There were two appeals before us, which we heard and disposed of together. The appellant is the same in both appeals, although the identities of the respondents in each appeal differ. The legal arguments in both appeals were identical.
 The appellant appealed against the decision of the High Court in granting leave to the respondents, pursuant to section 263(2) of the Companies Act 1965, to commence arbitration or adjudication proceedings against the appellant. The appellant is in voluntary liquidation.
 The purpose of such arbitration or adjudication proceedings is to recover retention monies held by the appellant. The appellant is the main contractor, while the respondents are the sub-contractors under two construction sub-contracts.
 Additionally, and arguably more significantly, the learned Judge also allowed the respondents’ prayers that a sum equivalent to the retention monies owing to the two sub-contractors be set aside pending the final determination of the arbitration.
 The central issue that falls for consideration in these two appeals is the legal status of those retention monies held by the main contractor, one Pembinaan Legenda Unggul Sdn Bhd (Dalam Penggulungan Voluntari Pemiutang-Pemiutang).
 In determining this central issue, two competing legal contentions had to be considered and adjudicated upon:
(a) Do these retention monies comprise trust monies which are therefore available to the two sub-contractor respondents as beneficiaries of those monies, in priority to other unsecured creditors; or
(b) Do these retention monies comprise a part of the general assets of the appellant available to unsecured creditors on a pari passu basis.
 The subsidiary issue in these appeals was whether leave was correctly given to the sub-contractors under section 263(2) of the Companies Act 1965 to commence arbitration against the main contractor. This issue is contingent upon the answer to the main issue. The sub-contractors here sought an order for the preservation of monies in the sums equivalent to the retention sums claimed, pending the adjudication of their disputes by way of arbitration.
 What is perhaps pertinent in this appeal is that in determining these appeals in favour of Pembinaan Legenda Unggul Sdn Bhd (Dalam Penggulungan Voluntari Pemiutang-Pemiutang), the appellant here, we departed from the decision of this Court in Qimonda Malaysia Sdn Bhd (In Liquidation) v Sediabena Sdn Bhd  3 MLJ 422 (‘Qimonda’).
 In Qimonda, this Court held, in substance, that it is implied by law in construction contracts that retention monies are held on trust by the main contractor for the benefit of the sub-contractors. In other words, the sub-contractor has a beneficial interest in the retention monies, irrespective of whether the terms of the contract stipulate the intention to have those monies held on trust, expressly or impliedly.
 Secondly this Court went on to hold that by virtue of a trust being implied by law, it was not necessary for an employer or a main contractor to set aside a sum equal to the retention monies in a separate fund.
 With the utmost respect, we determined that we had no option but to depart from Qimonda by reason of, inter alia, the following:
(a) In the absence of an express clause in the contract creating a trust, or the evincing of a clear intention on the part of the parties to create a trust from the circumstances surrounding the contract coupled with specific action taken to create such a trust, it cannot be implied in law that a trust subsists where a construction contract provides only that retention monies are to be held by a main contractor pending final release;
(b) In the absence of a trust, as we gleaned from a construction of the contract/s in the instant appeals, the sub-contractors do not enjoy a beneficial interest in the retention monies. Their claim is in the nature of a debt owed by the main contractor to the sub-contractor;
(c) In a winding up or insolvency scenario, given the absence of a clear provision for a trust, the position of the sub-contractors here is the same as all other unsecured creditors. There are no less than 128 sub-contractors who have claims similar to that of the respondents here. They are in no different position from the sub-contractors here, save that the sub-contractors here have chosen to file a claim for the retention monies. In other words, the pari passu principle prevails. To allow the sub-contractors here to enjoy priority in terms of the preservation of these monies pending arbitration, would amount to contravening the pari passu principle. The sub-contractors would effectively be accorded a priority that they are not entitled to, as there is no trust that was created prior to the winding up.
 In this context it is evident that the full effects of insolvency were not articulated fully before this Court in Qimonda. The effect of Qimonda taken at its highest is to accord priority to contractors and sub-contractors in a building contract, over and above other unsecured creditors of the employer. This has far reaching consequences in terms of the pari passu rule in a winding up, not to mention undue preference.
 There is no basis for debtors in the field of construction law to be accorded such a privilege or priority in the field of insolvency, in the absence of specific contractual provisions or legislation. This is discussed more fully in the course of the judgment.
A single judgement for both appeals
 Pembinaan Legenda Unggul Sdn Bhd (Dalam Penggulungan Voluntari Pemiutang-Pemiutang), in voluntary liquidation, is the appellant in both these appeals, and was the defendant in both suits in the High Court. The appellant will be referred to as ’the main contractor’ in these appeals.
 Two different sub-contractors make claim to the retention monies held by the main contractor for each of them respectively, on the basis that they enjoy a beneficial interest in the sums retained. They were the plaintiffs in the court below, namely SK M & E Bersekutu Sdn Bhd. (in appeal number W-02(NCC)(A)-945-05/2016) and Geohan Sdn Bhd (in appeal number W-02(IM)(NCC)-887-05/2016). They will each be referred to as ‘the sub-contractor’ in these appeals.
 Before the High Court these two matters were heard together and similarly the two related appeals were also heard together. Although the identities of the plaintiffs in each appeal differ, the legal arguments in both appeals were identical. Learned counsel for the main contractor, Mr. Y.Y. Chong, confined his arguments to appeal number W-02(NCC)(A)-945-05/2016 (‘the SK M&E Bersekutu appeal’), on the basis that it would be binding on appeal number W-02(IM)(NCC)-887-05/2016 (‘Geohan Appeal’). The contractual clauses relating to the retention sums in both contracts are identical. We therefore deal with both appeals in this single judgement. As in the High Court, the factual and legal arguments in the SK M & E Bersekutu appeal are utilised.
Salient Background Facts
 The facts are set out comprehensively in the judgment of the High Court as well as the submissions of both parties. The facts set out below are adopted from these three sources.
The SK M& E Bersekutu Appeal
 The main contractor appointed the sub-contractor to carry out electrical sub-contract works for the sum of RM9,789,815-00. The sub-contractor completed the requisite works and a certificate of practical completion was issued by the project architect on 30 May 2013.
 Clause 16.3 of the conditions of the sub-contract read together with the Appendix to the same provides that each and every payment for interim claims is subject to a 10% retention sum up to a maximum limit of 5% of the sub-contract price. The total sum retained under this clause is RM489,490.75.
 The Appendix provides, inter alia, that the main contractor shall release:
(a) 2.5% of the retention sum upon issuance of the certificate of practical completion (‘CPC’); and
(b) the balance 2.5% upon the end of the defects liability period.
 The defects liability period was for a period of 15 months commencing from the date of issuance of the CPC and ended on 30 August 2014 as stipulated in the CPC. Notwithstanding the lapse of the defects liability period, and despite legal demands, the main contractor neglected or failed to release the retention sum.
 On 14 August 2015 the main contractor issued a letter disputing the sub-contractor’s claim and sought verification of the claim. A similar letter was issued on 19 August 2015. Such verification was duly provided, but the retention monies were not paid out.
 After further correspondence, which was to no avail, the sub-contractor received a notice of meeting of creditors under section 260 of the Companies Act 1965 (‘CA’) dated 13 October 2015.
 The letter gave notice to the sub-contractor that:
(a) a meeting of creditors would be held on 2 November 2015;
(b) a meeting of the main contractor’s members was to be held on the same day to propose a special resolution for the voluntary winding-up of the main contractor with the appointment of a liquidator;
(c) the Statement of Affairs of the main contractor would be laid out, a liquidator appointed as well as a Committee of Inspection; and
(d) the sub-contractor should submit its proof of debt general form.
