IN THE HIGH COURT OF MALAYA ATSHAH ALAM IN THE …3 TWO SQUARE SDN. BHD. … DEFENDANT . BEFORE ....
Transcript of IN THE HIGH COURT OF MALAYA ATSHAH ALAM IN THE …3 TWO SQUARE SDN. BHD. … DEFENDANT . BEFORE ....
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IN THE HIGH COURT OF MALAYA AT SHAH ALAM
IN THE STATE OF SELANGOR DARUL EHSAN
SUIT NO: 22NCVC-510-07/2013
BETWEEN
PERBADANAN PENGURUSAN 3 TWO SQUARE ... PLAINTIFF
AND
3 TWO SQUARE SDN. BHD. … DEFENDANT
BEFORE
Y.A. TUAN GUNALAN A/L MUNIANDY
JUDGE, HIGH COURT
GROUNDS OF JUDGEMENT
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[1] This is a lengthy and protracted trial of 3 consolidated suits
commenced by the Plaintiff (‘P’) Management Corporation (‘MC’) of a
condominium called 3 Two Square (‘3TS’) established under Section 43 of
the Strata Titles Act, 1985 (‘STA’) against the Developer and previous
Managing Agent (‘M/A’) of the building , now the Defendant (‘D’).
[2] Vide the 1st suit, Shah Alam High Court (‘SAHC’) Suit No.
22NCVC-510-07/2013 (‘Suit 510’) filed on 31.7.2013, P seeks “the return of
management fees paid by the Plaintiff to the Defendant in the sum of RM
1,200,000.00 (management fees for the years 2008 – 2012 at
RM240,000.00 per year) and for various documents as listed in Annexure A
of Statement of Claim – A” also filed on 31.07.2013.”
[3] Vide the 2nd suit, SAHC, Suit No. 22NCVC-516-07/2013 (‘Suit 516)
P seeks payment from the Defendant in the sum of RM1,739,712.00 as
maintenance and sinking fund charges for the car parks owned by the
Defendant based on Car Park Maintenance Invoice 1 and Car Park
Maintenance Invoice 2.
[4] Vide the 3rd suit, SAHC Suit No. 22NVCV-125-03/2014 (‘Suit 125’)
filed on 10.06.2014 P seeks payment from the Defendant in the sum of RM
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139,200.00 as rental of the Car Park Office from August 2008 until May
2013 and presumably based on Car Park Office Rental Invoice 1 to 5.
Factual Background of Claims
Suit 22NCVC-510-07/2013
[5] Summary of P’s case:
(1) The Plaintiff is a management corporation for “3TS” incorporated
pursuant to Strata Titles Act 1985 on 2nd August 2008 and having
its office at Management Office, Block A LG2, 3 Two Square, No.
2, Jalan 19/1, 46300 Petaling Jaya, Selangor Darul Ehsan.
(2) The Defendant is a company incorporated pursuant to Companies
Act 1965 in Malaysia having its business address at F-39-PH,
Penthouse The Crest, Dataran 3 Two, No. 2 Jalan 19/1, 46300
Petaling Jaya, Selangor Darul Ehsan. The Defendant is the
developer for 3TS commercial center known as 3TS.
(3) After the completion of 3TS, the Defendant has full control on the
Plaintiff’s account and after the Plaintiff were incorporated, except
for accounts, the Defendant and/or Joint Management Body of 3TS
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had tendered all services and management dealing and affairs of
3TS to the Plaintiff. However, the Defendant had still continued to
deal with accounts of 3TS with no approval or consent from the
Plaintiff.
(4) Since September 2012, the Plaintiff had requested from the
Defendant for all documents and complete account books to be
submitted to the Plaintiff and around October 2012, the Defendant
had submitted documents and incomplete account books in nine
boxes to the Plaintiff.
(5) Vide letter dated 18.10.2012, the Plaintiff had requested for
documents in detail, listed in the list prepared by the Defendant.
However, the Defendant had failed, refused and/or neglected to
provide the documents tabulated in List “A” in Statement of Claim.
(6) Further and based on audit accounts, the Plaintiff discovered that
in 2008, the Defendant had charged a sum of RM240,000.00 per
annum for management fees for Joint Management Body of 3TS
and in 2009, 2010, 2011 and 2012, the Defendant had charged a
sum of RM240,000.00 per annum for management fees on the
Plaintiff with no management agreement entered into between the
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Plaintiff and the Defendant nor Joint Management Body of 3TS with
the Defendant to enable the Plaintiff to charge management fees of
RM240,000.00 per annum or RM20,000.00 per month.
(7) Thus, the Defendant had invalidly, unfairly and wrongly levied and
obtained payment of management fees which was not approved by
Joint Management Body of 3TS and the Plaintiff in the sum of
RM1,200,000.00 and had failed to give any explanation to the
Plaintiff despite numerous demands.
(8) The above action of the Defendant was intended to conceal its
fiduciary duties and responsibilities as the developer to the Plaintiff.
[6] Summary of D’s case:
(1) The Defendant is the developer appointed to develop a commercial
centre known as 3TS.
(2) After the Defendant completed the 3TS commercial centre in
August 2007, the Defendant in the capacity as developer had
maintained and managed 3TS project.
(3) Joint Management Body 3TS (‘JMB’) was incorporated on 2/8/2008
to take over the maintenance and management of 3TS.
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(4) JMB had directly or indirectly appointed the Defendant as the
Managing Agent to continue maintaining and managing 3TS on
behalf of the JMB.
(5) The Plaintiff was incorporated on 8/4/2009 and after the
incorporation of the Plaintiff, the Plaintiff had directly or indirectly
appointed the Defendant to continue maintaining and managing
3TS on behalf of the Plaintiff.
(6) The Defendant’s service in maintenance and management of 3TS
was terminated by the Plaintiff via the Plaintiff’s letter dated
13/7/2012.
(7) Subsequent to the above facts, JMB and the Plaintiff had paid to
the Defendant RM20,000.00 per month from 2/8/2008 until
31/7/2012 for maintenance and management services of 3TS as
provided by the Defendant.
(8) The maintenance fees were paid by the Plaintiff or JMB to the
Defendant with no complaint.
(9) All the Plaintiff’s documents and documents related to maintenance
and management of 3TS in the Defendant’s custody that were to
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be handed over to the Plaintiff under the law had already been
handed over to the Plaintiff.
(10) The Defendant had performed all its duties and responsibilities as
a developer.
Suit 22NCVC-516-07/2013
[7] Summary of P’s case:
(1) At all material times, the Defendant was the owner of all the car
park parcels at Basement 1 & 2 and L1 & 2 measuring 169,728 s.f.
in 3TS (the Defendant’s car park parcels).
(2) At all material times, maintenance charges and sinking fund
payable by parcel owners in 3TS including the Defendant are as
follows:-
From 1.08.2008 until 15.1.2010
Maintenance charges - RM0.18
Sinking fund - RM0.02
Total - RM0.20
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Since 16.1.2010
Maintenance charges - RM0.27
Sinking fund - RM0.03
Total - RM0.30
(3) However, since the Plaintiff was incorporated, the Defendant had
only paid maintenance charge of RM0.045 and sinking fund of
RM0.005 p.s.f., i.e. total of RM0.05 p.s.f.
