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2025 MarsdenLR 3988
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 may be granted upon establishing a good arguable case and real risk of asset dissipation, emphasizing the trust status of housing purchasers' funds in compliance with statutory obligations.
Headnote:(A) Housing Development (Control and Licensing) Act 1966 - Requirements for Housing Development Accounts - Breach of Subscription Agreements; Applications for Mareva Injunction - Defendants established good arguable case of misappropriation of housing purchasers' funds, raising concerns of actual dissipation of assets and breaches of trust obligations. (Para 40)
(B) Mareva Injunction - Principles established; Must show real risk of dissipation of assets, good arguable case, and jurisdiction to prevent abuse of process. (Paras 16, 30)
(C) Standing to apply; Defendants as preference shareholders and directors have standing due to breaches of statutory and fiduciary duties. (Paras 21, 45)
Facts of the case:
The case involves applications concerning control over a housing development company and alleged misappropriation of funds received from housing purchasers. The defendants sought a Mareva injunction against the plaintiffs to prevent disposal of assets following multiple breaches of the Housing Development Act and Subscription Agreements.
Findings of Court:
The court granted the defendants' Mareva injunction application, confirming that evidence showed breaches in trust and statutory obligations and justified preservation of the assets.
Issues: The principal issues were the legitimacy of the Mareva injunction given the potential for asset dissipation, the standing of the defendants, and the procedural merits of the applications before the court.
Ratio Decidendi: The court found that evidence presented showed serious breaches of both statutory requirements and trust obligations concerning housing purchasers' funds, warranting the Mareva injunction to prevent dissipation of assets until final determination of the case.
Result: The defendants' application for the Mareva injunction was allowed.
The part of the document that states the housing development account is trust property is: "Following Kinda Hardware Trading, the purchasers' monies constituted trust property." This is found in the section discussing breaches of trust obligations regarding HDA monies, specifically at (!) .
| Table of Content |
|---|
| 1. control over the company and procedural issues. (Para 1 , 2) |
| 2. court's decision on the mareva injunction. (Para 3 , 4) |
| 3. background and nature of housing development account monies. (Para 5 , 6 , 7 , 8 , 9 , 10) |
| 4. trust nature of hda monies and fiduciary obligations. (Para 11 , 12 , 15) |
| 5. breaches of statutory and contractual obligations. (Para 17 , 18 , 20 , 21 , 22) |
| 6. evidence of risk and actual dissipation of assets. (Para 26 , 27 , 28) |
| 7. balance of convenience is not a criterion for mareva. (Para 30 , 31) |
| 8. plaintiffs' misrepresentation regarding the shop lot. (Para 35 , 36 , 37 , 38) |
| 9. court's approval of mareva injunction applications. (Para 40 , 50) |
| 10. plaintiffs’ lack of standing under the mareva injunction. (Para 44 , 45 , 46) |
| 11. court dismissal of plaintiffs’ application to vary injunction. (Para 51 , 52) |
| 12. court's order requiring asset disclosure. (Para 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 depo
