PEMIUTANG PENGHAKIMAN Southeast Asia Special Asset Management Berhad PENGHUTANG PENGHAKIMAN Tan Sri Dato' Paduka (Dr.) Ting Pek Khiing

Case Significance

Instructive on the interplay between a court-appointed special manager's conferred powers and the Director-General of Insolvency's enduring statutory control over a bankrupt's estate under the Bankruptcy Act 1967.

This High Court decision at Kuala Lumpur, in its Commercial Division, concerns a post-bankruptcy application to confer further powers on a court-appointed special manager over the estate of a bankrupt. The applicant, Southeast Asia Special Asset Management Berhad, sought an order conferring additional powers on the special manager appointed over the estate of the judgment debtor, and a declaration that the special manager's remuneration be calculated on Table C of the Bankruptcy (Fees) Rules 1969. The judgment debtor had been adjudicated bankrupt, with Adjudicating and Receiving Orders made in 2010, and the administration of the estate had stretched over more than a decade with little achieved, prompting the applicant to seek the appointment of a special manager and, later, an expansion of his powers. The application engaged sections of the Bankruptcy Act 1967 and Rule 250 of the Bankruptcy Rules 1969, and raised questions about the limits of the special-manager order, whether res judicata arose from earlier orders, and whether the scope of the special manager's powers needed to be discussed with the Director-General of Insolvency before further powers were granted. The court, per Saheran Suhendran JC, emphasised that the assets of the bankrupt are vested in the Director-General of Insolvency, who retains supervisory control over the special manager, the assets and the estate notwithstanding the special-manager order, which cannot divest the Director-General of his statutory powers. While the court observed that the further powers could usefully be discussed between the special manager and the Director-General, it held that this was not a mandatory requirement but a matter going to the exercise of its discretion. Stressing that the long-delayed administration of the estate should not be prolonged, the court granted the application in part, allowing several of the prayers while giving liberty to re-apply for the remainder. The judgment is instructive on the interplay between a special manager's conferred powers and the Director-General of Insolvency's enduring statutory control over a bankrupt's estate.