Source: http://hba.org.my/laws/CourtCases/A/abric.htm
Timestamp: 2019-04-19 01:16:21+00:00

Document:
This grounds of judgment are in respect of the notice of motion dated 27 December 2005 (encl. 37) filed by one Ong Weng Seng @ Ong Say Lan (applicant) a contributory and former director of the 1st respondent (the company under liquidation).
(b) alternatively, that the applicant be given leave to commence proceedings to set aside the sale of the said land.
 The 1st respondent is a company incorporated in Malaysia, and was in the principal activity of property development.
 On 27 July 1999, the 1st respondent was wound-up by this court, pursuant to a winding-up petition presented by Abric Project Management Sdn. Bhd. ("petitioner") in respect of a debt of RM2,000,000.
 Pursuant to the winding-up order, one Lim Tian Huat was appointed as the liquidator over the 1st respondent ("the liquidator").
(b) a single storey terrace house located at No. 1, Jalan 8/18, Taman Toman, Petaling Jaya, Selangor Darul Ehsan, situated beside the said land.
 The said land was subject to a registered legal charge in favour of HSBC totaling RM33,000,000 as security for a term loan facility of RM28,000,000 and an overdraft facility of RM5,000,000 granted by HSBC to the 1st respondent.
 On 3 August 1999, the liquidator notified the applicant of his appointment and requested for the applicant to furnish the statement of affairs. The statement of affairs was never provided. As part of the liquidator's duties, the liquidator began the process of realising the assets of the 1st respondent by taking steps to sell the properties. Eventually, on or about 3 June 2003, the said land and single storey terrace property were sold to the 2nd respondent for purchase prices of RM17,900,000 and RM100,000 respectively. The sale and purchase agreement ("SPA") for the sale and purchase of the said land and the single storey terrace property respectively, became absolute and binding upon the 1st respondent on or about 27 August 2003.
 The sale and transfer was eventually completed on or about 24 November 2003 wherein the discharge of charge dated 24 November 2003 was released by HSBC in return for the payment of the full RM17,900,000 directly to HSBC. The said land was registered in the 2nd respondent's name on 27 November 2003.
 On 18 September 2003, the applicant's solicitors wrote to the liquidator with a proposal that a suit be instituted against HSBC for an alleged breach of contract. No query made as to the status of the said land.
 On 22 October 2003, the liquidator's representatives met with the applicant and his solicitors to discuss the proposed cause of action against HSBC for a claim in damages for breach of contract. No query was raised as to the status of the said land. On 25 May 2004, the applicant instituted proceedings inter alia, for this court to allow the applicant to use the name of the 1st respondent to institute a suit against HSBC. On 26 October 2004, this court allowed the applicant to use the name of the 1st respondent to initiate a suit against HSBC subject to certain express order.
 On 14 March 2005, the writ of summons and statement of claim was filed claiming damages against HSBC vide the Kuala Lumpur High Court Civil Suit No. D5-22-343-2005.
 On 27 December 2005, encl. 37 was filed by the applicant.
(r) interest in said land dwindled in 2001 and so the liquidator engaged further reputable and established estate agents in the form of Appolo Realty on 5 July 2001 and Henry Butcher Real Estate Sdn. Bhd. ("Henry Butcher") on 27 August 2001.
(y) subsequently, the liquidator received an offer from the 2nd respondent to purchase the said land for RM17,900,000. As this offer was the highest serious offer obtainable, the liquidator sought the consent of HSBC being the registered chargee over the said land as to the sale consented to the purchase price and agreed to discharge the charge over the said land for the redemption amount of RM17,900,000, being the total purchase price for the said land. The liquidator then accepted the offer and this led to the signing of the SPA with the 2nd respondent on 3 June 2003.
(f) the 2nd respondent is not a bona fide purchaser for valuable consideration.
