Annou Xavier, Tristan Ng and Yong Jia Wei for the Applicant [Messrs Azri, Lee Swee Seng & Co.] PENCELAH 1. ) Ong Chin Siong and Elise Tam for the 1st – 6th Interveners [Messrs Siong & Rita] 2. ) Judy Lim Phek Ng, Joshua Wu Kai-Ming , Lily H

DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR DALAM WILAYAH PERSEKUTUAN, MALAYSIA (BAHAGIAN DAGANG) SAMAN PEMULA NO. WA-28JM-23-12/2020 Dalam perkara mengenai MONDAY-OFF DEVELOPMENT SDN BHD (No. Syarikat: 623914-T) Dan Dalam perkara mengenai seksyen- seksyen 404, 405, 406, 407(1), 410, 411 dan 414 Akta Syarikat 2016 Dan Dalam perkara mengenai Kaedah- kaedah Syarikat (Mekanisme Penyelamat Korporat) 2018 Dan Dalam Perkara Aturan-Aturan 7, 88, 92 Kaedah 4 Kaedah-kaedah Mahkamah 2012 ANTARA MONDAY-OFF DEVELOPMENT SDN BHD (No. Syarikat: 623914-T) …PEMOHON DAN 1 1. BUMIMETRO CONSTRUCTION SDN BHD (No. Syarikat: 576189-W) 2. BUMIMETRO HARTANAH SDN BHD (No. Syarikat: 615097-H) 3. AXH WORLDWIDE SDN BHD (No. Syarikat: 899438-A) 4. BUMIMETRO GEOTEKNIK SDN BHD (No. Syarikat: 650915-P) 5. WONG CHEE WENG (No. K/P: 621229-03-5191) 6. LAW GEOK KING (No. K/P: 620220-03-5430) 7. JONES HU SONG KUAI (No. K/P: 850625-13-5644) …PENCELAH-PENCELAH JUDGMENT (Enclosure 1, 36, 58) 1. There is before this Court an Originating Summons filed by Monday- Off Development Sdn Bhd (Applicant)under sections 404,405,406,407 and 410 of the Companies act 2016 and orders 7,88,92 rule 4 of the Rules of Court 2012 for inter alia the following orders:- i. the Applicant to be placed under judicial management by a judicial manager (JM) 2 ii. that the Judicial Management Order („JMO‟) be granted to the Applicant for a period of 12 months from the date this Court so orders or as ordered by this Court iii. that Abdul Khudus bin Mohd Naim from Messrs Citi Partners be appointed as JM 2. The Application for the JMO is premised upon these salient facts:- a. the Applicant is or will be unable to pay its debts; b. the survival of the Applicant or its undertaking as a going concern will be achieved; c. It is a more advantageous realization of the Applicant‟s assets than having it being wound up; d. there are no secured creditors who has appointed or is or may be entitled to appoint a receiver or receiver and manager of the whole, or holding debenture. 3. The Applicant had filed this Application on 9.12.2020 and on 18.2.2021, this Court allowed, with no objection from the Applicant, the following entities to intervene as the 1st to 6th Interveners in the Application:- a. Bumimetro Construction Sdn Bhd 3 b. Bumimetro Hartanah Sdn Bhd c. AXH Worldwide Sdn Bhd d. Bumimetro Geoteknik Sdn Bhd e. Wong Chee Weng f. Law Geok King 4. Further on 4.3.2021, one Jones Hu Song Kuai was also allowed to intervene as the 7th Intervener in the Application, with no objection from the Applicant. Background Facts 5. The Applicant is a private limited company and developer of a prestigious condominium project known as „ONE KIARA‟ (“the Project”) located at No 1 Jalan Desa Kiara, Mont Kiara, Kuala Lumpur. The Project consists of 2 blocks of condominiums, with 226 units in total. 6. The construction of the Project is divided into 2 phases where Phase One consists of Block A and the common facilities, and Phase 2 consists of Block B. 7. The Applicant has sold 157 units for the Project with 103 purchasers for Block A and 54 purchasers for Block B. All 157 purchasers had entered into Sales and Purchase Agreements (“SPAs”) worth around RM253,330,330.00. 4 8. One Bumimetro Construction Sdn Bhd (“BCSB”) was appointed as the main contractor for Phase 1 of the Project and was to complete Phase 1 around March 2013, but only completed 40% of Phase 1. On or around 3.7.2013, BCSB stopped work and terminated the construction contract with MOD. 9. Due to the termination of the construction contract by BCSB, the Applicant went on to appoint MCC Overseas (M) Sdn Bhd (“MCC”) as the new main contractor for Phase 1 on 6.5.2014 in order to complete the Project. 10. The appointment of MCC, as the new 2nd Contractor for Phase 1 cost the Applicant about RM100.2 million, which is RM32 million more. 11. Around May 2015, a stop work order was issued by Dewan Bandaraya Kuala Lumpur („DBKL‟) which was in force for 3 months where MCC had to carry out works to ensure that the stop work order can be lifted. 12. Around September 2018, MCC ceased construction work for Phase 1, whereby Phase 1 work was about 80% completed. 13. Currently, the Applicant is in the process of negotiating with one Huashi (Malaysia) Sdn Bhd (“Huashi”), its contractor for Phase 2 to take over and complete Phase 1. 5 14. BCSB, Bumimetro Hartanah Sdn Bhd, AXH Worldwide Sdn Bhd, Bummimetro Geoteknik Sdn Bhd, Wong Chee Weng, Law Geok King (1st – 6th Interveners) and Jones Hu Song Kuai (7th Intervener) have all been made interveners in the Application herein. 15. MCC had also been allowed to intervene in the Application but have not taken any position in so far as the Application is concerned. Suits against the Applicant 16. BCSB had on 6.1.2021 served a Section 466 Companies Act 2016 statutory winding up notice to MOD. 17. Around September 2014, BCSB initiated arbitration proceedings against the Applicant and part of some claims were allowed, in that the Arbitrator allowed a sum of RM101,765,942.53. 14. BCSB subsequently filed two suits at the High Court of Kuala Lumpur to set aside parts of the Arbitration Award and referred questions of law to the Court. The Applicant filed a suit to stay the execution of the Arbitration Award and to set aside paragraphs of the Arbitration Award. 15. The High Court allowed BCSB‟s suits and dismissed the Applicant‟s suit. MOD then appealed to the Court of Appeal against the High Court‟s decisions. On 14.12.2020, the Court of Appeal dismissed 6 the Applicant‟s appeals and the Applicant has since filed 3 Motions to the Federal Court for leave to appeal. 