Wong Weng Foo v Hup Huat Construction and Engineering Sdn Bhd (in Liquidation) (RA-28PW-1-01/2024)

The Applicant has filed Form of Summons (Applicant’s Application for Remuneration) dated 19.1.2024 (Enclosure 1) for the followings –

that the Applicant, Mr. Wong Weng Foo (NRIC No.: 530609- 10-6007) (“the Applicant”)’s liquidator’s remuneration, costs and expenses for the period from 23.3.2023 to 4.8.2023 be allowed in the sum of RM215,731.20;

that the sum of RM215,731.20 being deposited and/or retained by the liquidator be approved to be paid out from the assets of

that the cost of this application on a solicitor-client basis is to be paid out from the assets of the Company; and

such further and/or other relief and/or orders as this Honourable Court deems just and fit.

The brief grounds of this application are as follows:

the sum of RM215,731.20 is a fair and reasonable amount given the density of the liquidation process of the Company involving various litigations as well as managing the affairs of the Company; and

the Applicant has diligently carried out his duties and responsibilities as the Liquidator in the course of the appointment and as such, the Applicant is entitled to the payment of the remuneration.

Having analyzed, examined and considered all the cause papers, relevant laws and arguments by all parties, this Court is fully in agreement with the submissions put by the Intervener and the Aggrieved Party, and has nothing to add.

In summary, based on trite law and the works done by the Liquidator, this Court is satisfied and is of the view that the remuneration sum of RM215,731.20 charged by the Liquidator for the period from 23.3.2023 to 4.8.2023, which is lesser than 5 months, is not fair and reasonable and does not proportionate to the nature, complexity and extent of the work completed (see Perumahan NCK Sdn Bhd v Mega Sakti Sdn Bhd [2005] 7 MLJ 389, Emiprima Sdn Bhd v Wonderful Castle Sdn Bhd (in liquidation) [2023] 5 MLJ 695, Re Econ Corp Ltd (In Provisional Liquidation) (No 2) [2004] SGHC 49 and Ong Kwong Yew & Ors v Ong Ching Chee & Ors and other appeals [2018] MLJU 2189).

In the case of Perumahan NCK Sdn Bhd v Mega Sakti Sdn Bhd (supra), Ramly Ali J (as he then was) held as follows: “[30] The remuneration to which the liquidators are entitled is for the work which was actually done. In the ordinary course, the process of fixing of remuneration comes down essentially to ensuring that the work upon which the claim was based was work undertaken in the course of administration; and that the amount claimed for having done that work is fair and reasonable S/N UaoDXZlSw0a846Ivken2Jg reward for it. Therefore, the burden of proof lies with the liquidators to show that the remuneration claimed is justifiable. [31] The benchmark in the assessment process is fairness and reasonableness. The court need not accept what is submitted at face value but will carefully scrutinise the facts placed before it, in deciding what aspect of the remuneration claimed is reasonable and justifiable. The court will not blindly accept that what is said as done is done. [Emphasis added]

In Emiprima Sdn Bhd v Wonderful Castle Sdn Bhd (in liquidation) (supra), the Court of Appeal through the speaking judgment of Che Mohd Ruzima JCA decided as follows: “[36] As clearly mentioned in the summary of Re Econ’s case, the guidelines are not conclusive. There are other factors that can be considered in determining the fair and reasonable remuneration of a liquidator. As to the burden of proof, it is trite law that the burden is always on a liquidator to prove all relevant factors in determining a fair and reasonable remuneration. [37] Based on the principles enunciated, it is clear that the prime consideration in determining the remuneration of a liquidator is that, it should be fair and reasonable. To determine a fair and reasonable remuneration, the court must ensure that the work upon which a claim is made must be the work undertaken or done in the course of the administration of the wound up company. In the determination process, the court has to consider all relevant factors involved, and need not accept what is submitted at face value but is duty bound to scrutinise all facts placed before it. Along the process, the burden to prove a fair and reasonable amount of remuneration lies on a liquidator.”. [Emphasis added]

In this respect, it is the finding of this Court that –

the Company is just at the beginning stage of a wound-up company where the liquidation process of the Company such as the process of realization and recovery of the assets to settle the liability of the Company has yet to be carried out;

the majority of the works of the Liquidator were administrative and plain in nature and they are far from being complex, for example, notification of his appointment as the liquidator of the Company, informing the relevant parties of the Company status, collecting details of the Companies from the relevant parties, including but not limited to Public Bank Berhad and performing tasks which are necessary to hold Creditors’ meetings;

the Liquidator had filed a number of unnecessary suits which renders extra costs and time had been spent on, such as –

the application for compelling the Board of Director of the Company and the Secretary to surrender the books and records of the Company under Kangar High Court Post Companies Winding Up Application No. RA-28PW-5- 07/2023 (“Suit No. 5”);

(ii) under the Kangar High Court Post Companies Winding Up Application No. RA-28PW-4-05/2023 – S/N UaoDXZlSw0a846Ivken2Jg

the application for stay of proceedings pending the hearing and disposal of the Suit No. 5 (“Enclosure 18’s application”);

the application to seek leave of the Court to admit Affidavit of Leong Ying Hoe and to file further affidavit (“Enclosure 55’s application”); and

the application for stay of proceedings pending the hearing and full disposal of the appeal against the Court’s decision in dismissing Enclosure 55’s application (“Enclosure 83’s application”); and

