Khor Yong Yong (Liquidator Of Shigen Polycolor Sdn. Bhd. (In Liquidation) [Company No: 200101031179 (566938-x)] v 1. ) TAN KHENG GUAN (PA-28PW-30-08/2023)

Tan Kheng Guan (K/P No: 750128-07-5275)

Chu Kok Khing (K/P No: 700916-07-5377)

Ee Geng Choon (K/P No: 530703-07-5112) …RESPONDEN-RESPONDEN JUDGMENT (LIQUIDATOR’S APPLICATION FOR REMUNERATION) PRELUSION [1] The company: Shigen Polycolor Sdn Bhd (Company) was wound up. The Applicant: Mr Khor Yong Yong was appointed the Company’s liquidator (Liquidator). [2] The winding up Petition was presented by the 1st Respondent in this proceeding: Tan Kheng Guan (Tan). Tan made the 2nd Respondent Page 2 of 17 in this proceeding: Chu Kok Khing (Chu), one of the respondents in the winding up Petition. The other respondent in the winding up Petition was the Company (a nominal respondent). The winding up Petition was part of the extended litigation (multiple legal proceedings) between Tan and Chu. [3] The Liquidator set out to perform his work. [4] Chu proceeded to apply to set aside the winding up Order. He succeeded. The winding up Order was set aside. The winding up was terminated. The Order appointing the Liquidator was also set aside. The Liquidator’s work ceased. [5] The Liquidator now applies to be remunerated for the period that he performed his work as the Company’s liquidator, namely between the date of the winding up Order and the date that the winding up Order was set aside. [6] Should the Liquidator be remunerated? If yes, who should pay his remuneration and expenses? THE PERTINENT CHRONOLOGY OF PROCEEDINGS [7] The Company was wound up on 19.7.2022. The Liquidator started his work soon after. [8] The winding up Order, and the Order appointing the Liquidator, were set aside on 24.3.2023 (eight months later). Page 3 of 17 JURISDICTION AND POWER TO ORDER THE PAYMENT OF REMUNERATION AND EXPENSES [9] “Remuneration” means payment for work done and services rendered. In the context of a company’s winding up and the ensuing liquidation process, the liquidator’s remuneration necessarily means the payment for the work done and for services rendered, and the expenses incurred, as a result of performing the duties and obligations of a liquidator. [10] Under statute law, section 479(2) of the Companies Act 2016 (CA), provides that a liquidator (other than the Official Receiver) is entitled to be remunerated. The remuneration is determined by any of these three ways—

by an agreement between the liquidator and the committee of inspection; or

if there is no agreement or no committee of inspection, by a resolution passed at a creditors’ meeting in the prescribed manner; or

if there is no agreement and there is no such resolution passed—by the Court. [11] Subsection 479(2) of the CA is set out below for reference (with my emphases added)— Section 479. Remuneration of liquidators in winding up by 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— Page 4 of 17

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 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. [12] The parties here agree that there was no agreement between the Liquidator and the committee of inspection (as there was no committee of inspection) for the Liquidator’s remuneration. The parties agree that there was no resolution passed at a creditors’ meeting for the Liquidator’s remuneration. Thus, this Court has the power and discretion to determine and grant the amount of remuneration for the Liquidator. [13] In other words, the Liquidator has a statutory entitlement to be remunerated for his work as the court-appointed liquidator. And the Court, in the circumstances of this proceeding, determines the amount to remunerate the Liquidator. [14] Also, section 527 of the CA, which sets out the priorities (the ranking) for payments when a company is wound up, provides that “the costs and expenses of the winding up”, which includes a liquidator’s remuneration—ranks first. Page 5 of 17 [15] The pertinent part of subsection 527(1) of the CA is set out here for reference (again with my emphases added)—

