Tai Hean Leng @ Tek Hean Leng v New Future Capital Sdn Bhd (in Liquidation) (WA-28PW-258-09/2021)

In the matter before this Court at enclosure 1 via a Form of Summons dated 27.7.2021 in Post Winding Up No: WA-28PW-213- 07/2021(Enclosure 1 PW 213), the Applicant therein, Tai May Chean (“TMC”) had applied to this Court that Tan Chil Kin or Lim Keng Peo be appointed as the Liquidator of the Respondent in place of Lim San Peen, the present Liquidator of the Respondent pursuant to inter alia Sections 466, 478, 479 and 482 of the Companies Act 2016.

The main grounds for Enclosure 1 PW 213 were inter alia as follows:-

Victor Saw Seng Kee is not a suitable candidate and that Lim San Peen has no right to propose a candidate;

(ii) Tan Chil Kin or Lim Keng Peo is a more suitable candidate to be appointed as the Liquidator of the Respondent;

(iii) there has been a failure by Lim San Peen and his team which includes Victor Saw Seng Kee to carry out his mandatory statutory duties as the liquidator of the Respondent which has prejudiced and done significant injustice to the Applicant; S/N 58kO7cvQzk6FzoPAHeI8bg

(iv) if Victor Saw Seng Kee is appointed he will carry out the same thing that Lim san Peen has been doing;

there has been nothing substantial done in relation to the liquidation of the Respondent;

(vi) the continued management of the Respondent would not in any way be of benefit if Victor Saw Seng Kee is appointed;

(vii) Lim San Peen and his team has not done anything to ascertain who the creditors of the Respondent are;

(viii) that the Applicant has lost faith and confidence in Lim San Peen and his team;

(ix) his plans for UER and Safety Capital Sdn Bhd (SCSB) to amongst others divest the entire share capital of SCSB before he calls for the POD frees Lin San Peen from needing to present his plan for the realization of the assets of the Respondent to the meeting of creditors and contributories in order to ascertain their wishes and obtain their agreement thereto and therefore his aid plans are premature and sub judice as the decision of the High Court in the petition for the winding up of UER has not been ascertained as yet;

Lim San Peen had disregarded the fact that the Respondent is holding on trust for SCSB 133 ordinary shares of Safety Credit & Leasing Co Sdn Bhd (Trust Shares) which is a vital factor to persuade this Court not to allow them to further manage the Respondent; S/N 58kO7cvQzk6FzoPAHeI8bg

(xi) Lim San Peen has therefore taken into consideration things he ought not to be doing at this stage or at all and thus Lim San Peen and his team which includes Victor Saw Seng Kee are unsuitable to manage the Respondent’s liquidation.

There was also another Form of Summons dated 10.9.2021 in Post Winding Up No: WA-28PW-258-09/2021(Enclosure 1 PW 258) filed by the Petitioner whereby the Petitioner had applied to this Court that Victor Saw Seng Kee or alternatively Duar Tuan Kiat be appointed as the Liquidator of the Respondent in place of Lim San Peen, the present Liquidator of the Respondent, on the grounds inter alia that :

Victor Saw Seng Kee is from Price Waterhouse Coopers (PWC), large and reputable firm with ample and readily available resources that has the necessary personnel, skill, and tools required for the liquidation process;

(ii) Victor Saw Seng Kee has worked with Lim San Peen and from the point of ease of transition, administration and expenses it is best that Victor Saw Seng Kee be appointed;

(iii) If Victor Saw Seng Kee is not a suitable appointment then Duar Tuan Kiat be appointed.

The third application before this Court was a Notice of Motion in WA- 28PW-182-06/2021 (PW 182) filed by the present Liquidator of the Respondent, Lim San Peen to be discharged and released on inter alia the ground that he was due to complete his tenure with Price Waterhouse Coopers and seeking for Victor Saw Seng Kee to be appointed in his place. S/N 58kO7cvQzk6FzoPAHeI8bg

On 31.3.2022 all of the above said matters were heard together, whereby the respective learned counsels had made their respective oral submissions before this Court on Enclosure 1 PW 213 as well as Enclosure 1 PW 258 and whereby this Court was also informed at the said hearing that the parties wished to record a Consent Order for the release of Lim San Peen as liquidator due to the fact that neither the Petitioner nor TMC were objecting to the release of Lim San Peen as liquidator.

