1. ) ANDREW HENG 2. ) MASMEYER DEVELOPMENT SDN. BHD. (Dalam Likuidasi) v CHONG KOK WOOI (bertindak atas kapasiti sendiri dan juga mewakili kumpulan pemilik-pemilik unit kondominium Marinox Sky Villas)

Case Significance

Confirms that leave of the court is required before commencing any action or proceeding against a court-appointed liquidator, who is an officer of the court under section 486 of the Companies Act 2016, and that proceedings begun without leave are incompetent.

This Court of Appeal decision concerns whether the leave of the court is required before an action may be commenced against a court-appointed liquidator of a wound-up company. The first appellant was the liquidator of the second appellant, Masmeyer Development Sdn Bhd (in liquidation), the developer of a condominium project. The respondent, suing on his own behalf and as representative of a group of unit purchasers of the project, had filed an Originating Summons in the High Court challenging the liquidator's decision concerning liquidator's fees. The High Court allowed that Originating Summons, and the liquidator and the company appealed. The central question was whether, because a liquidator appointed on a winding up by court order is an officer of the court whose powers derive from section 486 of the Companies Act 2016, leave of the court must first be obtained before any action or proceeding is taken against the liquidator. The Court of Appeal held that leave is indeed required: the requirement exists so that a liquidator can discharge the onerous statutory duties of the office without having to defend unnecessary litigation that might hinder the winding-up process, and no class of litigant should be given preference in commencing proceedings against a liquidator. Because the respondent had not obtained leave before filing the Originating Summons, the proceeding was incompetent. Following the authority the Court applied, it held that the High Court judge had committed a plain error of law in ruling that no leave was required, which warranted appellate interference. The Court allowed the appeal, set aside the order of the High Court, and consequentially dismissed the respondent's Originating Summons, with costs of RM15,000.00 to the appellants subject to allocatur. The judgment is a clear statement of the leave requirement protecting court-appointed liquidators from unauthorised litigation. The Court emphasised that the protection is procedural in nature, ensuring that a liquidator is not diverted from the task of realising and distributing the estate by litigation commenced without the court's prior sanction, and that this safeguard applies evenhandedly to all would-be litigants.