(4) Therefore, there were shortages of payment for maintenance
charges and sinking fund by the Defendant i.e. from 01.08.2008
until 15.01.2010 of RM0.15 p.s.f. and since 16.01.2010, shortage
of payment of RM0.25 p.s.f.
(5) Since August 2012, the Plaintiff and/or its solicitor had sent
notices, letters and invoices to the Defendant asking for payment
of the shortfall of maintenance charges and sinking fund for the
Defendant’s car park parcels. However, the Defendant ignored
the demands.
(6) Maintenance charges and sinking funds payable since 01.08.2008
until 31.7.2013 are as follows:-
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Details
From 1.08.2008 until 15.1.2010
Maintenance charges - RM0.18 - RM0.0045 = RM0.135
Sinking fund - RM0.02 – RM0.005 = RM0.015
Total month - 17.5 months
Maintenance charges - 169,728 sq ft x RM0.135 x 17.5 = RM400,982.40
Sinking fund - 169,728 sq ft x RM0.015 x 17.5 = RM 44,553.60
Total Shortage RM444,536.00
Since 16.1.2010
Maintenance charges - RM0.27 – RM0.0045 = RM0.225
Sinking fund - RM0.03 – RM0.005 = RM0.025
Total month - 30.5 months
Maintenance charges - 169,728 sq ft x RM0.225 x 30.5 = RM1,164,758.40
Sinking fund - 169,728 sq ft x RM0.025 x 30.5 = RM 129,417.60
Total Shortage RM1,294,176.00
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(7) The Defendant claims that payment of maintenance charges and
sinking fund was made for Corporate Office of RM0.50 permonth
p.s.f. from 01.08.2007 until 15.01.2010 and RM0.60 per month
p.s.f. from 16.01.2010 until now.
(8) The Plaintiff avers that the Defendant did not make payment for
maintenance charge and sinking fund in the sum averred by the
Defendant.
(9) Despite, all parcels of units in 3TS had paid the same rate of
RM0.20 p.s.f. per month from 01.08.2008 until 15.01.2010 and
payment of RM0.30 p.s.f. per month from 16.1.2010 until now.
(10) The Plaintiff avers that payment that the Defendant alleged as
excess payment is actually payment for electric bills for centralized
air conditioner, including chillers, related pumps, AHUs and
cooling towers.
[8] Summary of D’s case:
(1) The Defendant is a developer of a project known as “3TS” (“the
said development”) who is responsible towards the maintenance
of the said development from the date of delivery of vacant
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possession of each parcel in the said development to purchasers
until the lapse of the defect liability period.
(2) Vacant possession was delivered to the purchasers of the said
development on 3.8.2007 and the Joint Management Body was
established.
(3) The Plaintiff was incorporated on 8.4.2009.
(4) The Defendant is the registered owner of the land below in the
said development, detailed with the square feet of each parcel: -
(5) Since August 2007, that is the date of delivery of vacant
possession of parcels at the said development to purchasers, until
16 January 2010, the Defendant had paid RM0.50 p.s.f. per month
for Corporate Offices, RM0.20 p.s.f. per month for shops, and
RM0.05 p.s.f. per month for car park parcels. Amount paid by the
Defendant was RM80,827.80 per month. At the same time, all
purchasers in the said development are paying RM0.20 p.s.f.
(6) After 17 January 2010 until now, the Defendant had paid RM0.30
p.s.f. per month for the said shops, RM0.60 p.s.f. per month for
Corporate Office and RM0.05 p.s.f. for car park parcels. Total sum
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paid by the Defendant per month was RM95,850.00. At the same
time, all purchasers at the said development were paying RM0.30
p.s.f. per month.
(7) From the date of delivery of vacant possession until to-date, the
Defendant has paid RM0.30 p.s.f. every month on a higher rate for
its corporate office as compared to other owners at the said
premises, as per the Plaintiff’s bill, which contravenes the Strata
Title Act.
(8) Pursuant to the Strata Title Act, permitted rate that can be charged
to owners must be the same. However, after several complaints
and demands to the Plaintiff after 2012, the Plaintiff failed and/or
refused to rectify the above, despite having full knowledge that the
Plaintiff had overcharged the Defendant. The Plaintiff further
demanded that the Defendant pay RM0.15 and RM0.25 p.s.f.
every month for car park parcels.
(9) At the same time, the Plaintiff refused to maintain the common
areas at the Defendant parcel.
(10) The Defendant had paid extra to the Plaintiff every month from the
date of delivery of vacant possessions until todate.
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(11) Any increase in rate of charges payable to the Plaintiff as stated in
the Statement of Claim is invalid and contravenes the law.
(12) Further and/or in the alternative, without admitting to any increase
of charges as valid, the total monthly bills by the Plaintiff every
month for the Defendant’s parcels are lower that what the
Defendant had paid monthly in total to the Plaintiff.
(13) Except for management charges, the Plaintiff had contravened the
law by charging the Defendant the utility charges.
(14) Because of error of fact and law, the Defendant had overpaid the
Plaintiff every month for charges claimed to be payable to the
Plaintiff, for maintenance claimed for the common areas in 3TS
including common facilities at the Defendant’s parcels.
(15) The Defendant repeats and adopts the above paragraphs for its
counterclaim against the Plaintiff.
(16) Pursuant to the Strata Title Act, contribution or charges payable by
the Defendant should be the same rate with other parcel owners at
the said development i.e., RM0.20 p.s.f. or RM0.30 p.s.f. per
month, based on the relevant period.
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(17) Further, the Defendant had paid extra to the Plaintiff by RM0.30
p.s.f. every month for the Corporate Office for the period after
delivery of vacant possession until to-date.
(18) The Defendant counter-claims from the Plaintiff for the overpaid
sums received by the Plaintiff from the Defendant and for refund
RM2,516,671.50 for the overpaid sum or in the alternative, set-off
from any sum accrued in the Judgment owing by the Defendant to
the Plaintiff for car park parcels, if any, which is denied.
Suit 22NCVC-125-03/2014
[9] Summary of P’s case:
(1) Before July 2012, the Defendant had full control over JMB
members of 3TS and the Plaintiff. Therefore, any action taken by
3TS JMB and the Plaintiff were actually the decisions made by the
Defendant and solely for their benefit.
(2) At all material times, the Defendant has and still has the full control
of car park operation for 3TS and it has placed, continued using
and occupying the car park management office (‘CPMO’) located
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in an office space having approximately 600 square feet which is a
common property in Block A, LG-2, 3TS, No. 2, Jalan 19/1, 46300
Petaling Jaya, Selangor Darul Ehsan under the Plaintiff’s control
and management (The said Car Park Office).
(3) At all material times, neither 3TS JMB nor the Plaintiff had
appointed the Defendant, whether directly or indirectly or by any
implication, as managing agent and/or had given approval to the
Defendant to maintain nor manage 3TS as a whole until
management of 3TS is taken over by the Plaintiff after its
establishment on 8.4.2009.
(4) As a developer, the Defendant personally assumed that they are
the managing and maintenance agent to manage 3TS until the
new members had taken over the Plaintiff’s management and until
the Defendant’s involvement in management and maintenance of
3TS had ceased.
