Ahmad Ezmeel bin Ahmad Tarmizi for the Applicant/Plaintiff (Ahmad Azzam bin Ismail) [Messrs Exmeel & Co.] v 1. ) Ravenesan A/L Sivanesan for the 1 st to 3rd Defendant (1. Sri Alam Sdn Bhd, 2. Baltasar bin Maskor & 3. Wan Idris bin Wan Ibrahim) [Messrs S. Ravenesan] (WA-28PW-124-03/2022)

SRI ALAM SDN BHD (Company No.: 21739-T) (In Creditors’ Voluntary Liquidation)

BALTASAR BIN MASKOR (NRIC No.: 760626 -12-5211) [Being one of the Joint-Liquidators of

WAN IDRIS BIN WAN IBRAHIM (NRIC No.: 681003 -08-5107) [Being one of the Joint-Liquidators of

ABDUL RAHMAN BIN ZAINAL (NRIC No.: 680924-01-6013) …DEFENDANTS GROUNDS OF JUDGMENT (Enclosure 1)

In the Originating Summons dated 3.3.2022 (OS) in Enclosure 1, the Plaintiff is seeking pursuant to Order 7 and/or 28 of the Rules of Court 2012 and/or sections 510 and/or 517 of the Companies Act 2016 3 and/or rule 93 and/or 95 of the Companies (Winding Up) Rules 1972 and/or the inherent jurisdiction of this Court for the following orders and/or reliefs:- a) That leave, if necessary, be granted to the Plaintiff to proceed with this application against the Defendants; b) An extension of time, if necessary be granted to the Plaintiff to file and serve this application; c) That the decision of the 2nd and 3rd Defendants being the Joint Liquidators of Sri Alam Sdn Bhd (In Creditors’ Voluntary Winding Up) in admitting significant part of the 4th Defendant’s Proof of Debt dated 13th August 2020 to the extent of RM2,105,000-00 be reversed and/or modified by this Honourable Court; d) Alternatively, the 4th Defendant’s Proof of Debt dated 13th August 2020 be expunged by this Honourable Court; e) That the 2nd and 3rd Defendants’ decision in admitting significant part of the 4th Defendant’s Proof of Debt dated 13th August 2020 to the extent of RM2,105,000-00 be deemed and declared as erroneous and improper; f) An interim injunction to restrain the 2nd and 3rd Defendants from making full and final distribution of dividends to 4th Defendant pursuant to his Proof of Debt dated 13th August 2020 to the extent of RM2,105,000-00 from the assets of the 1st Defendant pending disposal of this action; g) That the costs to be paid from the assets of the 1st Defendant in favour of the Plaintiff; and h) Such further orders and/or other directions be given and/or made as this Honourable Court deems fit and proper. 4

The grounds in support of the OS are in brief as follows:-

The admitted amount of RM2,105,000-00 is the alleged outstanding professional consultant fees due by the 1st Defendant to the 4th Defendant.

(ii) The 2nd and 3rd Defendants were erroneous in admitting the sum of RM2,105,000-00 as Abdul Rahman Bin Zainal is not the consultant who rendered consulting service s and/or prepared the valuation report in relation to the Land Acquisition matters pertaining to Lots 3777 (New Lot Numbers 5335 and 5336) and 5539, Mukim of Dengkil, District of Sepang, State of Selangor. The actual consultant who rendered services for Haji Ismail is DMC Brooke Hillier Parker Sdn Bhd.

(iii) This is evidently shown by the Valuation Report prepared by DMC Brooke Hillier Parker Sdn Bhd where it is stated under the title of the report as “Prepared under the instruction of Tuan Haji Ismail Bin Mohamad”.

(iv) Further, the professional fees in relation to the said Land Acquisition matters has been agreed upon between the late Haji Ismail and DMC Brooke Hillier Parker Sdn Bhd in the sum of RM10,000.00 for every RM1,000,000.00 of compensation awarded over and above the original figure of RM5.50 per square foot on 1.3.1999.

