The Court of Appeal in its grounds of judgment dated 18 March 2021in Sunrise Megaway Sdn Bhd (in liquidation) v Kathryn Ma Wai Fong set out the principles when there is a challenge on a liquidator’s decision to admit or reject a proof of debt. Exceptional circumstances are required to second guess the liquidator’s decision. Continue reading →
The High Court in Re Rentak Arena Development Sdn Bhd (In Liquidation); Ex Parte Spanland Sdn Bhd and Another Case  MLJU 2133 (see the grounds of judgment dated 18 November 2020) provided useful guidance on factors considered when there are competing nominees to be appointed as liquidator of a company.
The Federal Court in its grounds of judgment dated 21 May 2020 Dubon Berhad (in liquidation) v Wisma Cosway Management Corporationheld that fees due to a management corporation or a joint management body under the Strata Management Act is not a secured debt. Such fees are a pure unsecured debt within the insolvency regime. This will bring clarity for a liquidator of a company which is an owner of a strata property.
I set out a case update on the Federal Court decision of Tee Siew Kai v Machang Indah Development Sdn Bhd (see the Grounds of Judgment dated 17 February 2020). The decision is on the law applicable to the grant of leave to sue a liquidator in his personal capacity. This decision reverses the Court of Appeal decision in Tee Siew Kai (as liquidator for Merger Acceptance Sdn Bhd) (in liquidation) v Machang Indah Development Sdn Bhd (in liquidation) (previously known as Rakyat Corp Sdn Bhd  2 MLJ 514.
This decision reiterates the importance of leave of the Court in order to avoid wasteful litigation against liquidators and to preclude unwarranted interference with the winding up process. There must be a prima facie case made out, the Court must evaluate the evidence to see if this has been met, and pecuniary loss suffered by the company must be shown. Continue reading →