 At the outset, it is observed that it is unclear as to what provision/s the applicant seeks to move this court. In fact, it is not stipulated anywhere in encl. 37, or for that matter, in any the supporting affidavits of the applicant, under which provision/s the applicant seeks relief. It is therefore uncertain as to what case the liquidator and the other parties are required to meet/answer. This amounts to a failure on a point of practice and procedure where it is a fundamental principle that a party must not take his opponent by surprise. It is incumbent upon the applicant herein to state with sufficient particularity, either in the heading or the body of encl. 37, as to the statute or rule under which this court is moved. As a result, all the other parties as well as the court are extremely prejudiced in having to contemplate the action taken by the applicant.
 Without derogating from the above, it appears from encl. 37 that the applicant seeks, in his capacity as a contributory, to move this court to interfere into the conduct of the liquidation by setting aside the sale of the said land by the liquidator.
 In support of encl. 37, the applicant initially attacked the conduct of the liquidator in the liquidation. He alleges "a complete failure or incompetence on the part of the liquidator in the exercise of his duties" and threatens the initiation of removal proceedings. His main grievances centered upon alleged acts and/or omissions of the liquidator leading to and/or in relation to the sale of the said land, arguing that the said land was sold at a gross undervalue.
 The applicant then goes a step further, launching a vicious assault directly against the liquidator, alleging concealment of facts from him and that the liquidator was colluding with HSBC to the detriment of the 1st respondent, its creditors and contributories. The applicant even alleges "a want of good faith on the part of the liquidator" in his conduct.
 Such allegations are serious allegations directed against the liquidator personally. Accordingly, before looking at the applicable law, it is necessary to first consider, in light of the personal attacks directed at the liquidator, whether leave of court is necessary.
 By encl. 37, the alternative prayer sought by the applicant is that the applicant be given leave to commence proceedings to set aside the sale of the said land.
 The applicant takes the liquidator to task in the latter's role in the sale of the property. He has made the most scathing attack against the liquidator contending inter alia that the liquidator has not acted in good faith, was in breach of his duty of care, acted in collusion with HSBC and had sold the property at gross undervalue. The applicant also contends that the purchaser is not a purchaser in good faith and for valuable consideration.
 It is the act and conduct of the liquidator in the discharge of the duties of his office, which are sought to be impeached by the applicant in this motion. The thrust of the applicant's case is that the liquidator was in breach of his duty of care owed to the 1st respondent in the sale of the property.
... it is clear that a Liquidator having been appointed by the Court, is an officer of the Court. It goes without saying leave of Court is needed before an action is commenced against him and officers like him.
 The case of Leon v. York-O-Matic Ltd. And Others  3 Ch. D 277, also appears to suggest that prior leave of the Companies Court had been obtained notwithstanding that no accusation of mala fide were directed at the liquidator therein.
Before bringing an action against the Defendant who was an officer of the Court by virtue of his position as a Court appointed provisional Liquidator, the Plaintiff should first obtain leave of the winding-up Court ... as a Court appointed provisional Liquidator, the Defendant is an officer of the Court and the Court will jealously protect him ... .
 In any event, the applicant himself appears to recognize the need for leave vide his alternative prayer in encl. 37.
... the Court must protect the integrity of the winding-up under its supervision and control, by taking appropriate steps to prevent any proceedings or conduct which will wrongly impede that process. One way in which this can be carried out is to require the grant of leave by the Court in respect of any action against an official Liquidator, so that the Court can satisfy itself that there is no wrongful interference with the process.
 The control by the court over the circumstances in which, and the extent to which, its own officers are to be subjected to personal liability in respect of their activities in the course of the performance of their official duties falls clearly within the concept of the protection by the court of its own process. (see: Re Siromath  1 ACLC 587).
His task is an onerous one. He is charged with a number of statutory duties ... He is open to accusations of impropriety, unfairness, and any label that a disgruntled party might level against him. He ought to be protected against such abuse unless here is sufficient prima facie evidence to support such allegation. If any dissatisfied litigant is allowed to merely raise some issue and insist that on such mere allegation he be given leave to bring an action against a Liquidator, then the wheels of justice, which at the moment grind extremely slowly, will in such circumstance come to a halt. No one will venture towards this task. A Liquidator will spend all his time defending every action filed against him. He will then have to have professional indemnity insurance cover to protect himself against multifarious actions. Costs will escalate and his fees will have to be fixed.