Additionally, the registered proprietor for Lots 3777 (New Lot Numbers 5335 and 5336) and 5539 is Haji Ismail Bin Mohamad and thus any consultancy services rendered to Haji Ismail in his personal capacity are not relevant to the 1st Defendant.

(vi) Therefore, the admission of the purported professional consulting fees is erroneous and absurd in which no reasonable 5 and prudent liquidator would come to the said decision in the circumstance of the case, therefore the decision should be reversed by this Honourable Court.

(vii) On 1.3.2022, the 2nd and 3rd Defendants had issued an email to the Members of the Committee of Inspection informing that the 2nd and 3rd Defendants intend to make full and final distribution of dividends to the creditors on the admitted POD, wholly and/or partly on or before 7.3.2022.

Prior to the placement of the 1st Defendant into Members’ Voluntary Liquidation, the late Haji Ismail was involved in an Appeal Case of the Land Acquisition pertaining to Lots 3777 (New Lot Numbers 5335 and 5336) and 5539, Mukim of Dengkil, District of Sepang, State of Selangor around end 2002 (“the said Appeal Case”).

In this connection, Haji Ismail has appointed various professionals including Messrs. Azlina Abdul Aziz (advocates & solicitors) and valuer, DMC Brooke Hillier Parker Sdn Bhd (“DMC”) who have rendered professional consulting services to Haji Ismail in relation to the said Appeal Case.

On 31.1.2013, the Board of Directors of the 1st Defendant passed a directors’ resolution to place the 1st Defendant under members’ voluntary liquidation whereby Mr. Lim Tian Huat (“LTH”) and Wan Mohamad Shukri bin Wan Ab. Kadir 6 (“WMS”) were appointed as the joint-liquidators of the 1st Defendant.

On 13.02.2015, LTH resigned, and WMS was the only liquidator of the 1st Defendant.

On 16.05.2019, WMS called the 1st Creditors’ Meeting. During the meeting, WMS converted the status of liquidation of the 1st Defendant to creditors’ voluntary liquidation and further appointed the 3rd Defendant as the Joint Liquidators of the 1st Defendant.

On 05.06.2020, pursuant to the Consent Order, WMS was removed and/or resigned and replaced by the 2nd Defendant.

Thereafter, the 2nd and 3rd Defendants become the current Joint Liquidators of the 1st Defendant.

On 9.2.2022, the Plaintiff’s solicitor wrote to the 2nd and 3rd Defendants seeking the details of the total debts due and owing to all creditors and a copy of the 4th Defendant, Abdul Rahman Bin Zainal’s (“ARZ”) Proof of Debt (“POD”), as the Plaintiff has never been given a copy. On 10.2.2022, the Joint Liquidator responded and extended a copy of ARZ’s POD dated 13.8.2020 together with the summary of the Proof of Debt for all creditors.

The Plaintiff had submitted amongst others that:- 7

11.1 The Plaintiff is one of the contributories of the Company and has the necessary locus standi to commence the OS

11.2 the Court should interfere and reverse the decision of the Joint Liquidators in partially admitting the 4th Defendant’s POD to the extent of RM2,105,000 11.3 the Joint Liquidators had not addressed themselves to the correct questions and/or have made an error of law 11.4 the Joint Liquidators had taken into account entirely irrelevant considerations 11.5 the Joint Liquidators had acted in a way no reasonable liquidator would have acted 11.6 the 4th Defendant could not be the consultant who rendered consulting services and/or prepared the valuation report for Hj. Ismail, the majority shareholder of Sri Alam as this was done by DMC Brooke Hillier Parker Sdn Bhd (DMC)

11.7 the 4th Defendant had failed to provide sufficient and/or relevant supporting documents which was fatal 11.8 There is no explanation on the rejection of the RM70,000 by the Joint Liquidators which arose from the same transaction

There was an allegation of delay in filing the OS by the Liquidators, which the Plaintiff rebuts. 8

After considering the circumstances of the matter before me, in particular the following evidence, I find no inordinate delay in filing the said OS with the said evidence being:-

13.1 the Plaintiff had only received the POD from the Liquidator on10.2.20022 as seen in exhibit AAI-4 of Enclosure 2 13.2 the Plaintiff had only received the Notice of Rejection of the POD on 2.3.2022 as per exhibit AAI-5 of Enclosure 2 13.3 the Plaintiff had to retrieve all the relevant documents and needed time to do so

Section 517 of the Companies Act 2016 reads: Any person aggrieved by any act or decision of the liquidator may apply to the Court which may confirm, reverse or modify the act or decision complained of and make such order as it thinks just.

