Jabatan Insolvensi Malaysia v Kuik Sian Ping (PA-28PW-28-07/2024)

(M) Sdn Bhd (No. Syarikat: 658810-H) PEGAWAI PENERIMA SEBAGAI PENYELESAI (MEGA FASTERNERS (M) SDN BHD) (NO. SYARIKAT: 658810-H …PEMOHON DAN KUIK SIAN PING (NO. K/P:730512-07-5335) …RESPONDEN Page 2 of 11 JUDGMENT (REMOVAL OF CAVEAT IN POST WINDING UP PROCEEDINGS) PRELUSION [1] Mega Fasteners (M) Sdn Bhd (Company) was wound up by Court Order. The Official Receiver (OR) was appointed the liquidator. [2] The OR (liquidator) is in the process of identifying and calling in the Company’s assets, vesting the properties, liquidating them, and distributing dividends to the creditors. [3] The OR found that the Company owned six properties. The OR also found that the Respondent (R) had entered private caveats on two of the properties. [4] The Companies Act 2016 (CA 2016) provides that in the liquidation process, the OR has the duty (and hence the right) to take custody of, or to take under his control, the Company’s properties. The OR can also apply for a Court Order that the Company’s properties vest in the OR (as liquidator). [5] This proceeding is the OR’s post-winding up application for a Court Order to remove the two caveats that R entered on the two properties, so that the properties can be vested in the OR. Should the caveats be removed so that the OR can deal with the properties in the liquidation process? PERTINENT STATUTORY PROVISIONS Page 3 of 11 [6] Section 483 of CA 2016 provides that when a winding up Order is made against a company, the liquidator (here: the OR) must “take into his custody or under his control” all the company’s property. It provides that the OR can apply for a Court Order to vest the property in the OR. It also provides that the OR can file proceedings relating to the property in the liquidation process. [7] The pertinent parts of section 483 of the CA 2016 (sections 483(1),

and (3)) are set out below for reference (with my emphases added)— Section 483. Custody and vesting of company’s property

Where an interim liquidator has been appointed or a winding up order has been made, the interim liquidator or liquidator shall forthwith take into his custody or under his control all the property to which the company is or appears to be entitled.

On the application of the liquidator, the Court may order that all or any part of the property belonging to the company or held by trustees on behalf of the company shall vest in the liquidator and the property shall, subject to subsection (3), vest accordingly and the liquidator may, after giving such indemnity, if any, as the Court directs, bring or defend any action which relates to that property or of which is necessary to bring or defend for the purpose of effectually winding up the company and recovering its property.

Where an order is made under subsection (2), every liquidator in relation to whom the order is made shall within seven days of the making of the order—

lodge an office copy of the order with the Registrar; and

where the order relates to land, lodge an office copy of the order with the appropriate authority concerned with the registration or recording of dealings in that land. Page 4 of 11 [8] Section 327 of the National Land Code 1965 (NLC) provides that any person aggrieved by a private caveat can apply for a Court Order to remove it. [9] The pertinent parts of section 327 of the NLC (sections 327(1) and

(2)) are set out below for reference (with my emphases added)— Section 327. Removal of private caveats by the Court.

Any person or body aggrieved by the existence of a private caveat may at any time apply to the Court for an order for its removal, and the Court (acting, if the circumstances so require, ex parte) may make such order on the application as it may think just.

The Registrar shall, on being duly served with any order under this section for the removal of a caveat, cancel the entry thereof on the register document of title, and note thereon the reason for the cancellation and the date thereof. [10] Section 417 of the NLC provides that the Court can order the land registrar and land administrator to do anything necessary to give effect to a Court Order in any proceeding relating to land. It also provides that the Court can order the cancellation of any instrument (like a private caveat) or any entry on any instrument. [11] The pertinent parts of section 417 of the NLC (sections 417(1) and

(2)) are set out here for reference (again with my emphases added)— Section 417. General authority of the Court.