Subject to this Act, in a winding up there shall be paid in priority to all other unsecured debts—

firstly, the costs and expenses of the winding up including the taxed costs of a petitioner payable under section 468, the remuneration of the liquidator and the costs of any audit carried out under section 514;… [16] Under case law, I am reinforced in my view that a liquidator is entitled to be remunerated for his or her work in a winding up (liquidation) process. The liquidator is “appointed by the court”. They are “officers of the court”. They are “entitled to be paid”. This Court has the jurisdiction and power to determine their remuneration—Perumahan NCK Sdn Bhd v Mega Sakti Sdn Bhd [2005] 7 MLJ 389 (HC); [2005] 4 AMR 683; [2005] 7 CLJ 370; [2005] 2 MLRH 635; at paragraphs [13], [15]. [17] I am also instructed that there are at least these four tenets to follow when determining a liquidator’s remuneration—

the prime consideration is that the liquidator’s remuneration should be “fair and reasonable”;

what is fair and reasonable is the liquidator’s burden to demonstrate;

the work that the liquidator should be remunerated for must be “work undertaken or done in the course of the administration” of the winding up; Page 6 of 17

to determine what is fair and reasonable, the Court should consider “all relevant factors” —Emiprima Sdn Bhd v Wonderful Castle Sdn Bhd [2023] 5 MLJ 695 (CA); [2023] 6 MLRA 85; [2023] 1 LNS 1438; at paragraphs [36], [37]. POWERS OF THE LIQUIDATOR IN A WINDING UP BY THE COURT [18] The powers of a liquidator in a winding up by the Court (as distinct from a voluntary winding up) are provided for in section 486 of the CA and the related Twelfth Schedule. The Twelfth Schedule has two parts. Part I sets out the powers exercisable without the authority of the Court or the committee of inspection. Part II sets out the powers exercisable with authority (which the liquidator must obtain from the Court or the committee of inspection before exercising these powers). So, the powers under Part I (without authority) are applicable to this proceeding. [19] The powers of the Liquidator i.e. the work that the Liquidator can perform under Part I of the Twelfth Schedule, include—

taking or defending any action or other legal proceedings in the name and on behalf of the Company (paragraph (a) of Part I);

sell the assets of the Company (paragraph (c) of Part I);

“do all acts” and execute all documents in the name and on behalf of the Company (paragraph (d) of Part I);

appoint an agent to do any business which the Liquidator is unable to do (paragraph (j) of Part I);

appoint an advocate to “assist” the Liquidator “in his duties” (paragraph (k) of Part I); Page 7 of 17

“do all such other things as are necessary” in the liquidation process (paragraph (l) of Part I). THE LIQUIDATOR’S EVIDENCE [20] In the affidavit filed in support of his application in this proceeding, the Liquidator produced evidence of the following facts—

On 26.7.2022 (within a week of being appointed), the Liquidator wrote to the Company’s directors (which include Tan and Chu) to ask them to give him the documents and information prescribed by the CA.

By a letter dated 2.8.2022, he asked for possession of the Company’s property. Only Tan responded to him. Tan informed the Liquidator that he (Tan) could not furnish the documents and information that the Liquidator had asked for because he had been excluded from the Company’s affairs and its management since 2004. And he had no access to the property.

As he faced difficulty in obtaining the Company’s documents and information, the Liquidator engaged solicitors to file a post-winding up application to get the Company’s documents and information, and to take possession of the property.

Tan had informed the Liquidator about the litigation between Tan and Chu, involving the Company. There were several proceedings that were already determined, as well as proceedings that were still pending at the time. Page 8 of 17