It is at this juncture also relevant to refer to Rule 93 of the Companies (Winding Up) Rules 1972 which states: If a creditor or contributory is dissatisfied with the decision of the liquidator in respect of a proof, the Court may, on the application of the creditor or contributory, reverse or vary the decision; but subject to the power of the Court to extend the time, no application to reverse or vary the decision of the liquidator in a winding up by the Court shall be entertained, unless notice of the 9 application is given before the expiration of twenty-one days from the date of service of the notice of rejection.

From the evidence before me, the 4th Defendant had lodged the POD dated 13.8.2020 to claim for outstanding professional charges and other disbursements via the 4th Defendant’s letter dated 18.10.2016 as seen in exhibit AAI-4 of Enclosure 2.

This Court agrees with the Plaintiff’s learned counsel that there does not appear to be a letter of appointment for the alleged services rendered by the 4th Defendant. However, this is not a legal pre requisite for a person or entity to be appointed as a consultant as there may be other extrinsic evidence available to the Court, which this Court has to gather from the documents before it and the surrounding facts of the matter at hand, to make a determination as to whether the said 4th Defendant had indeed been appointed by Hj. Ismail or the Company, Sri Alam to act as its consultant.

From the documents before this Court, it is my finding that DMC had rendered professional consulting services to Hj. Ismail in relation to the Land Acquisition as seen in the Valuation Report prepared by DMC dated November 2000 in exhibit AAI-6 of Enclosure 2 where under the Terms of Reference in Item 1.0 of the Report is stated that:- “We have been instructed by Tuan Hj. Ismail Bin Mohamad to determine the Market Value of Lots 3777…for the purposes of determining the quantum of compensation payable to the registered owner…” 10

I however note that in the POD lodged by the 4th Defendant, one of the supporting documents in exhibit AAI-4 of Enclosure 2 (in Bahasa Malaysia) in the document entitled “Tuntutan Baki Bayaran Kerja-Kerja Perunding” states; “Okt 2002, Sri Alam (Hj Ismail) melantik Abdul Rahman Zainal (ARZ) sebagi perunding dan/atau penasihat unutk menyusun semula strategi bagi memastikan kes bantahan bantahan Mahkamah berjaya dengan jumlah kenaikan tambahan yang lebih baik serta tempoh penyelesaian yang lebih singkat” and in the next paragraph it then states; “Sri Alam (Hj Ismail) bersetuju untuk membayar RM0.15 skp daripada jumlah kelulusan tanah (bersamaan dengan RM3.325 juta) sebagai consultant fees”

There is also before this Court, a letter dated 25.9.2003 from the Selangor State Legal Advisor’s Chambers where the 4th Defendant was copied as seen in exhibit AAI-4 of Enclosure 2 where the 4th Defendant’s name is attentioned to under the CC to Setia Haruman Sdn Bhd, which is prima facie evidence of the 4th Defendant’s involvement and his presence at a meeting held at the State Legal Advisor’s Chambers on 18.9.2003 as seen in paragraph 6 of that letter. I see no reason for the 4th Defendant to be present vis a vis his Company, Setia Haruman Sdn Bhd, had he not be involved in some way with the discussions and negotiations with the state via vis the Land. 11