 In Sarawak Timber Industry Development Corporation v. Borneo Pulp Plantation Sdn. Bhd.  8 CLJ 584, it was ruled that when misfeasance proceedings are brought, it is necessary for the applicant not only prove his allegations but also necessitates him to prove pecuniary loss to the company.
 Before descending into the merits (or lack thereof) of encl. 37, it is necessary for us to consider the possible applicable provisions of law.
 Upon the winding-up of a company, it is trite that the liquidator is expected to wind-up the affairs of the 1st respondent. In doing so, the liquidator would have to realise the assets of the 1st respondent and collect proceeds therefrom, if any, for distribution to the 1st respondents creditors and thereafter, if there is a balance, to the contributories.
the exercise by the Liquidator of the power conferred by this section shall be subject to the control of the Court, and any creditor or contributory may apply to the Court with respect to any exercise or proposed exercise of any of those powers.
any person aggrieved by any act or decision of the Liquidator may apply to the Court which may confirm reverse or modify the act or decision complained of and make such order as it thinks just.
 By reason of the lack of particularisation in encl. 37, one can only surmise that as a contributory, the applicant seeks to challenge the decision of the liquidator in selling the said land under these provisions.
 Basically, the court should be slow to interfere with any act or decision of the liquidator in discharging their roles in company's liquidation particularly in matters involving sale of company's assets which involve commercial considerations. The court can only interfere in very exceptional circumstances when the liquidator has acted utter unreasonably.
 The court shall now deal with all the six (6) grounds submitted by the applicant to supports this application in encl. 37, one by one.
 Here, the applicant seeks to advance the proposition that in the case of a company in liquidation, the liquidator is powerless to sell property if it is subject to a charge. With regards to this allegation, the court finds that the liquidator is embarrassed and surprised, as this purported issue was never raised in either the applicant's application (which was devoid of particularisation as to its focus) or its supporting affidavits. The applicant should not be allowed to conduct its case surreptitiously without allowing a chance for a proper response.
 In any event, with respect, this argument is critically flawed and/or misconceived.
(c) in doing so the liquidator would have to realise its assets to obtain proceeds to repay its creditors. The sale of the said land was therefore pursuant to such duties and responsibilities.
the Liquidator may sell the immovable and movable property ... of the company by public action, public tender or private contract with power to transfer the whole thereof in any person or company or to sell the same in parcels.
Section 236(2)(c) also dispels any doubt as to whether the sale can be done by the liquidator by way of a private treaty and/or whether the liquidator must obtain court sanction before proceeding. Clearly, the liquidator can do so without having to obtain court sanction prior to the sale.
(c) The chargee itself would also insist on protecting its own interest. After all, the charge was granted to the chargee as security. By reason of the chargor's default, there is an outstanding sum payable to the chargee and the right to exercise the security is activated. The chargee could opt to sell the property or it could allow the chargor to sell the property. By choosing the latter, the chargee would invariably only grant its consent subject to the proceeds of the sale being paid directly to it to offset the outstanding sums. If the proceeds of sale were higher than the outstanding sum, that portion would be paid directly to the chargor. This is in no way unfair and/or unusual.
 What the applicant is suggesting here cannot hold water. If one were to lead his proposition to its conclusion, the liquidator would have to sit put and cross its hands, being powerless on its own to sell the said land and therefore unable to complete the liquidation of the 1st respondent. This could never have been the intent of Parliament and/or common law.
(e) further, unlike in the case of Kimlim, here, there is no tussle between the liquidator and receivers and managers appointed under a debenture extended to the chargee. Under the present facts, there is no receivers and managers to talk of, rather, it was a simple and direct sale by the 1st respondent, acting through the liquidator, to a bona fide 3rd party purchaser for valuable consideration (2nd respondent) where the chargee (HSBC), had consented to the sale and provided a discharge of charge.
