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Court rules that management corporation may sue developer for latent defects in common property
Gan Partnership
  • Litigation
  • Malaysia
  • 15 June 2021

When the statutory duty to "properly maintain the common property and keep it in a state of good and serviceable repair" is passed to a management corporation, does the corporation have standing to sue the developer for any defects in the common property? A high court recently addressed this question in a decision which is a significant and welcoming legal development concerning strata and building management.

Is my name truly mine?
Gan Partnership
  • Litigation
  • Malaysia
  • 08 June 2021

In a recent case concerning a popular nasyid singer and composer, the Federal Court answered the question of law of who has the locus standi to commence a common law passing-off action as the owner of goodwill where two entities are entitled to claim such goodwill. The Federal Court's decision is a testament to the growth and advancement of the IP law regime in Malaysia.

CIPAA: adjudicators' powers to order remedies and interest when payment clause is unenforceable
Gan Partnership
  • Litigation
  • Malaysia
  • 25 May 2021

A recent high court decision examined the extent of an adjudicator's powers to determine remedies and interest in unique circumstances where a payment clause was void and the default statutory implied payment provision in the Construction Industry Payment and Adjudication Act was pleaded. The decision is a welcome judgment for the construction industry, especially unpaid parties as they are not strictly bound by their pleaded case, particularly with regard to the remedies sought.

CIPAA: can only advocates qualified under Sabah or Sarawak Advocates Ordinance practise in East Malaysia?
Gan Partnership
  • Litigation
  • Malaysia
  • 18 May 2021

The governing law of the legal profession differs in Peninsular and East Malaysia. Should a party wish to commence a court action in East Malaysia, an advocate qualified under the Sabah or Sarawak Advocates Ordinance would have to be appointed. However, what about adjudication proceedings conducted under the Construction Industry Payment and Adjudication Act 2012, which allows parties to "be represented by any representative appointed by the party"? The high court recently shed light on this matter.

Statutory oppression action: apex court confirms that remedies may extend to directors and third parties
Gan Partnership
  • Litigation
  • Malaysia
  • 11 May 2021

A recent Federal Court decision confirms that remedies in a statutory oppression action may extend to the directors of the subject company and third parties. The decision establishes the wide scope and remedies available in a statutory oppression action, in line with its expressed purpose of "bringing to an end or remedying the matters complained of". This provides welcome clarity with regard to Section 346 of the Companies Act 2016.

Apex court considers application of Prest in piercing corporate veil
Gan Partnership
  • Litigation
  • Malaysia
  • 04 May 2021

A separate legal entity – or rather, a 'corporate veil' – exists to separate a corporate entity from its incorporators. However, the corporate veil can be lifted when the corporation is used for fraudulent, dishonest and unlawful purposes. The leading judgment of the UK Supreme Court in Prest v Prest brought a new dimension to this fundamental principle. The apex court carefully considered the application of Prest in its recent decision in Ong Leong Chiou.

Section 30 of CIPAA – road less travelled has now widened
Gan Partnership
  • Litigation
  • Malaysia
  • 20 April 2021

While most companies which have obtained an adjudication decision in their favour choose to apply for said decision to be enforced via Section 28 of the Construction Industry Payment and Adjudication Act (CIPAA), the less-travelled road of demanding payment for an adjudication decision via Section 30 of the CIPAA is proving to be another effective recourse for payment – as evidenced by a recent high court decision.

No escape from paying minimum wage
Gan Partnership
  • Litigation
  • Malaysia
  • 13 April 2021

A recent Federal Court decision has confirmed that the hotel industry cannot use a service charge to supplement employees' wages in order to meet the minimum threshold for wage requirements. While the decision may be unpopular among hoteliers and related or similar industries, it was inevitable. The long-term impact that it may have on society outweighs any likely detriment that it may cause to a particular industry.

Challenging a liquidator's decision to admit a proof of debt
Gan Partnership
  • Litigation
  • Malaysia
  • 30 March 2021

The Court of Appeal was recently tasked with deciding whether a liquidator's decision to admit a proof of debt could be challenged. This decision clarifies the extent of judicial scrutiny regarding the exercise of liquidators' powers in admitting proofs of debt and at the same time provides welcome guidance for liquidators in this undertaking.

Contractors' claims in adjudication against subcontractors
Gan Partnership
  • Litigation
  • Malaysia
  • 23 March 2021

When a contractor takes over its subcontractor's works, can the contractor make a claim in adjudication against the subcontractor? Scenarios such as this are not uncommon; however, contractors which find themselves in such circumstances and wish to make a claim against the subcontractor by way of adjudication under the Construction Industry Payment and Adjudication Act 2012 should be wary of a recent high court case.