16. The Applicant is currently involved in an ongoing suit at the Kuala Lumpur High Court Suit No. WA-24NCVC-2612-12/2018 (“2612 Suit”), which was initially filed as an Originating Summons but was later converted into a Writ Action on 2.8.2019. 17. The Applicant is also currently facing a legal suit in the 2612 Suit for unlawful termination of the SPAs including claims for LAD. The Applicant’s Submissions 18. The Applicant‟s audited accounts for financial year ending 28.2.2019 and 29.2.2020 that the Applicant had suffered the following net losses:- Year Net Losses (RM) Reference 28.2.2019 28,125,600.00 Page 841, Enclosure 4 29.2.2020 26,144,417.00 Page 864, Enclosure 4 19. As at 30.9.2020, which is just 7 months from the end of financial year 29.2.2020, the Applicant continued to suffer losses where the net loss of the Applicant is at RM27,538,986.28. 20. Further, the audited accounts and management accounts of the Applicant also show that the current liabilities had been on a 7 downward trend since 2018. The current liabilities from 2018 till 2020 are as follows:- Year Current Liabilities Reference (RM) 28.2.2018 213,448,883.00 Enclosure 4, Exhibit LCW-40 (pg. 815) 28.2.2019 259,688,134.00 Enclosure 4, Exhibit LCW-40 (pg. 840) 29.2.2020 308,644,535.00 Enclosure 4, Exhibit LCW-40 (pg. 863) As at 30.9.2020 343,329,286.59 Enclosure 4, Exhibit LCW-39 (pg. 807) 21. The audited accounts and management accounts of the Applicant from 2018 to 2020 that the assets of the Applicant is much lower than its liabilities. Year Assets (RM) Reference 28.2.2018 100,198,337.00 Enclosure 4, Exhibit LCW-40 (pg. 815) 28.2.2019 118,311,988.00 Enclosure 4, Exhibit LCW-40 (pg. 840) 29.2.2020 141,123,972.00 Enclosure 4, Exhibit LCW-40 (pg. 863) As at 30.9.2020 145,799,036.63 Enclosure 4, Exhibit LCW-39 (pg. 807) 8 22. Should the Applicant be liquidated, it would have liabilities. This would demonstrate that the Applicant would be unable to pay its debts. 23. The Proposed Judicial Manager, had affirmed an Affidavit and exhibited a draft Scheme whereby it is shown that the Applicant owes the purchasers of the Project LAD for late delivery of vacant possession and late completion of common facilities amounting to a sum of RM138,622,118.00, as at 30.9.2020. 24. As the Project is still under construction, the LAD to the purchasers will continue to accrue until vacant possession is delivered and the common facilities are completed and the Applicant submits that they will be exposed to claims and potential lawsuits from the purchasers of the Project for the outstanding LAD once the Project is complete. 25. The Applicant submit that their finances will be strained even further in light of the ongoing lawsuits by purchasers for the LAD and also potential lawsuits in the near future. With the Applicant ‟s current financial status, the Applicant would not be able to pay for those LAD. 26. The Applicant company submits that it has met the criteria under section 405 (1)(a) of the Companies Act 2016 that it is unable or will be unable to pay its debts. 9 27. It is also submitted by the Applicant that the making of the JMO would likely achieve one of the purposes in Section 405(1)(b) of the Companies Act 2016 and that despite the financial difficulties:- a) the Applicant seeks to complete the Project and that as of October 2020, the phase 1 of the One Kiara Project is 80% completed whereas phase 2 of the One Kiara Project is 84.5% completed; b) Huashi has agreed in principle to appear as „White Knight‟ to assist MOD in the injection of capital and construction of One Kiara Project until its full completion, subject to an agreement of a Statement of Proposal, compromise and/or a scheme of arrangement among the Creditors of the Applicant; c) the Applicant is sincere to complete the Project so as to handover vacant possession to its purchasers with the assistance of the capital injection from Huashi. 28. The Applicant contends that the proposed scheme will create the best case scenario and a win-win situation for all parties whereby the agreement of a Statement of Proposal under the judicial management of the Applicant will:- a) allow the Project to be completed; b) allow the purchasers of the Project to eventually obtain vacant possession of their purchased units in the Project; 10 c) allows existing contracts and operations of the Applicant to continue; and d) prevent the Project from being stalled and/or abandoned whereby the Project will be left incomplete and the purchasers will not get vacant possession of their purchased units and all creditors will suffer more losses in the event the Applicant is wound up. 29. The Applicant also submits that: i. in a winding up scenario, the Liquidators are under no duty to rehabilitate and to protect the interests of the aggrieved purchasers in abandoned housing projects. Instead, this application for Judicial Management intends to keep the purchasers‟ interests in mind as much as feasibly possible; ii. as the Applicant is desirous in completing the Project and delivering vacant possession to its purchasers, it is necessary for the operations of the management and construction by the Applicant to continue in the near future. 30. The Applicant seeks that the JMO be in force for 12 months instead of 6 months for the following reasons:- a) the Applicant is desirous of completing the Project and deliver vacant possession to its purchasers. It would take 11 much longer than 6 months for the construction of the Project to be completed and vacant possession to be delivered. b) a 12-month effective period would allow the Judicial Manager to be appointed and to effectively come up with a Statement of Proposal and to carry out such Proposal once it has been approved. c) the proposed Judicial Manager had prepared a draft statement of proposal whereby it is targeted for the completion of the project within 15 months. Interveners Submissions 31. The 1st to 6th Interveners have raised one preliminary objection (PO) that the Application ought to be dismissed as the Applicant had sought for a JMO for the period of 12 months. 