Norliah Binti A P Kunhibava v 1. ) Mohd Noor Amin Bin Mohd Noor Khan 2. ) SHARIZA BINTI KAMARUZZAMAN 3. ) NUR JASNI BIN MOHAMED 4. ) NUEMERA (M) SDN BHD

Case Significance

Illustrates the test for appointing an interim liquidator pending a winding-up petition and the weight given to evidence of the misapplication of company funds and a risk to assets.

This High Court decision from the Commercial Division at Kuala Lumpur concerns an application to appoint an interim liquidator over a company that is the subject of a winding-up petition, decided amid a cluster of interlocutory applications. The petitioner, a contributory of the company claiming standing under section 464(1)(c) of the Companies Act 2016, had petitioned to wind up the company under section 465(1)(f) and section 465(1)(h) of the Act, on grounds that the directors had acted in their own interests rather than in the interests of the members as a whole and that it was just and equitable to wind up the company. A number of interlocutory applications were before the court, including applications to appoint an interim liquidator, to strike out the petition, for an ad interim stay, and to expunge affidavits, and one issue was whether the judge was correct to hear the application to appoint an interim liquidator first. The test the court applied for the appointment of an interim liquidator required a good prima facie or likely case that the company would be wound up, together with evidence that the company's assets were or would be at risk. The petition rested on allegations of the misapplication of company funds, including substantial payments said to have been made to place monies beyond the reach of the revenue authority and other transactions. The court found that there was good prima facie evidence that the company was likely to be wound up and that its assets were and would be at risk, holding that the very evidence of misapplication of funds demonstrated a risk to the remaining assets and rejecting the argument that appointment was pointless because assets had already been distributed, observing that a defence amounting to 'the horse has bolted' is no answer to such an application. The court granted the application to appoint an interim liquidator with costs of RM60,000.00 payable by the first to third respondents jointly and severally. The judgment is a useful illustration of the test for appointing an interim liquidator pending a winding-up petition and of the weight given to evidence of the misapplication of company funds and a risk to assets.