The role of the liquidator is to realise the assets of the company and to pay off creditors of the company from the proceeds of sale. If difficulty arises in the course of his administration of the winding up process, the liquidator may apply to the court for directions.
A decade ago, the Malaysian Federal Court (being the apex Court) held in Ooi Woon Chee & Anor v. Dato’ See Teow Chuan & Ors [2012] 2 MLJ 713 that such directions to the liquidator were non-appealable on the grounds that those directions were in the nature of advice only and were not a judgment or order.
Recently, the same issue (on the appealability of such directions) came up before the Federal Court in Tan Kim Chuan v. Tan Kim Tian & Ors and another appeal [2022] 6 MLJ 888. The Federal Court clarified and qualified its earlier decision and held that such directions given to the liquidator are appealable only if those directions affect the substantive rights of the parties involved in the liquidation, which was a question of fact.
With this Federal Court decision, the decade-long doubt about whether directions given to the liquidator pursuant to the liquidator’s application under section 487(3) of the Companies Act (section 237(3) of the repealed Companies Act 1965) are non-appealable – which was once thought to be a blanket ban on challenges to such directions – has now been finally and conclusively removed.
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