Adam Primus Varghese Bin Abdullah v KHEE SAN FOOD INDUSTRIES SDN. BHD. (WA-24NCC-455-09/2024)

The Plaintiff filed this Originating Summons to seek an order for payment of RM1,999,435.60 (including 6% SST) from the Defendant as remuneration for services performed by the Plaintiff and his team when he was a court-appointed Interim Judicial Manager (“IJM”).

The Plaintiff was appointed as IJM of the Defendant pursuant to an ex parte Order dated 17-11-2021 (“Order”) granted in WA-28JM- 21-11/2021 (“JM Suit”) on the application of Maybank Islamic Berhad. Issues on the recovery of his remuneration arose in circumstances where the Plaintiff was not ultimately appointed as the judicial manager. Procedural history

Maybank Islamic Berhad held 3.34% of the Defendant’s unsecured debt when the JM Suit was filed. The majority of creditors, including financial institution creditors (“FI Creditors”), Khee San Berhad, Tunai Impian Enterprise Sdn Bhd (“Tunai Impian”) as well as the directors of the Defendant, intervened and opposed the JM Suit. A total of eight (8) interveners joined the proceedings.

The JM Suit to place the Defendant under judicial management was discontinued by Maybank Islamic Berhad on 1-9-2022 before it was heard as part of a settlement between Khee San Berhad (“KSB”), the Defendant’s holding company, and the group’s FI Creditors. The creditors were in favour of a scheme of arrangement circulated by KSB.

The application to convene a scheme creditors meeting was filed on 12-9-2022 and the scheme eventually sanctioned in Kuala Lumpur High Court Originating Summons for WA-24NCC-1067- 12/2022 on 21-12-2022. The Plaintiff did not participate in the scheme as a creditor of the Defendant.

The Order appointing the Plaintiff lapsed on 1-9-2022 when the JM Suit was discontinued. Insofar as is relevant to the present suit for his remuneration, the Order contained the following terms:

Before the discontinuance of the JM Suit, the Plaintiff had filed an application for his remuneration as at 3-3-2022 to be approved on a time-cost basis with a composite rate of RM800 per hour for the Plaintiff and his team (“Enclosure 157”). This application was heard and dismissed on 20-3-2023, well after the IJM was discharged.

The reason for the dismissal of Enclosure 157 by the High Court is that the Plaintiff had not first secured an agreement with the Defendant or its creditors on his remuneration or, failing that, convened a meeting of creditors to approve his remuneration, before moving the Court. This 3-tier procedure is found in section 407(4) of the Companies Act 2016 (“CA”). In other words, Enclosure 157 was found to be prematurely filed.

The Plaintiff’s appeal against the decision of the High Court was dismissed on 9-1-2024 on a preliminary objection, i.e. when the appeal was filed, he was no longer the IJM with the capacity to proceed with the appeal in the name of the Defendant since the JM Suit had been discontinued. He had been discharged from office on 1-9-2022.

Thus, solicitors representing the Defendant had interjected in the appeal proceedings with the preliminary objection, which was upheld by the Court of Appeal. From the records, it appears that the Defendant withdrew the appeal filed in its name and the appeal was consequently struck off. In doing so, the Court of Appeal observed that the Plaintiff was not without remedy, as he may file a fresh action or proceed in the JM Suit as an intervener. Leave to appeal to the Federal Court was refused on 24-7-2024.

In September 2024, the Plaintiff filed this Originating Summons in a second attempt to fix his remuneration as IJM. It was met with the Defendant’s application to convert the Originating Summons to a writ action and, failing that, on 21-1-2025, an application for leave to cross-examine the Plaintiff on his affidavits. Both applications were dismissed on 21-8-2025. The Defendant’s appeals against both decisions were also dismissed. Analysis and findings

The prayers in the Originating Summons were as follows:

It is clear from the title of the Originating Summons, the Plaintiff’s response to the Defendant’s applications for conversion to writ and leave to cross-examine him and the position expressly stated in response to the Court’s query, that this Originating Summons is filed by the Plaintiff pursuant to a statutory entitlement to remuneration as the former IJM of the Defendant. It is not a suit for quantum meruit under section 71 of the Contracts Act 1950.

