GRANSTEP DEVELOPMENT SDN. BHD. v 1. ) TAN CHONG HENG CONSTRUCTION (DALAM LIKUIDASI) SDN. BHD. 2. ) Pegawai Penerima Dan Pelikuidasi Syarikat Tan Chong Heng Construction Sdn Bhd (Dalam Penggulungan)

Case Significance

Confirms that a company in liquidation must obtain the leave of the winding-up court before continuing enforcement of a CIPAA adjudication award, and that an enforcement order made without such leave is void.

This High Court decision at Shah Alam concerns whether a High Court order enforcing an adjudication award under the Construction Industry Payment and Adjudication Act (CIPAA) is void where the award creditor company was already in liquidation when the enforcement order was made. The plaintiff, Granstep Development Sdn Bhd, brought an originating summons seeking a declaration that a High Court enforcement order dated 6 August 2021, which had enforced a CIPAA adjudication award in favour of the first defendant, Tan Chong Heng Construction Sdn Bhd (in liquidation), was void. The second defendant was the Official Receiver and liquidator of that company. The plaintiff's case was that the enforcement order was void because the first defendant company had been wound up by an order dated 28 July 2021, before the enforcement order was made, and it was undisputed that the leave of the winding-up court for the company in liquidation to continue with its CIPAA enforcement action had never been applied for or obtained, as required under the Companies Act 2016. The court held that the question whether the enforcement order of 6 August 2021 was void was a pure question of law, the answer to which did not depend on the outcome of the parties' ongoing arbitration, so that a stay pending the arbitration was unnecessary. It noted that the Official Receiver had no objection to the originating summons, did not oppose it and did not seek to file affidavits or make arguments, appearing to concur that it could be determined without reference to the arbitration. Given the absence of the requisite leave of the winding-up court and the concurrence of the Official Receiver, the court granted the principal relief sought and declared the enforcement order void. The judgment is a useful statement that a company in liquidation must obtain the leave of the winding-up court before continuing enforcement proceedings, failing which the resulting order is void.