The Liquidator dealt with several parties concerned and performed liquidation work that included work such as: dealing with the Malaysian Insolvency Department; communicating with Tan and his solicitors, as well as Chu’s solicitors about the legal proceedings involving the Company; communicating with Tan and his solicitors about taking control of the Company’s assets; analysing the Company’s documents such as its books and records, for the liquidation process; communicating with the Company’s directors, company secretary, financier (bank) and auditor for documents and information; identifying the Company's assets and making a site visit to the Company’s premises; and commencing legal proceedings to obtain the Company’s statement of affairs, books, records and other documents. [21] The Liquidator averred that he (with his assistant) performed liquidation work for the approximately 8-month period between the winding up of the Company (19.7.2022) and the setting aside of the winding up Order (23.4.2023). [22] The Liquidator averred that to keep the liquidation costs at a minimum, he delegated the general administrative tasks to his assistant to perform. The Liquidator’s assistant’s hourly rate is significantly lower than the Liquidator’s. [23] The Liquidator particularised, on a time-cost (hourly-rate) basis, the amount of work he and his assistant performed and quantified his fees at the amount of RM53,280.00. He also particularised the disbursed Page 9 of 17 expenses he incurred when performing the work, and quantified it at the amount of RM1,593.51. I find these amounts to be fair and reasonable. [24] The Liquidator appointed a firm of solicitors to assist him. The solicitors’ pro forma invoice for their professional fees and disbursements was for RM10,000.00. [25] The Liquidator averred that he had diligently carried out his duties. CHU’S EVIDENCE [26] Chu filed an affidavit in reply to oppose the Liquidator’s application to be remunerated. In his affidavit in reply—

Chu averred that he had quickly (in less than three weeks from the winding up Order) applied to set aside the winding up Order. And his application was allowed;

Chu averred that he had served the cause papers for his application on the Liquidator. But the Liquidator continued to perform liquidation work on the Company;