If so, then quite apart from the exercise of determining the quantum that constitutes fair and reasonable remuneration for the Plaintiff’s services as IJM of the Defendant from 17-11-2021 to 1-9-2022, the following preliminary questions were raised in the course of this hearing: a) statutory basis for the IJM’s entitlement to remuneration and the source of this Court’s jurisdiction to entertain this Originating Summons; and b) status of the Order as a subject of enforcement.

The Court raised this question. The Plaintiff filed the Originating Summons pursuant to Section 407(4)(c) of the CA even though the position it had taken in respect of Enclosure 157 is that the provision did not apply to an IJM. The Plaintiff maintained this position at the Court of Appeal, but the issue was never ventilated due to the procedural issue as mentioned.

The applicability of section 407(4) of the CA to the IJM is a fundamental question because in principle, this Court is guided by the Court of Appeal decision in Estate of Lim Tuan & Ors v Lim San Peen & Ors [2019] 2 MLJ 306 (“Estate of Lim Tuan”) where the Court of Appeal observed that it will amount to a misdirection if the Court fixes fees other than what is statutorily provided for.

Estate of Lim Tuan concerned an application by liquidators in a members’ voluntary winding up for the Court to fix their remuneration as an order for directions. The Court of Appeal held that the High Court had no jurisdiction to fix or direct liquidators’ remuneration under ss. 237(3) and 274 of the Companies Act 1965, because those provisions are not sections meant to fix remuneration: “[6] .. The appropriate section to fix remuneration for liquidator will be s 232 in the case of compulsory winding up and s 258 in members’ voluntary winding up. A reading of s 258 will suggest that the remuneration of a liquidator is one related to agreement of parties and not one sought through the direction of court. If there is a dispute as to remuneration, it will appear from the reading of ss 232 and 258, that a civil suit has to be filed in case of voluntary winding up and only in case of compulsory winding up, that the court may determine the issue of remuneration. Reliance on ss 237 or 274 to fix remuneration or seek direction is in our view, a flawed application and the learned judge ought to have dismissed the application in limine.” [Emphasis added]

The Plaintiff was appointed as an IJM pursuant to section 405(5)(b) of the CA on the power of the Court to make a judicial management order and appoint a judicial manager which reads as follows: “(5) Nothing in this section shall preclude a Court- …

from appointing, after the making of an application for a judicial management order and on the application of the person applying for the judicial management order, an interim judicial manager, pending the making of a judicial management order, and such interim judicial manager may be the person nominated in the application and may exercise such functions, powers and duties as the Court may specify in the interim order.”

The CA provides for the role, powers, duties of insolvency practitioners in the insolvency and restructuring regime of the CA. As it relates to the remuneration of private insolvency practitioners however, the provisions are not uniform. There are statutory provisions on a private insolvency practitioner’s entitlement to, and the fixing of, remuneration in the following capacities: a) liquidators (s. 454(1), s.479(2)); b) interim liquidators (s.479(1)); c) receivers & managers (s.387(1), Order 30 Rule 3 Rules of Court 2012); and d) judicial managers (s. 407(4)); but not in the capacity of an IJM.

In this Originating Summons, the Plaintiff referred to section 407(4)(c) of the CA, but also sections 414(5) and section 417(3)(b) of the CA, presumably as possible sources of the Court’s statutory jurisdiction to fix the IJM’s remuneration. Common to all these provisions is that they are expressed to apply to the remuneration of a judicial manager and not an interim judicial manager. a)

Section 414(5) of the CA is a general directions provision applicable to judicial managers and it reads: “The judicial manager may apply to the Court for directions in relation to any particular matter arising in connection with the carrying out of his functions.”

The Court of Appeal in Estate of Lim Tuan held that general directions provisions similar to section 414(5) of the CA (but for liquidators) are not meant to fix a liquidator’s remuneration. Although the observation was made in a different context where a specific provision on the remuneration of liquidators in a voluntary winding up (as was the case) existed, this Court considers that section 414(5) of the CA should not also be invoked to fill a gap in the statutory remuneration scheme where there is no specific provision, as in this case.