32. The 1st to 6th Interveners also submit inter alia that there is a lack of bona fide demonstrated by the Applicant and a) that it is for the Applicant to demonstrate the element of bona fide in order to convince this Court to grant a JMO b) the Applicant concealed the fact that Application has been made at he Applicant‟s appeal pertaining to the Arbitration Award which was heard by the Court of Appeal on 14.12.2020 and was eventually dismissed by the Court of Appeal on the same day. 12 c) the Applicant was served with the 466 Notice by the 1st Intervener on 6.1.2021, but the Applicant only chose to divulge the filing of the Application on 22.1.2021 when the Applicant could have revealed it as early as in December 2020 d) the Applicant has, as a matter of fact, planned to apply for judicial management order in November 2020. This can be observed in a letter dated 12.3.2021 from Huashi addressed to the Applicant In the said letter, it is mentioned that the Applicant had on 27.11.2020 wrote to Huashi evincing its intention to apply for a JMO e) the Applicant concealed the 9 units of condominium held by the 1st Intervener when the issue relating to the said units are to be arbitrated in a subsequent arbitration proceedings and notwithstanding the issue of the 9 units of the condominium being unresolved, the Applicant had included those units as unsold units in the Project f) the Applicant allegation that the termination of the construction contract by the 1st Intervener was wrong and illegal is wrong and without basis as the arbitrator has ruled that the 1st Intervener‟s determination of the said contract is valid and lawful, which arbitrator‟s finding is also affirmed by the High Court and the Court of Appeal. 33. It is also contended by the 1st to 6th Interveners that the Applicant alleged that Huashi has agreed in principle to be the white knight to 13 revive and to continue the Project by injecting capital into the Applicant so as to allow the Project to be completed but that prior to the filing of the Application, the Applicant did not furnish a single documentary evidence to show that Huashi has agreed to provide the requisite funding to the Project and that the Applicant only disclosed Huashi‟s Letter when the Interveners raised their doubt against the veracity of the Applicant‟s statement. 34. The 1st to 6th Interveners further state that Huashi‟s Letter clearly confirms that the alleged white knight agreement between Huashi and the Applicant has not been formalised and that there is not even the indication of a capital injection by Huashi which is the most critical component in the whole survival plan of the Applicant, and that the Applicant and/or the nominated judicial manager has conveniently sidestepped the said issue. 35. The 1st to 6th Interveners also contended that no evidence has been produced by the Applicant to show Huashi‟s financial ability to inject fund into the Project and Huashi (Malaysia) Sdn Bhd being the alleged proposed white knight is a different entity from China Huashi Enterprises Company Limited and that no connection has been established by the Applicant to show the connection between Huashi (Malaysia) Sdn Bhd and China Huashi Enterprises Company Limited. 36. It is also submitted by the 1st to 6th Interveners that the Applicant has failed to disclose the details in the Housing Development Account and that the Applicant only exhibited its HDA's statement of account from September 2020 to January 2021 after the 14 Interveners raised that no HDA details were disclosed by the Applicant. 37. The 1st to 6th Interveners alleges that there is no explanation offered by the Applicant to show how a constantly lossmaking operation could acquire the fund to pay off its bank loans yet failed to complete the Project and pay its contractors and that looking at the documentary evidence, the only conclusion that can be drawn is that the Applicant has used the monies in the HDA to pay off its bank loans. 38. It is further submitted by the 1st to 6th Interveners inter alia that a) the Project has been categorised as “Projek Perumahan Swasta Yang Sakit” by the Housing and Local Government Ministry since 2018 until to-date and as such the Applicant will not be able to renew its license and/or permit if the Project fell under the category of “Projek Sakit” as published in the official portal of the Housing and Local Government Ministry, and therefore it is questionable how the Applicant is able to renew its license and permit; b) the Applicant‟s have a tendency in making empty promises where for example in 2018, the Applicant in supporting its applications for an order for stay of execution (under Originating Summons No. WA-24C(ARB)-41-12/2016 and under Civil Appeal No. W-02-C(A)-58-01/2018) and a fortuna injunction (under Originating Summons No. WA-24NCC-141-03/2018 had stated in its affidavits that the Project was due to be completed 15 in September 2018 and the Court of Appeal granted an order for stay of execution in favour of the Applicant after taking into account the purchasers‟ interest and that albeit the sworn statements given by the Applicant, the Applicant still failed to complete the Project as promised c) the Applicant‟s List of Creditors revealed that the Applicant owed the sum of RM39,391,652.31 to its directors and shareholders and that the said amount ought not to be included in the List of Creditors as this will affect the voting right of the creditors at the impending creditor meeting d) the Applicant‟s documents do not reveal the actual progression of the Project e) the draft Proposal is vague and lack of the necessary details and that at this juncture, the Applicant should have had a concrete and tangible proposal ready to be perused and considered by this Honourable Court f) that the projected revenue for the 69 unsold units at RM221,696,903 by the Applicant and/or the nominated judicial