Yew Huoi, How & Associates | Leading Malaysia Law Firm

WINDING-UP – OFFICIAL RECEIVER AND LIQUIDATOR (“ORL”)

1. Responsibilities of the Official Receiver and Liquidator in Mandatory Company Liquidation:

In cases of compulsory winding up, the court would appoint a liquidator under s.478 of the Companies Act 2016 (“CA 2016”) to expeditiously recover and realise the assets of the wound-up company for the distribution of dividends to creditors and administer any outstanding matters involving the wound up company.

If the court does not appoint a person as liquidator, the ORL will become the interim liquidator by virtue of s.477(1)(a) of CA 2016. As an officer of the court that is entrusted to deal with the company’s property, the ORL holds a duty to account all action taken in dealing with the company’s assets. In implementing the duty, due diligent, transparency and accountability of all aspects of insolvency practice are paramount and indispensable.

It is beneficial to glance through Malaysian Department of Insolvency’s website (mdi.gov.my) to find out the role and duty of ORL.

2. How the ORL Fulfills Responsibilities in Administering and Examining the Affairs of Court-Liquidated Companies:

  • The ORL must diligently investigate the company’s records to accurately ascertain the ownership of the company’s properties.
  • Relying solely on land searches for property ownership verification is insufficient and does not align with the ORL’s primary duty to thoroughly investigate the company’s affairs.
  • The ORL must therefore take comprehensive measures to confirm that properties are indeed owned by the company undergoing liquidation.

3. Illustrative Scenario:

Company X, a developer, sold a property to individual Y under a sale and purchase agreement, with the property’s strata titles listing Company X as the registered owner. Subsequently, Company X was liquidated by the court. In such cases, an ORL appointed by the court cannot sell the property to a third party based only on land searches of the title documents, especially if individual Y’s name is not listed on these documents.

4. Case

Malayan Produce Company Sendirian Bhd v Landbanq Sdn Bhd (in liquidation) & Anor [2023] 6 MLJ 840

Recent Post

JURISDICTION – CHOOSING THE RIGHT COURT: THE SEA JUSTICE CASE HIGHLIGHTS WHERE MARITIME DISPUTES SHOULD BE HEARD

In The Sea Justice cases [2024] 2 Lloyd’s Rep 383 and [2024] 2 Lloyd’s Rep 429, the Singapore courts tackled a key question: which country should handle a maritime dispute when incidents span international waters? After examining the location of the collision, existing limitation funds in China, and witness availability, the courts concluded that China was the more appropriate forum. This ruling highlights that courts will often defer to the jurisdiction with the closest ties to the incident, ensuring efficient and fair handling of cross-border maritime disputes. This approach is also relevant in Malaysia, where similar principles apply.

Read More »

BREACH OF CONTRACT – FORCE MAJEURE – FORCE MAJEURE UNPACKED: WHEN ‘REASONABLE ENDEAVOURS’ DON’T BEND CONTRACT TERMS

The UK Supreme Court clarified the limits of force majeure clauses, ruling that “reasonable endeavours” do not require a party to accept alternative performance outside the agreed contract terms. This decision emphasizes that force majeure clauses are meant to uphold, not alter, original obligations – even in unexpected circumstances. The case serves as a reminder for businesses to define alternative options explicitly within their contracts if flexibility is desired.

Read More »

NEGLIGENCE – MEDICAL NEGLIGENCE – HOSPITAL ACCOUNTABILITY REINFORCED: COURT UPHOLDS NON-DELEGABLE DUTY IN MEDICAL NEGLIGENCE

In a landmark ruling, the court reinforced the hospital’s non-delegable duty of care, holding that even when services are outsourced to independent contractors, the hospital remains accountable for patient welfare. This decision emphasizes that vulnerable patients, reliant on medical institutions, must be safeguarded against harm caused by third-party providers. The ruling ultimately rejected the hospital’s defense of independence for contracted consultants, underscoring a high standard of duty owed to patients.

Read More »

CONTRACTS – CONTRACT FOR THE SALE OF GOODS FOB – REMOTENESS OF DAMAGES IN BACK-TO-BACK CONTRACTS – COURT DEFINES LIMITS ON LIABILITY

In a complex dispute involving back-to-back contracts, the court clarified the boundaries for assessing damages, emphasizing that a chain of contracts does not automatically ensure liability passes through. Although substantial losses resulted from delays and disruption, the court highlighted the importance of the remoteness of damages, noting that each contract’s unique terms ultimately limited liability. This decision emphasise the need for parties in chain contracts to carefully define indemnity and liability provisions, as damages are assessed based on foreseeability rather than simply the structure of linked agreements.

Read More »

TORT – BREAKING CONFIDENTIALITY – COURT CRACKS DOWN ON INSIDER LEAKS AND CORPORATE CONSPIRACY

In a recent ruling on corporate confidentiality, the court held two former employees liable for disclosing sensitive business information to a competitor, deeming it a breach of both employment contracts and fiduciary duties. This case highlights the serious consequences of unauthorized sharing of proprietary data and reinforces that such disclosures can lead to substantial legal and financial repercussions, even for the receiving parties if they knowingly benefit from confidential information.

Read More »
en_USEN
× Contact Us