 Schedule G to the main contractor’s statement of affairs set out a list of unsecured creditors. The total debt owed by the main contractor amounted to RM91,876,776.62. The main contractor had categorized the debt owed to the sub-contractor in the sums of RM1,316,862.90 as a “trade debt” and separately the retention monies amounting to RM514,146.14 under the category of “retention sum”.
 On 26 October 2015 the sub-contractor submitted its proof of debt form to the liquidator specifically excluding the retention sum of RM489,490.75, in respect of which it took the position that the same was being held by the main contractor on trust for it.
The Geohan Appeal
 The sub-contractor in this appeal, a civil engineering contractor, was engaged by the main contractor to carry out works comprising earthwork, piling, retaining wall and basement slab for the sum of RM17,734,455.55 for its project. The sub-contract is identical to the sub-contract in appeal number 945.
 Similarly the sub-contractor in this appeal completed the works and the CPC was issued on 8 January 2014. Premised on the identical clause 16.3 and the Appendix:
(a) 5% of the total sum due for works undertaken was retained in the sum of RM886,723.00;
(b) 2.5% was to be released upon issuance of the CPC; and
(c) 2.5% was to be released upon issuance of the certificate of making good defects of the main contract works. The defect liability period was for a period of 27 months from CPC.
(d) These retention monies were not released to the sub-contractor on the due dates or thereafter.
 Similarly the sub-contractor in this appeal received two separate section 260 notices. The list of unsecured creditors disclosed that the main contractor had categorised its debt to this sub-contractor in the sum of RM886,723-00 as a “retention sum”.
The Judgment of the High Court
 Before the High Court two issues arose for consideration in respect of both the appeals:
(a) whether leave should be granted to the sub-contractors to commence or proceed with legal proceedings against the main contractor who was wound up;
(b) whether an order to preserve the retention sums in a separate account pending the final determination of the dispute should be granted in both suits.
 With respect to issue (a), namely whether leave ought to be granted in respect of legal proceedings against the main contractor, the learned judge held that leave ought to be granted as the claims of the sub-contractors could not be dealt with in the winding up process as the main contractor had been wound up and there was no avenue for the sub-contractors to obtain the reliefs sought in the winding up process. The learned judge concluded that this was because the retention monies did not form part of the general assets of the main contractor, but were, in essence trust monies belonging to the sub-contractors. In so concluding, the learned Judge relied on Qimonda, which was binding on Her Ladyship.
 Her Ladyship further held that as these monies were trust monies it would be prejudicial to the interests of the sub-contractors if these trust monies were utilised to pay off the debts owed by the main contractor to its other general unsecured creditors. This, she felt, might also result in undue enrichment to the other creditors. Therefore it was only right that leave be granted to the sub-contractors to exercise their legal rights to recover such retention sums.
 The Court then went on to hold that pending the grant of leave and the final adjudication of the disputes between the sub-contractors and the main contractor, the monies claimed ought to be preserved and apportioned between the two sub-contractors. In so doing the learned Judge adopted the rule of “qui prior tempore, potior est jure” meaning “he who is first has the strongest right”.
Arguments taken on appeal by the parties
 The arguments taken in the appeal are fully considered in the course of the judgment. We therefore do not propose to set out these arguments out here. Suffice to state that the sub-contractors who are the respondents here, essentially relied on the decision of this Court in Qimonda to support their claim for the retention monies to be held on trust pending arbitration. The main contractor put forward numerous contentions which are considered below.
The analysis, reasoning and conclusion of this Court in these appeals
 In determining the legal status of the retention monies under both sub-contracts in the instant appeal, it appeared to us that the following matters required consideration:
(a) What is the correct approach to be adopted when determining the status of the retention monies? Should the contracts be construed to ascertain whether an intention to create a trust subsists, either by virtue of an express term or to be implied from the contract or the conduct of the parties?
(b) Alternatively should all retention monies held by the main contractor be held in law to amount to a trust in favour of the sub-contractors?
(c) Is it necessary to set aside an ascertained portion of the retention monies in order for such a trust to be given effect, such that the beneficial ownership in those ascertained monies lies with, or is vested, in the sub-contractors? What are the consequences of failing to set aside the retention monies notwithstanding the subsistence of a clause or conduct denoting an intention to create a trust?
(d) What is the effect of insolvency in the foregoing situation:
(i) Does the pari passu principle apply or does the fact that the monies are “retention monies” in itself mean that they are held on trust and beneficially owned by the sub-contractors? How are the claims of numerous other sub-contractors who enjoy similar terms under their individual sub-contracts to be dealt with?
The Relevant Clauses of the Sub-Contracts
 The relevant clauses in the sub-contracts are identical.
 Clause 16 of the sub-contracts is entitled ’’Claims and Payments”. It provides for the submission of interim claims and the mode of presentation and timing of such claims.
 Clause 16.2 deals with measurements for the sub-contract works and how they are to be assessed and verified.
 Clause 16.3 which is of material relevance in these appeals provides as follows in relation to retention sums:
’’Unless otherwise stated in the APPENDIX, each and every payment for Interim Claim shall be subjected to a 10% retention sum to the maximum limit of 5% of the Sub-Contract Price”.
 The Appendix to the Conditions of Sub-Contract makes provision for the release of the retention sum in relation to Clause 16.3, as follows:
1st moiety shall be released upon issuance of Certificate of Practical Completion (CPC) of the Main Contract Works and will be forward [sic] a copy accordingly;
2nd moiety shall be released upon issuance of the Certificate of Completion of Making Good Defects (CMGD) of the Main Contract Works and will be forward [sic] a copy accordingly.
 Effectively the Appendix to the Conditions of the Sub-Contract provides that:
(a) 2.5% of the retention sum is to be released upon the issuance of the certificate of practical completion; and
(b) the balance 2.5% of the retention sum is to be released upon the end of the defect liability period.
 In both appeals the sub-contract works were completed by the sub-contractors and the whole of the project works were also certified as practically completed.
Issues (a) and (b):
(a) What is the correct approach to be adopted when determining the status of the retention monies? Should the contracts be construed to ascertain whether an intention to create a trust subsists, either by virtue of an express term or to be implied from the contract or the conduct of the parties?
(b) Alternatively should all retention monies held by the main contractor be held in law to amount to a trust in favour of the sub-contractors?
 These two issues may be dealt with together, as they comprise alternative propositions.
 Issue (a) advocates the proposition that when ascertaining whether retention monies are held on trust or otherwise, the first step is to determine whether there is express provision to this effect. If there is, then it is beyond dispute that there is a contractual obligation on the part of the main contractor to set aside or retain specifically by way of trust, the retention monies deducted and payable to the sub-contractor at a future specified date (subject to express provisions for set-off for defective works etc).
 Even where there is no such express provision, it may be construed, given the circumstances of a particular case coupled with the conduct of parties, that the parties intended that these retention monies be held by way of trust for the sub-contractor. Or that the building contract itself or the circumstances of a particular case warrant the inference of an implied term to the same effect.
 In such instances too, a contractual obligation arises on the part of the main contractor to set aside or specify monies which are retained purely for the benefit of the sub-contractor (again subject to a right of set-off as stated above).
 Where the sub-contract does not make express provision for the creation of a trust in favour of the sub-contractor in relation to retention monies, or where such a trust is not readily inferred from the contract or the circumstances of the case coupled with the conduct of the parties, what then is the situation? Can it be concluded without more, that a trust subsists by virtue of the very nature of retention monies and the relationship of a contractor and sub-contractor? Or that such a trust arises in relation to retention monies by operation of law as a consequence of the relationship of “employer-contractor” in building contracts? This was the subject matter of consideration in Qimonda.