(5) Despite several meetings and negotiations between the Plaintiff’s
representative and the Defendant’s representative, the Defendant
failed, refused, and/or neglected to make any rental payments to
the Plaintiff.
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(6) Since September 2012, the Plaintiff and/or its solicitors had sent
invoices and letters (including letters dated 26.9.2012, 6.12.2012
and 6.1.2013) to the Defendant demanding monthly rentals from
them for the said CPMO and demanding arrears of payment from
the Defendant since the establishment of the Plaintiff.
(7) The Defendant’s representative, Ms. Rachaelle Yong had made a
false representation to the Plaintiff’s representative, Mr. Loh Kim
Tong that the CPMO was owned by the Defendant. The Plaintiff
came to know that the said CPMO is not owned by the Defendant
but a common areas owned by the Plaintiff after the Plaintiff
acquired Strata Title Plan for 3TS.
(8) The Defendant admitted that the Plaintiff is entitled to collect
rentals for the CPMO since the establishment of the Plaintiff as
they never permitted the Defendant to occupy the premise for free
with no rental. In addition, even if the Defendant is the managing
agent, the said office was not meant for maintenance of 3TS but
was intended by the Defendant to manage car park parcels owned
by the Defendant. The Defendant had used its office at Block F
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Corporate Tower as its management office for the purpose of
managing and maintaining 3TS.
(9) As at April 2013, the Defendant had failed, refused and/or
neglected to pay monthly rentals since August 2008 until and
including the month of April 2013. The total monthly rental owed
by the Defendant to the Plaintiff is RM136,800.00 (RM4.00 p.s.f. x
600 s.f. = RM2,400 per month x 57 months (August 2008 to April
2013) ( the said outstanding rentals).
(10) The Plaintiff had instructed it’s solicitors Messrs Ling & Mok to
issue a notice dated 18 April 2013 (The said Notice of Demand) to
demand from the Defendant to make payment of the said
outstanding rentals and give a notice of the Plaintiff’s intention to
repossesses the said CPMO on or before 31.5.2015. However, the
Defendant still failed, refused and/or neglected to make any
payment of the said outstanding rentals. The Defendant however,
had delivered the vacant possession of the said CPMO on
31.5.2013.
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[10] Summary of D’s case:
(1) The Defendant is the developer of a development project 3TS.
After 3TS project was completed and delivery of all shop lot
parcels and office to the purchasers had taken in August 2007, the
Defendant as the developer had maintained 3TS project from
August 2007 until the establishment of Joint Management Body
(“JMB”) 3TS in August 2008.
(2) After the establishment of JMB, JMB had appointed the Defendant
directly or indirectly as managing agent and/or had given approval
to the Defendant for them to fully maintain and manage the 3TS
project until the Plaintiff took over after their establishment in April
2009.
(3) Therefore, the Plaintiff had appointed the Defendant as managing
agent directly or indirectly and/or had agreed and allowed the
Defendant to continue maintaining and managing 3TS project until
the Defendant’s services were terminated by the Plaintiff in July
2012.
(4) As managing agent, the Defendant had occupied the said office
with no charges and agreement, permission or with objection from
JMB and the Plaintiff since August 2008 so that the Defendant
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could manage and maintain 3TS projects including car park area
affairs in 3TS.
(5) After the termination of the Defendant’s services in July 2012, they
were allowed to occupy the said office to manage the car park
area in 3TS. The Plaintiff had agreed directly or by conduct that
the Defendant was permitted to continue occupying the office
without charges or rental and the Plaintiff be restricted or estopped
from denying this.
(6) In any circumstances, the Defendant is not responsible or liable
towards the Plaintiff for the rental for the period before the
establishment of the Plaintiff.
(7) There was no tenancy agreement entered into by the Defendant to
rent the said office. The Plaintiff’s claim is invalid, baseless and
mala fide.
The Law on Burden of Proof
[11] The governing provisions of this aspect of the law are Sections 101
and 103 of the Evidence Act, 1950 (‘EA’) which provide that:
“101. Burden of proof
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(1) Whoever desires any court to give judgment as to any legal
right or liability, dependent on the existence of facts which he
asserts, must prove that those facts exist.
(2) When a person is bound to prove the existence of any fact,
it is said that the burden of proof lies on that person.
…
103. Burden of proof as to particular fact
The burden of proof as to any particular fact lies on that person
who wishes the court to believe in its existence, unless it is
provided by any law that the proof of that fact shall lie on any
particular person.
…”
[12] On the onus of proof at different stages of the trial, the classic case
is Selvaduray v Chinniah [1939] 8 MLJ 253 where Terell, AG CJ explained
succinctly that:
“… it is clear that the onus is on the plaintiff to prove his case.
After the conclusion of the whole case there must be some
preponderance in his favour. It may be true that the plaintiff
established a prima facie case, but at the conclusion of the trial
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the learned Judge has found that the position was exactly even,
i.e. that any preponderance in the plaintiff’s favour had
disappeared. That being the case the plaintiff must necessarily
fail, as he has not discharged the onus which is upon him. No
doubt the defendant would equally have failed if he had been
the claimant and had tried to establish, as a substantive part of
his case, the alternative version which he tried to prove in
answer to that of the plaintiff. But as he was not the claimant,
that consideration is quite immaterial. It is quite sufficient for his
purpose if he can satisfy the Court that the plaintiff has not
established his case and the learned Judge has so found.”
[13] As regards adjudicating the veracity of witness testimonies, the
leading authority is Tindok Besar Estate Sdn. Bhd. v Tinjar Co. [1979] 2
MLJ 229 where Chang Min Tat, FJ, remarked:
“For myself, I would with respect feel somewhat safer to refer to
and rely on the acts and deeds of a witness which are
contemporaneous with the event and to draw the reasonable
inferences from them than to believe his subsequent
recollection or version of it, particularly if he is a witness with a
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purpose of his own to serve and if it did not account for the
statements in his documents and writings. Judicial reception of
evidence requires that the oral evidence be critically tested
against the whole of the other evidence and the circumstances
of the case. Plausibility should never be mistaken for veracity.”
[14] On the same area of the law, in Lee Ing Chin @ Lee Teck Seng &
Ors v Gan Yook Chin & Anor [2003] 2 MLJ, 97 Gopal Sri Ram, JCA (later
FCJ) pronounced:
“A judge who is required to adjudicate upon a dispute must
arrive at his decision on an issue of fact by assessing, weighing
and, for good reasons, either accepting or rejecting the whole
or any part of the evidence placed before him. He must, when
deciding whether to accept or to reject the evidence of a
witness, test it against relevant criteria. Thus, he must take into
account the presence or absence of any motive that a witness
may have in giving his evidence. If there are contemporary
documents, then he must test the oral evidence of a witness
against these. He must also test the evidence of a particular
witness against the probabilities of the case. A trier of fact who
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makes findings based purely upon the demeanour of a witness
without undertaking a critical analysis of that witness’ evidence
runs the risk of having his findings corrected on appeal. It does
not matter whether the issue for decision is one that arises in a
civil or criminal case: the approach to judicial appreciation of
evidence is the same.”
Credibility of Witnesses
[15] P, in their submission, called into question the credibility and
truthfulness of several witnesses called by D, foremost among whom are
as below based in contradictions and discrepancies in their evidence. I held
the view that this was a valid issue that merited sessions consideration.
