Mark Ho and Eldarius Yong for the Applicant Liquidators [Messrs Chellam & Wong] PIHAK KETIGA Henry Quah and Dwayne Pinto for the Joint Management Body of Duet Residence [Messrs The Chambers of Lim Yeu Ren]

Mark Ho and Eldarius Yong for the Applicant Liquidators [Messrs Chellam & Wong] PIHAK KETIGA Henry Quah and Dwayne Pinto for the Joint Management Body of Duet Residence [Messrs The Chambers of Lim Yeu Ren]

The JMB cannot be authorised to act for purchasers under the SPAs because the SMA confers no power to assume purchasers' contractual rights and the JMB is not party to the SPAs; under s.7A HDA the stakeholder monies vest in the liquidator who must apply them to discharge developer obligations (priority: strata title application first, then common property rectification, then creditors) and the liquidators' estimated administrative expenses of RM1,236,000 (including remuneration on time-cost basis) may be ring-fenced as fair and reasonable given creditor approval under Companies Act s.479.

Citation
POST WINDING-UP NO. WA-28PW-312-09/2020 (Mahkamah Tinggi)
Parties
Applicant Liquidator: Dato' Heng Ji Keng; Applicant Liquidator: Andrew Heng; Respondent / Company: Bandar Kinrara Properties Sdn Bhd (In Liquidation); Interested Party / JMB: Joint Management Body of Duet Residence
Court
High Court
Jurisdiction
Malaysia
Judgment Date
22 March 2021
Case Number
POST WINDING-UP NO. WA-28PW-312-09/2020 (Mahkamah Tinggi)
Procedural Posture
Winding Up / Post Winding Up Directions / Judicial Determination on Notice of Motion for Directions Under S.487 Companies Act 2016 (directions Hearing)
Outcome
Application allowed in part; declaratory directions issued to liquidators on application of stakeholder monies and on JMB authority
Legal Topics
Liquidator Duties and Powers, Stakeholder (retention) Funds Under HDA, JMB Statutory Powers and Locus Standi, Sale and Purchase Agreement Defects Liability, Priority and Application of Housing Development Account Funds, Liquidator Remuneration (time Costs)
Source Language
Malay/English
Company Law Insolvency Law Strata/property Law Housing Development Regulation Contract Law Liquidator Duties and Powers Stakeholder (retention) Funds Under HDA JMB Statutory Powers and Locus Standi +3 more

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Parties

Dato' Heng Ji Keng

Applicant Liquidator

Andrew Heng

Applicant Liquidator

Bandar Kinrara Properties Sdn Bhd (In Liquidation)

Respondent / Company

Joint Management Body of Duet Residence

Interested Party / JMB

Procedural Posture

Winding Up / Post Winding Up Directions / Judicial Determination on Notice of Motion for Directions Under S.487 Companies Act 2016 (directions Hearing)

Legal Issues

  1. 1 Whether the JMB can be authorised to act on behalf of purchasers under the SPAs
  2. 2 Whether the stakeholder/retention sums should be released to the JMB or vested in the liquidator
  3. 3 How the remaining stakeholder monies should be prioritized and applied (strata title application; common property rectification; creditor payments)

Ratio Decidendi

The JMB cannot be authorised to act for purchasers under the SPAs because the SMA confers no power to assume purchasers' contractual rights and the JMB is not party to the SPAs; under s.7A HDA the stakeholder monies vest in the liquidator who must apply them to discharge developer obligations (priority: strata title application first, then common property rectification, then creditors) and the liquidators' estimated administrative expenses of RM1,236,000 (including remuneration on time-cost basis) may be ring-fenced as fair and reasonable given creditor approval under Companies Act s.479.

Court Disposition

Application allowed in part; declaratory directions issued to liquidators on application of stakeholder monies and on JMB authority

Orders

  • Declare that the Joint Management Body of Duet Residence is not authorised under the SMA 2013 to act on behalf of purchasers to exercise contractual rights under the respective Sale and Purchase Agreements
  • Direct that the remaining stakeholder/retention sums (after ring‑fencing approved liquidation administration expenses) shall be applied in the following order: first for application for strata titles and related expenses; second for rectification costs of common property pursuant to the SPAs; third for payments to...