The prayers in this Originating Summons are not in the nature of directions under the Court’s general supervisory jurisdiction but an application invoking a statutory remuneration jurisdiction. Per Ooi Woon Chee & Anor v Dato’ See Teow Chuan & Ors and other appeal [2012] 2 CLJ 501, court directions to liquidators are advisory and supervisory in nature, and generally not appealable. This was also observed in Estate of Lim Tuan in rejecting the application in that case. b) Section 417(3)(b) of the CA

Section 417(3)(b) of the CA provides as follows: “(3) Where at any time a person ceases to be a judicial manager of a company whether by virtue of this section or by reason of his death- …

any remuneration and expenses properly incurred by him, shall be charged on and paid out of the property of the company in his custody or under his control in priority to all other debts, except those subject to a security to which subsection 415(2) applies.” Section 417(1) and (2) of the CA deals with the vacation of office and release of a judicial manager by reason of removal, resignation, cessation of practice as an insolvency practitioner or when a judicial management order is discharged.

Considering the words of section 417(3)(b) of the CA, the Court finds that it relates to the vacation of the office of a judicial manager under circumstances which do not apply to this case. It also does not confer any jurisdiction on the Court to fix the remuneration, but merely grants it priority of payment, however it is arrived at. The word “defrayed” presupposes an already ascertained sum.

There is also section 416(1)(c) of the CA, which neither party adverted to. It provides that: “(1) The judicial manager or interim judicial manager of a company …

shall be entitled to be indemnified in respect of that liability [for contracts], and to have his remuneration and expenses defrayed, out of the property of the company which is in his custody or under his control in priority to all other debts except those subject to a security to which subsection 415(2) applies.” The above sits in the section on “agency and liability for contracts” and subsection (a) and (b) of section 416(1) preceding the above extract, deem the judicial manager or interim judicial manager as agents of the company assuming personal liability for contracts entered into or adopted by him. As with section 417(3)(b) of the CA, section 416(1)(c) of the CA does not confer any jurisdiction on the Court to fix the remuneration. c)

As for section 407(4) of the CA, it was and remains the Defendant’s stand that the statutory basis for the IJM’s remuneration in this Originating Summons may be found in section 407(4) of the CA. The Defendant had taken precisely that position in opposing Enclosure 157 in arguing that there are preconditions before the jurisdiction of the Court under section 407(4)(c) of the CA may be invoked.

As noted, the High Court in the JM Suit agreed with the Defendant and dismissed the IJM’s claim for remuneration in Enclosure 157 as premature. Based on the authorities proffered by the Defendant on the interpretation of section 407(4) of the CA, it appears to be the case that the power of the Court to determine a judicial manager’s remuneration under subsection (c) may only be invoked if subsections (a) and (b) have been attempted and cannot be met (Poly Ritz Development Sdn Bhd v Datuk Tee Guan Pian [2020] MLJU 2517 (“Poly Ritz”); Sinong Sepadu Sdn Bhd v Chong Kwong Chin (dalam kapasitinya sebagai bekas pelikuidasi bersama bagi Kub Sepadu Sdn Bhd) & Ors [2026] MLJU 2633.

The Defendant’s position concerning applications filed in Court to fix the IJM’s remuneration was and remains that it is premature because no meeting of creditors has ever been called or attempted to be called by the IJM to approve his remuneration. Insofar as this Originating Summons is concerned, this Court disagrees.

An application to the Court under section 407(4)(c) for the fixing of a judicial manager’s remuneration is available in a situation where a determination of such remuneration in a meeting of creditors under paragraph (b) is practically impossible, not merely inexpedient or difficult (Re Molyneux Aluminium Pty Ltd [1970] VR 456). In Poly Ritz, the Court considered it common sense that a creditors' meeting can no longer be held for this purpose after termination of the winding up. Likewise, it is practically impossible for the IJM to convene a creditors’ meeting, much less secure any resolution on his remuneration.

As a former IJM (and one whose appointment was opposed by the majority of creditors), the Plaintiff had no standing to call for a creditors’ meeting after his discharge. As it transpired when the Plaintiff attempted to secure written feedback on his remuneration from creditors by letter, the general body of creditors of the Defendant had no incentive to respond one way or another, to a former IJM who has left office, and a majority did not bother to respond. For completeness, the results of the IJM’s inquiry were as follows:

That being said, even if the conditions for invoking section 407(4)(c) of the CA have been met in this case because it is practically impossible for him to secure an agreement or convene a creditors resolution to procure the passing of a resolution on his remuneration, this does not answer the question of whether section 407(4) of the CA applies to an IJM at all.