The Court or a Judge may by order direct the Registrar or any Land Administrator to do all such things as may be necessary to give effect to any judgment or order given or made in any proceedings relating to land, and it shall be the duty of the Registrar or Land Administrator to comply with the order forthwith. Page 5 of 11

Where, pursuant to any order made by virtue of this section, the Registrar or any Land Administrator -

cancels any instrument relating to land, or any memorial or other entry on any such instrument, or

makes any other amendment of, or addition, to, any such instrument, he shall note thereon the reason for the cancellation, amendment or addition, and the date thereof, and shall authenticate the same by his signature and seal. PERTINENT CASE LAW [12] Case law authority applies section 483 of the CA 2016. Case law authority held that section 233 of the Companies Act 1965 (now section 483 of the CA 2016) permits the liquidator to “take into his custody or under his control all the property to which the company in winding up is or appears to be entitled”. Section 233 of the Companies Act 1965 (section 483 of the CA 2016) also “empowers the court to vest in the liquidator all or any part of the property” belonging to the company in liquidation—Hor Chin Ser & Anor v Villa Genting Development Sdn Bhd (in liquidation) & Ors and Other Appeals [2017] 1 MLJ 311 (CA); [2017] 5 CLJ 17; [2016] MLRAU 490; at paragraph [11]. [13] Hor Chin Ser (supra) and section 483 of the CA 2016 were also applied in the case law authority of Ketua Pengarah Insolvensi v Setiausaha, Lembaga Wakaf Hindu Pulau Pinang & Anor Appeal [2020] 5 CLJ 295 (CA); [2020] 4 MLRA 304; [2020] MLJU 313; [2020] AMEJ 0187; at paragraph [30]. PERTINENT CHRONOLOGY OF FACTS [14] I set out here a chronology of facts pertinent to this proceeding—

10.12.2019—The Company was wound up and the OR was appointed the liquidator;

25.3.2021—R entered private caveats on two of the Company’s properties (with these title particulars: GM 6428, Lot No. 12963, Mukim 15, Seberang Perai Tengah, and GM 6427, Lot No. 12962, Mukim 15, Seberang Perai Tengah);

April to June 2023—the OR asked R to withdraw the two caveats, but R refused to. R’s OPPOSITION TO THE OR’s APPLICATION [15] R filed an Affidavit In Reply (AIR) to oppose this application. But R did not file any written submissions. From R’s AIR, it can be seen that R mounts the following arguments—

R raises a “preliminary objection” that “an application to cancel a caveat” concerns the NLC. The application should have been made “by summons in chambers or by a fresh action”. This application “does not concern winding up procedure”— paragraph 7 of the AIR.

R is “in the process of filing court proceedings to challenge the winding up order”, and he “reserves his right” to file a further affidavit “to exhibit the cause papers”—paragraph 10 of the AIR.

If the winding up order is challenged, the OR “would have no right to administer any property” until those proceedings are determined—paragraph 12 of the AIR.

The land search that the OR exhibited in its affidavit in support of this application was dated 31.10.2022, which was done two Page 7 of 11 years before. The OR should exhibit the latest land search— paragraph 13 of the AIR.

R has a caveatable interest over the two properties concerned, “on the ground that he is in the process of taking action to set aside the winding up order”—para 14 of the AIR.