 In his submissions, the applicant argues that the sale amounted to a compromise or arrangement between the liquidator and HSBC and failure to obtain leave or sanction of the court under s. 236(1)(c) and in the absence of the committee of inspection, the non-compliance or breach of the Act and Winding-Up Rules renders the sale void.
 Section 236(1)(c) provides that the liquidator may with the authority either of the court or of the committee of inspection -"make any compromise or arrangement with creditors or person claiming to be creditors ..."
 The court is of the view that the sale transaction in the present case cannot amount to a compromise or arrangement as envisaged under s. 236(1)(c) of the Companies Act 1965. First, HSBC is not in the same position as that of all the other creditors under the liquidation. Instead, HSBC is a secured creditor; in that HSBC holds a registered charge over the said land and therefore takes priority over the proceeds from its sale. Secondly, cl. 4 of the sale and purchase agreement with regards to the payment of the purchase price does not in any way imply a compromise. As stated above, the said land is subject to a charge in favour of HSBC totaling RM33,000,000 as security for facilities rendered to the 1st respondent by HSBC. Before the said land can be sold free of encumbrances, a discharge of charge would have to be given by HSBC. Payment of the purchase price proceeds directly to HSBC was the only way in which HSBC would consent to the sale. The sale was conducted within the powers extended in s. 236(2)(c) of the Companies Act 1965, wherein prior court sanction is not required.
 Further, provisions for a refund in the event of a termination, is a standard term in sale and purchase agreement. If not, no purchaser would pay earnest money without a safety net ensuring that it would be returned should for any reason the sale be terminated on no fault of any party.
 In any event, here, the total proceeds of sale fell clearly short of fully repaying the outstanding amount owed to HSBC. As a secured creditor, HSBC, would have priority over the proceeds of sale of the charged property.
 The liquidator was in no way colluding with HSBC. In short, the liquidator had a job to do, ie, to wind-up the 1st respondent. Before this could be completed, the liquidator would have to realise the said land. If not, the liquidation could never be completed. The liquidator opted to perform the sale and he was empowered to do so under s. 236(2)(c) of the Companies Act 1965 as long as he had HSBC's consent. Therefore this ground cannot support the applicant's application in encl. 37.
 The applicant was given the prior opportunity by the liquidator to make an offer for the said property. He was then certainly aware of the impending sale of the property. The applicant never chose to take an active part in the liquidation. In fact, the applicant had never showed any interest in the liquidation when requested to furnish the statement of affairs in his capacity as a director of the 1st respondent company, he failed to do so. He has not denied knowledge of the advertisement for the sale of the property placed by the liquidator in "The Star" newspaper on 20 September 1999 as well as signboard put up on the property. He was given express notice by the liquidator of the sale by letter dated 8 July 2002. Nevertheless, the applicant now seeks to complain, after the event and in hindsight, that the purchase price RM17,900,000 was grossly undervalued.
 The applicant himself does not provide any alternatives to this court except that he "received inquiries from business associates who were interested in purchasing the land". This is not only a bare averment but offers nothing to show that there was a higher purchase price that could have been obtained for the said land. In fact, the applicant ought to be reprimanded for not sharing this with the liquidator so that the liquidator could have followed through on those alleged "inquiries". Instead, the applicant merely complains (without action) at the conduct of the liquidator.
 The applicant vehemently argues that the said land had been originally purchased for RM34,500,000. The court cannot accept that argument because it is not only impractical but also unreliable to use the original purchase price as a gauge. The price suggested pertains to a sale conducted many years prior. Furthermore, the consideration as to why such a price was paid are unknown, for example, the 1st respondent may have paid a premium by reason of its peculiar partiality towards the said land. We will never know and therefore the original price cannot be used as a point of reference.
(c) most importantly, they took consideration "assumptions not yet realised" ie, that a development was completed on the said land. In actual fact, the development was never built and the said land remained a vacant plot of land when it was finally sold to the 2nd respondent.
 Upon realising the above, the applicant then produced a new valuation report dated 18 May 2006, apparently abandoning the abovementioned valuations. This time, the applicant claimed that the actual price obtainable on 3 June 2003 was RM30,000,000.