Notwithstanding that the parties are on common ground that section 407(4) of the CA applies, the Court finds it necessary to form a view on the matter. If the Court has no statutory jurisdiction to fix an IJM’s remuneration, it cannot be conferred by agreement of the parties.

As a matter of statutory interpretation, it is significant that the remuneration sections for court-appointed liquidators and judicial managers do not share the same structure: Section 479 – Remuneration of liquidators in winding up by Court Section 407 – Nomination of judicial manager

An interim liquidator other than the Official Receiver shall be entitled to receive the salary or remuneration by way of percentage or otherwise as is determined by the Court.

A liquidator other than the Official Receiver shall be entitled to receive such salary or remuneration by way of percentage or otherwise as is determined by-

an agreement between the liquidator and the committee of inspection, if any;

where there is no agreement or where there is no committee of inspection, a resolution passed at a meeting of creditors by a majority of not less than three-fourths in value and one-half in number of the creditors present in person or by proxy and voting at the meeting and whose debts have been admitted to vote, which meeting shall be convened by the liquidator by a notice to each creditor to which notice shall be

In any application for a judicial management order under section 404, the applicant shall nominate a person who is an insolvency practitioner, who is not the auditor of the company, to act as a judicial manager.

The Court may refuse the nomination of the applicant under subsection (1) and may appoint another person who is an insolvency practitioner as the judicial manager.

Where a nomination is made by the company under subsection (1), a majority in value of the creditors, including contingent or prospective creditors may be heard in opposition to the nomination and the Court may, if satisfied as to the value of the creditors' claims and as to the grounds of opposition-

invited the creditors to nominate a person who is an insolvency practitioner to act as the judicial manager; and attached a statement of all receipts and expenditure by the liquidator and the amount of remuneration sought by him; or

if the agreement or determination under paragraph (a) or (b) fails, the Court.

Where the salary or remuneration of a liquidator other than the Official Receiver is determined in the manner specified in paragraph (2)(a), the Court may, on the application of a member whose shareholding represent in the aggregate not less than ten per centum of the issued capital of the company, confirm or vary the determination.

Where the salary or remuneration of a liquidator other than the Official Receiver is determined in the manner specified in paragraph (2)(b), the Court may, on the application of the liquidator or a member referred to in subsection (3), confirm or vary the determination.

Subject to any order of the Court, the Official Receiver when acting as a liquidator or interim liquidator of a company shall be entitled to receive such salary or remuneration by way of percentage or otherwise as is prescribed.

adopt the nomination if the Court thinks fit.

A judicial manager shall be entitled to receive such salary or remuneration by way of percentage or otherwise as is determined-

by agreement between the judicial manager and the company or creditors, as the case may be;

failing such agreement, by a resolution passed at a meeting of creditors by a majority of not less than seventy-five per centum in value and of the creditors present in person or by proxy and voting at the meeting and whose debts have been admitted to vote, which meeting shall be convened by the judicial manager by a notice to each creditor to which notice shall be attached a statement of all receipts and expenditure by the judicial manager and the amount of remuneration sought by him; or

failing a determination in a manner referred to in paragraph (a) or (b), by the Court.

In the absence of a provision equivalent to section 479(1) of the CA in section 407 of the CA, one view that may be taken is that it is an intentional omission to leave the remuneration of an IJM as a matter of private contract between the IJM and the applicant if no judicial management order is ultimately made.

Section 405(4) of the CA does provide that the costs and expenses of any unsuccessful application for a judicial management order shall, unless the Court otherwise orders, be borne by the applicant. If so, then absent statutory jurisdiction, remuneration becomes a claim in debt or quantum meruit, which should be pursued in ordinary civil proceedings.

As far as the principles of statutory interpretation are concerned, the object and intent of Parliament in enacting the provisions on judicial management in the CA must be ascertained and given effect to and in doing so, the Court is limited to interpreting the words used by Parliament and not read words into a statute unless clear indication for this is found in the statute itself.