Chu argued that since he succeeded in setting aside the winding up Order, the Order appointing the Liquidator was also rendered “erroneous and irregular”. CHU’s TWO ARGUMENTS AND MY FINDINGS [27] Chu makes only two arguments in this proceeding. One—Chu argues that the Liquidator knew that Chu was applying to set aside the winding up Order. Chu argues that the Liquidator “ought to have considered” that the winding up Order “was subject to challenge” and hence “might not be final”. Chu argues that as the Liquidator knew about his (Chu’s) application to set aside the winding up Order, the Liquidator should have stopped performing his work. Page 10 of 17 [28] I find that Chu’s argument—that since the Liquidator knew that Chu was applying to set aside the winding up Order, the Liquidator should stop his work—is untenable. Firstly, the Liquidator’s appointment by the Court took effect. The Liquidator was obligated to diligently, and not contingently, perform his liquidation work. [29] Secondly, Chu is effectively arguing that where there is a winding up Order, and a liquidator is appointed, and a party (who has the right to do so) applies to set aside the winding up Order—the liquidator concerned should stop performing his liquidation work, as if there is effectively a stay of the liquidation process. And if the liquidator does not stop (continues) performing his work, and the winding up Order is set aside, the liquidator will not be remunerated for the work that he has done. [30] I am of the view that this circumstance cannot be an acceptable outcome. Such an outcome would be unfair and unjust to every court-appointed liquidator who diligently performs his or her liquidation duties. They would find themselves facing parties who oppose their request to be fairly and reasonably remunerated for the work that they have done. Or worse, they find themselves not fairly and reasonably remunerated for the work that they have done. [31] I am of the view that as long as a liquidator’s appointment is in effect, the liquidator has liquidation duties to perform. And for performing those duties, the liquidator should be fairly and reasonably remunerated for his fees and defrayed with his expenses—even if the winding up Order (which triggered his appointment as liquidator) is later set aside, or the winding up is terminated, which would cause his or her appointment to Page 11 of 17 cease. The liquidator should be fairly and reasonably remunerated for the work done in the period when the appointment was in effect. [32] Two—Chu argues that the dispute that led to the winding up Order, and hence to the Liquidator’s appointment as liquidator, was actually a dispute between two shareholders: Tan and Chu. Chu argues that the Company’s money should not be expended on account of a dispute between shareholders. [33] For this general principle, Chu cites the case law authority of Dato’ Tan Toh Hua & Ors v Tan Toh Hong & Ors [2001] 1 MLJ 369 (CA) at MLJ page 373, paragraph D - E; [2001] 1 AMR 792; [2001] 1 CLJ 733; [2001] 1 MLRA 8, where the Court Of Appeal cited Re a Company (No 004502 of 1988) ex parte Johnson [1992] BCLC 701, per Harman J. [34] I find, however, that Chu’s reliance on the general principle that “the company’s money should not be expended on disputes between shareholders”—is distinguishable from this proceeding. Firstly, in Dato’ Tan Toh Hua (supra), the company’s money was used to oppose i.e. defend against a winding up Petition. But here, in this proceeding, the issue is whether the Company’s money should be expended to remunerate the Liquidator who was appointed by the Court—which is a rather different circumstance. [35] Secondly, if Chu’s argument is right (as in it brings about a just and fair outcome), then every winding up Petition filed by a shareholder against another shareholder as well as against the company (as the nominal respondent) on the just and equitable ground, which results in a winding up Order that puts the company in liquidation, but the winding up Page 12 of 17 Order is later set aside—the court-appointed liquidator, who has done the liquidation work, will need not be remunerated. [36] This circumstance is an unfair and unreasonable outcome. I am not inclined to permit this circumstance to occur, where the Liquidator, who has performed the liquidation work, is not remunerated, when the law specifically provides for his remuneration. THE FEES AND EXPENSES OF THE SOLICITORS APPOINTED BY THE LIQUIDATOR [37] The Liquidator averred that he appointed solicitors to assist him. He is entitled to appoint solicitors to assist him. It is provided for in the Twelfth Schedule, Part I, at paragraph (k). The Liquidator averred that the solicitors’ “professional legal fees and disbursements” are RM10K. The Liquidator produced (exhibited) the solicitors’ pro forma invoice dated 28.3.2023 for RM10K (for professional fees and disbursements). [38] The particulars given in the invoice include: perusing the winding up Petition; advising the Liquidator on the winding up Petition; attending to the Liquidator’s application for an Order to compel the directors of the Company to lodge a statement of affairs; advising on and attending to (by a watching brief) Chu’s application to set aside the winding up Order. [39] I see this work as relevant to the Liquidator’s work as the Company’s liquidator. The directors' lodging a statement of affairs is an important aspect of the liquidation process. Also, Chu’s application to set aside the winding up Order is a pertinent proceeding to monitor, because it relates to the winding up of the Company. The very status of the Company is at stake. Page 13 of 17 [40] I find that it is fair and reasonable to include the solicitors’ fees and disbursements as part of the Liquidator’s expenses in the performance of his work as liquidator. I make it clear here, however, that