 This court is faced with conflicting situation. On one hand, there is a valuation for RM30,00,000. The liquidator himself supplied a valuation providing the amount of RM28,00,000. On the other hand, the only serious offers received by the liquidator were from OSK Properties Berhad (an offer for RM17,000,000), Modern Peak Sdn. Bhd. (an offer for RM12,000,000) and the 2nd respondent (an offer for RM17,900,000).
 The decision of the Court of Appeal in Malayan Banking Bhd. v. Lim Poh Ho & Anor  2 CLJ 516 answer this quandary, wherein it was held that "the true commercial value of a property is not what a valuer thought it should be, but the actual price that the property would fetch on the open market". In fact, the Malayan Banking Bhd. case (supra) is authority to suggest that the applicant cannot merely complain without having taken any action or provided any proof that the liquidator acted fraudulently or unreasonably.
(d) the 'softness' of the market for commercial properties. A close look at the valuation report of Messrs. CH Williams dated 18 May 2006 (as tendered by the applicant) there was scarce or no interest buyer for the property in 2003. For the entire year of 2003, there was only one (1) transaction involving commercial land recorded in Petaling Jaya.
 The applicant also suggests that the liquidator ought to have pursued a sale to HSBC for RM40,000,000. This is plain absurd as not only was this offer made way back in 1998, HSBC later had specifically stated in its letter dated 10 June 1999, that HSBC "no longer wish to continue negotiations ..." Accordingly, the offer was withdrawn by HSBC.
 The applicant does not desist and argues that the said land ought to have been sold by public tender or public auction. He further alleges insufficient advertising and that the liquidator had failed to obtain an updated valuation just prior to selling. This, the applicant easily says in hindsight, however, the applicant fails to appreciate the situation faced by the liquidator at that material time.
 In this respect, the liquidator cannot please everyone. The liquidator is required to juggle between escalating expenses in having to dispose of the said land, in terms of obtaining valuations which are expensive and paying for advertising costs and on the other hand, adequately pacing the said land in the market. Moreover, the liquidator faced limited funding as the properties amounted to the only major assets of realisable value. The applicant cannot expect the world without having pitched in to fund the disposal.
 Here, first and foremost, a tender was performed by advertisement but proved worthless as no one responded. The said land, being a huge vacant plot of land, was not an ordinary piece of property. Those interested would have to have vast resources, not only to pay for the land but also to develop it.
 Therefore, the liquidator decide to approach reputable professional estate agents to source for potential buyers. This proved to be cost efficient as no advance payments were necessary and the prospect of gaining the commission would drive the estate agents to actively search for a buyer. In turn, the liquidator benefited for the wealth of contacts, marketing networks, expertise and resources available to the estate agents. Further, these estate agents would place signboards on the said land and advertise through publications and leaflets at their own costs. As can be seen, this method proved to be effective, as the estate agents had introduced many prospective purchasers.
 Consequent to the above, the conduct of the liquidator was not unreasonable or absurd. Instead, it was in line with the circumstances faced at that material time. As can be seen from the steps undertaken as act out above, the liquidator was at all material time acting reasonably and bona fide in searching for the best price obtainable for the said land under the circumstances.
 In support of this finding, the court relies on the case of Leon v. York-O-Matic Ltd & Ors  3 All ER 277, as an authority that it is for the applicant to satisfy this court with credible and concrete evidence that the liquidator was unreasonable of his action or he was acting in a manner in which no reasonable liquidator could act; if the applicant fail to do so, the court ought not exercise its power to interfere.
 The applicant alleges that the liquidator had no capacity to enter into the sale of the said land as he had failed to provide the requisite security deposit to the official receiver pursuant to s. 228 of the Companies Act 1965. By this, the applicant alleges that the appointment of the liquidator is flawed and any act performed thereon is void, including the sale.
