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2025 MarsdenLR 3844
HIGH COURT MALAYA KUALA LUMPUR
BINA HARTA GROUP SDN BHD & ORS – Appellant
Versus
YAP CHEE PANG & ANOR (ENCLS 37 38 40 48 55 60 70 75 & 95) – Respondent
[Suit No: WA-24NCC-122-03/2024]
A Mareva injunction requires establishing a strong arguable case and a real risk of asset dissipation where breaches of trust and statutory obligations are present.
Headnote:(A) Housing Development (Control and Licensing) Act 1966 - Requirement to maintain Housing Development Accounts for deposit of purchasers' monies. Allegations of misappropriation and breach of fiduciary duties established, resulting in injuries to purchasers. (Paras 5-27)
(B) Mareva injunction - Principles - Establishing a good arguable case and real risk of asset dissipation are crucial for success. (Paras 16-26)
(C) Standing - Defendants, despite being preference shareholders, held standing due to breaches exposing them to potential criminal liability. (Paras 21, 22)
Facts of the case:
Dispute involved alleged breaches of Subscription Agreements related to RM15 million investment in housing projects. Defendants accused Plaintiffs of diverting funds to non-HDA accounts, violating statutory obligations under the Housing Development Act. (Paras 5-6, 19, 20)
Findings of Court:
Defendants confirmed their Mareva injunction application based on established breaches of contract and statutory duties, with Court confirming earlier orders. (Paras 41, 50)
Issues: Key questions include the legitimacy of the Mareva injunction application, the standing of the Defendants, and the actual risk of asset dissipation. (Paras 16-26)
Ratio Decidendi: Defendants demonstrated serious breaches of obligations resulting in systematic diversion of trust monies, thus justifying the Mareva injunction. (Paras 33, 41)
Result: Defendants' Mareva injunction application granted; the Plaintiffs' applications to set aside injunction were dismissed.
Certainly. Based on the provided legal document, here are the key points:
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The case involves allegations of breaches of Subscription Agreements and statutory obligations under the Housing Development (Control and Licensing) Act 1966, specifically regarding the misuse and misappropriation of housing purchasers' monies (!) (!) .
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The dispute centers on the diversion of funds from Housing Development Accounts (HDA) into non-HDA accounts, which constitutes a breach of statutory duties and breaches of trust obligations (!) (!) (!) .
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The court emphasized the importance of HDA funds being kept separate and used only for permitted purposes, with strict legal requirements for deposits and withdrawals, underscoring the protected status of these monies (!) (!) (!) .
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The application for a Mareva injunction was granted because the defendants demonstrated a strong case, including breaches of contractual and statutory duties, and evidence of actual dissipation of trust monies (!) (!) (!) (!) (!) (!) .
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The defendants, despite being preference shareholders, had standing to apply for the injunction due to their direct involvement in breaches of contractual obligations and potential criminal liability as directors (!) (!) (!) (!) .
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Evidence showed that a significant portion of purchasers’ monies was diverted into non-HDA accounts, with only a small amount remaining in trust or client accounts, indicating actual dissipation of funds (!) (!) (!) .
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The court found that the risk of asset dissipation was real and substantiated by the evidence, justifying the grant of the Mareva injunction to preserve assets pending the resolution of the dispute (!) (!) .
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The application to set aside the ex-parte Mareva injunction was dismissed because the defendants met all procedural requirements, and the evidence supported the existence of a real risk of dissipation (!) (!) (!) (!) (!) (!) .
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The court confirmed the earlier orders and upheld the injunctions, including the inclusion of BH Homes as a party, based on the evidence of misuse of funds and breaches of statutory and contractual duties (!) (!) .
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The application to vary the injunction order was dismissed, except for a specific application by the defendants to vary part of the order, which was allowed (!) (!) .
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The court noted that the balance of convenience was not a primary consideration in granting the Mareva injunction but emphasized that the purpose was to prevent abuse of the legal process through asset dissipation (!) (!) .
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The court also highlighted issues of credibility and transparency, noting that some representations made by the plaintiffs regarding security and property ownership were inaccurate or misleading, further supporting the need for injunctive relief (!) (!) (!) .