 In Qimonda, the facts were in substance similar to the factual matrix here. Pursuant to a building contract, the employer was entitled to deduct and retain a certain sum of monies from the interim payments on progress payments due to the main contractor and sub-contractor. The retention monies were due to be released in two moieties, much as in the instant case. The employer did not release these monies to the contractor and sub-contractor. The employer was then voluntarily wound up. The main contractor and sub-contractor sought a declaration that the retention monies held by the employer were held on trust in favour of the main contractor and the sub-contractor.
 The relevant clause there, namely clause 22.1.3 provided, inter alia, that: “...an amount to be deducted as retention sum, calculated by reference to the percentage of retention as set out in Appendix 1 in relation to the total of the amounts under…, until the total amount so retained is equal to the limit of the retention as stated in Appendix 1".
 Clause 23 dealt with the release of the retention monies which were due at specific intervals, the first moiety after issuance of the handing over certificate and the second moiety after the issue of the certificate of statutory completion.
 This Court held that the first question for determination was whether a trust could be implied where the agreement or contract does not contain an explicit provision that the retention monies be held on trust by the employer. In determining that such a trust could indeed be implied this Court relied on Re Kayford Ltd  1 All ER 604 (’Re Kayford’) and Geh Cheng Hooi & Ors v Equipment Dynamics Sdn Bhd and other appeals  1 MLJ 293 (’Geh Cheng Hooi’). Importantly this Court held, inter alia, that:
“ The court must consider the circumstances concerning the relationship between the parties. A trust (as in the case of Geh Cheng Hooi as well as in the present case) can be implied even where the agreements themselves do not contain an express clause as it is clearly manifested in the agreements and the correspondence concerned that it was the intention of parties to create one. The court must look into the arrangements as to how the monies were deducted from the progress payments under the contract, held and treated by the parties. The court cannot reject the respondent’s claim just because they did not choose to enter into an agreement with specific trust clause.”
 The Court went on to hold that the retention monies were earned by the contractors for works done under the contracts as they had been claimed and certified as being due to the contractors.
 It went on to reason that the use of the word ’deduction’ for the creation of the retention monies from the certified sum under the contract further supported the fact that the parties recognised that the retention monies are contractor’s monies.
 As such, all the requisites of a valid trust were present and the parties had manifested a clear intention to create a trust, as the whole purpose of what had been done was to ensure that the monies remained in the beneficial ownership of the contractors. Therefore it was concluded that the retention monies held by the employer did not belong to it, but to the contractors.
 In short a trust was implied into the contract by reason of:
(a) a clause subjecting progress payments to deduction of a specific amount coupled with an obligation on the part of the employer to pay out those sums at a specified period;
(b) the contractors’ sub-contract works having been verified;
(c) the failure of the employer to comply with the release provisions, notwithstanding that the relevant periods for such release had lapsed and no part of the monies was to be deducted for defective work.
 The Court also held that there was no requirement to set aside or set apart these retention monies prior to liquidation in order to conclude that a trust subsisted. It stated that once it was established that the retention monies were in fact, trust monies, it mattered not whether the monies were set aside prior to liquidation. In other words, the fact that the retention monies may have been mixed in the common fund of the contractor did not detract from the subsistence of a trust or the beneficial ownership of the monies as such retention monies could be determined and were traceable.
 In so concluding this Court relied on the Supreme Court case of Geh Cheng Hooi (above) and Re Kayford (above). As such, the Court held that the retention monies could not form a part of the general assets of the employer and the failure to separate the retention monies/ trust monies from the common funds prior to liquidation did not serve to defeat the trust.
 As the monies were trust monies belonging to the contractors, such trust arising prior to liquidation, it was held that the contractors were entitled to those trust monies in priority to other unsecured creditors, as the monies did not belong to the employer and therefore could not comprise a part of the general assets.
 With the greatest of respect, we are in complete agreement with the principles of law set out in Qimonda in relation to the creation of a trust. We concur that it is not necessary that an express term like ‘trust’ has to be expressly mentioned in the construction contract. Such a trust, as we have stated in issue (a), may be gleaned from a construction of the terms coupled with the conduct of the parties.
 However the crucial issue is, in a case relating to a construction contract with provision for the deduction of retention monies, as is the case here, with nothing more than the bare content of clauses 16.3 and the Appendix specifying:
(a) the quantum of monies to be retained;
(b) that the retention monies are monies earned by the contractors but subject to set-off for defective works until final completion and certification is complete as specified in the contract; and
(c) the dates of release of the retention monies respectively.
 Whether it can be construed or implied that a trust subsists? In this context it is to be noted that there was no correspondence or negotiation or agreement between the parties to the effect that the retention monies would be treated as belonging to the sub-contractors, or that those monies be set aside. Reliance is placed solely on the relevant clause and appendix in the sub-contract, to infer or construe the existence of a trust.
 (In this context, it must be said that even in Qimonda, the terms were similarly bare, containing nothing more than the present case.)
 Such a conclusion warrants the question of whether the nature and purpose of retention monies, being monies earned for work done, but retained by the employer, in itself denotes the existence of a trust?
 It appeared to us, again with the utmost of respect, that the issue of whether a trust arises in any particular contract must necessarily be a question of construction of the contract. In other words, we were of the view that it cannot be implied purely from the nature and purpose of retention monies per se, that a trust is thereby created in favour of the contractor or sub-contractor as the case may be. The concept of a trust is not inherent in the use of the words ’deductions’ in the present context. Most construction contracts do not operate via a trust (unless expressly so stipulated in the terms). They operate at the level of contract and debt. (see Farepak Food and Gifts Ltd (in Administration)  EWHC 3272 (Ch)).
 To conclude that a trust may be inferred from such a relationship would, in our respectful view, amount to the promulgation of a new and general proposition of law, whereby a trust is implied by operation of law in all construction or building contract cases where there is provision for the deduction of retention monies. In other words, it would follow that any construction contract which contains a clause for the retention of monies would have the effect of creating a trust by law. This would have far reaching consequences, particularly in the fields of trust law and insolvency law.
 The purpose of deducting the retention monies is to afford security to the employer for the performance of the contractor’s obligation. That is why it is expressly subject to set-off provisions in the event of defective works. The contractor recognises that the retention monies are deducted for such a purpose, namely security for performance. Once performance is complete, he becomes entitled to make claim for those monies. In these circumstances, can it be said that the purpose and intent of the parties to the construction contract is to create a trust in favour of the contractor, without more? To our minds, it would be difficult to conclude that a trust subsists by virtue of the bare clauses of the contract in themselves.
 This is borne out by a consideration of several material cases pertaining primarily to construction contracts as well as trusts. The leading case advocating the requirement to construe the relevant clauses in the building contract to ascertain whether or not a trust is intended and constituted in the area of construction cases is Rayack Construction Ltd v Lampeter Meat Co Ltd (1979) 12 BLR 30 (’Rayack’). It is inherent from a reading of the judgment that Vinelott J was guided primarily by the express provisions of that particular contract which specifically provided for the existence of a trust. The agreement in that case embodied the standard condition schedules in the current JCT articles of agreement. Clause 30(3) provided for the retention of a proportion of the sums due under the certificates during a defects liability period, which was five years. Clause 30(4) of the agreement, which is of significance, provided:
“The amounts retained by virtue of sub-clause (3) of this Condition shall be subject to the following rules:
(a) the Employer’s interest in any amounts so retained shall be fiduciary as trustee for the Contractor (but without obligation to invest) and the Contractor’s beneficial interest therein shall be subject only to the right of the Employer to have recourse thereto from time to time for payment of any amount which he is entitled under the provisions of this Contract to deduct from any sums due or to become due to the Contractor” (emphasis ours).