 The evidence shows that it is not that the liquidator blatantly omitted to provide the security deposit rather he had originally applied to the official receiver for a waiver of the security deposit via a letter dated 10 August 1998. The official receiver did not respond until 8 July 2003 (which was in any event after the SPA for the said land was entered into) and even then the official receiver had issued the letter dated 8 July 2003 to the wrong address. The liquidator had since shifted to a new address and this had been notified to the official receiver via the required Form 73 (notice of change in situation of office of liquidator). Accordingly, the liquidator never received the official receiver's letter.
 The liquidator has since attempted to settle the security deposit but the official receiver has refused to accept. In any case, the court is of the view that the lack of provision of the security deposit is a mere omission and is capable of validation by this court pursuant to s. 355 of the Companies Act 1965 and/or r. 194 the Companies (Winding-Up) Rules 1972. No substantial injustice was caused to the 1st respondent or the applicant by virtue of this omission.
 In any case, s. 232(8) of the Companies Act 1965 provides "subject this Act the acts of a liquidator shall be valid notwithstanding any defects that any afterwards be discovered in his appointment or qualification". This provision was placed in the Companies Act 1965 to ensure that justice would be maintained and that the acts taken by a liquidator in the best interest of a company in liquidation cannot later be set aside merely by reason of any defect in his appointment.
 Further, the liquidator has just filed the liquidator's 4th affidavit in reply (affirmed on 22 January 2006) wherein it is provided that the official receiver has just issued the 'Certificate that Liquidator or Special Manager Has Given Security" in Form 21 on 21 November 2006 confirming that the security deposit has been duly paid. The official receiver therefore does not wish to penalise the liquidator under r. 48 of the Companies (Winding-Up) Rules 1972.
 The applicant contends that the title of the property must first be vested in the liquidator's name as required under s. 233 of the Companies Act 1965 read together with s. 349 of the National Land Code 1965. The applicant further contends that the provisions of Bankruptcy Act shall apply.
 The applicant's contention that the title of the property must first be vested in the liquidator's name before he can deal with it is misconceived. With respect this argument stems from a failure to appreciate that the legal title of the property remains with the respondent and is not affected by its winding-up. Thus there is no necessity to vest the title of the property which is already in the name of the respondent. This is unlike the estate of a bankrupt, where upon the making of a receiving order, it is necessary to vest the estate of a bankrupt unto another person that is the official assignee under s. 349 of the National Land Code.
 In the present case, the said land was registered, at all material times, in the name of the 1st respondent. The sale and purchase agreement was therefore entered between the 1st respondent and the 2nd respondent. The liquidator signed the said agreement (SPA) in his capacity as liquidator appointed over the 1st respondent ie, as agent of the company and not in his personal capacity. The sale was conducted under s. 236(1)(c) of the Companies Act 1965.
 The interplay between s. 233 and s. 236(2) is well illustrated in Official Receiver and Provisional Liquidator of Maril-Rionebel (M) Sdn. Bhd. (formerly known as Kredin Sdn. Bhd) v. Anafartal Caddesi Sdn. Bhd.  2 CLJ 757.
The applicant in Maril-Rionebel's case was the official receiver and liquidator of the company in liquidation. The respondent was the shareholder of the company. The company was the registered proprietor of 5 pieces of land. The liquidator entered into a sale and purchase transaction with a third part to dispose of the lands. The respondent entered private caveat on the lands preventing the liquidator from fulfilling its obligations under the sale and purchase transaction. The liquidator made an application to the court to have the caveats removed.
The respondent opposed the liquidator's application on the ground, inter alia, that the sale of the lands were invalid as the liquidator has failed to obtain an order from the court to vest the lands in the name of the liquidator pursuant to s. 233 prior to the sale.