The Court after hearing submissions on 31.3.2022 had reserved its decision on Enclosure 1 PW 213 as well as Enclosure 1 PW 258 to 25.5.2022 and informed the counsels that the Consent Order for the release of Lim San Peen as liquidator would then be recorded on the same day.

On 25.5.2022, this court had thereafter recorded a Consent Order in PW 182 and dismissed the application in Enclosure 1 of PW 213 and allowed prayer 1 of Enclosure 1 PW 258 to appoint Victor Saw Seng Kee as the Liquidator in place of Lim San Peen.

The Applicant PW 213, TMC, being dissatisfied with this Court’s decision has since appealed against the same as well as the Order dated 25.5.2022 given in PW 258 where the said TMC is not cited as a party thereto but had filed affidavits in the said PW 258 opposing PW 258 which contents of TMC’s affidavits were responded to by the Petitioner in PW 258 and which no party had objected to TMC being heard or partaking in PW 258. S/N 58kO7cvQzk6FzoPAHeI8bg

The Respondent was wound up by this Honourable Court on 9.1.2018 vide the Petitioner’s Winding-Up Petition on 28.7.2017 (“WUP”) on the “just and equitable” ground. The Petitioner was a 50% shareholder and was one of the two directors of the Respondent.

The WUP was opposed by TMC being the other shareholder holding the remaining 50% shareholding as well as the other director of the Respondent.

Upon the Petitioner’s successful winding-up of the Respondent and nomination of liquidator, Lim San Peen was appointed as the liquidator of the Respondent (“Liquidator”) on 9.10.2018.

Given LSP’s impending completion of his tenure in PriceWaterhouseCooper Advisory Services Sdn Bhd (“PWC”), Lim San Peen has, on 9.6.2021, filed a Notice of Motion vide WA-28PW- 182-6/2021 (“LSP’s Motion” or “Motion 182”) seeking, amongst others, orders that he be released as the Liquidator of the Respondent and for Victor Saw Seng Kee of PWC to be appointed as the Liquidator of the Respondent. Findings and Decision of this Court

In coming to my decision, I had dealt with all 3 matters together as they were heard together although they were not strictly consolidated as the issues were in essence based on the same set of facts involving who should be appointed as the new liquidator of the S/N 58kO7cvQzk6FzoPAHeI8bg Respondent company in place of Lim San Peen, the then Liquidator of the Respondent.

After giving due consideration to the respective written and oral submissions by the respective learned counsels with regards the 3 matters together heard before me, I had ordered that Victor Saw Seng Kee been appointed as the Liquidator of the Respondent in place of Lim San Peen and thus granted order in terms for PW 258 and dismissed PW 213.

My reasoning and consequently my written grounds in support of my decision for granting PW 258 was due to the following reasons:

I note that Victor Saw Seng Kee is from the same firm as Lim San Peen i.e Price Waterhouse Coopers (PWC) and found that for the ease of convenience, transition, administration and expenses it was more prudent to appoint the said Victor Saw Seng Kee as the liquidator of the Respondent company so as not to disrupt the liquidation process but also for the sake of continuity and well-being of the creditors of the Respondent;

(ii) Victor Saw Seng Kee would therefore be well versed with the on goings of the liquidation of the Respondent as he had been assisting Lim San Peen in the Respondent’s affairs post the Winding Up Order and when Lim San Peen was appointed as the Liquidator of the Respondent; S/N 58kO7cvQzk6FzoPAHeI8bg

(iii) the books, accounting records and documents of the Respondent were accessible to Victor Saw Seng Kee and he would have easy access and immediate access to the same;

(iv) Victor Saw Seng Kee’s qualifications and 28 years of experience shows that he is duly qualified to administer the Respondent’s continued liquidation process.