As it is not the province of the court to add or subtract any word and the duty of the court is limited to interpreting the words used by the Legislature, it has no power to fill in the gaps disclosed (Teobin Mostapa v Hulba-Danyal Balia & Anor [2020] 7 CLJ 561). It does not appear to be the scheme of the judicial management provisions in the CA that the term “judicial manager,” wherever used in the CA, was intended to also refer to an IJM. For example, a distinction is made in section 416 of the CA.

Considering section 479(2) of the CA as it applies to liquidators, and the distinct section 479(1) of the CA as it applies to interim liquidators, there was a deliberate provision for the 3-tier statutory remuneration scheme to apply to liquidators but not to interim liquidators. Likewise, the Court construes section 407(4) as inapplicable to an IJM, and there are practical reasons why that should be so.

The legislature may not have considered it necessary to provide a statutory remuneration scheme for an IJM since the issue should hardly arise when an IJM would ordinarily not remain in office for more than 60 days without either being confirmed as the judicial manager or being discharged as the case may be (see rule 9 of the Companies (Corporate Rescue Mechanism) Rules 2018).

That it is increasingly common for protracted judicial management applications to remain unresolved might be a good policy reason to allocate the risks of the costs of IJM appointments according to section 405(4) of the CA.

In the absence of a specific statutory basis for commencing a fresh action by Originating Summons to obtain the reliefs sought, the present proceeding must necessarily derive its juridical foundation from the Order itself. An alternative basis for the Plaintiff’s claim for this Court to fix his remuneration might be the terms of the Order itself.

To this point, the Defendant’s arguments are two-fold:

the Order was granted ex parte, is provisional and the challenge to its validity vide opposition to the JM Suit proper had no opportunity to be heard and decided on merits; and/or

the Order cannot be a lawful justification for further action since it lapsed on 1-9-2022 with the discontinuance of the JM Suit (Starr v Trafalgar Financial Corporation Ltd (No. 2)

8 ACLR 367 (“Starr”)). Provisional and subject to challenge

The Court is of the view that it is no longer open to the Defendant to challenge the validity of the Order. The appropriate course of action by the Defendant would have been to file an application in the JM Suit to set aside the Order and resist the discontinuance of the JM Suit until the disposal of that application.

However, no application was filed to stay or set aside the Order or to otherwise remove the Plaintiff as the IJM. In fact, the JM Suit was ultimately struck off with no order as to costs against Maybank Islamic Berhad. With the exception of Tunai Impian, none of the affected parties pressed for costs to be paid by Maybank Islamic Berhad.

The Defendant not only consented to the discontinuance of the JM Suit, but it also consented to its discontinuance with liberty to refile and no order as to costs. Thus, there is no doubt that the Order was valid and operative until it lapsed on 1-9-2022. Lapsed and of no further effect

As for the argument that no order may be made further to a lapsed Order, Starr concerned an ex parte order to appoint a provisional liquidator which was made without jurisdiction, and his claim for remuneration for work done before the order was rescinded. Although the order was held to be voidable and not a nullity (and therefore valid unless set aside), the Court held that no further action may be taken on a rescinded order: “It was submitted for the plaintiffs that, as the summons had been dismissed and the order appointing Mr. Grant rescinded, no power existed to order that he be paid his remuneration. I think the matter is to be considered more as one of substance than of one depending upon the order of events, but I agree with the submission that no further order of the court is appropriate or permissible. It seems to me that to order one of the parties to pay Mr. Grant’s remuneration would be to take “further action” on the rescinded order. What has been done has been validly done, but no further orders based upon the validity of that order would be justified.”

It was conceded by the Defendant that this case is distinguishable from Starr in a material respect, in that the Order was never rescinded, set aside nor has any jurisdictional or other such grounds been advanced to suggest that it is a nullity or void ab initio by operation of law.

In other words, the expiry of the Order does not extinguish the Court's jurisdiction to determine matters consequential upon, or incidental to, its earlier operation. It is an ancillary jurisdiction arising from the making of that Order, exercised for the purpose of giving effect to the rights and obligations that accrued while it remained in force. This arises in contexts such as the enforcement of undertakings as to damages given in support of ex parte orders, and applications for committal founded upon breaches committed while such orders were in force.

Thus, another possible juridical basis for the IJM’s entitlement to have his remuneration fixed by the Court, is that it is an ancillary jurisdiction of the Court arising from the IJM’s appointment by the Court under section 405(5)(b) of the CA, having regard to the terms of the Order and the existence of a provision like section 416 of the CA that expressly entitles the IJM to defray his remuneration from the assets of the company in priority to other debts.