These points collectively reflect the court’s reasoning and decision to grant the Mareva injunction to prevent further dissipation of assets involved in breaches of trust and statutory obligations related to housing development funds.
| Table of Content |
|---|
| 1. overview of applications and disputes (Para 1 , 2) |
| 2. importance of housing development accounts (Para 5 , 6 , 7 , 8 , 9) |
| 3. trust nature of hda funds (Para 10 , 11 , 12 , 13 , 14) |
| 4. criteria for mareva injunctions (Para 16 , 17 , 18 , 19 , 20) |
| 5. defendants' standing in the case (Para 22 , 23 , 24 , 25) |
| 6. evidence of dissipation of funds (Para 26 , 27 , 28) |
| 7. balance of convenience in mareva injunction applications (Para 30 , 31) |
| 8. court's decision on mareva injunction application (Para 40 , 41 , 42) |
| 9. plaintiffs' attempt to set aside orders (Para 44 , 45) |
| 10. conclusion on plaintiffs' application (Para 50) |
| 11. conclusion on defendants' application to vary injunctions (Para 52 , 53) |
(Enclosure 37, 55, 64 & 70)
Introduction
[1] The applications broadly relate to control over the company, alleged misappropriation of housing purchasers' monies, and procedural issues regarding how the dispute should proceed. The key underlying dispute involves alleged breaches of Subscription Agreements and Housing Development Act requirements regarding purchasers' monies. Vide encl 37, Ad interim Mareva Injunction was granted on favour of the Defendant's application.
Applications For Determination
[2] There were 4 applications in relation to Mareva Injunction filed by the Defendants. They are:
1) Enclosure 37 - Defendants' Mareva Injunction;
• Ex-parte application for Mareva injunction to freeze assets of the Second Plaintiff (Lee) and BH Homes
• Based on allegations of misappropriation of purchasers' monies and breach of Housing Development Act
2) Enclosure 55 - Plaintiffs' application to set aside Ex-Parte Order dated 28 June 2024 (Enclosure 48)
3) Enclosure 64 - Plaintiffs' application to vary Ad Interim Injunction Order dated 15 July 2024
4) Enclosure 70 - Defendants' application to vary Ad Interim Injunction Order dated 15 July 2024
• Application to vary the Ad Interim Mareva Injunction Order
• Seeking to increase restrained amount from RM2.28 million to RM4.86 million
This Court granted several orders which include:
(i) Ex-parte Order dated 28 June 2024 made upon the Defendants' Mareva Injunction Application in encl 37 ("Ex-Parte Mareva injunction Order");
(ii) Ad Interim Order dated 15 July 2024 extending effect of the ex-parte Order until the hearing of encl 37 ("Ad Interim Mareva Injunction Order");
(iii) An Order dated 13 August 2024 that varied the terms of the Ad Interim Mareva Injunction Order ("Varied Ad Interim Mareva Injunction Order"
Enclosure 37 - Defendants' Mareva Injunction Application
Introduction
[3] This is my decision on the Defendants' application for a Mareva injunction in encl 37, seeking to restrain Lee Lun Teong (the Second Plaintiff) and Bina Harta Homes Sdn Bhd ("BH Homes") from disposing of or dealing with their assets up to the value of RM4,866,282.00.
[4] After careful consideration of the evidence and submissions, I allowed the Defendants' application. These are my reasons.
Background Facts
[5] The background facts are largely undisputed. Coneff Corporation Sdn Bhd ("Coneff") is a licensed housing developer undertaking two ongoing housing projects - Phase 3B (Residensi Desa Idaman) and Phase 5 (Residensi Wilayah Madani).
[6] In November 2022, the Defendants invested RM15 million in Coneff through Subscription Agreements dated 1 November 2022. Under cl 2.3, this investment was to be used solely for developing and completing the housing projects. Clause 6.3 required Coneff to comply with all applicable legislation relating to its business operations.
[7] As a licensed housing developer, Coneff is subject to the Housing Development (Control and Licensing) Act 1966 ("HDA") and Housing Development (Housing Development Account) Regulations 1991 ("HDR"). These require that all purchasers' monies must be deposited into Housing Development Accounts ("HDA Accounts"), separate HDA Accounts must be maintained for each development phase, and HDA monies may only be utilized for permitted purposes.
Nature O