[16] DW1, who was D’s consultant engineer was shown by his
demeanour to be an interested party having also been a former member of
the JMB and MC. He further conceded that he had no personal knowledge
of the matter that he had testified on as he had never been present in any
of the relevant meetings and AGM. This rendered his evidence hearsay
and devoid of credibility.
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[17] DW2 was the surveyor who prepared the Strata Plan (‘SP’) for the
present development. The subject of complaint against his evidence was
that he had clearly present a version that was contrary to the Defence case
when he acknowledged that the share units assigned to each parcel
determines the following:
(1) the working rights of the proprietor;
(2) the quantum of undivided shares of each proprietor in the common
property; and
(3) the proportion payable by each proprietor of the contribution levied
by the MC.
[18] P took issue with the evidence of DW3, a director of D and ex
council member of the MC, on the ground of his constant reluctance to give
full and frank disclosure to the Court and evasiveness throughout the
cross-examination. It was plainly apparent that when he was confronted he
could not support his testimony with any corroborative evidence and most
of the documents which he had mentioned in court were not produced in
the Bundles.
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[19] Lastly, but most importantly, it was the evidence of DW4, D’s Head
of Finance and a key witness in this case, whose contradictory evidence
presented a lot of difficulties and tarnished the defence case for seriously
lacking credibility. He particularly appeared not to understand the simple
meaning of having personal knowledge of the contents important of
documents that D sought to produce of which he was not the maker and
instead as contended by P, “… continued with his charade of giving
inconsistent statement which led to the commencement of a committal
proceeding against him. Despite being a Chartered Accountant by
profession, he conveniently ignored several attempts, including by the
Court, to explain in plain language what personal knowledge meant.
[20] In the circumstances, I further concurred with the submission of P
that PW4’s evidence as a whole did not justify being “… given much
probative value in the light of other contemporaneous documents as well as
the conflicting testimonies given by the DW4 himself while under oath
during the cross examination.
[21] It would appear that DW3 was a partisan witness who had
intentionally or deliberately presented conflicting and irreconcilable version
in regard to his personal knowledge of the contents of several material
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document such as payment vouchers and debit not exhibited in the
Bundles of Documents (‘BOD’) while he had all the opportunity to clarify
that the signatures appearing on the documents in question were his he
had, for reasons of his own, chosen to deny it but only admitted the same
at the last stage of cross-examination. As rightly pointed out by P, it was
highly improbable and most unlikely for DW4 not to be able to identify his
signatures on document placed before the Court on one day of the trial and
to strangely recognize the same on the very next day. Equally important is
the fact that DW4 by his own admission conceded that much of his
knowledge in regard to that material documents on which he testified was
based on information received from a 3rd party, namely, another employee
of D and he himself had no personal knowledge.
[22] Hence, it can be seen that only very minimal credibility can be
attached to DW4 credibility and that his evidence was substantially hearsay
that should not be taken into consideration.
Analysis of Evidence and Findings on Core Issues
Suit 22NCVC-510-07/2013
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[23] This suit arises basically from alleged illegal and unauthorized
payments by the Defendant (‘D’) and the incomplete handover of important
documents to P following its incorporation and takeover of management of
the complex.
[24] The crux of D’s case in respect of this suit is based on the following
material facts as submitted by them.
“D as the developer of the complex had been maintaining the
complex from the initial period i.e. August 2007 until August
2008 after which the JMB came into existence by operation of
law.
D is the registered proprietor of 13 shop lots, 17 office lots
(‘Block F’) and all the car park parcel which is attached to one
of the unit in Block F (parcel 267) (‘accessory parcel’) of the
Complex.
D via its representative was the jointly involved in the
management of the complex along with other parcel owners.
D post the initial period, i.e., after August 2008, continued to
‘manage’ the complex until 2012.
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D’s representative had continued to control the JMB and
subsequently the MC vide its proxy until 2012 during which the
parcel owners voted for new MC members.
After the newly appointed MC members, i.e., on 2012/2013, /
office bearers, took over the management of the MC, startling
discoveries were made, such as:
a) The so-called managing agent which is the alter ego of D
has been continuously ‘managing’ the complex from 2007
until 2012 when in 2012 they were replaced with Clement
Management, a licensed property management company.
b) That the so-called managing agent i.e. D had been paid
RM20,000.00 per month from 2008 – 2012 under the
pretext of payment of management service.
c) Above the RM20,000.00 payment, D continued to charge
all the operation cost of its management staff which
includes benefis, cover allowances and all other expenses.
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d) It was also discovered that there were no records of
collection of maintenance charge and sinking fund from D
as the registered proprietor of various units in the complex.
e) It was also discovered that D had been outsourcing all the
procurement jobs and supplies from its subsidiaries
companies known as Crest Builder Sdn. Bhd., CB Tech,
and others where there is an additional 7% kick back
charges billed to the MC without prior approval of the MC.
f) That D had been misusing their position as the de facto
managing agent in making purchases for their personal
staff, car park business operation, their customer and
holdings (Crest Builder Sdn. Bhd. by way of subsidy from
the maintenance funds which was collected in their own
personal bank account.
g) That D as the Developer had failed to open a separate
maintenance account under the development account up to
2011 and has been collecting and depositing the
maintenance charges into their own account over which
they had full control and no proper account was given.
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h) That there are no documentary records of council meetings
and resolutions passed by the MC from 2009 until 2012.”
[25] P also highlighted the following undisputed facts that emerged at
the trial:
“(a) There was no tender application open for a competent
licensed property Management Company to manage the
complex from 2008-2012.
(b) That no proposal for the appointment of a managing
agent was brought to the AGM.
(c) That the issues of calling for tender and appointments of
management company was never brought before any of
the council meetings.
(d) That there was no letter of appointment appointing D as
the managing agent (‘M/A’).
(e) There was no approval either from the MC or even from
the AGM approving the payment of RM20,000.00 as M/A
fee.
(f) There was no payment voucher or paper trail to show
who approved the payment.
Page 31 of 65
(g) That D was paid RM20,000.00 per month from 2008-2012
from the management fund as their professional fees.
(h) Over and above the RM20,000.00, D had charged
separately for the staff and supplies to the management
fund.”
[26] It was not in dispute that there was no documentary evidence
before the Court showing that there was any letter of appointment or offer
ever issued or given by P to D for the position of managing agent (‘M/A’) of
the condominium.
[27] D’s case on the issue of its appointment as M/A and right to collect
management fees is briefly this:
(1) The JMB had expressly or impliedly appointed D as the Managing
agent for the complex.
(2) After 8/4/2009 in which the Management Corporation (‘MC’) was
formed, the MC had expressly or impliedly appointed D as the
managing agent.
(3) That all the documents were already handed over to P.
Page 32 of 65
(4) That the management fee of RM20,000.00 per month was paid
without any objection.
(5) That D as the Developer had discharged their duty and obligation
with full transparency.
(6) That D had paid all the maintenance charges charged by P in
respect of the parcels that it owned.
[28] P on the other hand, alleged that since the inception of the MC that
D had at all material times been unjustly enriching themselves and abusing
their position first as the Developer, then as M/A and lastly as majority
office bearers of the MC during the period 2008 to 2012.
