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In Monday-Off Development Sdn Bhd v Bumimetro Construction Sdn Bhd & Ors [2021] MLJU 915, a judicial management application, we took the opportunity to advance the argument that statutory reliefs/remedies in social legislation (such as liquidated damages) cannot be set aside by way of judicial management.

The Applicant, the housing developer of the One Kiara project, inter alia, owed RM138,622,118.00 in liquidated damages to purchasers of the units of the project (as at 30/9/20).

If the Applicant is successful in its judicial management application, the Applicant’s corporate recovery proposal included purchasers of units of the One Kiara project waiving their entitlement to liquidated damages.

In the event the Applicant is successful in its judicial management application and its corporate recovery proposal is approved at the creditors’ meeting:

(i) this would defeat the very intention of Parliament and/or the Minister of Housing and Local Government to protect the purchasers of units of housing developments by compensating purchasers for the Applicant’s failure to deliver vacant possession and/or failure to complete the common facilities within the stipulated time;

(ii) the purchasers who voted against the proposal would nevertheless be deprived of their constitutional right to property, namely to liquidated damages; and

(iii) the purchasers’ entitlement to statutory reliefs/remedies (namely liquidated damages) by virtue of the Housing Development (Control and Licensing) Regulations 1989 [a delegated legislation created pursuant to the Housing Development (Control and Licensing) Act 1966, the latter being a recognised social legislation] would in effect be set aside by way of judicial management.

Regrettably, His Lordship was of the view that the issue could be “raised later by obtaining the leave of the Court should [the purchasers] feel that they are deprived of their rights to pursue their respective claims due to the [Judicial Management Order].”

Although His Lordship allowed the Applicant’s judicial management application, the judicial management order was subsequently discharged and the Applicant was wound up by one of its larger creditors shortly thereafter.