29 August 2025
COMPANY LAW
Liquidator’s fee – Leave of Court – Winding Up Proceedings – Bare Trustee
Andrew Heng & Anor v Chong Kok Wooi (acting in his own capacity and also representing the group of owners of the condominium units at Marinox Sky Villas)
Civil Appeal No. P-02-(NCvC)(A)-431-03/2024 | Court of Appeal
– see the grounds of judgment here
Facts The 2nd Appellant, Masmeyer Development Sdn Bhd (“the Company”), was the developer of a project known as Marinox Sky Villas in Penang. The Respondent, Chong Kok Wooi, purchased one of the units under a Sale and Purchase Agreement dated 2 December 2013. The Company was wound up by the Penang High Court on 18 July 2019, and the 1st Appellant, Andrew Heng, was appointed as liquidator on 30 January 2020. Following his appointment, the individual strata titles were issued, and by letter dated 4 August 2020, the liquidator imposed an administrative fee of RM8,000 per purchaser for the execution of the Memorandum of Transfer (“MOT”). The Plaintiff, on behalf of 33 purchasers, filed an Originating Summons (“OS”) challenging the fee. The High Court allowed the OS, holding that the fee was unfair and unreasonable, reducing it to RM1,000 per unit, and further held that leave of court was not required for the Respondent to commence proceedings against the liquidator. The Appellants appealed.
Issues 1. Whether leave of court was required before the Plaintiff could commence proceedings under section 517 of the Companies Act 2016 (“CA”) against the liquidator and the wound-up company; and
2. Whether the liquidator acted within his powers under the CA in imposing the RM8,000 administrative fee.
Held In delivering the judgement of the Court of Appeal, YA Datuk Azhahari Kamal Bin Ramli, allowed the appeal and set aside the High Court’s decision. The Court held that as a court-appointed liquidator, the 1st Appellant is an officer of the court, and consistent with the Federal Court’s decision in N Chanthiran Nagappan v Kao Che Jen [2023] 5 MLRA 247, leave of the winding-up court is required before any action may be commenced against a liquidator. This requirement applies equally to proceedings brought under s. 517 CA, as such proceedings involve challenging acts or decisions of the liquidator. The Court also found that leave of court was similarly required to proceed against the wound-up company under s. 471(1) CA. Since no leave was obtained, the Respondent’s OS was incompetent. On this basis alone, the Court of Appeal allowed the appeal, dismissed the Respondent’s OS, and ordered costs of RM15,000 to the Appellants.
Zul Rafique & Partners
{29 August 2025}
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