manager is highly inflated g) it is premature for the Applicant to include the Purchaser LAD as a debt it has to pay. This is because the Applicant‟s position is that the Purchaser LAD is not due and payable until handing over of vacant possession and completion of common facilities and that it is unfair for the Applicant to require the purchasers 16 who had waited for almost 10 years for the completion of the Project to waive their Purchaser LAD claims against the Applicant without offering any alternative compensation h) there was a complete absence of effort on the part of the Applicant to involve/invite the purchasers in its plan to apply for JMO as they had no prior knowledge of the Applicant‟s plan to seek a JMO and by allowing the limitation period to set in, the Applicant effectively puts itself in a position where it can now plead limitation against any possible claim from any purchasers. This is because the contractual date of handing over of vacant possession had exceeded the limitation period of 6 years i) the figures listed in the List of Creditors do not reflect the actual debts owed by the Applicant. This is because the Applicant has made a mistake in stating the sum of RM16,642,308.08 as the amount owed by the Applicant to the 1st Intervener as of September 2020. Without taking into account the Court of Appeal Orders, the sum owed by the Applicant to the 1st Intervener is greater than the alleged RM16 million j) the total outstanding sum owed by the Applicant to the 1st Intervener has accumulated to the sum of RM22,266,266.79 (as at 6.1.2021) as claimed in the 466 Notice. k) the Applicant has refused and/or failed to take into account the Construction LAD that is payable by MCC and Huashi to the Applicant is to defeat the 1st Intervener‟s claim against the Applicant. By inflating the amount owed by the Applicant to MCC 17 and Huashi, the percentage of the debt owed to the 1st Intervener from the total debt owed to the creditors will be accordingly reduced l) the Proposal is only concerned with diminishing the purchasers and the creditors‟ rightful entitlement in terms of payment and the Applicant never have the best interest of the purchasers and creditors in mind m) the Applicant is severely insolvent and its liabilities far exceed its assets and has difficulty in proving that Huashi has confirmed to allocate a certain sum of money to be injected into the Project and thus it is sensible to wind up the Applicant than to grant a JMO to the Applicant n) The Interveners object to the Applicant‟s suggestion to appoint Abdul Khudus bin Mohd Naaim as the judicial manager as i. the nominated judicial manager has failed to question the unreasonable amount of remuneration that was paid to the directors of the Applicant; ii. the nominated judicial manager has failed to question the details in the HDA account maintained by the Applicant; iii. the nominated judicial manager has failed to consider the capital injection required to revive the Project; 18 iv. the nominated judicial manager has acted upon mere averments of the Applicant without taking the initiative to enquire for further details; v. the nominated judicial manager has failed to consider the statement of affairs of the company when preparing the Proposal; vi. the nominated judicial manager has failed to consider whether the terms in the Proposal would have real prospect in improving the financial status of the Applicant; vii. the nominated judicial manager has inflated the projected revenue for the unsold units in the Project so that the Proposal appears to be more viable; viii. the nominated judicial manager has failed to consider the contractual issue between the Applicant and MCC for the Project; ix. the nominated judicial manager has included the amount that ought not to be taken into account in the List of Creditors; and x. the nominated judicial manager has failed to take the initiative to question the Applicant despite severe lack of details and clarification made available by the Applicant. 39. The 7th Intervener submits that at this stage of the judicial management application, the Applicant should have furnished to this Court strict proof and evidence that the Applicant had already finalised the terms of the agreement whereby Huashi unequivocally 19 agrees to be the white knight – of which, the Applicant had failed to do. 40. The 7th Intervener further submits that: a) this Court must show great heed to the wishes and views of the Applicant‟s creditors b) Applicant‟s judicial management application is not viable and would not achieve the survival of the company, or the whole or part of its undertaking as a going concern c) as a purchaser of the Property from the Applicant, the 7th Intervener is entitled to liquidated damages as a result of the Applicant‟s failure to deliver vacant possession of the Property and failure to complete the common facilities of the Project within the stipulated time frame d) statutory reliefs/remedies in social legislation, such as liquidated damages, cannot be set aside by way of judicial management e) the Application made is not bona fide on the similar grounds as that relied on by the 1st – 6th Interveners Court’s Findings Preliminary Objection 20 41. I will firstly deal with the PO raised by the 1st to 6th Interveners that the Application ought to be dismissed as the Applicant had sought for a JMO for the period of 12 months. With respect, I find this argument wholly misconceived and I dismiss the said PO on the grounds that: a) the Court need not necessarily grant the said JMO for 12 months for the reasons to be given hereinafter b) any procedural error, if any, does not warrant a dismissal of the Application c) there is no serious defect in the Originating Summons Interveners Position as Unsecured creditors 42. Although all the Interveners are unsecured creditors, and are not “…entitled to appoint a receiver or receiver and manager …” , and do not have the automatic