I am not creating a category of expenses described as “professional legal fees and disbursements”. Instead, I find that the professional fees and disbursements of the professionals appointed by the Liquidator to assist him in this liquidation process, and to assist him to administer the wound up Company—may it be solicitors or accountants or valuers and such— should be paid. [41] These professionals should be remunerated for their services given to the Liquidator. If it were not so—if this winding up Court does not facilitate the payment of their fees and disbursements—it would be utterly unfair to them. These professionals would be reluctant (or would likely outright refuse) to be appointed to assist the liquidator in the liquidation exercise. This is a circumstance that must be avoided. [42] I am of the view that these professional fees and disbursements can and should be—where it is appropriate to do so—paid and defrayed, as part of the Liquidator’s expenses. [43] In this proceeding, the Liquidator distinctly describes the solicitors’ fees and disbursements (the RM10K) as the solicitor's professional fees and disbursements, rather than as part of his (the Liquidator’s) expenses. I find that it is not inappropriate to do so. The solicitors issued to the Liquidator a pro forma invoice, which is a preliminary bill or estimate. Perhaps the Liquidator had not yet paid the solicitors these fees and disbursements, such that the Liquidator should not include the solicitors’ Page 14 of 17 fees and disbursements as part of his expenses already incurred (already paid). In any event, I am nevertheless of the view that the professional fees and disbursements of the professionals that the Liquidator appoints in the liquidation exercise are rightly part of the Liquidator’s expenses incurred while performing his work. [44] I find that the Liquidator should be paid the RM54,873.51 (RM53,280.00 + RM1,593.51) remuneration (including expenses). And, the solicitors (appointed by the Liquidator to assist him) should be paid their RM10K as their professional fees and disbursements. [45] But who should be ordered to pay these moneys? WHO SHOULD PAY THE LIQUIDATOR’S REMUNERATION AND EXPENSES, AND THE SOLICITORS’ FEES AND DISBURSEMENTS? [46] Tan presented the winding up Petition on grounds that include the just and equitable ground prescribed under section 465(1)(h) of the CA. This ground is usually a result of a dispute between the company’s shareholders—as it is in this Petition. The winding up Order was made, but it was made in default of Chu’s appearance and representation at the hearing of the Petition. Chu, being a respondent in the winding-up Petition, applied to set aside the winding up Order. The winding up Order was set aside. The winding up was terminated. [47] The Liquidator was appointed because of the winding up Order which Tan obtained. But Chu applied to set aside and succeeded in setting aside the winding up Order, thus ceasing the Liquidator’s appointment and his duties. The solicitors were appointed by the Page 15 of 17 Liquidator to assist him in the eight months that he held the duties as the Company’s liquidator. [48] The winding up Petition is now still pending determination. The shareholders have an extended dispute between them. I am guided by the general principle that the Company’s money should not be expended on a dispute that is actually between the shareholders (and the Company is merely a nominal respondent). [49] I am therefore of the view that the party who should be made liable to pay the Liquidator’s remuneration and expenses, including the solicitors' fees and disbursements, is the losing party in the winding up Petition, and not the Company. In other words, the shareholder who ultimately loses in the dispute contained in the winding up Petition should pay these respective amounts to the Liquidator and the solicitors. [50] I therefore make this Order—the losing party in Petition No. PA- 28NCC-42-05/2022 (Petition 42) is to pay the Liquidator: Khor Yong Yong, the sum of RM54,873.51, and pay the solicitors appointed by the Liquidator: Messrs. Cheng, Lee and Goh the sum of RM10K, within one month from the date the winding up Court determines Petition 42. [51] As for the costs for this proceeding (the Liquidator’s application to be remunerated), I order that the same losing party in Petition 42 is to pay RM5K costs to the Liquidator’s solicitors, namely Messrs. Cheng, Lee & Goh, and RM5K costs to Chu’s solicitors, namely Messrs. Tung, Chan & Partners, also within one month from the date the winding up Court determines Petition 42. These costs are subject to the allocatur. Page 16 of 17 [52] If Petition 42 is either withdrawn or settled between Tan and Chu, all these respective sums described above are to be equally shared and jointly and severally paid by Tan and Chu to the respective recipients named above, within the one month from the date that Petition 42 is either withdrawn or settled. Dated: 2 July 2025 KENNETH ST JAMES Judge Penang High Court Counsel/Solicitors: For the Applicant— Cheng Theng Keat and Loh Joo Xun [Messrs. Cheng, Lee & Goh (Penang)] For the 2nd and 3rd Respondents— Tung Mun Yeong [Messrs. Ismail Khoo & Associates (Penang)] Legislation referred to:

Section 479(2) of the Companies Act 2016.

Section 527(1) of the Companies Act 2016.

Section 486 and the Twelfth Schedule of the Companies Act 2016.

Section 465(1)(h) of the Companies Act 2016. Page 17 of 17 Case referred to:

Perumahan NCK Sdn Bhd v Mega Sakti Sdn Bhd [2005] 7 MLJ 389 (HC); [2005] 4 AMR 683; [2005] 7 CLJ 370; [2005] 2 MLRH 635.

Emiprima Sdn Bhd v Wonderful Castle Sdn Bhd [2023] 5 MLJ 695 (CA); [2023] 6 MLRA 85; [2023] 1 LNS 1438.

Dato’ Tan Toh Hua & Ors v Tan Toh Hong & Ors [2001] 1 MLJ 369 (CA) at MLJ page 373, paragraph D - E; [2001] 1 AMR 792; [2001] 1 CLJ 733; [2001] 1 MLRA 8.