The developer is wound up. What happens to your strata-title claim?

Purchasers may already be pursuing a strata-title claim against a developer when the company is wound up. Does liquidation bring those proceedings to an end, leaving them only with a claim in the liquidation?

Court: High Court, Melaka
Case: El’Kanah Sdn Bhd v MDSA Resources Sdn Bhd (Encls 68 & 76) [2026] MLRHU 2139

In this case, the High Court permitted two groups of purchasers to continue their pending strata-title proceedings. The nature of the relief sought was central to the decision.

What did the strata-title claim seek?

The purchasers had bought commercial units in Elements Mall at Hatten City. In separate proceedings, they alleged that the developer had failed to fulfil its statutory and contractual obligations concerning the strata titles.

They sought declarations and orders requiring the developer to provide the necessary application documents and registrable strata titles. Their claims also included monetary relief.

MDSA Resources was subsequently wound up on 1 April 2026. The purchasers then applied to the winding-up court for leave to continue their existing proceedings.

Why was the court’s permission necessary?

Section 471 of the Companies Act 2016 restricts the commencement or continuation of proceedings against a company after a winding-up order or the appointment of an interim liquidator, unless the court grants leave on appropriate terms.

The application must be made to the court that granted the winding-up order and served on the liquidator. This allows the court to protect the liquidation process while considering whether a particular claim needs to be determined separately.

Why could the strata-title proceedings continue?

The strata-title claim principally sought declarations and mandatory orders concerning the purchasers’ titles. Those remedies could not adequately be obtained by simply lodging a proof of debt, which is the process for claiming money owed in the liquidation.

The court also found a genuine dispute warranting determination. The material concerning the sale agreements, the completed building and the absence of registered titles raised an arguable claim. At this stage, the purchasers did not have to establish final success on every disputed issue.

The liquidator did not oppose the applications, although the court made clear that non-opposition did not replace its own duty to decide whether leave should be granted.

Leave was given subject to safeguards. Any money judgment, damages or costs obtained would have to be proved in the winding up and could not be enforced against the company or its assets without further leave. The purchasers also had to notify the liquidator of material steps in the proceedings.

Did the court order the developer to deliver the titles?

No. This decision permitted the purchasers to continue their cases. It did not finally determine whether the developer had breached its obligations or whether the purchasers were entitled to the substantive orders sought.

Those questions remained for the court hearing the strata-title proceedings. The distinction matters: leave to litigate is a procedural step, not a judgment establishing the underlying claim.

What can purchasers do next?

Start by finding out what is holding up your strata title. Ask the liquidator whether the title application has been submitted, which documents are still outstanding and who is handling the process. Keep the replies in writing.

Gather your sale and purchase agreement, payment records and correspondence about the title. If you have already started a court case, keep the court papers together as well. These documents will help your lawyer identify what remains to be done and whether the existing case can continue.

Be clear about what you need: your strata title, a refund or compensation. They are not necessarily pursued in the same way. If a case is already ongoing, tell your lawyer that the developer has been wound up before taking further steps; permission from the winding-up court may be needed.

Most importantly, do not assume that the developer’s liquidation means your strata-title claim must be abandoned.

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