Injunctions against Shopee?
Gan Partnership
  • Litigation
  • Malaysia
  • 02 March 2021

E-commerce platforms are accessible to both authentic and counterfeit sellers. Anyone may register and begin selling immediately, without the need to undergo scrutiny or due diligence. The high court recently provided some clarification on the extent of liability that online marketplaces have regarding IP infringements by sellers. This decision is a palpable relief for online marketplaces, the continued existence of which arguably benefits the public by encouraging competition and stimulating the economy.

Calling on performance bonds: new test for unconscionability?
Gan Partnership
  • Litigation
  • Malaysia
  • 23 February 2021

With the recent enforcement of the Temporary Measures for Reducing the Impact of Coronavirus Disease (COVID-19) Act 2020, the question has arisen as to whether it provides a new ground for contractors to challenge calls on bank guarantees. A recent high court decision on the application of the Prevention and Control of Infectious Diseases (Measures Within Infected Local Areas) Regulations 2020 provides insight into how the courts may interpret the act.

Housing developers beware – aftermath of PJD
Gan Partnership
  • Litigation
  • Malaysia
  • 16 February 2021

The Federal Court recently delivered a landmark decision concerning the delay of delivery of vacant possession for Schedule G and H-type contracts under the Housing Development (Control and Licensing) Regulations. This article focuses on the decision's impact on housing developers with respect to their completed and ongoing housing projects. While the dust on the calculation of liquidated and ascertained damages for housing projects is now settled, the storm may be brewing for housing developers.

Housing developers beware – Federal Court upholds Faber Union
Gan Partnership
  • Litigation
  • Malaysia
  • 09 February 2021

In a recent landmark decision, the Federal Court unanimously held that Faber Union is good law. The key question that the court considered was where there is a delay in the delivery of vacant possession, does the date for the calculation of liquidated and ascertained damages begin on the date of the payment of the booking fee or on the date of the sale and purchase agreement?

Federal Court rules that termination clauses should be construed strictly
Gan Partnership
  • Litigation
  • Malaysia
  • 02 February 2021

A recent Federal Court decision has breathed new life into the interpretation of termination clauses in contracts. Indeed, it sounded a cautionary note to the business community at large when the court held that termination clauses must be interpreted strictly. This decision is a warning to all contracting parties not to rush the termination of a contract. Instead, care and a meticulous reading of the entire contract are required to ensure strict compliance with the termination clauses.

Who has the right to sue a consultant?
Gan Partnership
  • Litigation
  • Malaysia
  • 26 January 2021

As cashflow is crucial for main contractors in any ongoing construction project, prompt and expeditious payments by the employer are often expected. However, if the main contractor is dissatisfied with the payment certificate, can the main contractor sue the consultant for negligence? The Court of Appeal recently addressed this question and unanimously upheld a high court decision in dismissing a main contractor's claim against a consultant.

Oppression versus derivative actions: courts' wide discretion maintained
Gan Partnership
  • Litigation
  • Malaysia
  • 19 January 2021

The Federal Court recently refused leave to appeal a Court of Appeal decision which had found that the courts' powers in an oppression action are broad and unfettered. This includes the power to order restitution to a company, a remedy traditionally seen as belonging to companies. The broad language used in the oppression provision is crucial in providing the courts with the necessary discretion to formulate remedies which are appropriate and just in the circumstances of a particular case.

Section 368 of Companies Act: apex court rules ex parte application for restraining proceedings is valid
Gan Partnership
  • Litigation
  • Malaysia
  • 12 January 2021

A recent Federal Court decision regarding applications made by a company or its creditors under Section 368 of the Companies Act 2016 to restrain proceedings against the company under a proposed scheme of arrangement appears to be a welcomed decision. Clarity is now proffered on the procedure to be adopted when making such applications. Nevertheless, there may yet still be room for further judicial interpretation on applications concerning a scheme of arrangement.

De facto doctrine applies to defective judicial appointments and preserves judicial decisions
Gan Partnership
  • Litigation
  • Malaysia
  • 22 December 2020

Pursuant to Rule 137 of the Rules of the Federal Court 1995, seven motions were filed in the apex court, requesting it to invoke its inherent power to review its decisions delivered in seven separate lawsuits. Interestingly, a common question arose from these motions premised on coram failure and further questions that were peculiar to the circumstances of each case. While the apex court dismissed all of the motions, its unanimous decision on coram failure is significant for ongoing and future cases.

Court rules former director of AIAC's directorship is non-justiciable
Gan Partnership
  • Litigation
  • Malaysia
  • 15 December 2020

The Kuala Lumpur High Court recently struck out two originating summonses against the former director of the Asian International Arbitration Centre (AIAC). The court's ruling included that the appointment of the director of the AIAC was not justiciable. It is hoped that this decision will provide valuable case law and put similar challenges to rest, as such challenges are not only vexatious but also a waste of judicial time and resources.

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