(iii) the appeal against the Court’s decision in dismissing Enclosure 55’s application under Putrajaya Court of Appeal, Appeal No. R-02(IM)-1649-10/2023 (“Appeal No. 1649”);

the Liquidator had failed to justify and prove the time spent and the charge out rate for each of the position handler and the necessity of the team force he put in, as stipulated and highlighted in the case of Re Econ Corp Ltd (In Provisional Liquidation) (No 2) (supra) as the followings: “[35] We also like to refer to the Singapore High Court decision in Re Econ Corp Ltd (In Provisional Liquidation) (No 2) [2004] 2 SLR 264 (Re Econ’s case) where Justice VK Rajah has spelt out the guiding principles to be taken into account in determining a fair and reasonable remuneration for a liquidator. The guidelines as stated in Re Econ’s case can be summarised as follows:

valued contribution, what difference the liquidator has made to the matter;

time spent, the importance will vary from case to case, from being a possibly critical factor in one case to just another matter for consideration in another;

the rates, in the absence of acceptable guidelines it cannot be accepted at face value and the rates to be determined as fair and reasonable by the court depends on complexity or otherwise of the case;

the assistance, rendered by the employees from the liquidator’s firm subject to strict proof;

the scope of work, it is important to understand the functions and responsibilities of the liquidator;

the disbursement, it must have some measure of restraint and discipline on how the items are recouped and accounted for; and

in summary, it remains open for the court in any matter to decide whether the basis for the remuneration ought to be on a time basis, a realisation basis or an all-encompassing basis absorbing all or a combination of the criteria identified, and the guidelines are not immutable rule;

the Liquidator had failed to discharge his burden to prove all the relevant factors in determining a fair and reasonable remuneration as required in the case of Emiprima Sdn Bhd v Wonderful Castle Sdn Bhd (in liquidation) (supra) and Re S/N UaoDXZlSw0a846Ivken2Jg Econ Corp Ltd (In Provisional Liquidation) (No 2) (supra);

no creditors’ meeting had been successfully held by the

the Liquidator had unilaterally withdrawn the sum of RM215,731.20 as his remuneration without prior obtaining the consent and approval from all the creditors and contributories of the Company and without the sanction of the Court. The Liquidator’s action has thus amounted to a breach of his duty and contravened the law. This has been decided by the Court of Appeal through the judgment of Nallini Pathmanathan JCA (as she then was) in the case of Ong Kwong Yew & Ors v Ong Ching Chee & Ors and other appeals (supra), as follows: “[47] We are of the considered view that while the order of the Court envisages that the liquidator must be paid remuneration for the work undertaken, that sum is not to be determined or removed from the account of the company unilaterally by the liquidator. The law envisages that the liquidator receives compensation in accordance with the provisions of the Companies Act 1965 (‘CA ‘65’) (which was in force at the material time). Any removal of funds by way of remuneration which is not in compliance with the Act would amount to a contravention of the same. ... S/N UaoDXZlSw0a846Ivken2Jg [53] In all these circumstances it appears to this Court that the liquidator was obliged to obtain the sanction of the court prior to withdrawing monies which he felt, subjectively, was due to him for work he had undertaken. It is the lack of sanction either from the Court or the consent of all the contributories that taints his unilateral withdrawal of the funds. Given that a liquidator is in a fiduciary position in relation to the funds of the company which he holds on trust for both the contributories and creditors, it is untenable if not bordering on unethical conduct for him to pay himself out of those funds. This is particularly pronounced in the instant case where applications for his removal were before the Court. The withdrawals appear to be an imprudent attempt to collect his fees prior to any potential removal from office. [54] The liquidator was not entitled to act as he did in relation to his own remuneration. The unilateral and periodic withdrawal of monies of the company in liquidation (which he held on trust for creditors and the contributories) without the requisite consent of the contributories or the Court in the instant case, amounts to a contravention of section 232 (3) of the CA ‘65. [55] It would therefore follow that any monies taken in contravention of the law ought to be reimbursed to the Companies in question, and a proper claim be made for remuneration in accordance with section 232(3) of the CA ‘65, namely by way of application to Court to obtain sanction.”. [Emphasis added]

In the light of the foregoing analysis and reasons, the Applicant’s Application for Remuneration in Enclosure 1 is dismissed with costs of RM10,000.00 each to the Intervener and the Aggrieved Party. Dated : 28 SEPTEMBER 2025 (DR. ARIK SANUSI BIN YEOP JOHARI) Judge High Court of Malaya, Kangar Perlis S/N UaoDXZlSw0a846Ivken2Jg (PERLIS) The Applicant’s Solicitor: Mr. S. Muhillan (together with Ms. Samantha Sum Pui Si) Messrs. Muhillan Ng & Gomez Advocates & Solicators C-05-01, Plaza Mont Kiara No.2 Jalan Kiara 50480 Kuala Lumpur The Intervener’s Solicitor: Ms. Alane Neo Messrs. YY Chin & Co VO3-05-03, Designer Office VO3, Lingkaran SV, Sunway Velocity, 55100 Kuala Lumpur The Aggrieved Party’s Solicitor: Mr. Low Eu Thuan (together with Ms. Ang Jinn Fenn) Messrs. Cheong Wai Meng & Van Buerle No. 20 -1 (1st Floor) Jalan USJ 10/1B 47620 Subang Jaya