However, the following consequential questions also arise in this case: a) In which forum and under what procedure is an application to be filed if it is filed pursuant to the ancillary jurisdiction to enforce the original Order; and b) what does paragraph 3 of the Order on the IJM’s appointment mean in circumstances when the CA does not prescribe the manner in which his remuneration is to be fixed. Forum for ancillary relief

The Plaintiff argued that conceptual difficulties stand in the way of intervening in the JM Suit to file an application to fix his remuneration when the JM Suit has been struck out. This is generally true, but there are exceptions where the court is exercising a continuing or ancillary jurisdiction over matters arising from the concluded proceedings.

The Court is of the view that the remedy prayed for in this Originating Summons ought properly to have been pursued by renewing the application made in Enclosure 157 in the JM Suit, after steps were taken by the Plaintiff through letters to the body of creditors of the Defendant known to him, to gather consensus on his remuneration.

Ultimately, however, this does not matter because the Order recognizes an entitlement to remuneration but does not itself prescribe the mechanism by which remuneration is to be quantified. It does not say that the remuneration and expenses of the IJM are to be fixed by the Court. All that paragraph 3 of the Order says is that: There is no part of the Order to enforce or give effect to at this stage, pending determination of the Plaintiff’s remuneration.

The closest analogy for the Plaintiff to find support for the fixing of his remuneration by the Court is Ler Cheng Chye & Anor v Billion Shopping Centre Sdn Bhd [2017] MLJU 1864 (“Ler Cheng Chye”) in the case of a former interim receiver and manager was appointed in a minority oppression petition. The appointment was effectively terminated on appeal when the Court of Appeal found it unnecessary and replaced him with a monitoring accountant.

The High Court in Ler Cheng Chye also distinguished Starr on the basis that the original appointment had never been rescinded or declared invalid, rejecting the argument that the Court of Appeal had set aside the original appointment, and instead held that the appellate order merely amended it prospectively.

It then proceeded to fix the remuneration of the former interim receiver and manager pursuant to Order 30 Rule 3 of the Rules of Court 2012 which provides that a person appointed receiver shall be allowed such proper remuneration, if any, as may be fixed by the Court.

In Ler Cheng Chye, the High Court held that as the appointment as interim receivers was valid for the period from 23 August 2010 until 20 July 2011, during which they lawfully discharged their duties as officers of the Court, the Court held: "...where an order appointing an interim receiver is subsequently amended and substituted to monitoring accountants, the interim receivers who were appointed by court as an officer of the Court remains entitled to his just remuneration and expenses during the validity of the appointment until the substitution."

It is worthwhile also noting that the appointment order in Ler Cheng Chye provided that the interim receivers be remunerated on a time-cost basis from the company’s assets, and those provisions were left undisturbed by the Court of Appeal when the order was varied on appeal.

In this case, the Order is ambiguous and adverting to the absence of any statutory jurisdiction of the Court to fix the IJM’s remuneration in the CA, all that the CA provides is found in section 416(1)(c) of the CA that the IJM’s remuneration shall be paid out of the assets of the Defendant in priority to other debts, which may cover the period that IJM is in office prior to confirmation as the judicial manager.

It seemed clear to the Court that the position of the Courts before which this matter had previously come up in respect of Enclosure 157 and indeed, the common position of all parties involved in the JM Suit, was that the Plaintiff should not be left without a remedy for his remuneration. In the absence of statutory jurisdiction, this points instead to the conclusion that the IJM must sue for his fees on a quantum meruit basis. Conclusion In conclusion, Enclosure 1 is dismissed with no order as to costs.

This Court reaches this conclusion with considerable hesitation. Case law has overwhelmingly favoured ensuring that fair and reasonable remuneration is paid to insolvency practitioners who execute a professional function in good faith. However, for the insolvency practitioner who undertakes IJM assignments, there is no statutory remuneration scheme the way that there is for interim liquidators. This is a matter for legislative intervention.