right under Section 408 (1)(b)(ii) and s.409 (b) of the Companies Act 2016 to oppose the making of a JMO, this Court has previously held, and I do continue to hold as in Goldpage Assets Sdn Bhd v Unique Mix Sdn Bhd [2020] MLJU 723 that “Each of the said sections, 404, 405 & 409 of the Companies Act 2016 do not specify anywhere that an unsecured creditor cannot take part in the JM hearing or oppose the JM Application.” and 21 “The words in the said sub sections, do not state that any other creditor cannot oppose the JMO but it is obligatory upon the Court, by the use of the word „shall‟ therein, to dismiss the application for a JMO if the secured creditor who is one who can also appoint a receiver or receiver manager, opposes the JMO. In „Companies Act 2016: The New Dynamics of Company Law in Malaysia „ by Kenneth Foo Poh Khean and Lee Shih at p. 454, the learned authors refer this as the right to exercise the veto. [34] Whether any other creditor can oppose or otherwise is, with respect, within the discretion of the court who must exercise its discretion judiciously [35] Such unsecured creditors views need not necessarily form the basis of this courts decision as the court will decide on whether to grant a JMO based upon the criteria in sections 404 & 405 and whether they have been satisfied and proven by the applicant. Accordingly, I may consider the objections or at least the view of the unsecured creditors” Documents examined by the Court 43. In coming to my decision herein, I have perused the relevant audited accounts and management accounts of the Applicant at Enclosure 4, Exhibit LCW-40 and taken into account the fact that the liabilities of the company exceeds the assets of the company when deciding whether the company was insolvent. 44. This court has also noted that the Applicant owes a sum of about RM344,116,531.35 to its creditors as at 30.9.2020, which consist of 22 the contractors, the consultants as well as the purchasers of the Project and the Applicant‟s trade creditors and that the Applicant now has a cash balance of only around RM259,927.50 as seen in Enclosure 4, Exhibit LCW-37 and LCW 29 respectively. 45. This Court has also examined the draft Scheme submitted by the Proposed Judicial Manager in Enclosure 11 which contained inter alia the following scheme of proposal:- a) the Profit and Loss (“P&L”) shows the Applicant would not be able to sustain the cost of completion of the One Kiara Project; b) the purchasers will release the Applicant from any claims or demand, crystallized and/or contingent arising pursuant to LAD. c) the unsecured creditors (with the exception of the Purchasers of the Project) to agree to a proposed „haircut‟ to be determined by the Proposed Judicial Manager in the finalised Statement of Proposal; d) the funding to the Project to be provided by Huashi, the „White Knight‟, which is conditional upon after approval of a Statement of Proposal, compromise and/or a scheme of arrangement among the Creditors of the Applicant ; 23 e) with the agreement of the Statement of Proposal, the Applicant will have the required resources to complete the Project within a targeted 15 months period; f) the funding from Huashi will be based upon project completion progress of a 15-month completion period commencing from date of lodgement of Statement of Proposal agreed by the Creditors of the Applicant. 46. I have also taken into consideration that the aforesaid proposal is not set in stone and is merely a preliminary draft scheme of proposal which can be fine-tuned, amended and/or altered accordingly in the finalised Statement of Proposal by the Proposed Judicial Manager if the JMO is granted and upon a proposal being set by the proposed Judicial Manager within 60 days 47. This Court has also accepted the Applicant‟s explanation that it took a little more time to secure a written form of acknowledgement of Huashi‟s commitment as a white knight due to the ongoing Movement Control Order (MCO) and the travel restrictions as well as the Chinese New Year holidays in February and the negotiations that had to take place as stated in paragraph 24 of the Applicant‟s Affidavit in Reply in enclosure 35 . Bona Fides of the Applicant 48. I hold that not all non-disclosure of facts will affect the bona fides of the Application and I quote Carnwath J in Re MTI Trading Systems 24 Ltd (in administration) and others [1998] 2 BCLC 246 where His Lordship held: “The court is concerned with the interests of the companies and their creditors. It cannot be right that those interests should be jeopardised merely because of a failure of disclosure by the applicant, if there is otherwise merit in the case.” 49. With respect, the issues raised by the 1st – 6th Interveners with regards the Applicant‟s lack of bona fides in making the Application such as the failure to disclose the details in the Housing Development Account earlier on or that the Applicant concealed the 9 units of condominium held by the 1st Intervener in the Application are in my view irrelevant to the Application before me as all other relevant materials and facts are before this court for the Court to consider and determine the Application herein. I rely on Emporium Jaya (Bentong) Sdn Bhd (in liquidation) v Emporium Jaya (Jerantut) Sdn Hhd [2002] 3 CLJ 10 where his Lordship Ramly Ali J ( as he then was) stated: “[5] As a rule, the failure of a petitioner to make a full and frank disclosure of all relevant or material facts in its ex parte application will empower the court to set aside the ex parte order. On the facts, the "undisclosed facts" as alleged by the applicants were neither material nor relevant in the context of the other materials before the court at the stage of the ex parte application. The alleged "undisclosed facts" were not really essential in determining the issue on the appointment of a provisional liquidator. All material and relevant facts for 25 consideration were stated in the liquidator's affidavit in support of the petitioner's application. The question of the petitioner having suppressed material evidence in the said affidavit did not arise.” 