My above said decision would be in consonant with the ratio in Re Keith Morris Pty Ltd (1975) ACLC 28, 244 where it was held that in liquidation of several companies within a group, the liquidation of the companies should be undertaken by the same liquidator unless serious conflict of interest were bound to arise. See also Burton Pty Ltd, Re (1990) 2 ACSR 277; (1990) 8 ACLC 821;

In coming to my decision, I had considered the Applicant in PW 213 argument and /or contentions that Lim San Peen had inter alia:

failed to comply with or was derelict of his statutory duties which amongst others included calling for the creditors / contributories meeting and found that this contention was misconceived as there is no legal requirement which states that the same has to be done within any specific time;

(ii) failed to lodge with the registrar an account of his receipts and payments within 30 days of the expiration of 6 months from the date of his appointment which again I find as untenable as there is evidence before this Court in exhibit LSP 6 in Lim San Peen’s S/N 58kO7cvQzk6FzoPAHeI8bg AIR(2) at enclosure 10 as seen that he had on at least occasions from 9.10.2020 to 8.4.2021 lodged the liquidators accounts with both CCM and the Official Receiver;

(iii) failed to settle a list of contributories with convenient speed and find that the Respondent has insufficient funds and that this has been explained by Lim San Peen in his respective affidavits that he intended to settle the list of creditors and call for the Proof of Debts (POD) exercise after the assets were realized. I have also noted in this context that Lim San Peen had averred that the Respondent’s assets in the form of shares in SCSB and of which he had considered of divesting them with the shares held by United Eastern Resources (UER) who is the majority shareholder of the SCSB and that combining the said shares will yield better realization than selling the Respondent’s minority stake at this point, and find that this is a rational decision on his part in light of the factual scenario placed before me;

(iv) failed to send each creditor a summary of inter alia the company’s statement of affairs of which I find that based on the documents before this Court, it has not been shown that any of the creditors has requested for the same;

taken into consideration things he ought not to be doing at this and thus Lim San Peen and his team, which includes Victor Saw Seng Kee, are unsuitable to manage the Respondent’s liquidation of which I have, from the facts before me as indicated above, found that this is an unfounded allegation and on this, I am guided by the Federal Court decision in Wong Sin S/N 58kO7cvQzk6FzoPAHeI8bg Fan & Ors v Ng Peak Yam & Anor [2013] 3 CLJ 17; [2013] 2 MLJ 629, 638) where the Federal Court in the latter case had stated : “The principles of law governing an application to remove a provisional liquidator (or liquidator) are well set out as in the case of Ng Yok Gee & Anor v. CTI Leather Sdn Bhd; Metro Brilliant Sdn Bhd & Ors (Interveners) [2006] 3 CLJ 360 and include the following:

The court does not have an unfettered discretion, as cause must be shown before a liquidator can be removed. The position is not the same as it is when a liquidator is first appointed and the court may choose between two or more competing candidates.

The normal grounds for removal are that the liquidator has a personal unfitness, has failed to act impartially or is in a position where his duty and interest are in conflict.

The removal of the liquidator must be in the interest of all those who are interested in the company being liquidated. Thus, all the contributories and creditors of the company being liquidated must support such application to remove the liquidator. [24] Based on the above principles of law, 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 S/N 58kO7cvQzk6FzoPAHeI8bg decision simply because its opinion might differ from that of the liquidator. (emphasis mine)(see the case of Andrew Christopher Chuah Choong Eng Chuan v. Ooi Woon Chee & Anor [2007] 2 CLJ 405).”

(vi) disregarded the fact that the Respondent is holding on trust for SCSB 133 ordinary shares of Safety Credit & Leasing Co Sdn Bhd (Trust Shares) which is a vital factor to persuade this Court not to allow them to further manage the Respondent, and find that the Liquidator did in fact reply to the Applicant as can be seen in the Liquidator’s letter dated 17.3.2020 in exhibit TMC- 3 enclosure 10 and had acted on the same as averred to in the Liquidator’s affidavit in enclosure 10 paragraph 12 where the Liquidator then discovered conflicting positions taken by the contributories of the Respondent vis-a-vis the Trust Shares.

This Court has further noted that upon the Applicant’s POD being received, Lim San Peen had responded to the Applicant and requested for more documentation and that Lim San Peen had given formal notice of his appointment on 6.5.2019 which timing as to the lodgment of the same was not challenged by the Applicant at that material time.