The IJM should be aware that the CA places the risk of an unsuccessful application for a judicial management order on the applicant and so he must look to the applicant for an indemnity. This not only acts as an automatic moderator of fees if they are ultimately chargeable to the financially distressed company, but this ensures that he is paid. Fair and reasonable remuneration

For completeness, this Court has also considered what fair and reasonable remuneration might look like in this case if the CA provided for a statutory remuneration scheme for IJMs.

Based on a statement of work covering the period 8-11-2021 to 26- 8-2022 (“Statement of Work”) submitted by the Plaintiff, he claims RM1,999,435.60 as fair and reasonable remuneration for the 2357.87 hours recorded by the IJM and his team members based on a composite hourly rate of RM800.00, derived as a discounted average of the hourly charge-out rate.

As a basis for determining the fair and reasonable remuneration of the IJM in this case, the Court has considered the Statement of Work and competing affidavit evidence against the guidelines on assessment of remuneration payable to liquidators locally. See Perumahan NCK Sdn Bhd v Mega Sakti Sdn Bhd [2005] 7 MLJ 389; Ong Kwong Yew & Ors v Ong Ching Chee & Ors and Other Appeals [2018] 1 LNS 2247 and Goh Swee Oh @ Khoo Swee Cheng & Ors v Heng Ji Keng [2010] MLJU 2.

Applying the guidelines that have emerged from case law on fixing the remuneration of liquidators, there is no formula based on realization or time-cost, nor any objective standard to measure the value contribution of the office-holder. Whether in a quantum meruit trial about benefits, expert assisted assessment or as a taxation exercise, there can be no scientific or mathematical precision to the question of what is fair and reasonable. Time-cost charge

In this case, this Court accepts that the time-cost approach provides the most objective starting point for determining the remuneration payable to the IJM for his services. The hourly rates of professional services providers typically capture the commercial, professional and economic value of the individual in his organization and are benchmarked against comparables in the market.

In 2021/2022, a charge-out rate of RM1,500.00 per hour for an experienced approved liquidator is within the market norm even if arguably on the high side for small firms with lower overheads. In that regard, this Court found nothing inherently unreasonable about the discounted composite rate of RM800.00 per hour. It is not excessive, having regard to the professional charges of lawyers, insolvency practitioners and consultants generally. Description of work done

Although much is made of the Plaintiff’s Statement of Work, it is not a contemporaneous timesheet generated by the individual timekeepers. The document appears to have been constructed, or reconstructed from another primary source. This is not a criticism of the document as a basis for determining the work undertaken by the Plaintiff and his team, as there is no reason to suppose that any of the entries are fictitious.

Based on the Defendant’s complaint about their interference in the business, there is no serious dispute that the Plaintiff did deploy a team of professionals from his firm to the Defendant’s premises between November 2021 and August 2022 in a “takeover” of management, so to speak. The Statement of Work appears to have undergone retrospective editorial refinement and rationalisation, including time write-offs and cosmetic revision of the narrative descriptions. Therefore, this Court accepts the Statement of Work at face value.

As the narratives in the Statement of Work disclose, when the Plaintiff and his team first mobilised to site, it is a proper function of an IJM to take control of the business, preserve operations, reassure suppliers, meet bankers, understand cash flow, stabilize production and communicate with employees, all of which would ordinarily attract remuneration. The principal issues that the Court found were with the period of claim, inappropriate resource allocation, excessive time entries and some element of unnecessary operational over-reach in the subsequent period. a) Period outside IJM appointment

The raw breakdown of the hours clocked in by month were provided as follows:

To start with, the period before and after the actual period of the IJM’s appointment is not recoverable. This Court can see no basis for fair and reasonable remuneration to include the 32 hours clocked in before 17-11-2021 and the 95 hours clocked in after 1- 9-2022, totalling RM101,600.00 before tax. The Plaintiff’s background work to pitch for the assignment before his appointment and steps taken to recover fees are unrelated to work of the IJM in exercise of his court-appointed powers, and for the benefit of the Defendant. b) Inappropriate resource allocation

The Statement of Work generally discloses over-manning or inappropriate resource allocation for the tasks described, over-servicing in the context of an IJM with a limited mandate of preservation and protection of assets, and the learning curve problem – the cost of the Plaintiff’s own inexperience in the attempt to forcibly take over management and implement operational changes.