 This clause was first construed in its context within the contract. Pursuant to such construction the learned judge concluded that it imposed upon the contractor an obligation to appropriate and set aside as a separate trust fund a sum representing the retention sum. There was no other way in which Clause 30.4 in that case could be construed.
 In determining this issue the judge held that the purpose of clause 30(4) served to protect both employer and contractor against the risk of insolvency of the other. The contractor was protected against the risk that his claim for payment of the retention sum would be similarly ranked as an unsecured debt.
 Rayack differs from the present case, certainly in so far as the subsistence of a trust is concerned. The express words in the material clause clearly provide for:
(a) the employer to be in the position of a fiduciary;
(b) imposes upon the employer the duty to set aside retention monies in favour of the contractor specifically; and
(c) recognises that the contractor enjoys a beneficial interest in the retention monies.
 There is no like provision in the instant case. It would therefore be difficult to read or imply into clause 16.3 that in the instant case:
(i) the main contractor is in the position of a fiduciary to the sub-contractors; or
(ii) there is a duty to set aside the sub-contractors’ monies specifically (although clearly this would be the prudent and correct thing to do); or
(iii) the sub-contractors enjoy a beneficial interest in the retention monies.
 To that extent Rayack affords support for the proposition that in order to determine whether a sub-contractor is entitled to claim a beneficial interest in retention monies wrongfully withheld by the contractor, the first step in ascertaining such entitlement is to construe the building contract to ascertain whether there was an intention to create such a trust. The first step would be to construe the express terms of the contract. And next, to ascertain whether it can be implied that such was the intention of the parties. In this context the correspondence between the parties and their conduct will have direct relevance as to the subsistence or otherwise of a trust. However it is not authority for the general proposition that a trust subsists in relation to retention monies by operation of law simply by reason of the relationship of employer and contractor between the contracting parties to a building contract.
 Similarly in the case of Mac-Jordan Construction Ltd v Brookmount Erostin Ltd (in receivership)  CLC 581 there was a clause in the building contract that provided that “...the employer’s interest in the retention is fiduciary as trustee for the contractor (but without obligation to invest)".
 Again, it was implicit in the building contract that parties had agreed that the monies would be held by the employer in a fiduciary capacity as trustee for the contractor, meaning that the contractor enjoyed a beneficial interest in the monies. This entitled the contractor to priority in the event of insolvency. (Notwithstanding this the employer was expressly entitled to exercise a right of deduction in respect of those monies).
 In Kumpulan Liziz Sdn Bhd v Pembinaan OCK Sdn Bhd  4 CLJ 709 there was similar provision in relation to the retention monies namely that the employer’s interest in the retention sums were as fiduciary as trustee for the contractor without an obligation to invest. The contractor’s beneficial interest in those retention monies was subject to the right of the employer to have recourse to that sum for monies owed to it. Therefore again there was an express clause specifying the role of trustee in relation to the employer, thereby conferring a beneficial interest in the retention monies on the contractor. A trust was clearly created and subsisted. If retention monies in themselves invited or created a trust, then these clauses would be entirely superfluous.
 Similar provisions are apparent in the cases of Wates Construction (London) ltd v Franthom Properties Ltd (1991) 53 BLR 23. Teknik Cekap Sdn Bhd v Villa Genting Development (2000) 6 MLJ 513, Concorde Construction Co Ltd v Colgan (1984) 29 BLR 120, Syarikat Pembinan Woh Heng  1 LNS 49.
 It would appear that in all these cases the existence of a trust was construed from the contract which clearly envisioned that the employer would hold the retention monies as trustee for the contractor. Therefore it would lend support to the contention that in order to ascertain whether a trust subsists, it is necessary to construe the contract. Following from this, a trust ought not to be construed as subsisting where there is no provision for its existence and the conduct of parties does not lend itself to such an inference. As for an implied term pertaining to the existence of a trust, as stated earlier, there is no general proposition of law in a building contract that retention monies are, as a rule, held by way of trust between an employer and a contractor, and that accordingly, the contractor enjoys a beneficial interest in those monies. On the contrary it would appear that each contract has to be construed and the surrounding circumstances considered to ascertain whether a trust subsists. This is of paramount importance in the event of insolvency, as the subsistence of such a trust accords priority to the contractor over and above all other unsecured creditors.
 In light of these authorities therefore we conclude in relation to issues (a) and (b) that it is necessary to construe a building contract in order to ascertain whether the parties intended that a trust be created in favour of the contractor in respect of retention monies. It is not sufficient to conclude, without an express provision in the contract, or an inference from the conduct of parties over time, that a trust subsists.
 In the absence of an express clause/s or clear conduct on the part of the parties creating such a trust, it would, with respect be untenable to conclude that a trust subsists, conferring a beneficial interest on the retention monies in favour of the contractor, or sub-contractors as is the case here.
 In so concluding above, we are cognisant that we are departing from the decision of this Court in Qimonda. We therefore consider and explain why we are of the respectful view that no trust may be inferred as subsisting in the factual matrix of the appeals before us. It is pertinent that in deciding Qimonda, this Court relied on Re Kayford and Geh Cheng Hooi. We consider these decisions below.
Re Kayford and Geh Cheng Hooi
 In Qimonda this Court relied on Re Kayford and the Supreme Court decision of Geh Cheng Hooi to conclude, as summarised earlier that:
(a) express words such as ’trust’ are not necessary to manifest an intention to create a trust;
(b) the circumstances of the relationship between the parties even where there is no express clause creating a trust, can indicate an intention to create a trust.
 It was further held that Rayack was not followed by the Malaysian courts. In Geh Cheng Hooi the Supreme Court had affirmed the finding of the High Court that monies for goods paid by the customer were then held in trust for their benefit. The fact that these monies had been paid into a bank in a common fund did not have the effect of the monies losing their character as trust monies and were traceable.
 Therefore it was concluded that the Malaysian apex court had recognised the principle set out in Re Kayford namely that payment into a separate bank account was by no means conclusive indication of an intention to create a trust. Rayack, it was held, did not sit well with Re Kayford.
 This Court also held that Rayack imposed too high a burden or obligation on contractors to safeguard the retention sum during the performance of the building contract and this did not accord with commercial reality in the construction industry in the Malaysian context.
 This Court then held that the retention monies are monies earned by the sub-contractor and the use of the word ’deduction’ for the creation of retention monies from the certified sum amounted to recognition that those monies are the contractor’s monies. As such, all the requisites for a valid trust were present.
 The whole purpose of the deduction of those retention monies was to ensure that they remained in the beneficial ownership of the sub-contractors, and a trust served to achieve this purpose. In short, by reason of the nature and purpose of a retention sum, a trust could be implied by law to be held by the employer in favour of the contractor.
 It is useful to consider the factual background in Re Kayford. There was a company that carried on a mail order business. Customers paid in full or by way of deposit when ordering goods. The company was in financial difficulties in November 1972. It was concerned for its customers who had sent and were sending monies for goods they had ordered. The company wanted its customers’ monies protected. It took advice and was advised to place these payments and deposits from customers in a separate bank account to be called ’Customers Trust Deposit Account’. All further sums of monies sent by customers who had not been sent their goods were to be placed there. The company then advised its bank to open such an account. The bank however utilised a dormant deposit account in the company’s name for these monies, rather than opening a new bank account as set out above.