I had further considered the Applicant’s contention that the delay in filing PW 182, if any, was a tactical maneuver to circumvent the due process and discharge and find that this allegation is unfounded and has not been proven by the Applicant to the satisfaction of this Court. S/N 58kO7cvQzk6FzoPAHeI8bg

This Court has also taken into account the Applicant’s claim that she is not only a contributory but also the purported majority creditor of the Respondent, but I hold that this Court has the ultimate discretion to appoint the person the Court feels is best suited to be the liquidator based on the circumstances of the matter so long as that discretion is exercised in accordance with the law. In fact, another factor in coming to my decision herein was that based on the submissions and the documents before me, the Petitioner who is an equal 50% contributory of the Respondent company and the Respondent’s other creditors do not hold the same view with that of the Applicant.

I hold that the fact that a majority creditor has proposed a particular nominee as liquidator does not bind the Court to accept the same and that the Court can take and/or consider the views of the parties who will be affected in such a situation. I need to go no further than quote Re Dunquil Pty Ltd (In Iiq) [1985] 3 ACLC 606, which was also quoted by our Court of Appeal in Malaysian Assurance Alliance Berhad v Comsa Properties Sdn Bhd & Anor Appeal [2011] 7 CLJ 942 and which reads: “There can be little doubt that, where it appears that a company is hopelessly insolvent, the views of the creditors, whilst by no means binding upon the Court, must nevertheless be given due weight - for it is they and not the shareholders of the company who have the primary interest in the ultimate outcome of the liquidation”

I also wish to reiterate what Ramly Ali J (as His Lordship then was) had stated in Ng Yok Gee & Anort v CTI Leather Sdn Bhd & ors [2006] 3 CLJ 360 where His Lordship stated: S/N 58kO7cvQzk6FzoPAHeI8bg “[41] As a matter of law, it is not a sufficient ground for removal of a liquidator that a substantial minority or even the majority of shareholders wants the liquidators to be removed. It is not a popularity contest.”

Accordingly, based on the facts before me and my aforesaid reasons, this Court did not find any prejudice and/or any injustice to the Applicant by the acts of Lim San Peen and/or his team.

I was thus satisfied that Lim San Peen had exercised his duties professionally and impartially and that there was no element of lack of independence or impartiality or dereliction of duty shown, and thus Victor Saw Seng Kee who was working side by side with Lim San Peen in the Respondent’s liquidation was equally similarly acting as such. On that ground amongst others, I had decided that Victor Saw Seng Kee was the best person to take over the liquidation of the Respondent and to be appointed as the Liquidator of the Respondent in place of Victor Saw Seng Kee based on the entire evidence before me and after giving due consideration to all the views of the parties before this Court as required of me and as per the Court of Appeal in Malaysian Assurance Alliance Berhad (supra) where it was held: “The rule of fair play demands that a liquidator should be independent and also seen to be independent. To be one, the views of creditors must be taken into consideration. When there exist opposing views on the appointment of a liquidator, the winding-up court ought to give due consideration to all the views.” S/N 58kO7cvQzk6FzoPAHeI8bg

As I had found no evidence of any alleged wrongdoing or impartiality on the part of Lim San Peen or Victor Saw Seng Kee who was working as team with Lim San Peen, I hold that Victor Saw Seng Kee be appointed as the liquidator of the Respondent and allowed prayer 1 for the said Victor Saw Seng Kee to be appointed as the liquidator and prayers 2,3 and 4 costs of RM5,000 to be paid by Tai May Chean to the Petitioner in PW 258 and dismissed PW 213 with costs of RM5,000 to be paid by the Applicant to the Petitioner. Dated: 1st August 2022 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE KUALA LUMPUR HIGH COURT Parties: Barry Goh Meng Yew, Suria Juan and Goh Jen Nie for the Applicant / Contributory (Madam Tay May Chean) in PW213 & PW258 [Messrs Iza Ng Yeoh & Kit] Dennis Yuean for the Petitioner in suit 258 [Messrs Chooi & Co + Cheang & Ariff] Caitlin Tan Hui Yi for the Liquidator of the Respondent (Lim San Peen) / Applicant in WA-28PW-182-06/2021 [Messrs Shearn Delamore] S/N 58kO7cvQzk6FzoPAHeI8bg Priscilla Ulau Deng for the Official Receiver [Malaysian Department of Insolvency] S/N 58kO7cvQzk6FzoPAHeI8bg