In further support of my finding it is important to note that Mohamed Bin Mustapha, a director of the Company since 1979 who had also acted as a Company Secretary for the Company for a number of years, and the right hand man of Hj. Ismail, had sworn and confirmed in a Statutory Declaration dated 10.8.2020 inter alia that:-

he had met the 4th Defendant in the year 2000 and the Company had appointed the 4th Defendant in the year 2004 as their consultant to carry out the services as a “Land Consultant” whose “primary roles was to ensure the success of the appeal while enhancing the potential settlement value of the aforesaid Sepang Land” and that “consultancy fees was agreed upon”

(ii) the 4th Defendant had “revised and re strategized the approach in respect of the settlement with the Government and with his in-put and fact finding, a much improved offer was made to the Government to settle out of court”

(iii) the 4th Defendant had “significantly contributed in obtaining the additional sum of RM158,991 million from the Government

(viii) the 4th Defendant had been paid the sum of RM900,000 being part payment of his consultancy fees

(ix) there is still a significant amount owing to the 4th Defendant which remains unpaid to dated

It was also averred to this Court at the said public examination of Mohamed bin Mustapha who is one of the 1st Defendant’s director on 1.11.2021 and a close confidante of the late Hj. Ismail, before this Court in relation to a related matter concerning the 1st Defendant; vis 12 a vis WA-28PW-106-04/2021, that the Plaintiff was not privy to this arrangement with the 4th Defendant.

On this and other evidence available to the Liquidator, I rely on and quote as well as accept this to be the correct proposition of law in our jurisdiction as per the Singapore Court of Appeal decision in Fustar Chemicals Ltd (Hong Kong) v Liquidator of Fustar Chemicals Pte Ltd (2009) SGCA 35; [2009] 4 SR 458 para 10 where it was held: “..the liquidator must assess every proof of debt lodged and may call for further evidence in support of the claim. In considering a proof, the liquidator is not bound by the audited accounts or audit confirmations entered into by the company, and is entitled to go behind them to determine the veracity of the debt claimed (In re Van Laun; ex parte Pattullo [1907] 1 KB 155 at 162;Re Ice-Mack Pte Ltd; AA Valibhoy & Sons (1907) Pte Ltd v Official Receiver [1989] SLR 876 (“ Re Ice-Mack”)). [14] These principles apply to the winding up of both solvent and insolvent companies. In Re Menastar Finance Ltd (in liq), Menastar Ltd v Simon [2003] 1 BCLC 338 (a case of an insolvent company), Etherton J said the liquidator has a duty to “ensure that the assets of the insolvent company Page 465 are distributed amongst those who are justly, legally and properly creditors …’” [emphasis added] at [46]. Only the true liabilities of a company should be met.’

This Court further holds that the previous part payment of RM900,000 to the 4th Defendant by the Company is in fact an admission of 13 services provided by the 4th Defendant and consequently the debt owed to the 4th Defendant.

I have further observed that the liquidator had also acted on the documents evidencing that the late Hj. Ismail had held the Land as a trustee of the Company as seen in the ‘Surat Akuan” dated 3.1.1995 signed by him and the Company Resolution dated 7.9.1977 which affirmed the same and which are both in the records of the Company to be found in exhibit WI-3 of enclosure 16.

Based on all of the above evidence, I hold that the Liquidator was, on a balance of probabilities, correct to have found :

DMC had prepared the Valuation Report dated November 2000 in respect of the Land; and

that the 4th Defendant was in fact engaged by the Company to “menyusun semula strategi bagi memastikan kes bantahan bantahan Mahkamah Berjaya” i.e to restructure strategies to ensure the Court objection cases succeed.

I further hold that it was up to the Company to engage any number of consultants that they wish to act in whatever capacity they may be appointed for so long as the said appointment is not illegal in law or against public policy, in other words in contravention of Section 24 of the Contracts Act 1950 which reads: The consideration or object of an agreement is lawful, unless:

it is forbidden by a law; 14

it is of such a nature that, if permitted, it would defeat any law;

it is fraudulent;

it involves or implies injury to the person or property of another; or

the court regards it as immoral, or opposed to public policy. In each of the above cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.