 Soon after this, in December 1972 discussions were held to put the company in liquidation. The company’s advisers realised that their advice had not been correctly carried out and advised that the oral arrangements with the bank be confirmed in writing. The company went into liquidation and the following day a letter was sent to the bank uitlising the words ’Customers trust deposit account’.
 In liquidation the question arose as to whether the customers’ monies were held on trust for them, or whether they comprised part of the general assets of the company. On those facts, the English High Court held that a trust had been created in favour of the customers.
 Megarry J held that it was clear that from the very outset the company had determined to establish a trust account on advice from its accountants. The whole purpose of the exercise was to ensure that the monies remained in the beneficial ownership of those who sent them and a trust was the way to achieve this. It was accepted that the general rule was that when customers sent monies and did not receive their goods, the customers were merely creditors unless a trust was created.
 Such a trust could be achieved by the customer utilising the appropriate words when the monies were sent or the company doing it by taking suitable steps prior to the receipt of the monies. If this was the case then the obligations in respect of the monies were effectively transformed from a debt to a trust. Payment into a separate bank account was a useful way of indicating an intention to create a trust but a trust could still be construed even without such banking arrangements.
 It is apparent from Re Kayford that the company in liquidation had:
(i) manifested a clear intention to protect its customers’ monies prior to such liquidation; and
(ii) pursuant to that intention, taken clear steps to implement a trust.
 Not only was there the manifestation of an intention to create a trust, there were concrete steps taken to constitute the trust in the form of the deposit of customers’ monies into a separate bank account.
 The question there, as pointed out by learned counsel for the contractor, was whether there was an intention on the part of the company to create a trust of the monies for the benefit of those customers, despite no clear express declaration of trust being made by the company.
 That is quite different from the present case (and Qimonda) where there was no manifestation of an intention to create a trust, nor any steps or conduct taken to constitute or implement a trust. If the contractor had in fact taken steps to set aside retention monies in a common fund recognising all sub-contractors’ retention monies in a particular pool of funds separate from its own general assets, it might then be argued that notwithstanding the absence of an express clause requiring that retention monies be treated as trust monies, such a trust could be inferred from the conduct of the parties. Re Kayford is clearly distinguishable on its facts, because there is no substratum of facts in the instant appeals warranting an inference from the conduct of parties that they intended to create a trust.
 Re Kayford is authority for the proposition that an intention to create a trust may be inferred from the circumstances of a case without the need for express words to that effect.
 The fact that a trust may be created without express words to that effect is a well-accepted proposition of law, but there must be a factual basis or conduct on the part of the parties, evincing such an intention and seeking to implement such a trust. That was the case in Re Kayford. But, such a factual matrix does not subsist in the instant cases. There is no series of correspondence between the parties nor conduct to that effect from which such a trust may be inferred.
 It should also be stressed that in Re Kayford it was recognised that the general rule is that an obligation to refund or release monies held and failure to do so gives rise to a right of recovery of a debt as opposed to a beneficial interest in or right to the monies per se.
 In any event, there is a clear distinction between an intention to create a trust and the creation or constitution of a valid trust. The failure to carry out an obligation in a contract to create a trust, gives rise to a breach of a contractual obligation to create a trust. It does not follow that by reason of the existence of such a contractual obligation, express or implied, a trust necessarily exists or may be implied to so exist. The contractual obligation must, in other words be acted upon. Otherwise it remains nothing more than a contractual obligation.
 The failure to comply with a contractual obligation to create a trust is to be contrasted with a situation where a trust does subsist (albeit by the implementation of an express provision or by conduct of parties) and monies due to be paid into the trust are not so paid, and are instead paid into another pool. In this latter instance, as a trust subsists, the remedy of tracing is available to recover such monies, arguably in priority to other creditors in a liquidation scenario, on the grounds that the trust was created bona fide and subsisted well before liquidation.
 However the failure to comply with a contractual obligation to create a trust does not afford the remedy of tracing because no trust subsists, far less a pool of monies to support such a remedy.
 Re Kayford is therefore authority for the proposition that a trust may exist without the necessity of having to use express words relating to trusts to create it. It is not authority for the proposition that a valid trust comes into existence just because a contractual clause provides so.
 In any event there is no such contractual clause in the appeals before us. Neither can an obligation to create a trust be inferred from the contract or the conduct of the parties. Nor can a trust be inferred as subsisting in the instant appeals because, as stated earlier:
(a) there is no contractual provision, express or implied, that can be construed as manifesting an intention to create a trust in the building contracts in these appeals. Neither does such a trust arise by operation of law; and
(b) there is no factual matrix that warrants a construction that the parties manifested an intention to create a trust, far less the actual constitution or creation of a trust.
 As for Geh Cheng Hooi, which was relied upon by this Court in Qimonda, it should be noted that the Supreme Court was dealing with the question of the subsistence of a trust in relation to the monies collected by the companies in the Emporium Group on behalf of the concessionaires and consignors from the sale of their goods placed within the premises of these companies.
 There the proceeds of the sale of those goods belonged to the concessionares and consignors and were held by the companies vide the proceeds of sale. The question was whether a trust of such monies could be defeated if the monies were mixed with the monies of the trustee or if the trustee was insolvent and declared bankrupt or insolvent. In other words, a trust effectively subsisted.
 To that extent. as submitted by learned counsel for the contractor, Geh Cheng Hooi is authority for the proposition that where a trust has already been created in that the beneficial ownership already lies with the beneficiaries, the trust cannot be defeated by virtue of the fact that the trustee has mixed trust assets with his own, in which event tracing is available, or simply because the trustee has gone into liquidation.
 That is to be contrasted with the instant appeals involving retention sums, where the wrongfully withheld monies are not beneficially owned by the sub-contractors until or unless there is an agreement express or implied to hold such sums on trust and such sum is appropriated and set aside as a separate trust fund. To that extent we are not able, with the utmost of respect to concur with the decision in Qimonda that Geh Cheng Hooi supports the contention that a trust can be inferred to subsist no matter that no monies have been specifically set aside for that purpose, as tracing affords a remedy.
Can a trust be inferred from the purpose of the retention sum?
 In Qimonda, this Court further held that the retention monies are monies earned by the sub-contractor and the use of the word ‘deduction’ for the creation of retention monies from the certified sum amounted to recognition that those monies are the contractor’s monies. As such, all the requisites for a valid trust were present. The whole purpose of the deduction of those retention monies was to ensure that they remained in the beneficial ownership of the sub-contractors, and a trust served to achieve this purpose. In short, by reason of the nature and purpose of a retention sum, a trust may be implied by law to be held by the employer in favour of the contractor.
 In this context where the contract does not lend itself to a construction that the parties intended the creation of a trust, it would, in our respectful view, be difficult to imply purely from the purpose of the retention sum that the creation of a trust in relation to such sum was intended. This is because the ultimate purpose of the retention sum is to provide security to the employer for the performance of the contractor’s obligation. The purpose of the retention sum is not primarily to create a trust for the contractor in respect of earned monies. Such a purpose is collateral to the primary purpose of security performance. As such, where parties intend to make such collateral provision, there should be a clear reference to such an intention, preferably expressly. Alternatively it should be possible to construe an implied term in the building contract. This is to be contrasted with a general proposition by operation of law to the effect that retention monies in a building contract are held by employers on trust for contractors.
