DATO' CHANG JONG YU v 1. ) DATO' SERI YONG TU SANG 2. ) YONG HIN SIONG 3. ) YONG EMMY 4. ) KUALA IBAI DEVELOPMENT SDN BHD 5. ) IBAI LEISURE SDN BHD 6. ) IBAI RIA SDN BHD 7. ) IBAIMAS SDN BHD 8. ) IBAI GOLF & COUNTRY CLUB BHD PIHAK TERKILAN WOO THIN CHOY

Case Significance

Confirms that a court-appointed liquidator with actual notice is bound by a subsisting consent order restricting dispositions, notwithstanding the statutory liquidation framework, and may be punished for contempt where he wilfully disregards the order and obstructs the course of justice.

This High Court decision concerns committal proceedings for contempt against a court-appointed liquidator for breaching a consent order, and whether such an order binds a liquidator exercising statutory functions. The underlying originating summons, arising from a web of disputes between two substantial shareholders of a holding company and its subsidiaries, had concluded with a recorded consent order restraining dealings with the assets of the group, including land owned by one subsidiary. After that subsidiary was wound up, the plaintiff commenced committal proceedings against its court-appointed liquidator, alleging that he had disobeyed the consent order by entering into a termination-and-conveyance arrangement and eight sale and purchase agreements affecting the land, while the liquidator applied to set aside the leave granted ex parte to commence committal. The court addressed whether a consent order restricting asset dispositions survives winding up and binds a court-appointed liquidator, and how the statutory liquidation framework under the Companies Act 2016 interacts with a pre-liquidation consent order. It held that the liquidator, being a fiduciary, trustee, agent and officer of the court, was held to a higher standard of conduct, that he had actual notice of the consent order and of the limitations it placed on his powers, and that he had no genuine basis to doubt its applicability. Finding that he was bound as a matter of law to comply with the clear terms of the consent order yet had wilfully disobeyed it by entering into the impugned agreements with notice of its terms, the court held the contempt established as an obstruction of justice, given the ongoing disputes affecting the subsidiaries' assets. It allowed the committal application and dismissed the liquidator's application to set aside leave, and, treating the contempt as unmitigated, imposed a fine of RM100,000.00, in default six months' imprisonment. The judgment is significant for confirming that a court-appointed liquidator with notice is bound by a subsisting consent order and may be punished for contempt for wilfully disregarding it.