Winding Up Court Directions Given to the Liquidator Affecting Substantive Rights of Parties are Now Appealable

The role of the liquidator is to realise the assets of the company and from the sale proceeds, pay off creditors of the company. If a difficulty arises in the course of his administration of the winding up, the liquidator may apply to the winding up 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 given by the winding up court to the liquidator were non-appealable on the ground that those directions were in the nature of advice only and were accordingly 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, where the Federal Court clarified and qualified its abovesaid earlier decision made a decade ago, and held that such directions given by the winding up court to the liquidator are appealable only if those directions affect the substantive rights of the parties involved in the liquidation.

In this Update, we summarise the legal issues in this decision of the Federal Court and discuss its impact.

For more information, click here to read the full Legal Update.

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