 Finally, retention sum clauses in construction contracts are not a known category of contracts having terms implied by law. That explains why many building contracts (as enumerated above in case-law at paragraph 76) have specific clauses defining and stating that the retention sum is to be held on trust (ie by the employer as fiduciary for the contractor). Such clauses would be unnecessary if retention sum clauses were a recognised category of cases giving rise to implied terms relating to the creation of trusts with respect to retention monies.
The Nature of the Obligation created under Clause 16.3 and the Sub-conditions in the Appendix
 Having regard to the preponderance of case-law in both the construction and the trust fields, what then is the nature of the obligation owed by the contractor in the instant case to the sub-contractors upon completion of the contractor’s works, and after the defects liability period has lapsed?
 Firstly, a consideration of clause 16.3 makes it clear that apart from providing for the deduction of retention monies, there is nothing further in that clause that lends itself to a construction that a trust is thereby created. The ensuing sub-clauses in clauses 16 and 17 merely allow the contractor to deduct monies for defective works. The provision of the specific dates of release as set out in the Appendix to the Conditions of the Sub-contract similarly proffer no words or intention from which it may be construed that a trust subsists or that the retention monies belong beneficially to the sub-contractor. In short, it is difficult to infer or imply from these particular sub-contracts that there was an intention to create a trust in favour of the sub-contractors, or that the monies retained from their individual sub-contracts belong beneficially to them. Finally there is, in our respectful view, no general rule of law that all retention monies in building contracts are held on trust for sub-contractors.
 In point of fact when these clauses, namely Clause 16.3 and the provisions in the Appendix pertinent to Clause 16.3, are analysed, it follows that at best, these clauses create a legal obligation on the part of the contractor to retain these monies in favour of the sub-contractors. The failure of the contractor to comply with this obligation to retain the monies due to the sub-contractors, amounts to a default on his part. It amounts to a breach of a condition of the contract. In short, it is a contractual default. As a contractual default it gives rise to a remedy for liquidated damages, namely the retention sum.
 It is not a situation where a trust subsists as may be implied by the terms of the contract and the conduct of parties, and the contractor has gone on to utilise monies beneficially owned by the sub-contractors. This is because there is no trust that arises on the facts of this case, either by implication or expressly or by operation of law. In the absence of a trust, it cannot be said that the retention monies belong beneficially to the sub-contractors.
Retention monies do not belong beneficially to the sub-contractors
 In any event, with the greatest of respect, we are unable to concur with the earlier decision of this Court in Qimonda that provisions in a contract which provide only for deduction of retention monies and subsequent release of the same at specified terms, coupled with the purpose and intent of retention monies, confers beneficial ownership on the sub-contractors.
 This is because the monies deducted as retention monies emanate from the contractor itself. The failure to release the retention monies (which emanate from the contractor himself) as and when such release falls due, gives rise to a debt, due from the contractor to the sub-contractors. A debt which is a chose in action, does not confer any beneficial right in the retention monies in favour of the sub-contractors. It gives rise to a right to recover such debt from the contractor. That is a right in personam. It does not accord the sub-contractors a right in rem to the retention monies. Only a trust can confer such a beneficial interest.
 In other words, what arises from a default in the release of retention monies due, is a debt. As the monies emanated from the contractor and in the absence of a trust impressed upon those retention monies expressly or impliedly, no beneficial ownership can arise in relation to those monies. If the sub-contractors enjoy no beneficial ownership, they are not entitled to have those monies either retained or paid out in their favour in priority to other unsecured creditors.
 Finally it should be considered that generally, courts are disinclined to find a trust relationship in commercial matters. In order for the courts to infer the existence of a trust there should be clear evidence from what is said or done of an intention to create a trust, being “an intention to dispose of a property or a fund so that somebody else to the exclusion of the disponent acquires the beneficial interest in it” (see Paul v Constance  1 WLR 527 at 531) as quoted in MF Global Singapore Pte Ltd (in creditors’ voluntary liquidation) and others v Vintage Bullion DMCC (in its own capacity and as representative of the customers of the first plaintiff) and another matter  SGHC 162).
Issue (c): Is it necessary to set aside an ascertained portion of the retention monies in order for a trust to be given effect, such that the beneficial ownership in those ascertained monies lies with, or is vested, in the sub-contractors? What are the consequences of failing to set aside the retention monies notwithstanding the subsistence of a clause or conduct denoting an intention to create a trust?
 In Qimonda it was held that where monies are retained by the employer after certification of sums due to the contractor, a trust subsists in relation to the withheld monies whether or not monies were set aside or appropriated for that purpose. This has been discussed extensively above. Here we would reiterate our earlier reasoning in paragraphs 113-114 that a contractual obligation to create a trust is distinct and different from the parties’ conduct in relation to retention monies in a building contract where it may be inferred or construed that a trust is in existence.
 Where parties have taken steps which can be construed as constituting a trust, for example, setting aside the retention monies in a separate account or marking/ designating particular monies as belonging to the sub-contractor, or entering into a series of correspondence where the beneficial ownership of those monies is clearly conferred upon the sub-contractor, then a trust may be implied to subsist. The failure to fully comply with the requirement to place monies separately amounts to a breach of trust. The remedies are different and separate from a breach of a contractual obligation.
 It therefore follows that the act of setting aside or designating or taking steps to recognise that the sub-contractors’ retention monies are to be kept separately, is an integral constituent part of the creation and recognition of a trust.
 In Snell’s Equity (Thirty-Third Edition, published by Sweet and Maxwell) the following is stated in relation to trust assets at paragraph 22-017:
“...The assets to be held on trust must be certain. As a necessary minimum, the assets must exist as a specific fund. A duty to pay a sum of money cannot give rise to any trust over the payer’s assets if the payer was not required to discharge the liability to pay from any particular fund of money…”
 In this context, the decision of this Court in Fawziah Holdings Sdn Bhd v Metramac Corp Sdn Bhd  1 MLJ 505 (’Metramac’) is of value. Although the decision was subsequently reversed by the Federal Court, the reasoning of Gopal Sri Ram JCA (as he then was) in this Court in relation to the essential requirements for the constitution of a trust were not disturbed. Indeed the statements there reflect the general position in law in relation to the essential requirements for the constitution of a trust.
 In Metramac, reference was made to Mac-Jordan Construction Ltd v Brookmount Erostin Ltd (’Mac-Jordan’) where it was held that there was no trust because it was impossible to identify any specific money as subject to the trust obligation. There the building contract provided for the retention of 3% of the contract price as trustee for the builder. The purpose was to secure performance. The employer became insolvent and the issue was whether a trust of retention money had been successfully created. The lack of an ascertained pool or sum of money precluded the finding of a valid trust. This was because there was no property appropriated or allocated or segregated that could comprise the trust property.
 Similarly in the Privy Council decision of In re Goldcorp Exchange Ltd  1 AC 74 (also applied in Metramac), Lord Mustill referred to In re London Wine Co (shippers) Ltd  PCC 121 as authority for the proposition that where the trust property is unascertained, no trust subsists as it fails for uncertainty. In that case a wine merchant held large stocks of wine in various warehouses. A customer ordered a consignment and it was intended that the bottles ordered be set aside such that it became the property of the customer from that point in time. But no such segregation was undertaken. The customer’s bottles could not be identified from the rest of the bottles. It was held that the intended express trust failed for uncertainty.