As highlighted by the Defendant, the total time allegedly expended by the Plaintiff is 171.53 hours amounting to RM137,220.00, making up only 6.8% of total time-cost claimed. The remaining 93.2% of time-cost is for works allegedly done by members of his team. This is not in itself problematic as organizational leverage optimizes cost efficiencies in carrying out a range of tasks. However, the Plaintiff has designated comparably expensive resources as Project Leader, Assistant Project Leader and Team Leaders to perform the functions described. c) Excessive time entries

Time-based billing inevitably reflects some degree of inefficiency which the Court may take into account in assessing the appropriate remuneration. Specifically, the Court finds a recurring pattern of excessive attendance by multiple professionals at routine meetings and the deployment of senior personnel for administrative and operational tasks that could reasonably have been delegated.

For example, the time spent by five professionals in daily local commutes to the project site is arbitrary, excessive and unwarranted as totally unproductive time entries. There are also multiple internal conferences and unnecessary attendance on operational matters generally, having regard to the fact that the Defendant is a fully functioning and staffed manufacturing operation. d) Over-servicing

In the case of an IJM appointment made upon representations by the applicant that there is a risk of dissipation of assets pending the determination of the application for a judicial management order, the actual mandate of the IJM is necessarily limited even as he is empowered with broad ranging powers. An issue that troubled this Court is what may be considered over-servicing by the IJM during his term.

The Statement of Work indicates that the IJM and his team properly undertook the immediate stabilisation of the Company's affairs following their appointment. While some operational oversight was inevitable given that the Company continued to trade, the degree of operational intervention went beyond the limited preservative role ordinarily expected of an IJM pending the Court's determination of the judicial management application.

The time entries suggest that the team was not merely supervising the business but effectively assuming the role of executive management. The time entries included weekly management meetings involving the direction of production, sales and marketing strategy, planning for future operations and reorganisation of management structure. An interim appointment ordinarily focuses on preserving options until the Court determines whether judicial management should proceed.

The Court’s criticism is to the scope and proportionality of the Plaintiff’s activities before a rehabilitation plan is properly formed or approved. His actions may have ultimately benefited the company, but they are more characteristic of the functions of a judicial manager appointed after a judicial management order than those of an IJM charged primarily with preserving the status quo. e) Other factors

The Defendant also adverted to the Plaintiff’s failed attempts to secure his fees, that of his former solicitors and what appears to be a contractual liability he had undertaken with a foreign worker agency, and then to wind up the Defendant. These included self-help transfers of funds which ultimately did not reflect well on the Plaintiff. The Defendant criticized the Plaintiff’s interference which it says caused more detriment to the finances of the company.

There were also countervailing arguments by the Plaintiff that the IJM appointment achieved the objective of stabilizing the operations and improving the Defendant’s revenue and sales pipeline, that his presence increased operational transparency and restored confidence among stakeholders, which he says contributed to the buy-in by FI Creditors to the settlement and scheme of arrangement that was ultimately implemented.

The above factors are all disputed by the parties and there is insufficient evidence for this Court to make any conclusive findings whether the Plaintiff improved the finances of the Defendant or otherwise, whether the Plaintiff engaged in misconduct in the setting aside of funds for his remuneration (which was eventually returned) and whether the Plaintiff played an instrumental role in the eventual scheme of arrangement or otherwise. They are also completely subjective elements that are impossible to quantify in a remuneration claim.

Considering this Court’s observations about claims outside the IJM appointment period, inappropriate resource allocation and excessive time entries, and the disproportionate involvement by an unconfirmed IJM in executive management beyond the role of preservation, this Court would have quantified the Plaintiff’s remuneration by deducting RM101,600.00 for the period outside the IJM appointment and further one-half of the remaining hours to account for overmanning, over-servicing and other inefficiencies. This would have resulted in a remuneration of RM892,330.00 [with 6% SST chargeable on the same provided a tax invoice is issued]. Bertarikh: 28 Julai 2026 ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA KUALA LUMPUR Peguam Untuk Plaintif: Saritha Devi a/p Kirupalani (Katrina Ellen a/p Rameshvaran bersamanya) Tetuan Firoz Julian Untuk Defendan: Tharminder Singh a/l Ginder Singh (Mohamed Amir Syahmi bin Mohamed Nazir dan Jane Chan Ee Nin bersamanya)