50. Although the said Emporium Jaya (Bentong) Sdn Bhd (in liquidation) was based on a case involving a winding up petition, I am of the view that the principle therein is equally applicable to the matter before me. 51. Learned counsel for the 1st – 6th Interveners had relied on this Court‟s decision in Twin Unitrade Sdn Bhd v TSK Hardware Sdn Bhd [2020] MLJU 2326 to allege that since the Applicant has failed to make a full and frank disclosure in relation to the HDA, the Application should not be allowed by this Court. With respect, this court‟s decision in Twin Unitrade Sdn Bhd (supra) was based on the facts therein where I had stated: “[37] I also find from the facts before me that the Applicant had at the time of the JM Application failed to inform this Court of the Judgment obtained by the PI and this together with the fact that the Application had been filed in Kuala Lumpur when the Applicant was in fact a company based in Johor Bahru are in the considered view of this court factors which constitute a lack of bona fides on the part of the Applicant. This court also finds the conduct of the Applicant in not informing the PI or the Sessions Court in the Civil Suit of the JM Application as being surreptitious and that such acts of concealing the JM Application in the Civil Suit appear to this Court to be deliberate and conscious acts 26 which would have a bearing on the JM Application and the subsequent JM Order.” 52. Twin Unitrade Sdn Bhd (supra) should therefore be distinguished from the Application before me where herein I have found no such acts of deliberate concealing which would have a bearing on the Application and my earlier finding that all other relevant materials and facts are before this court for the Court to consider and determine the Application herein. 53. I also hold that the reliance by counsel for the 1st – 6th Interveners on Vision Development Concept Sdn Bhd v Low Sheh Ling [2020] MLJU 2387 is also misconceived, as this Court‟s decision in that case was based on the facts of that case as can be clearly seen in the following statement in that said case : “[52] I am of the considered view that Vision was not entirely bona fides in making the JM application before me by withholding these information and/or facts, which I am of the opinion are material factors to be considered by me in such an application as in Enclosure 1 herein, especially with regards the Adjudication Decision which has been strongly relied on by Vision in order to support their contention that the survival of the company as a going concern or that income can still be generated by Vision as well as that there are assets to meet the creditors demand.” 27 Requirements under the Companies Act 2016 54. This Court has to consider and be satisfied that section 405(1) of the Companies Act 2016 which inter alia provides that where a company or its directors, under a resolution of its members or board of directors, makes an application under section 404, the court may make a judicial management order in relation to the company if: (a) the court is satisfied that the company is or will be unable to pay its debts; and (b) the court considers that the making of the order would be likely to achieve one of more of the following purpose: (i) the survival of the company, or the whole or part of its undertaking as a going concern; (ii) the approval under s. 366 of a compromise or arrangement between the company and any such persons as are mentioned in that section; (iii) more advantageous realisation of the company‟s assets would be effected than on a winding up. 55. In my decision herein, I also note that Section 466(1)(c) CA 2016 states that the Court should take into account the contingent and prospective liabilities when determining if a company is unable to pay its debts. 56. I find from the facts before this Court that: 28 a) the prospective claim for LAD would be imminent, and the same would seriously affect the survival of the Applicant who may then be wound-up b) in its current financial situation, the Applicant is not in a financial position to settle any claims and/or to pay any demanded sum c) the 1st to 6th Intervener had admitted at paragraph 92 of its Afidavit Untuk Menentang Perintah Pengurusan Kehakiman Dibuat affirmed by Wong Chee Weng on 4.3.2021 in enclosure 33 that the Applicant is unable to pay its debts. 57. I therefore find that the Applicant is thus unable to pay its debts pursuant to Section 466(1)(a) of the Companies Act 2016. 58. From a careful consideration of the draft statement of proposal referred to above, I find that the Applicant appears to be desirous in completing the Project and delivering vacant possession to its purchasers and have the purchasers‟ interests in mind. I further find that the completion of the balance work of 20% remaining for Phase 1 and 15.5% remaining for Phase 2 would benefit about 157 purchasers and that this objective can only be achieved if the Applicant is allowed to continue with its operations as well as the management and construction of the Project. In coming to my decision I have also noted that the Proposed JM had in his Affidavit at enclosure averred that Project would be able to be completed in approximately 15 months. 29 59. A winding up of the Applicant will in my view surely tantamount to the Project not being able to be completed which will at the end of the day be less beneficial to the creditors as compared to a judicial management option. The value of the Project can only be unlocked if the Project is completed as there would be hardly any value or considerably less value on an uncompleted project. 