiff (the appellant) was wound up by a Court order dated 30 May 2006 and the Official Assignee was appointed a liquidator.The appellant had not obtained any leave either from the Court or the liquidator (Official Assignee) prior to the filing or commencement of the suit.The appellant had not disclosed its winding-up status in the Writ and the statement of claim.

[4] The respondent (as the defendant in the suit) objected to the appellant's locus standi to initiate the action.On 21 May 2010, the 1st plaintiff was directed by the Court to amend its Writ and statement of claim, to remove the appellant or to obtain sanction, but it failed to do so.Thus, the action was struck out, as the amendment was not made as directed.

[5] On 12 November 2010, on the appellant's application the action was reinstated on condition that if sanction was not obtained by 30 November 2010, the 1st plaintiff was to amend the statement of claim and remove, the appellant (2nd plaintiff) from the action; or alternatively if sanction was obtained by 30 November 2010, the plaintiffs were to write to the Managing Judge Unit to fix for case management.Conditional sanction was communicated by the Official Assignee office to the appellant's solicitor vide his letter dated 29 November 2010.Finally, on 3 March 2011 the appellant had obtained the sanction after fulfilling all the relevant requirements or conditions as stated in the letter dated 29 November 2010.

[6] In the meantime, on 28 February 2011 the respondent filed the present application to strike out the appellant's claim against the respondent under O 18 r 19(1)(b) and (d) of the RHC 1980 on the grounds, inter alia that the appellant, being a wound up company has failed to obtain leave of the Court before commencing the present action and therefore has no locus standi to proceed the action against the respondent; and the appellant's action is therefore vexatious, frivolous and scandalous, and also an abuse of the process.On 1 July 2011, the said application to strike out was allowed by the High Court. Hence the present appeal before us.