Therefore, in the matter before me there was nothing wrong, illegal or improper for the Company to engage the 4th Defendant for the aforesaid reason and that it was clear to me that DMC’s function was to prepare the Valuation Report for the Land whilst the 4th Defendant was appointed to ‘ensure the success of the appeal while enhancing the potential settlement value of the aforesaid Sepang Land’ which for all intents and purposes was a different function from that of a land valuation done by DMC.

Accordingly, I hold that the 4th Defendant had come within the ambit of section 2(d) of the Contracts Act 1950 in that the promisee had done something at the desire of the promisor and the act of the promisee can be construed as consideration for the promise where the said section 2(d) provides that:-

when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, 15 such act or abstinence or promise is called a consideration for the promise;

A case on point for the above can be found in Ahmad Zaini bin Japoar v TL Offshore Sdn Bhd [2002] 7 MLJ 604 which was referred to me by learned counsel for the Liquidator where it can be seen in the ‘Held” portion of the grounds of judgment that the plaintiff therein had expended his exertions in securing a contract and he was successful in his endeavours and the Court therein had held that:-

what the plaintiff did came within the ambit of s 2(d) of the Contracts Act 1950 in that the promises had done something at the desire of the promisor,

(ii) the act of the promisee can be construed as consideration for the promise

(iii) there the plaintiff promised that he would assist in obtaining the contract and in return, the defendant promised to pay the plaintiff RM12 million for the service

(iv) the exchange of mutual promises, although executory, was a good consideration under the law

there was a binding contract between the parties

It was held in Sunrise Megaway Sdn Bhd v Kathryn Ma Wai Fong [2021] 3 MLRA 617 that:- “The onus of establishing that a proof of debt was improperly admitted rests on the person who makes this assertion, in this case 16 it is the respondent [See McPherson's Law of Company Liquidation, 3rd Edition, Sweet and Maxwell 2013,”

It is also stated Wong Sin Fun & Ors V Ng Pek Yam @ Ng Pek Yeow & anor [2013] 2 MLJ 629 by the Federal Court that a court should be slow to interfere with the findings of a liquidator where the Court had held: “… we are of the view that the court should be slow to interfere with any act or decision of the liquidators in discharging their roles in company liquidation and will do so only if it is so unreasonable and absurd that no reasonable person would have acted in that way. The court will not interfere with the decision simply because its opinion might differ from that of the liquidator “

See also Teow Guan & Ors V Liquidators of Kian Joo Holdings Sdn Bhd (In Liquidation) [2008] 1 CLJ 218 where the Court of Appeal held that:- “The court would only interfere with the exercise of the liquidator's discretion where he acted in bad faith or his decision was perverse and since there were no allegations of this nature the court would not interfere.”

Based on my above findings and applying the above authorities, I hold that the Plaintiff has failed on a balance of probabilities to show that the POD was improperly admitted and that this Court has found that Liquidator’s actions in admitting the POD was not so unreasonable and absurd that no reasonable person would have acted in that way or that he had acted in bad faith. Thus, this Court 17 holds that the Liquidator had addressed the correct questions in coming to his decision to admit the said POD as per Andrew Christopher Chuah. Choong Eng Chuan v Ooi Woon Chee & Anor [2007] 2 MLJ 12. Hence forth, this Court will not in the circumstances, interfere with the exercise of the liquidator's discretion herein in admitting the said POD of D4.

Enclosure 1 is therefore dismissed with costs. Dated: 20th day of June 2022 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE KUALA LUMPUR HIGH COURT Parties: Ahmad Ezmeel bin Ahmad Tarmizi for the Applicant/Plaintiff (Ahmad Azzam bin Ismail) [Messrs Exmeel & Co.] Ravenesan A/L Sivanesan for the 1st to 3rd Defendant (1. Sri Alam Sdn Bhd, 2. Baltasar bin Maskor & 3. Wan Idris bin Wan Ibrahim) [Messrs S. Ravenesan] Jason Chan Wa Chiang and Kelly Khoo Seo Ju, Lee Xin Yi and Serene Lee Min May for the 4th Defendant (Abdul Rahman bin Zainal) [Messrs Malis & Khoo]