[29] During the same period D had been allegedly collecting
management fee of RM20,000.00 per month which was never approved by
the parcel owners of the complex but decided unilaterally by D when they
were in control of the funds. Neither was D ever appointed by the parcel
owners as the M/A in any AGM or Council Meeting.
[30] D had also during their tenure as M/A been allegedly withholding
information of the accounts and expenses of parcel owners and refused to
disclose the same when queried during the AGM of the MC.
Page 33 of 65
[31] P also rightly stressed that the so called ‘audited accounts’
produced by D must be treated with caution as their reliability was in
question since the purportedly independent’ account out appointed by D to
perform the audit relied wholly on documents selectively provided by D. As
correctly contended, the credibility of the said audited accounts was open
to question as the accounts could not be verified by P as the essential
documents listed in the Appendix A were not fully handed over to P.
[32] D, further, did not provide any proof that the maintenance and
sinking fund (‘M and S/F’) charges collected by D during the period 2008 to
2012 were credited into the Maintenance Fund of the complex.
[33] A scrutiny of the evidence, based on the comparative study,
disclosed a wide disparity between the managing agent (‘M/A’) fee charged
D s an unlicensed M/A and that charged by Clement Management, the
licensed M/A appointed by P. Without going into details of the figures, what
was discovered was that the professional fees charged by Clement was
RM13,500.00 per month or RM162,000.00 per annum whereas D charged
RM240,000.00 per annum throughout the period.
[34] In the analysis of D’s case and evidence at the trial, the crux of
their defence can be summarised as follows:
Page 34 of 65
(1) The JMB and the MC had expressly or impliedly appointed D as
the Managing Agent (‘MA’) for the complex and allowed D to keep
maintaining the complex.
(2) That all the documents were handed over to P.
[35] Concerning the 1st limb above, no evidence of any sort was
presented to prove the existence of the so claimed express or implied
consent or approval of the JMB followed by the MC, for the appointment of
and payment to D as the M/A. DW3, D’s former director and ex-chairman of
the MC himself, conceded that the appointment of the M/A was never
proposed nor endorsed at the AGM of the JMB or MC. The same was
confirmed by other important witnesses for D. There was no management
agreement entered into between the MC and D. According to DW3, the
process of appointment of D as the M/A never went through the AGM but
was done by the Committee Members themselves without any approval or
endorsement by the AGM. Neither were tenders called from managing
agencies to bid for the job.
[36] Under the circumstances, I upheld P’s contention that D had failed
to proffer any evidence of value at the trial that went to show that the JMB,
MC and/or parcel owners had expressly or at least implicitly appointed and
allowed D as the M/A with a fee of RM20,000.00 until 2012. However,
Page 35 of 65
having done so, I also took note of P’s contention that P, being a body
corporate established on 8.04.2009 pursuant to S. 39 of the STA was not
entitled to claim for matters (fees and charges) or debts incurred prior to its
corporation. Among the claims that fell in this category was the claim for
return of managing agent fees for the years 2008 and 2009.
[37] I found merits in D’s submission that P’s aforesaid claim for matters
prior to its incorporation is untenable in law as P did not have the right or
locus standi to make the claim at that point in time. The provisions of the
STA have no retrospective effect to validate the claim for matters arising
prior to the incorporation of the JMB. The position taken by P is erroneous
that it is entitled to levy charges and claims against D even before it is
deemed incorporated. It is also noteworthy as pointed out by D that at no
time between 02.02.2008 and 8.04.2009 has there been any notice
pursuant to Section 23(3) of the Building and Common Property
(Maintenance and Management) Act, 2007 issued to D. The charges in
question were never levied by 3 TS JMB but by P. It, thus, followed that the
claim for return of management fees was sustainable only with effect from
8.4.2009, i.e., after the incorporation of P.
Page 36 of 65
[38] With respect to the part of the claim relating to the request for
documents as per Annexure A of the Statement of Claim (‘SOC’), I agree
with D’s contention that this aspect of the claim appears to be incongruous
or in conflict with the claim for return of M/A fees paid to D. As P had
claimed that D had never been appointed the M/A of 3TS as no
management services had been provided by them it would be untenable for
P to seek the return of documents during the period when D was
maintaining and managing 3 TS. Based on the undisputed documentary
evidence that was raised in P’s case, it was correctly contended by D that
the following events are material to the issue of request for documents by
P:
“(i) By way of P’s letter dated 15 May2012, D was requested to
provide to P’s Council various financial information of 3TS
such as (1) details of the computation of cashflow
projection, (2) budget for the financial year beginning 1
August 2012 until 31 July 2013, (3) existing payroll costs,
(4) details of rental expense, (5) listing of monthly
collections from January to March 2012, (6) the monthly
management accounts from 1 August 2011 to 31 March
2012 and etc;
Page 37 of 65
(ii) By way of a memo/letter dated 31 May 2012, D provided P
with various documents relating to the maintenance and
management of 3TS such as (1) the actual maintenance
charges and sinking fund collection since 2008; (2)
breakdown of maintenance charges billings and
collections; (3) breakdown of monthly operation costs; (5)
payroll of the management team at the MC Office; details
of rental expense being paid on a monthly basis; (6)
copies of the contracts with the various service providers
and etc. These documents were acknowledged received
by PW-1 on 1 June 2012;
(iii) By way of D’s letter dated 9 August 2012, D had given P
(1) bank reconciliation as at 30 June 2012 and (2) the
bank records for the month of July 2012;
(iv) In a further letter dated 29 August 2012, D had also given
P (1) the creditors listing as at 31 July 2012; (2) bank
reconciliation as at 31 July 2012; and (3) statements of
account for Block F (Corporate Tower) in respect of
tenants with outstanding balances;
Page 38 of 65
(v) By way of the Plaintiff’s letter dated 18 October 2012, P
had requested D (as the previous Managing Agent of 3TS)
the to provide various documents as listed in the annexure
to the said letter. In this regard, it was inter alia made
known that P had received nine (9) boxes of documents
from D and that list of items are need to ‘fully substantiate
the previous audit accounts prepared by the auditors
GEPs and Associates’.
(vi) In a memo/letter dated 3 September 2012, an undated
memo/letter and a further undated memo/letter
(acknowledged received by P on 18 December 2012, D
had handed to P (1) maintenance and sinking fund bills
(April 2008 – May 2008); (2) quit rent bills and insurance
premium bills (2008 – (2012); (3) water and sewerage bills
(October 2007 – June 2012); (3) official receipts attached
with bank in slip (August 2010 – July 2012); (4) journal
vouchers (2008 – 2012); (5) payment vouchers (June
2010 – December 2010 and Jan 2008 – September 2010);
(6) official receipt books (2007 – 2010 and etc.
Page 39 of 65
[39] I am also in agreement with D’s submission it is clear from PW3’s
evidence itself that all such documents requested by P pursuant to P’s
letter dated 18 October 2012 which is identical to List A of the Statement of
Claim-A, have mostly been provided by D to P under the cover of D’s
undated memo/letter (acknowledge received by P on 18 December 2012.
PW3 admitted that based on the contemporaneous documents, the request
by P for documents had been fulfilled by D.