... it is clear as crystal that the very purpose of section 233 of the Companies Act 1965 is to essentially gather all the assets, landed or otherwise, for the purpose of putting them in the hand of the Liquidator. Here, the said lands are already registered in the name of the company in liquidation and therefore there is no need to vest the said lands or to put the said lands in the custody and control of the Liquidator because it is already in the custody and control of the Liquidator ... it is wrong to say that before the Liquidator can sell the said lands, the said lands must first vest in the Liquidator under section 233 of the Companies Act 1965. It is pointless to have section 236(2) of the Companies Act 1965 as enacted by Parliament if this Court give effect to it. The qualified powers of a Liquidator are deliberately provided for under section 236(1) of the Companies Act 1965. And I venture to say, and it is my judgment, that the powers provided for under section 236(2)(a) or section 236(2)(c) of the Companies Act 1965 are not in any way curtailed by section 233 of the same Act.
(1) the custody and control of all the property and choses in action of the company are transferred from those persons who were entitled under the memorandum and articles to manage is affairs on its behalf, to a Liquidator charged with the statutory duty of dealing with the company's assets in accordance with the statutory scheme (section 243). Any disposition of the property of the company otherwise than by the Liquidator is void (section 277).
(1) where the Official Assignee claims any land, or share or interest in land, under any written law for the time being in force relating to bankruptcy, he may apply to the Registrar under this section for the registration thereof in his name, and the registrar shall give effect to the application by endorsing a memorial of the transmission on the register document of title to the land in question or, as the case may be, the land in which the share or interest in question subsists.
(3) No land, share or interest shall vest in the Official Assignee under any adjudication of bankruptcy, or order for administration in bankruptcy, until it has become registered in his name pursuant to this section.
 This contention by the applicant is clearly without merit and therefore unsustainable. Under this argument, the applicant first states that the sale was not for "valuable consideration". Nevertheless, nowhere does the applicant justify why the payment by the 2nd respondent did not amount to "valuable consideration". Here, payment of the full purchase price cannot be disputed and HSBC itself recognised the receipt of an amount of RM17,900,000 and released the discharge of charge.
 Related to this issue, the applicant also contends that the 2nd respondent was not a bona fide purchaser and the transaction was not at arms length because the 2nd respondent is a related party.
 The court cannot agree with this contention. At all material times the fact that the 2nd respondent was indirectly related to the 1st respondent was never concealed. In turn, the requisite announcements were made and the necessary approvals and waivers were obtained from the relevant regulatory bodies.
 Related party transactions are not prohibited in law. The fact is the law requires certain procedural steps to be complied with if the transaction falls within the category of a related party transaction. In this case full disclosure has been given to Bursa Saham Malaysia concerning the connection and shareholding between a shareholder of the 1st respondent and the 2nd respondent. As can be seen the shareholder that holds a 25% direct share and a 25% indirect share in the respondent also holds a 6.29% share in MFCB who in turn holds a 55% share in the 2nd respondent. The connection between the 2 is minimal. In any case Bursa Saham Malaysia had exempted the 2nd respondent from complying with the usual requirements of obtaining approval at a shareholders meeting.
 Further it must be recalled that the liquidator entered into the sale and purchase agreement for the respondent as vendor. As can be seen the director concerned had not been involved with the deliberations in the proposed acquisitions. In light of the above the applicant's submission on related party transactions is a red herring.
 The applicant also alleges that HSBC ought to have surrendered its security over the said land and filed a proof of debt.
 Once again the court cannot accept this allegation. The applicant is again under a mistaken understanding of the HSBC's position in the liquidation. HSBC is a secured creditor and is not obliged to submit a proof of debt (even when called upon to do so by the liquidator) if he relies upon his security for payment. He need only submit his proof of debt if he gives up his security and proves for the whole debt or if he decides to prove for the unsecured portion. There is no mandatory requirement for a secured creditor to come under the liquidation.
See: K. Balasubraminiam, Liquidator for Kosmopolitan Credit & Leasing Sdn. Bhd. (In Liquidation) v. MBF Finance Bhd. & Ors  1 CLJ 793.
 In mortgage transaction, the title of the mortgagor in respect of his property passes to the mortgagee. However, under the National Land Code, the chargee has only a security interest in the property. The chargor ie, the 1st respondent remains the legal proprietor of the property. The applicant has failed to appreciate the distinction between a mortgage and a charge.