60. In such a situation, I hold that the „public interest‟ element under Section 405 (5)(a) of the Companies Act 2016 is another factor which this Court has taken into consideration in its decision herein and which section reads:- (5) Nothing in this section shall preclude a Court: (a) from making a judicial management order and appointing a judicial manager if the Court considers the public interest so requires. 61. This is also in line with Her Ladyship Wong Chee Lin JC ( as she then was) who held that: “[45] Even if the court is not satisfied that the making of the judicial management order would be likely to achieve one or more of the purposes set out in s 405(1)(b) of the CA 2016, s 405(5)(a) of the CA 2016 has the effect of vesting in the court an overriding power to make a JMO if it considers the public interest so requires. 30 [46] What constitutes „public interest‟ is not defined in the CA 2016 and so must be determined on a case to case basis.” 62. With respect, there is nothing under the law which requires the Applicant at this stage of the proceedings to involve any of its creditors or to ask for their opinion of the issues they face in completing the Project as submitted by the interveners herein. Such factors as well as all the other issues and/or contentions which were raised by the Interveners pertaining to for example inter alia the Applicant‟s directors still drawing salaries or how is it that the Applicant has managed to settle their bank loans, are in this Court‟s view immaterial to this Court in deciding the Application herein as they are not matters which the law requires this court to consider under section 405(1) of the Companies Act 2016. 63. I also find that the 1st to 6th Interveners have failed to demonstrate to this Court how winding up the Applicant is a better option rather than to have it placed under Judicial management. 64. This Court also finds that the 1st to 6th Interveners have only 9.41% of the value of creditors if they wish to make any objection to the Statement of Proposal and as such the value held by the 1st to 6th Interveners here are merely meagre compared to the other creditors. I have thus accepted the Applicant‟s counsel‟s calculation of the 1 st to 6th Interveners value as follows:- 31 30/09/20 % Bumimetro - LAD ( 10 units ) 10,698,087.12 3.05% Bumimetro - creditor amount 16,642,308.08 4.75% Others LAD 127,924,031.07 36.53% Others 188,852,105.08 53.93% ________________________________ ___ Total 344,579,900.71 98.39% Amount to be accrued for BCSB 5,623,958.71 1.61% (Differences between judgement Sum of RM 22,266,266.79 and Amount provided in account) ___________________________________ Grand Total 350,203,859.42 100.00% ================================== 65. I find that as the 1st to 6th Interveners are but a small minority of purchasers in the Project as compared to the balance of 151 other purchasers in the Project, they should have no absolute right to make any decision on behalf of the other purchasers, and that the said 157 purchasers in the Project and other creditors of the Applicant should be given a chance to consider and vote on the final Statement of Proposal to be tabled at the Creditors Meeting if this Court does so allow the JMO. 66. Pursuant to section 420 of the Companies Act 2016, the judicial manager shall, within sixty days or such longer period as the Court may allow, after the making of the order to prepare and send a statement of his proposal to all the creditors for them to consider the 32 same. I am of the view that it is for this reason that Parliament had enacted the 60 days period for the Statement of Proposal to be submitted so as to give that period to the Applicant & the judicial manager to tie up whatever loose ends in the draft Statement of Proposal and thus the said draft Statement of Proposal cannot be said to be cast in stone at this Application stage, and the proper latitude has to be given to such draft at this stage. 67. I have further considered that the 1st to 6th Interveners claim that as the Applicant Company is categorized as „Projek Sakit‟, the Applicant company will be prevented from renewing its Developer‟s License and Sales and Advertising Permit ( “DL/AP”), but I find that the Applicant company has made all the necessary applications for renewal of annual licenses to the Ministry of Housing and Local Government (“KPKT”) which is currently being processed as seen in exhibit LCW -52 of the Applicant‟s Affidavit In Reply in enclosure 35. 68. This Court also finds that there is nothing that bars the Applicant from renewing or obtaining its DL/AP despite it being a Projek Sakit as seen in the official web portal page of Jabatan Perumahan Negara at exhibit LCW -51 of the Applicant‟s Affidavit In Reply in enclosure 35 where KPKT had defined „Projek Sakit‟ as “Projek yang mengalami kelewatan melebihi 30% berbanding kemajuan yang sepatutnya atau telah tamat tempoh Perjanjian Jual Beli (PJB).” I therefore agree with the Applicant‟s counsel that it does not state anywhere that it is a project that has no chance of being revived or continued and that KPKT merely defines projek sakit as a project delayed in completion. 33 69. I have further perused paragraph 42 to 45 of the 1st to 6th Interveners‟ Affidavit in enclosure 33, whereby the 1st to 6th Interveners‟ averred that they wrote to KPKT to seek for clarification as per exhibit WCW-12 thereto vide BCSB‟s letter dated 9.12.2021. An examination of the said letter in exhibit WCW-12 thereto shows that this averment as being untrue as that letter had in fact sought to direct the Ministry not to issue the DL/AP to the Applicant Company where in the last paragraph of the said letter it is stated (in Bahasa Malaysia) “Oleh itu, pihak kami amat berharap pihak Puan tidak memperbaharui lessen pemajuan perumahan dan permit iklan dan jualan pada MOD..”. 