[40] In view of the weight of evidence and admission supporting D’s
assertion that the P’s request for documents had been substantially
complied with by D, P’s claim for the handover of various documents
relating to management fees for the years 2008 to 2012 was devoid of
merits. Furthermore, based on the finding that D had not been appointed as
M/A for the complex following the setting up of the JMB the order sought
would be redundant and academic.
Suit 22NCVC-516-07/2013
[41] This claim is for M and S/F charges in respect of D’s car parks
which are accessory parcels to Parcel No. 267 located on the 15th Floor
(Penthouse) of the Corporate Tower, Block F of the 3 TS complex. It is
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undisputed that P claim in Suit 516 is based solely on Car Park
Maintenance Invoice 1 and Car Park Maintenance Invoice 2 which were
only issued on 17 July 2013.
[42] D’s defence in this suit is basically that P’s claim and purported
entitlement to charge maintenance and sinking fund charges upon the car
parks owned by D independently of D’s parcel, is contrary to Sections 34(2)
and 69 of the Strata Titles Act 1985.
[43] For ease of reference, the relevant provisions of the STA invoked
by D to support its defence are reproduced below:
“Section 4. Interpretation
In this Act, unless the context otherwise requires -
“accessory parcel” means any parcel shown in a strata plan as
an accessory parcel which is used or intended to be used in
conjunction with a parcel;
…
“common property” means so much of the lot as is not
comprised in any parcel (including any accessory parcel), or
any provisional block as shown in an approved strata plan;
Page 41 of 65
…
“parcel”, in relation to a subdivided building, means one of the
individual units comprised therein, which (except in the case of
an accessory parcel) is held under separate strata title, and in
relation to a subdivided land, means one of the individual units
of land parcel;
34. Rights of proprietor in his parcel and common property
…
(2) No rights in an accessory parcel shall be dealt with or
disposed of independently of the parcel to which such
accessory parcel has been made appurtenant.
36. Share unit entitlements
The value of each parcel, except in the case of an accessory
parcel where no share value shall be allotted, shown in the
schedule of share units shall be taken as the share unit
entitlement, and in the case of a provisional block the value
shall be taken as the provisional share unit entitlement. The
share units of a parcel or the provisional share units in the case
Page 42 of 65
of a provisional block as specified in the strata title or in the
provisional strata title, as the case may be, shall determine -
(a) the voting rights of the proprietors;
(b) the quantum of the undivided share of each proprietor in the
common property; and
(c) the proportion payable by each proprietor of the contribution
levied by the management corporation pursuant to section 45,
63 or 66
…
45. Management fund.
(1) The management corporation shall establish a
management fund sufficient in the opinion on the management
corporation to meet the administrative expenses as may be
incurred for the purposes of controlling, managing and
administering the common property, paying rent, rates and
premiums of insurance and discharging any other obligation of
the management corporation.
Page 43 of 65
(2) The management corporation may invest any moneys in
the management fund, but only in such investments or in such
manner as may be approves at a general meeting.
(3) Subject to section 41A, for the purpose of establishing and
maintaining the management fund the management corporation
may at a general meeting-
(a) determine from time to time the amount, to be raised
for the purposes mentioned in subsection (1);
(b) raise the amounts so determined by levying
contributions on the proprietors in proportion to the share
units or provisional share unit of their respective parcels or
provisional blocks; and
(c) determine the amount of interest payable by a
proprietor in respect of late contributions which shall not
exceed the rate of ten per cent per annum.
…
(5) Any contribution levied under subsection (3) in respect of a
parcel shall be due and payable on the passing of a resolution
Page 44 of 65
to that effect by the management corporation and in
accordance with the terms of that resolution, and may be
recovered as a debt from a proprietor of, or his successor in
title to, the parcel.
…
(6) For the purposes of subsection (5), the word “proprietor”
shall include -
(a) the person for the time being receiving the rent of the
parcel, whether as an agent or a trustee or a receiver, and who
would receive the same if the parcel were let to a tenant; or
(b) a purchaser to be duly registered as proprietor.
Section 69. No dealing in accessory parcel independent of
a parcel
No accessory parcel or any share or interests therein shall be
dealt with independently of the parcel to which such accessory
parcel has been made appurtenant as shown on the approved
strata plan.”
Page 45 of 65
[44] Considering the provisions of sections 34(2) and 69 of the STA
which expressly prohibit any accessory parcel or any share or interest
therein from being dealt with independently of the parcel, I concur with the
contention that P’s action in charging maintenance and sinking fund
charges, on the basis of square footage (sq. ft.) in respect of D’s car parks
is clearly prohibited in law as such action by P amounts to treating D’s
accessory parcels and its interest therein independently of the parcel to
which it was made appurtenant.
[45] It followed that since the establishment of P on 8.4.2009, P was
only entitled to one payment of contribution from D or at the very least, as
an individual proprietor of Parcel 267. As pointed out by D, in order to arrive
at D’s share unit entitlement for Parcel 267, the square area of this parcel
as well as the area of the accessory parcels together with their weightage,
are factored in to obtain the share unit for the particular parcel. Further, the
accessory parcels with Parcel No. 267 do not just comprise car parks but
other components as well, such as rooftop area, air con ledges, planter
hones, etc. for which no charges were imposed.
[46] Under S. 36 of the STA, the accessory parcels are not allocated
share units but only the parcel itself by taking into account the specific
Page 46 of 65
characteristics of each accessory parcel to obtain the aggregate share
units of the parcel. In levying charges on D’s car parks, the same cannot be
treated as regular parcels subject to the same S/F & M charges at RM0.20
p.s.f. and later at RM0.30 p.s.f.
[47] It is also important to note the undisputed fact that no other parcel
owner, with exception of D, had been subjected to such charges for their
accessory parcels. The said additional charges had only been imposed on
D without any valid reasons.
[48] By levying the said charges towards D’s car parks P was in effect
treating the said car parks as regular parcels based on the rate imposed,
which was, thus, not in accordance with the provisions of the STA as
alluded to.
[49] Also noteworthy is S. 18 of the STA under which the share units
(share value) of each parcel is approved by the Director of Land & Mines
and is based on a proposed assignment of share units by the proprietor of
the lot (D’s licensed surveyor) pursuant to Section 9(1)(g) of the STA. The
First Schedule of the Strata Management Act, 2015 (‘SMA’) lays down the
precise formula for the calculation of share units for each parcel. It is similar
to the formula allocation of share units pursuant to the STA except that the
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SMA obviates the need for the allocation of share units to be approved by
the Director of Land and Mines.