When the OR refers to the two private caveats in the OR’s affidavit in support of this application, the OR did not refer to the specific private caveat presentation numbers. This has “confused (mengelirukan)” R—paragraph 15 of the AIR. MY FINDINGS [16] I find R’s arguments untenable. My reasons are as follows. One— at the hearing of this application, I asked R to refer me to the statutory provision that states that an application to remove a private caveat must be made under the NLC and the procedure set out under the NLC, or that they cannot be made under the CA 2016. R could not give me an answer. R could not refer me to the applicable provisions. [17] Instead, I am mindful that section 327 of the NLC provides for the removal of private caveats by the Court. It provides that any person aggrieved by the private caveat (here: the OR) may at any time apply for a Court Order for its removal. And the Court may make such an Order as it thinks just. [18] In other words, an application to remove a private caveat does not necessarily have to always follow the filing of forms prescribed under the NLC for the removal of private caveats. Page 8 of 11 [19] The OR is aggrieved by R’s private caveats over the two properties because the OR has a duty, as liquidator of the Company, to deal with the two properties (as with all the Company’s assets) to liquidate them, and to pay the Company’s creditors who have lodged their proofs of debt. [20] Also, in the intitulement of this post-winding up application, the OR has indeed stated that one of the provisions under which the OR is making this application is section 327. [21] Two—R avers that he intends to file court proceedings to set aside the winding up order made against the Company. And for this purpose, he reserves his right to file further affidavits in this proceeding to exhibit the cause papers in the intended application to set aside the winding up order. However, he affirmed his AIR on 5.12.2024. The hearing of this application was on 3.3.2025, which was three months after he affirmed his AIR. Yet, R has not filed the intended application to set aside the winding up order. [22] More critically, the Company was wound up on 10.12.2019 (more than five years ago). But R has not filed his intended application to set aside the winding up order made against the Company through the five years. [23] Three—R asserts that once he challenges the winding up order, the OR can no longer carry out the liquidation process. But R has failed to show any statute law or case law that supports this assertion. [24] Four—R complains that the OR had exhibited an outdated land search to prove that the two private caveats are binding the two Page 9 of 11 properties. But R does not submit as to how this alleged shortcoming on the part of the OR assists R in the merits of this application. And I do not see how this issue or matter favours R. [25] Five—in his AIR, R asserts that he has a caveatable interest in the two properties because he is in the process of applying to set aside the winding up order made against the Company. But I reiterate that R has not done what he said he would do. He has not filed any application to set aside the winding up order. [26] At the hearing, I asked R to demonstrate that he has a caveatable interest to sustain the private caveats he entered on the two properties. R could not give me an answer, much less a satisfactory answer. [27] Six—R complains that the OR omitted to state or cite the presentation numbers of the private caveats he lodged over the two properties. He complained that the OR’s omission “confused” him. [28] This argument is incomprehensible. The presentation numbers are available for R’s reference. The two private caveat presentation numbers are stated in the land search that the OR conducted on the two properties, which the OR exhibited in his affidavit in support of this application. [29] Seven—in addition to the six points that R raised in his AIR, at the hearing of this application, R submitted that he was one of the shareholders in the Company. He took action against the Company and its three directors. The parties recorded a consent judgment (on 17.9.2015). But even though a consent judgment was agreed on, the Company and the directors appealed. Their appeal was dismissed. Page 10 of 11 [30] I cannot comprehend—because R fails to explain or demonstrate—how this reference to the proceedings between him and the Company and its directors, is supposed to persuade me not to make an order to remove the two private caveats so that the OR can carry out performing the liquidation exercise on the Company. [31] Eight—I consider the justice of the case. Firstly, I find that R has failed to produce evidence that he has any caveatable interest to sustain the private caveats binding the two properties. Secondly, R lodged the private caveats instead of applying to terminate the winding up of the Company, or filing proceedings to apply for reliefs or remedies that will crystallise his rights and interests in the two properties. R’s private caveats over the two properties are a hindrance to the liquidation process. Thirdly, the OR needs to get the private caveats removed, before the OR can make an application to vest the properties in the OR (per section 483 of the CA 2016). Fourthly, I have to consider the interests of the Company’s creditors in this liquidation process. [32] I therefore find that it is fit and just to order the removal of the two private caveats that R entered over the two properties that the Company owns. CONCLUSION [33] In conclusion, I grant the orders to remove the two caveats that R entered over the two properties that the Company owns. And I order that the land registrar or the land administrator do all that is necessary to give effect to this order. [34] I also order R to pay RM5K costs to the OR by 3.4.2025. Page 11 of 11 Dated: 27 May 2025 KENNETH ST JAMES Judge Penang High Court Counsel/Solicitors: For the Applicant—Norfatin Azera [Jabatan Insolvensi Malaysia Negeri Pulau Pinang (Georgetown)] For the Respondent—Koay Ee Teng [Koay Partnership (Bukit Mertajam)] Legislation referred to:

Section 483 of the Companies Act 2016.

Section 327 of the National Land Code 1965.

Section 417 of the National Land Code 1965.

Section 233 of the Companies Act 1965. Cases referred to:

Hor Chin Ser & Anor v Villa Genting Development Sdn Bhd (in liquidation) & Ors and Other Appeals [2017] 1 MLJ 311 (CA); [2017] 5 CLJ 17; [2016] MLRAU 490.

Ketua Pengarah Insolvensi v Setiausaha, Lembaga Wakaf Hindu Pulau Pinang & Anor Appeal [2020] 5 CLJ 295 (CA); [2020] 4 MLRA 304; [2020] MLJU 313; [2020] AMEJ 0187.