 In re Goldcorp Exchange Ltd. (in receivership)  UKPC 3, an appeal from the Court of Appeal of New Zealand to the Privy Council, the facts were as follows. A company which dealt in gold and other precious materials sold unascertained bullion to claimants for futher delivery. The company’s brochure provided that it would be responsible for storing and investing the customers’ bullion and that physical delivery of gold and silver could be obtained with seven days’ notice. Each customer received an invoice or certificate verifying his ownership. It was also represented to customers that the company would maintain a separate and sufficient stock of each type of bullion to meet their demands, but this was not done in actuality. One customer having initially purchased specific gold maple coins agreed to purchase a further 1,000 such coins on a non-allocated basis and to store all the coins with the company. The company did acquire a substantial quantity of such maple coins but did not allocate these coins specially for the customer. There was another category of claimants who had bought bullion from another company, W Ltd., but that entity’s business was taken over by the company. W Ltd had ascertained and appropriated the bullion to each of those claimants, but the company unlawfully misappropriated that bullion by mixing it with its own bullion, removing bullion from the mixed stock and adding more bullion to it.
 The company became insolvent and receivers and managers were appointed under the terms of a debenture which crystallised. At this point in time, the bullion had not been specifically appropriated to the individual purchasers. There was insufficient bullion and other assets to satisfy the secured debt owed to the Bank of New Zeland. The issue for consideration was whether these customers could take in priority to the bank on the grounds that they enjoyed a beneficial interest in the purchase moneys paid under the contracts of sale which could be traced into the company’s general assets in priority to the bank’s charge. The New Zealand Court of Appeal held in favour of both categories of customers. The receivers and managers appealed and their appeal was allowed. It was held that as the non-allocated customers had contracted to purchase unascertained generic goods no property in any bullion passed to them in law or in equity. The collateral promises made in the company’s brochures and by its employees did not constitute a declaration of trust in favour of the customers in relation to the current stock of bullion so as to immediately transfer title to them in respect of that bullion.
 With respect to the customers who had indeed purchased identifable bullion through W Ltd, it was held that the company was not estopped from denying their title because there was no fixed and identified bulk in existence from which a title could be created by a deemed appropriation. More so in relation to a crystallised charge which enjoyed a proprietary interest in the company’s assets unaffected by any prior dealing with such assets. In effect their remedy was of a personal nature and they were not entitled to a proprietary remedy relating to the bullion.
 In the course of the judgment the Privy Council specifically held that the bullion never having been separated or allocated in favour of individual purchasers, was just another asset of the company like its vehicles or office furniture. Thus no proprietary interest arose in favour of the individual customers. In the course of their judgment their Lordships commented on Mac-Jordan and affirmed the decision of the English Court of Appeal.
 It may thus be concluded that the traditional principle in equity and trusts law is that property must be separately identifiable in order to infer a trust. There must be a tangible or identifiable ’thing’ or pool of assets upon which the trust may be impressed. Even in a constructive trust situation which requires elements of dishonesty or acts/ omissions in bad faith where a trust arises by operation of law, the property should be identifiable or traceable. In the instant case there are simply no identifiable monies, not only in relation to the retention monies of the sub-contractors in these appeals but of 128 other contractors. There is simply one account which is that of the contractor, with very limited funds of a general nature in that acount. Is it any different where the property is not tangible but is fungible, namely in the form of money or shares?
 Generally it would appear not. Coming back to the reasoning in Mac-Jordan, where there was no event of insolvency and the issue was whether a mandatory injunction ought to be granted to enable retention monies from the general pool of monies being utilised by the employer as working capital to be set aside in favour of the contractor, to protect the contractor in the event of insolvency. No injunction was granted by the English Court of Appeal as no retention monies had been set aside. The core of LJ Scott’s reasoning was that as no monies had been set aside, there were no identifiable assets that were impressed with the trusts applicable to the retention fund.
 And that is the point in the instant case. There are simply no assets that may be said to have been impressed with a trust. Even if the assumption is made that a trust could be inferred, the lack of segregation of the retention monies precludes, in our respectful view, the existence of any trust that would enable the sub-contractors here to take in priority to the other unsecured creditors. The question of tracing does not arise in the absence of a constituted trust. Tracing is only available once a trust is constituted, as a remedy.
 As stated earlier, even if it is assumed that there was an intention or obligation to create a trust in the instant appeals, the failure of the appellant to actually execute his obligation can, at best, amount to a breach of a contractual obligation to create a trust. The remedy lies in damages. Such a breach cannot give rise to a proprietary interest in the funds. No right in rem subsists in favour of the sub-contractors in relation to the monies held in the contractor’s general account.
 In this context, learned counsel for the appellant brought to our attention that several cases were not brought to the attention of this Court in Qimonda. The cases following Rayack for example, which upheld the reasoning there, were not made available. They include Re Arthur Saunders Ltd (1981) 17 BLR 125, Re Jartay Developments (1983) 22 BLR 134, Wates Construction v Franthorm Property (1991) 53 BLR 23 (CA) (’Wates Construction’), MacJordan Construction Ltd v Brookmount Erostin Ltd  CLC 581 (CA) (’MacJordan’), the Hong Kong High Court case of Concorde Construction Co Ltd v Colgan (1984) 29 BLR 41 (’Concorde’).
 All these cases recognised that retention sum type clauses in construction contracts are contractual promises or obligations to create a trust and not a trust per se. In order to constitute a valid trust monies had to be allocated or segregated such that there were separately identifiable.
 In Re Jartay Developments (1983) 22 BLR 134 the retention sum clause was held to amount to a contractual promise or obligation to create a trust, and not a trust per se as there was no segregation of the retention sums:
“In my view it is clear both in principle and on authority that Clause 30(4)(a) of the RIBA conditions imposed an obligation on Jartay to appropriate and set aside GBP23,009 retentions as a separate trust fund, and that if RPW had made an application before Jartay went into liquidation the court would have made a mandatory order to that effect; see Rayack Construction Ltd v Lampeter Meat Co Ltd (1979) 12 BLR 30. However it is equally clear in principle that the relief ceased to be available to RPW on the commencement of the liquidation. Accordingly there being no evidence that any part of the retentions was appropriated or set aside before the liquidation commenced, RPW cannot now claim to be treated as if it had.”
 And in Wates Construction:
"...the only way in which the interest of the beneficiaries (the contractor and the sub-contractors) in the retention fund could be safeguarded and preserved is if that fund is placed in a separate account and is not used for any of the purposes of the employer’s business or hazarded in any other way.”
 Similarly in Concorde the Hong Kong High Court opted to follow Rayack when it held that the condition in the building contract under consideration imposed upon the employer an obligation to appropriate and set aside the retention monies in a separate trust account and the subsistence of a beneficial interest in those monies was predicated on whether such a fund was appropriated and set aside. The Court held that it was not bound by any of the English decisions on point but concluded that Rayack commended itself as “good sense which produces a fair result” and that it should therefore be followed in Hong Kong too. (See also Yew Sang Hong Ltd v Hong Hong Kong Housing Authority  3 HKC 290 where the Hong Kong Court of Appeal refused to order restitution of retention monies to a sub-contractor on the grounds, inter alia that monies had not been allocated or set aside for that purpose. The claim was struck out as disclosing no reasonable cause of action).
 And in MacJordan, the English Court of Appeal found that the relevant clause was nothing more complex than a contractual obligation to appropriate and set aside the requisite sum in a retention fund. It was further held that such a contractual obligation did not carry with it any equitable or beneficial interest of a security character in the assets of the employer.