[50] D also raised the issue of the legality of the additional charges
imposed on D for M and S/F for the accessory parcels (car parks) by
reference to a Court of Appeal authority, Perbadanan Pengurusan Endah
Parade v Magnificent Diagraph Sdn. Bhd. [2014] 5 CLJ 881 where it was
held affirmatively that the STA only allows a management corporation to
levy only one payment or contribution from parcel owners and such
contribution or payment must be approved at a general meeting. Mohamad
Ariff Yusof, JCA in delivering the judgment of the Court of Appeal held:
“The High Court Judge was correct in his decision that the STA
merely allows the levying of one payment or contribution from
unit holders approved at a general meeting. The conclusion
reached by the High Court accorded with the wording of the
Act, and the presumed collective intention and wisdom of
Parliament. The management corporation established is by
statute deemed to be a body corporate with perpetual
succession and a common seal. The council constitutes the
executive body of the management corporation here, and the
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council is subject to restrictions or directions of the general
meeting. (paras 26, 27 & 29)
…
In terms of statutory context, the proprietors of a subdivided
building have what is termed by the statute as “share units
entitlements” (s. 36) which is taken to be the “value” of each
parcel. That “value” shall, inter alia, determine “the proportion
payable by each proprietor of the contribution levied by the
management corporation pursuant to s. 45...” (s. 36(c)). It is
quite plain that based on this formula each proprietor has to
share the administrative and maintenance expenses, inclusive
of insurance premiums, which are carefully defined and
delineated by the several statutory provisions mentioned earlier
above. …
The issue here is not whether proprietors do not have to
contribute towards the payments for insurance premiums, but
whether they can be compelled to pay their share over and
above the statutory contribution to the management fund as
established under s. 45(1). In this respect, we agree with the
Page 49 of 65
proposition advanced by the respondent that the management
corporation as a body incorporated under statute can only levy
payments which are mandated by the statute. It will be ultra
virus its powers for the management corporation to levy
payments which are not sanctioned by the statute. This is
where a proper interpretation of s. 45 of the STA becomes of
fundamental importance. Section 45(1) states very clearly that
the management corporation “shall establish a management
fund sufficient in the opinion of the management corporation to
meet the administrative expenses as may be incurred for the
purposes of controlling, managing and administering the
common property, paying rent, rates and premiums of
insurance and discharging any other obligation of the
management corporation.” This is a very comprehensive
provision. The expenses referred to includes the payment of
“premiums of insurance” and other payments in connection with
“discharging any other obligation of the management
corporation.” To this extent, we agree with the submission of
counsel for the respondent that in fixing the contribution to be
paid by each proprietor, the management corporation must
Page 50 of 65
budget for it for approval at general meeting. After all, s. 45(3)
allows the management corporation to “determine from time to
time the amount to be raised for the purposes mentioned in
sub-s. (1), i.e., the contribution to the management fund. The
issue is not whether the management corporation should not be
empowered to act reasonably or to deny that it should have
discretion and flexibility to manage the subdivided building in its
day-to-day running, but rather whether the charges have been
properly decided by the unit holders in general meeting. We
have been referred to the High Court decision in Lai King Lung
v. Perbadanan Pengurusan Anjung Hijau & Anor [2012] 1 CLJ
1013, which in turn quotes the Singapore High Court decision in
Ezio Paganetto v. The Management Corporation Strata Title No
1075 [1988] 1 LNS 141; [1988] 1 SLR 268, and the general
principle that a management corporation should be allowed to
act reasonably without undue insistence on the existence of
specific by-laws to cover every practical difficulty. We agree
such an approach will be unreasonable and, to quote counsel
for the appellant, “at most... highly technical and at its lowest...
pedantic”. Nevertheless, the issue of proper authority to impose
Page 51 of 65
a levy is too important to be left to the management corporation
or the council to decide as a matter of discretion. It is not quite
a matter such as deciding which contractor should mow the
lawn.
The same reasoning applies in relation to the sinking fund. We
find the statutory provision in s. 46 of the STA quite clear. It
states that the management corporation “shall maintain the
special account in which shall be paid such portion of the
contribution to the management fund as may from time to time
under para. (ba) of sub-s. (5) of s. 41 by special resolution for
the purposes of meeting its actual or expected liabilities” in
respect of the several matters concerned with maintenance
already alluded to earlier. The amount to be placed in the
special account must be “such portion of the contribution”, and
therefore on a proper and purposive interpretation of this
provision, the management corporation cannot impose an
additional levy as sinking fund over and above the contribution
to the management fund. We therefore agree with the decision
of the learned trial judge on this issue.”
Page 52 of 65
[51] Having perused the above comprehensive pronouncement I upheld
the submission of D that any attempt to levy the instant additional charges
separately and distinctly on the proprietors, as in the case of D, is void and
prohibited under the STA and that it is explicitly clear that P in this case
does not have the authority under the STA to levy additional charges
against D in respect of its accessory parcels for which, pursuant to Section
36 of the STA no share value (share unit) is allotted.
[52] Finally, as regards whether the claim is this suit is sustainable or
otherwise, this suit is predicated solely on Car Park Maintenance Invoices
1) and 2) [‘CPM I 1) and 2)’] which were only issued on 17.07.2013 for
which there was no approval at a general meeting of the MC whereas this
claim was filed only on 31.07.2013. As such, this claim filed before the
issuance of CPM 1) and 2) could be regarded as premature and the
invoices issued without the approval of the general meeting as null and
void as well. It also means that at the time suit 516 was filed P had no valid
and sustainable cause of action against D as nothing was then due and
payable. It has to be further noted that by virtue of the clear pronouncement
in: PP Endah Parade (supra) if a MC wishes to raise each proprietor’s
contribution to meet expenses incurred it would have to budget for it,
meaning that it is not empowered to pass resolutions as and when it
Page 53 of 65
wished having the retrospective effect of levying fresh charges against
proprietors.
[53] On the abovementioned grounds, I would conclude that, on the
facts and in law, the claim herein has no merits and has to be dismissed
with costs.
Suit 22NCVC-125-03/2014
[54] Vide this suit P seeks the following reliefs against D:
(1) The vacant possession of the common property;
(2) Arrears of rents at a sum of RM139,200.00 as of 31.5.2013;
(3) Double rent at the rate of RM4,800.00 a month starting from
1.6.2013 until the vacant possession was given;
(4) Interest at the rate of 8% per annum on the awarded sum from the
date of filing of this Writ till the date of Judgment and 5% interest
date from the date of Judgment till the date of full settlement; and
(5) Cost;
Page 54 of 65
(6) Any other relief which the Honourable Court deems just and
reasonable.
Material Facts
[55] The important facts as outlined briefly in D’s Written Submission
are these:
“The office space in dispute in this matter known as the car
park management office (‘CPMO’) is the office space within the
common property of the complex which belongs to the MC.
It is not disputed that D had been occupying the common
property as early as 2008 and have been running their carpark
business operation from the said office.
It is also not disputed that D had been occupying the common
property without paying any rental or contribution to the MC.
It was admitted by D’s witness that the Strata plan was only
handed over to the current MC on July 2012 and prior to that
the strata plan was not in their possession.”
Page 55 of 65
P’s Case
[56] P submits that their case in this suit is as follows:
“P submits that D had misused their authority as the Developer,
‘managing agent’ and majority office bearers for 2009 – 2012 to
occupy the common property to operate their car business
without paying any rental.
It is highly improbable for D who had originally applied for the
Strata Application for the development not to be in possession
of the Approved Strata Plan (‘SP’).
It was recorded in the minutes and also during the trials that
only upon repeated requests from the 2012/2013 MC then D
passed a copy of the Strata Plan in July 2012.
There is no way that P could have given their consent directly,
expressly, impliedly or tacitly any time before July 2012 since
any knowledge of what constitute a common property or
common area require a visual observation of the SP.