 Therefore, as the legal owner of the property, the respondent has the capacity to enter into the sale with the purchaser through the liquidator. There is no necessity for HSBC to surrender the security to the liquidator as contended by the applicant, before the liquidator can deal with the property.
Under the Code, there is nothing to prevent a chargor with the consent of the chargee to sell the charged property by private treaty.
 Accordingly, the parties to the sale agreement, agreed that the purchase price which turn out to be an amount lesser that the debt owing by the 1st respondent to HSBC, be paid to HSBC to secure the discharge of the chargee. HSBC was and is entitled as of right to the redemption sum as the chargee and secured creditor of the property. The redemption sum had to be and was paid to HSBC in consideration of them giving up their security. It will thus be seen that the issue of non filing of the proof of debt raised by the applicant is irrelevant and misplaced.
 The balance of justice is against the granting of the application in encl. 37. To set aside the sale of the said land would not be a commercially viable decision. It serves no good of the 1st respondent company as well as to the shareholders, and creditors.
(d) approximately 164 purchasers have entered into sale and purchase agreements for the purchase of development units comprised in the development.
 It would therefore cause great injustice not only to the 2nd respondent but also IJM and the many purchasers who have since entered into agreements to buy units. This is not a case in which the act of the liquidator can easily be reversed without grave consequences. Again, the applicant chose to awaken too late.
 The applicant who has all along shown no interest at all in the liquidation process and has still to date not filed the statement of affairs of the 1st respondent, has suddenly bestirred himself whilst a massive and prestigious mixed commercial development known as PJ8 is taking shape on the property in Petaling Jaya. The PJ8 project comprises of 1 block of 38 storey service suite, 1 block of 12 storey office suit and 2 blocks of office towers with 12 & 17 storey respectively. The setting aside of the sale of the property would have disastrous effect on the numerous purchasers of the units in this project and brings no benefit whatsoever to anyone including the applicant and the 1st respondent company.
 The applicant on the other hand is not an aggrieved party. There is no advantage or benefit to be gained from this motion. As it is even if the property had been sold at RM30 million, there will still be a deficiency of RM13.3 million to HSBC and no surplus whatsoever to the respondent or the applicant. In the final analysis, whatever the shortcomings (if any which is denied) of the liquidator, there is no prejudice to the respondent or the applicant or the creditors.
 There was clear delay in the filing of encl. 37. Enclosure 37 was only filed on 27 December 2005 where evidence suggests that the applicant knew of the sale of the said land at least as early as 20 August 2004.
 No reasons have been proffered by the applicant to explain a delay of almost one and a half years. Such a delay would be in itself, be grounds to refuse encl. 37. In the Leon case (supra). Plowman J held "another ground for refusing the relief for which the plaintiff is asking in this motion is the matter of delay. It is clear from the evidence that the plaintiff knew before Christmas, 1965 ... the writ was not issued until Mar. I, that is to say, after a delay of over two months ..."
 As was the state of affairs in the Leon case (supra), the liquidator here was dependent on the approval of HSBC in the sale of the said land. The fact that the said land was leasehold land exacerbated the issue, calling for the said land to be sold as soon as possible. The decision was made and the SPA was signed on 3 June 2003 with the consent of HSBC. It is therefore unreasonable for the applicant to have now awakened from his slumber over two and a half years later to begin to question and interfere with that decision with hindsight.
 The applicant has failed to establish a sufficient prima facie case against the liquidator to warrant interference of the court in the sale of the said land. Therefore the alternative prayer in encl. 37 for leave to commence proceedings to set aside the sale of the said land cannot be granted.
(d) the applicant failed to establish that he was aggrieved by the decision of the liquidator in selling the said land at RM17,900,000. Even taking the applicant's case at it's highest, the sale of the said land at the price of RM30,00,000 (as suggested by him) would still leave a deficit of approximately RM13,300,000 due to HSBC. No monies would flow back into the liquidation pool for distribution to the contributories. The applicant, as a contributory, is not aggrieved by the sale of the said land.
 Based on the foregoing, encl. 37 is dismissed with costs.

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