70. I therefore agree with the Applicant‟s counsel that the said BCSB‟s letter dated 9.12.2021 in exhibit WCW-12 shows that the 1st to 6th Interveners have acted in bad faith by requesting KPKT not to issue the DL/AP to the Applicant thereby attempting to stop or hinder the Applicant from completing the Project. Such conduct is in my view also evident of the 1st to 6th Interveners acting in its own self-interest and not to the interest of the other purchasers of the Project whom are not before this Court or to the Applicant‟s other creditors. 71. After hearing the counsels for the 1st – 6th and the 7th Interveners before this Court, I have found that the 1st -6th Interveners have submitted that they want to assist the liquidator, in the scenario where the Applicant is wound up, to complete the Project. I therefore agree with counsel for the Applicant, that the end conclusion seems to be that all the parties before this Court are heading towards the same direction i.e for the completion of the Project. 34 72. In the circumstances after a careful consideration of all the facts and issues before this Court, this Court therefore holds that Section 405(b) of the Companies Act 2016 is fulfilled whereby the Applicant has satisfied this Court that it is more probable than not that:- a) the survival of the Applicant or the whole or part of the undertaking of the Applicant as a going concern maybe achieved; and b) it would, in the circumstances, be a more advantageous realization of the Applicant‟s assets would be affected whereby the interests of creditors would be better served than by resorting to a winding up. 73. The above is consonant with my decision in Spacious Glory Sdn Bhd v Coconut Three Sdn Bhd (previously known as Nexgram Land Sdn Bhd) [2020] MLJU 1827 where this Court held in deciding whether the making of the order is likely to achieve one or more of the following purposes as stated in Section 405 (1)(b) of the Companies Act 2016 stated: “[28] The term „likely‟ has not been defined in the Companies Act 2016 but the term „likely‟ has been held in the UK in the case of AA Mutual International Insurance Co Ltd Re [2004] EWHC 2430 (Ch) to mean the applicant to demonstrate on a balance of probabilities that it is „more probable than not‟ that this criterion will be fulfilled. I respectfully adopt the same definition for the 35 purposes of defining the term „likely‟ under Section 405 of the Companies Act 2016.” 74. Based on all of the above, this Court is thus satisfied that the requirements in Section 405 of the Companies Act 2016 for a JMO to be ordered. 75. As to whether there should be a 12 month JMO instead of a 6 month JMO, I hold that the provision of section 406(1) of the Companies Act 2016 only states that a JMO shall remain in force for a period of 6 months but there is no specific provision which prohibits an applicant from praying for an order over and above that period. The said section 406 reads as follows: “A judicial manager order shall remain in force for a period of six months from the date of the making of the order, unless the judicial manager is otherwise discharged, but the Court may, on the application of a judicial manager, extend this period for another six months subject to such terms as the Court may impose.” 76. This Court however holds that as the said section 406(1) of the Companies Act 2016 states that the JMO „shall remain in force for a period of six months from the date of the making of the order‟ , this Court will not make any JMO other than for a 6 month period and any extension thereto maybe applied for by the Applicant thereafter is the situation so requires. My decision is also based on this Court‟s previous decision in Re Gold Coast Morib International Resort Sdn Bhd and another case [2021] MLJU 126 which held 36 that the word “shall” in section 406(1) of the Companies Act 2016 connotes a mandatory term which demonstrated the Parliament‟s intention to make a JMO to be in force for a period of 6 months only. 77. I further hold that the 1st to 6th Interveners‟ objection to the Proposed Judicial Manager is baseless as the Proposed Judicial Manager when appointed will have to put up a complete draft within the time limit as prescribed under the Companies Act 2016. In any event, the Judicial Manager once appointed by the Court is under the control and supervision of the Court and is thus an officer of the court. 78. I would also like to state that the issues raised by the Interveners on the issue of being deprived of their LAD and other claims, may pursuant to section 411 (4) (c) of the Companies Act 2016 be raised later by obtaining the leave of the Court should they feel that they are deprived of their rights to pursue their respective claims due to the JMO. The said section 411 (4) (c) of the Companies Act 2016 states: (4) During the period for which a judicial management order is in force: (d) no steps shall be taken to enforce security over the company's property or to repossess any goods in the company's possession under any hire purchase agreement, chattels leasing agreement or retention of title agreement, except with consent of the judicial manager or leave of the Court and subject to such terms as the Court may impose; 37 79. Wherefore this Court hereby grants order in terms of Enclosure 1 as follows: a) the Applicant to be placed under judicial management by a judicial manager b) that the Judicial Management Order be granted to the Applicant for a period of 6 months from the date this Court so orders c) that Abdul Khudus bin Mohd Naim from Messrs Citi Partners be appointed as JM d) that the Applicant be at liberty to apply e) that costs of the Application be borne by the Applicant Dated: 31st day of May 2021 sgd. NADZARIN WOK NORDIN JUDICIAL COMMISSIONER KUALA: LUMPUR HIGH COURT Parties: Annou Xavier, Tristan Ng and Yong Jia Wei for the Applicant [Messrs Azri, Lee Swee Seng & Co.] 38 Ong Chin Siong and Elise Tam for the 1st – 6th Interveners [Messrs Siong & Rita] Judy Lim Phek Ng, Joshua Wu Kai-Ming , Lily Ho, Melissa Ong for the 7th Intervener [Messrs L. Ho & Associates] Koo Yin Soon and Sharon Jessy for MCC Overseas (M) Sdn Bhd, Intervener [Messrs Shearn Delamore & Co.] Jason Ng – Amicus Curiae 39