The Appeal Court in their ruling 12th July 2011 in the case between Qimonda Malaysia Sdn Bhd v’s Sediabena Sdn Bhd and APC Corporate Holding Sdn Bhd held that retention monies are by their nature and purpose trust monies held by the Employer to rectify defective works and following the making good of any defects the retention moneys or balance there of shall be released to the Contractor. It further ruled that such retention money could not be used to pay the Employer’s creditors as a result of the Employers voluntary winding up. The Court further rules that the Contractors filing of a proof of debit did not remove their right to claim retention monies as trust monies.
Qimonda-Malaysia-Sediabena-APC-W-02(NCC)-1132-2011_30678
Malaysian Construction and Contract Law 