The court established that liquidators must perform their duties promptly and competently, emphasizing fiduciary responsibility and justifying removal due to prolonged delays.

Introduction

[1] This is an appeal against the decision of the High Court siting at Kuala Lumpur dismissing the appellant's application to remove Ler Cheng Chye and Lum Tuck Cheong as liquidators of Jade Realty Sdn Bhd (the 2nd respondent) and for the appointment of Wong Chong Yong as the liquidator of Jade Realty and other consequential relief.

The Salient Facts

[2] Jade Realty was the registered owner of land held under four master titles located in Mukim Batang Kali, Daerah Ulu Selangor, Negeri Selangor measuring approximately 742 acres ('the Lands') under four master titles. The Lands were charged to Hong Leong Finance Berhad for bridging finance.

[3] Jade Realty intended to develop the Lands into a property development known as the Genting Valley Countryside Living Resort ('the Project'). The Project would comprise residential and commercial projects involving (i) 665 bungalow lots separated into five phases (Phases 1, 2, 2A, 2B & 3), (ii) low and medium cost apartments, (iii) a proposed retirement village resort, (iv) a proposed executive holiday resort, (v) clubhouse, (vi) pitch and putt golf course, (vii) a proposed horse camp as well as (viii) a commercial centre spanning over 767 acres of freehold land.

[4] The development commenced on part of two out of the four master titles and was planned for subdivision into 655 plots of land divided into Phases 1, 2, 2A, 2B and 3 with approval for bungalow lots.

[5] Between 2000 and 2004, Jade Realty sold 627 out of 655 bungalow plots of land under sale and purchase agreements to various purchasers, inter alia, to the appellants herein. Pursuant thereto, Jade Realty was to construct and build infrastructure works and deliver vacant possession of the plots. Jade Realty was also to apply for conversion from agricultural to residential use as well as subdivide the Land into individual titles in respect of each plot of land.

[6] The Project was abandoned sometime in 2004. Only Phase 1 of the Project was completed and vacant possession was handed over to the purchasers of the bungalow lots in Phase 1.

[7] A winding-up petition was presented by Hong Leong Finance Bhd against Jade Realty on 20 June 2006. Subsequently on 24 January 2007, an order for the winding up of Jade Realty was made and Ler Cheng Chye and Lum Tuck Cheong were appointed as liquidators.

[8] The appellants are also members of the Genting Valley Purchasers Group ('GVPG'), an informal group consisting of purchasers in all five phases in the Project. GVPG was initially formed by and consisted of purchasers in Phase 1 only. However, its membership was subsequently opened to all purchasers in the other four phases with the objective of finding and exploring all avenues and/or options to obtain legal titles to their respective bungalow lots as well as the revival of the Project with no additional and/or minimal top-up.

Decision Of The High Court

[9] The learned judge recognised the appellants' main grievance which was described in para 3 of her judgment as follows:

"In essence the applicants (appellants) are unhappy with the Liquidators and contend the Liquidators have failed to protect their interest and rights as purchasers of the Project and are unjustly prolonging the S (Jade Realty's) liquidation process to the detriment of the plaintiffs (appellants) through alleged misconduct and/or improper actions."

[Parenthesis Added]

[10] The learned judge's findings on the five main issues raised by the appellants is summarised below:

A. Statutory and Fiduciary Duty

i. The complaint that the Proof of Debt was not called within the prescribed time is without merit because no time is presc