Cerah Teguh Sdn Bhd

On the court record

A company litigating a managing director's breach of duties, the alleged misuse of winding up under section 351 of the Companies Act 2016, and the leave and joinder requirements governing proceedings against a company in liquidation.

Cerah Teguh Sdn Bhd appears in the corpus in company and insolvency litigation centred on the conduct of a managing director, the winding-up process and the leave and joinder requirements that govern proceedings once a company is in liquidation. It appears as defendant, applicant, appellant and plaintiff across the High Court and Court of Appeal.

The directors'-duties strand is prominent. In one suit the plaintiffs alleged that a managing director had breached his duties and obligations, the claim resting substantially on a consent judgment and on breaches of directors' duties. Disputes of this kind — where a company or its stakeholders pursue a director for failing to honour a settlement and for breaching the fiduciary and statutory duties of office — are a recurring feature of contests for the control and value of a company.

The insolvency strand raises the recurring questions of leave and misuse. At the Court of Appeal the theme was the misuse of a company's winding-up process and the statutory remedies under section 351 of the Companies Act 2016. In a post-winding-up matter the court considered whether leave was required under sections 351, 461, 482(b), 486(2) and 510 of the Companies Act 2016, whether it had jurisdiction to grant the declaratory and injunctive relief sought, and whether the application was defective for failing to join a necessary party. A related interlocutory-injunction application engaged the American Cyanamid principles but foundered in part on the absence of a necessary party — the liquidator not having been joined as a defendant, with leave to proceed against the liquidator pending in another court. The company's footprint is a study in how directors' duties, the winding-up process and the strict leave and joinder rules that attend a company in liquidation become entangled in a single, hard-fought corporate dispute, and in the care the courts take to ensure that proceedings touching an insolvent company are properly constituted.