Chapter 19 - Post-Winding Up Petition

Question 1

POST-WINDING UP PETITION

Overview

Answer 1

1) Effect on action or proceeding
2) Effect of winding up order on creditors
3) Appointment of liquidators

Question 2

POST-WINDING UP PETITION

Effect on action or proceeding - the law

Answer 2

S.471(1):

no action or proceeding shall be proceeded with or commenced against the company except by leave of the Court and in accordance with such terms as the Court imposes.

Question 3

POST-WINDING UP PETITION

Effect on action or proceeding - application

CA, 2017

Answer 3

Ganda Setia Cemerlang Sdn Bhd & Anor v Maika Holdings Bhd:

• leave of Court is required by a party who is seeking for the commencement of a fresh action or to proceed with any pending action.
• There are no distinctions applicable in this aspect between a voluntary winding-up and a compulsory winding-up.

Question 4

POST-WINDING UP PETITION

Effect of winding up order on creditors

Answer 4

S.475:

An order for winding up a company shall operate in favour of all the creditors and contributories of the company as if made on the joint petition of a creditor and of a contributory.

Question 5

POST-WINDING UP PETITION

Appointment of liquidators - the law

Answer 5

S.477:

Appointment of liquidators.

S.478:

Appointment of liquidators other than Official Receiver.

Question 6

POST-WINDING UP PETITION

Appointment of liquidators - Effect of appointment

Answer 6

General:

• A liquidator would be appointed to take control of the company and its assets in order to liquidate and distribute the proceeds to the company’s creditors.
• While the company would still continue to exist, the appointment of a liquidator would result in the directors losing their powers over the management and running of the company.
• Be that as it may, the directors are not completely released from responsibility over the company.
• For instance, one major duty imposed on directors is the preparation and filing of the company’s statement of affairs with the liquidator.

Taman Sungai Dua Development Sdn Bhd v Goh Boon Kim:

• The BoD still retains residuary power;
• i.e. they can still instruct their solicitors to oppose current petition or appeal against WU order.