Jabatan Insolvensi Malaysia v Kuik Sian Ping

Case Significance

Illustrates a liquidator's recourse to the court in post-winding-up proceedings to remove private caveats obstructing the realisation of a company's land: where the properties belong to the wound-up company and fall to be administered in the liquidation, the court will order the caveats removed so the Official Receiver can deal with them.

This High Court decision at Penang, delivered by Judge Kenneth St James, concerns a post-winding-up application by a liquidator to remove caveats obstructing the vesting of a company's properties in the liquidation. The company, Mega Fasteners (M) Sdn Bhd, had been wound up by court order, and the Official Receiver had been appointed its liquidator. In the course of realising the company's assets, the Official Receiver found that the respondent had entered private caveats on properties owned by the company. By this application, brought in the post-winding-up proceedings under provisions of the Companies Act 2016 and the National Land Code 1965 together with the court's inherent jurisdiction under Order 92 rule 4 of the Rules of Court 2012, the Official Receiver sought orders removing the caveats so that the properties could be dealt with in the liquidation.

The court granted the orders sought. It approached the matter by reference to the liquidator's statutory duty and power to get in and realise the assets of the company for the benefit of its creditors, and to the principle that a caveat should not be permitted to stand where the caveator cannot establish a caveatable interest sufficient to justify obstructing that process. Satisfied that the properties belonged to the company and fell to be administered in the winding up, and that the caveats stood in the way of the Official Receiver dealing with them, the court granted the orders to remove the two caveats entered by the respondent and directed the land registrar or land administrator to do all that was necessary to give effect to the order. It ordered the respondent to pay costs of RM5,000 to the Official Receiver. The judgment is a useful illustration of the liquidator's recourse to the court to clear caveats standing in the way of realising a wound-up company's land.