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2024 MarsdenLR 798
HIGH COURT MALAYA SHAH ALAM
ARAGREENS RESIDENCES JOINT MANAGEMENT BODY & ANOR – Appellant
Versus
HSB DEVELOPMENT SDN BHD – Respondent
[Malaysia Guaman No: BA-22NCvC-285-06/2018]
The court established that interim payments can be granted to alleviate plaintiffs' hardship, especially in cases where defendants are in liquidation, subject to the principle of pari passu.
Headnote:(A) Rules of Court 2012 - Order 22A - Interim payment application - The 2nd Plaintiff sought interim payment for defects at AraGreen Residences, asserting risk of fund erosion due to Defendant's liquidation - Court found liability established and granted RM13,000,000.00 interim payment, subject to pari passu principles. (Paras 8, 19, 26, 35)
(B) Interim Payment - Legal principles - The purpose of interim payment is to alleviate plaintiff's hardship during litigation; no need to show specific financial need. (Paras 16, 17)
Facts of the case:
The 2nd Plaintiff applied for interim payment due to ongoing litigation concerning defects at a residential development, asserting financial risk due to the Defendant's liquidation.
Findings of Court:
The court found that the 2nd Plaintiff's fear of fund erosion was reasonable and granted a reasonable sum of RM13,000,000.00 as interim payment.
Issues: The court addressed whether the 2nd Plaintiff faced risks due to liquidation, the entitlement to RM20,000,000.00, and the applicability of the pari passu principle.
Ratio Decidendi: The court held that the interim payment was justified based on established liability and the necessity to protect the 2nd Plaintiff's interests during the liquidation process.
Result: Application for interim payment granted.
JUDGMENT
(Application For Interim Payment)
A. Introduction
[1] This is an application by the 2nd Plaintiff pursuant to O 22A r 2 of the Rules of 2012 ( ROC 2012) for interim payment via Enclosure No 440 of this suit.
[2] The trial to determine liability for this suit has been fully completed and the assessment of damages were ordered to be carried out before this Court by the trial judge.
B. Salient Background
[3] On 7 June 2018 ie after the Defendant had the 1st Plaintiff brought an action against the Defendant essentially for the faults and defects in common areas and common facilities of the Development mainly:
i. Water Dampness at Basement Car Parks Levels B3 and B2;
ii. Swimming pools that are defective with numerous tiles popping out;
iii. Damaged wooden deck and otherwise in poor state and condition;
iv. Water retention and ponding of the futsal Court ;
v. Unusable rock climbing wall without safety certification; and
vi. Water seepage at buildings due to rain (the 1st Plaintiff had subsequently dropped this defect from its claim).
[4] Additionally, the 1st Plaintiff had also pleaded a design defect which had resulted in wet driveways at Basement Car Park Levels B1 and B2 from heavy rainfall. The 1st Plaintiff had sought that the Defendant repair and rectify the said defects but the Defendant failed, neglected and/or refused to repair and rectify the said faults and defects in common areas and common facilities.
[5] The Defendant contended against the 1st Plaintiff's allegations in its Defence as follows:
i. That the reported defects or faults have allegedly been completely and satisfactorily rectified;
ii. That certain defects or faults are in fact, not defects or faults, but are allegedly "wear and tear" and due to purported lack of maintenance and management by the Plaintiff;
iii. That the water ingress is not a design defect but is intended so by the Architect as an architect design for the purposes of natural ventilation;
iv. That the Defendant has continuously engaged the Plaintiff on matters of inspection, repair and rectification by requesting for access, corresponding, arranging for a team on site and attending to every defect that was lodged with the Defendant;
v. That the Plaintiff is in no position to aver, demand, dictate and/or determine that any final certification issued by the Architects and/or Consultants is not conclusive as the Plaintiff is not a professional body possessing the relevant and necessary technical knowledge and qualifications to assess and/or adjudge on the alleged defects and/or faults; and
vi. The Sale and Purchase Agreements clearly provide that the Architect is the professional body authorised to certify if any alleged defects are satisfactorily rectified.
C. Trial
[6] The trial of this suit commenced on 3 August 2020 and concluded on 14 March 2023 and the parties were directed for written submissions to be exchanged.
[7] On 27 March 2023, the 2nd Plaintiff applied to intervene and be joined as a co-plaintiff after the Management Corporation was formed via Enclosure No 354. The High Court allowed Enclosure No 354 on 26 May 2023 after hearing opposing submissions from the Defendant.
[8] On 18 September 2023, the High Court found the Defendant liable for breach of its duty of care. After 42 days of trial with a total of 23 witnesses, 8 for the 1st Plaintiff and 15 for the Defendant, the High Court trial judge, Justice Wong Kian Kheong (as His Lordship then was) had delivered his judgment on 9 December 2023 as follows:
"a) Defendan adalah bertanggungjawab kepada Plaintif-Plaintif untuk kecacatan-kecacatan dan kerosakan-kerosakan berikut di AraGreens Residences:
i. Kelembapan Air di tempat letak kereta Tingkat Bawah Tingkat B3 dan B2;
ii. Kolam renang yang berada dalam keadaan cacat dengan banyak jubin yang terkupas keluar;
iii. Dek kayu yang rosak dan sebaliknya dalam keadaan tidak baik dan teruk;
iv. Penahanan air yang teruk dan bertakung di gelanggang futsal;
v. Dinding memanjat batu y
