MEGAFEST SDN BHD (DALAM LIKUIDASI) v 1. ) Ketua Pengarah Insolvensi Selaku Wakil Sah Dan Pengurus Dan Penerima Estet Lim Thian Hock @ Lim Thiam Hock, Simati (Dalam Kebankrapan) 2. ) SIVANANTHAM A/L MUTHU KARPAN 3. ) LIM KWEE GEE

j-02ncvcw-765-05-2023 Court of Appeal (Mahkamah Rayuan) 26 February 2026 • J-02(NCvC)(W)-765-05/2023 • 34 min read

12 cases cited (4 SG, 8 foreign)

Catchwords

allegations of undue preference, premised on voluntary settlements said to have been made without valuable consideration and not in good faith - fraudulent preference - application for a validation order in respect of a payment rendered void as the payment was made after the presentation of the winding-up petition. - (i) the distinct statutory requirements governing undue preference as opposed to fraudulent preference; (ii) whether proof of a dominant intention to prefer remains a necessary element for fraudulent preference; (iii) the scope of the recognised exceptions where payments are made under genuine commercial pressure to avert the imminent collapse of the company; (iv) the scope of the directors’ duties and (iv) the circumstances in which the court may properly grant validation of payments otherwise void against the liquidator. - Companies Act 1965 (“CA 1965”) - Insolvency Act 1967 (“IA 1967”).

Practice Areas

allegations of undue preference, premised on voluntary settlements said to have been made without valuable consideration and not in good faith

Judges (3)

Ahmad Kamal bin Md. Shahid Coram Azhahari Kamal bin Ramli Coram Ong Chee Kwan Delivered

Counsel (4)

Raj Shankar Firm Mohamed Shah Reza Counsel Respondent Raj Shankar a/l Rajahram Counsel Appellant Tina Francis Counsel Appellant

Parties (4)

Ketua Pengarah Insolvensi Selaku Wakil Sah Dan Pengurus Dan Penerima Estet Lim Thian Hock @ Lim Thiam Hock, Simati (Dalam Kebankrapan) Respondent MEGAFEST Sdn Bhd (DALAM LIKUIDASI) Appellant Lim Kwee Gee Respondent Sivanantham a/l Muthu Karpan Respondent

Case Significance

MEGAFEST SDN BHD (DALAM LIKUIDASI) v 1. ) Ketua Pengarah Insolvensi Selaku Wa... is a Court of Appeal (Mahkamah Rayuan) decision dated February 26, 2026 (citation: j-02ncvcw-765-05-2023). <p>Megafest Sdn Bhd (in liquidation) brought five related appeals involving allegations of undue preference, fraudulent preference, and a validation order for payments made after the winding-up petition. The key issues included the distinction between undue and fraudulent preference, whether a dominant intention to prefer was proven, and the scope of directors' duties. The Court of Appeal allowed Appeals 765, 761, and 764, dismissed Appeal 763 except for RM50,000 in post-petition payments, and a The panel comprised Ahmad Kamal bin Md. Shahid, Azhahari Kamal bin Ramli and Ong Chee Kwan, with Ong Chee Kwan delivering the judgment. Counsel appearing: Mohamed Shah Reza (counsel for respondent), Raj Shankar a/l Rajahram (counsel for appellant), Tina Francis (counsel for appellant).

Summary

Megafest Sdn Bhd (in liquidation) brought five related appeals involving allegations of undue preference, fraudulent preference, and a validation order for payments made after the winding-up petition. The key issues included the distinction between undue and fraudulent preference, whether a dominant intention to prefer was proven, and the scope of directors' duties. The Court of Appeal allowed Appeals 765, 761, and 764, dismissed Appeal 763 except for RM50,000 in post-petition payments, and allowed Appeal 775.

What was the outcome of MEGAFEST SDN BHD (DALAM LIKUIDASI) v 1. ) Ketua Pengarah Insolvensi Selaku Wa...?

<p>Megafest Sdn Bhd (in liquidation) brought five related appeals involving allegations of undue preference, fraudulent preference, and a validation o...