Khor Yong Yong (Liquidator Of Shigen Polycolor Sdn. Bhd. (In Liquidation) [Company No: 200101031179 (566938-x)] v 1. ) TAN KHENG GUAN 2. ) CHU KOK KHING 3. ) EE GENG CHOON

Case Significance

Confirms that a liquidator who properly performs work under a winding-up order that is later set aside remains entitled to remuneration under the Companies Act 2016, and that the cost may be placed on the parties whose litigation generated the winding up and its reversal.

This High Court decision at Georgetown addresses whether a liquidator should be remunerated for work done while a winding-up order was in force but later set aside, and who must bear that cost. A company had been wound up and the applicant appointed as its liquidator. The winding-up petition had been presented by the first respondent as part of extended litigation between him and the second respondent, and the second respondent later succeeded in setting the winding-up order aside, so that the winding up was terminated and the order appointing the liquidator fell away. The liquidator, who had by then set about performing his statutory functions, applied to be remunerated for the period between the making of the winding-up order and the date it was set aside, raising the questions whether he should be remunerated at all and, if so, who should pay his remuneration and expenses.

The court reasoned that a liquidator who has properly performed work during the currency of a winding-up order should not go uncompensated merely because the order is subsequently set aside, and it turned to the framework in the Companies Act 2016 — including sections 479(2), 486 and the Twelfth Schedule, and section 527(1) — governing a liquidator's remuneration and expenses. It concluded that the liquidator was entitled to be remunerated, and that the burden should fall on the two protagonists whose litigation had generated the winding up and its reversal.

The court ordered that the liquidator's remuneration be equally shared and paid jointly and severally by the two respondents who had driven the litigation, to the recipients named, within one month of a related petition being withdrawn or settled. The judgment illustrates that a liquidator who works under a winding-up order later set aside remains entitled to remuneration, and that the cost may be placed on the parties responsible for the proceedings.