 In the present appeals there is no such clause in relation to the retention sums imposing any obligation or recognition of the sub-contractor’s interest in those monies, far less any provision prescribing or implying a setting aside of the monies. There is therefore even greater basis/ reason to hold that no trust subsists. (see also Parkview Qld Pty Ltd v Commonwealth Bank of Australia  NSWCA 422)
 And see more generally the Canadian cases of Ontario (Hydro-Electric Power Commission) v Brown  O.J. No 446 or 21 D.L.R. (2d) 551 where the requirement to keep the requisite funds separate is stated to be essential for the purposes of construing a trust relationship between the parties. Otherwise where the primary or sole duty is to pay out the monies to the recipient, the relationship is one of debtor and creditor. Such is the case here.
What is the effect of insolvency in the foregoing situation?:
(i) Does the pari passu principle apply or does the fact that the monies are “retention monies” in itself mean that they are held on trust and beneficially owned by the sub-contractors in these appeals? How are the claims of numerous other sub-contractors who enjoy similar terms under their individual sub-contracts to be dealt with?
 It is evident from the judgment thus far that our conclusion is that no trust subsists in favour of the sub-contractors in the building contracts in these two appeals. In the absence of such a trust, it cannot be argued that such a trust was created or implied prior to liquidation and that therefore these sub-contractors are entitled to priority in preference to other unsecured creditors. This would run awry of the pari passu principle which is the cornerstone of insolvency law. While the existence of a valid trust would afford such relief, the absence of a trust (albeit implied from the contract or the circumstances and the conduct of parties) precludes any such priority. There is a discernible trend from the line of cases beginning with Rayack that the courts generally require monies to be placed in a separate account for that to occur. Therefore where this is not done, then the sub-contractors are in no different position from all other unsecured creditors and can only make claim on that basis. This is borne out by the line of cases commencing from Rayack, which have been discussed extensively above.
 In the context of insolvency, the textbook Snell’s Equity at paragraph 22-015 states:
“…It has been said that there is a “general disinclination of the courts to see the intricacies and doctrines connected with trusts introduced into everyday commercial transactions”. [reference is made to the case of Neste Oy v Lloyds Banks Plc  2 Lloyd’s Rep 658 at 665]
…The imposition of a trust, without strong evidence of an intention to declare one, would upset the usual proportionate distribution of assets in insolvency. So a simple advance payment of money for a particular purpose is generally not enough to payer...
If it can be shown that either party intended that the recipient should not have the free disposal of the money and that it should be applied solely for a specified purpose, then it may be impressed with a trust. [the case of Twinsectra Ltd v Yardley  UKHL 12 cited.] ...An intention that the recipient was to hold the money unmixed as a separate fund is strong evidence to this effect. This rule is the foundation of the so-called “Quistclose Trust”…
In insolvency it may be important to know whether the payer or the recipient had the relevant intention to declare a trust of the funds that created the debt. A recipient’s declaration of trust for the payer may amount to an unlawful preference in the payer’s favour. The trust would be voidable as against the person administering the recipient’s insolvent estate."
And generally at paragraph 22-025:
“The primary element in the trust is the asset that is to be its subject-matter. If this is not identified clearly enough then the purported declaration of trust is a nullity. If that asset is sufficiently identified but the settlor’s intention to create a trust over it is uncertain then the person entitled to the asset holds it beneficially for himself and free of any trust…”
 It is clear therefore that in the absence of a clear intention or manifestation of an intention to create a trust coupled with the segregation of monies to enable a trust to be imprinted on those funds, it cannot be said that a trust subsists. Without a trust coming into being well before liquidation, no priority accords to the sub-contractors in the present appeals, and the pari passu rule must prevail. As such it would follow that the monies in the appellant’s general account are more properly found to be general assets beneficially belonging to the contractor and to which the sub-contractors in this appeal enjoy no priority in preference to other unsecured creditors.
 To uphold the learned Judge’s finding that the sub-contractors in these appeals are entitled to priority in relation to all other unsecured creditors, would result in relative chaos, particularly on the facts of the instant appeals where 128 other sub-contractors with similar, if not identical claims, stand to be refunded with retention monies owed to them.
 The sub-contractors’ claims in the present appeals are properly characterised as debts due and owing to them, as is the case with all other unsecured creditors. They are entitled to such monies as are available to be divided between the entire pool of unsecured creditors on a pari passu basis.
 With respect to the claims of the other sub-contractors, the learned judge concluded that “he who is first has the strongest right”. This would mean that where there are insufficient funds to meet all trust obligations, the first person who obtains an order of court to set aside the money prevails over all others. This would, with the greatest of respect, be completely unacceptable and erroneous in the context of the trite and well-accepted position in insolvency law of the equality of treatment of all unsecured creditors. It runs contrary to the underlying principles of insolvency and priority provisions of our statutory Companies Act 2016 and the earlier 1965 Act.
 On a global level, attempts are being made to implement this fundamental rule on a cross-border basis. It would be a retrograde step to allow an unsecured creditor with no clear entitlement to claim the subsistence of a trust, to circumvent the pari passu rule. It would elevate building contract retention monies’ claims to a special category outside of the general insolvency provisions.
 More so in a case like the present where all the other 128 sub-contractors could make similar claims to the sub-contractors in the present appeals. That would render the result in these appeals meaningless. There would be a free for all in every case in which an employer or main contractor faces insolvency.
 The proper manner in which to ensure such priority would be to ensure that there is an efficacious clause in the contract which provides expressly for the retention monies due to the contractor upon completion of the contract to be retained in a separate account. That in itself is insufficient. It should be ensured that those monies are then actually placed in a separate account. Court action should be initiated if necessary to ensure that this is done at an early stage, and not after liquidation.
 Alternatively, there should be statutory provision for retention sums to be kept separately by way of trust for sub-contractors such that their interests are adequately protected, as has been introduced in other jurisdictions.
 It was therefore clear to us that the learned judge erred when she held that the first in time stood to take all the monies that remained, as it were, in priority to other unsecured creditors. The principle of “he who is first has the strongest right” was utilised in Public Finance Bhd v Scotch Leasing Sdn Bhd (In Receivership) (Perwira Habib Bank Malaysia (Intervener)  2 MLJ 369 to state that where a legal estate is outstanding the priority of equitable interests is governed by that principle. It has no application in the case of insolvency where the pari passu principle is applied.
Should leave have been granted for the sub-contractors to commence proceedings against the contractor?
 This brings us to the issue of whether leave ought to be granted to the sub-contractors here to commence proceedings against the contractor. The principles for the grant of leave under the then prevailing Companies Act 1965 are well settled. Leave is generally only granted where the creditors’ claims cannot be dealt with in the course of the winding up. In the instant case the sub-contractors’ claims for the retention monies are clear and do not warrant adjudication by way of the Construction Industry Payment and Adjudication Act (CIPAA) 2012 or arbitration. Neither are the sub-contractors seeking a remedy which is not available in winding up. Their claim is for monies due under the building contract for work done. There is no real dispute. To this end the filing of the proof of debt ought to be sufficient to enable the liquidator to deal with the claim accordingly. There is also a right of appeal to the High Court if the sub-contractors are aggrieved by the liquidator’s decision on the proof of debt. (see Mosbert Berhad (In liquidation) v Stella D’Cruz  2 MLJ 446, Shencourt Sdn Bhd v Perumahan NCK Sdn Bhd  5 MLJ 191 and Mesuntung Property Sdn Bhd v Kimlin Housing Development Sdn Bhd.  4 MLJ 886).
 It follows from the foregoing that there is no basis to grant an order for the sum equivalent to the retention sums be preserved pending the final determination of the arbitration. That order must fall as a consequence of our earlier conclusion.
 For the foregoing reasons we allowed the appeals against the decision of the High Court granting leave and the preservation order.
Court of Appeal
Dated: 21st February 2018