Since P was misled by the misrepresentation of D’s
representative as to ownership or location of their parcels, P is
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entitled to compensation or contribution in the form of rentals
retrospectively.”
D’s Case
[57] The core of D’s case was estoppel. D invoked the principle of
estoppel on the ground that the MC had never objected to D using and
occupying the spaces in question.
Issues For Determination
(1) Whether estoppel could be raised against the 2012/2013 MC for
the uninterrupted use and occupation of the CPMO?
(2) Whether the MC (‘P’) is entitled to reimbursement/rental from D
who had been using the common properties for D’s car park
business operation without paying rentals to the MC?
Finding
Page 57 of 65
[58] P contended, in my view, correctly that under the facts and
circumstances of this case, the principle of estoppel could not be relied
upon by D for certain valid reasons.
[59] First and foremost, D’s own Legal Manager (‘DW5’) who was
actively involved in the complex had in her evidence admitted that nobody
had authorized D to occupy the common property.
[60] Secondly, P could not have agreed or consented for D to occupy
the common property prior to July 2012 as they were not in the position to
know that the office space was a common property and that there was a
false representation made by D’s agent.
[61] Thirdly D’s Director / Council Member and Chairman of the 2010
MC (‘DW3’) contended that the no one could differentiate between a
common property and a private unit without a strata plan.
[62] DW3 himself admitted that there is no evidence to support their
pleading at paragraph 6 of the Amended Defence i.e., that P had
consented to and agreed with no objections for, the occupation of the
common property by D’s staff for the said carpark operation.
Page 58 of 65
[63] I also concur with D’s submission that based on the reasons
advanced, which arise from D’s own evidence, it was more likely and
probable than not that P could not have consented as alleged by D to the
occupation as P themselves were not aware that the office space was a
common property prior to July 2012. The facts and evidence clearly show
that upon obtaining the Strata Plan, P had immediately sought arrears of
rental from D for usage of the common property.
[64] In support of the above contention, P relied, inter alia, on Section
71 of the Contracts Act, 1950 (‘C/A’) which lays down expressly that:
“Where a person lawfully does anything for another person, or
delivers anything to him, not intending to do so gratuitously, and
such other person enjoys the benefit thereof, the latter is bound
to make compensation to the former in respect of, or to restore,
the thing so done or delivered.”
[65] In the Privy Coucil case on Siow Wong Fatt v Susur Rotan Mining
Ltd & Anor [1967] 2 MLJ 118 the principles governing the application of S.
71, C/A were discussed and it was held:
“Four conditions must be satisfied to establish a claim under
section 71. The doing of the act or the delivery of the thing
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referred to in the section: (i) must be lawful; (ii) must be done
for another person; (iii) must not be intended to be done
gratuitously; (iv) must be such that the other person enjoys the
benefit of the act or delivery.”
[66] Based on the above legal principles, I am of considered view, that
in the instant case, as held in LCS Management Corporation v Leisure
Commerce Square Sdn. Bhd. [2015] MLJU 757, D was liable to pay
reasonable and appropriate compensation to the MC for the enjoyment by
D and/or their servants/ agent of the common property in 3TS as referred to
for the period of occupation. If D are not ordered to make an adequate
contribution, it would be indisputably unjust to the other purchasers/
proprietors who had duly contributed to the maintenance and management
funds for the maintenance and upkeep of the complex after having
substantially benefited from use of the common property.
[67] On these principal grounds, I held that P is entitled to judgment
against D in this suit for rental of the common property (‘CPMO’) to be
calculation from the date of occupation of the same at a reasonable rate as
stated below.
Page 60 of 65
Conclusion
[68] I have taken note of the fundamental principle of evidence that in a
civil action the burden of proof rests throughout on the Plaintiff and that the
applicable standard of proof is on a balance of probabilities. This principle
applies equally to the Plaintiff (‘P’)’s claim in the 3 suits and the Defendant
(‘D’)’s counter claim (‘C/C’) in one of the suits.
[69] In this trial, where numerous witnesses have been called over
many days and voluminous documentary and oral evidence have been
adduced, the Court has to determine the issues in dispute by considering
all the material evidence as a whole and not the testimonies of individual
witnesses or documents in isolation.
[70] Having done so and after reading the submissions of both counsel
carefully and considering the respective contentions, I conclude my findings
as follows on P’s claims and D’s C/C.
Suit 22NCVC-510-07/2013
[71] The Court finds that the P has proved on a balance of probabilities
(‘B/P’) that there was no agreement that was binding and enforceable
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entitling the Defendant to collect fees as Managing Agent (‘M/A’) of the
Condominium (‘3TS’) since the incorporation of P in 04/2009, upon which D
was not entitled in law to manage the Condominium any longer or to act as
the M/A. There was clearly no binding agreement or contractual obligation
on the part of P for D to be paid RM20,000.00 per month as management
fees. However, the P is not entitled to claim in this action in its capacity as
the Management Corporation (‘MC’) for any sums owing before its
incorporation on the ground of not having the necessary locus standi until
its incorporation.
[72] I therefore, allow the Plaintiff’s claim for return of the management
fees paid to D with effect from 08.04.2009 at RM20,000.00 per month.
[73] Prayer (b) for documents to be handed over as per Annexure A is
not necessary in view of the above order and because most of the
documents have already been handed over to P.
[74] Judgment entered for P as per prayer a) in part with effect from
08.04.2009 only, prayer c) interest at 5% per annum from date of filing of
writ until realisation and prayer d) for costs.
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Suit 22NCVC-516-07/2013
[75] This is a claim for maintenance and sinking funds charges (‘M &
S/F’) for accessory parcels namely, car parks owned by P, independently of
the residential parcels owned by them.
[76] In view of the provisions of Section 69 of the Strata Titles Act
(‘STA’) as well as Section 36, I uphold D’s contention that, based on
authorities cited on the interpretation of Section 36, it is explicitly clear P
does not have the authority under the STA to levy additional charges
against D in respect of the said accessory parcels over and above the M
and S/F charges for the residential parcels.
[77] I therefore dismiss this claim with costs. Based on the same
reasoning I allow D’s counter-claim (‘C/C’) in part with costs, i.e. sum of RM
143,971.62 and RM 288,882.24 wrongly paid as M & S/F charges for the
accessory parcels with interest of 5% per annum.
[78] As for return of utility charges allegedly wrongly paid by D to P, this
claim has no merits or basis in law or facts as the charges were incurred by
D in respect of property owned by them for which there is no provision or
agreement for the MC to pay utility charges.
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[79] This prayer is dismissed. Judgment entered for D on the C/C to the
above extent only.
22NCVC-125-03/2014
[80] P has proved their entitlement to be paid rental for the Car Park
Office (‘CPO’) which is common property and unlawfully occupied and used
by D without paying rental. D was, therefore, liable to pay reasonable rental
for the use and occupation of P.
[81] However, there was no tenancy agreement, whether express or
implied, on the rate of rental and other terms. There can, however, be no
doubt that D has to pay rental for the space that was not part of the
property in Block F that it owned.
[82] Hence, I allow this claim in part too on the basis of fair and
reasonable compensation for wrongful use and occupation at half the rate
claimed as follows:
(1) RM 1,200.00 per month from 08/2008 till 05/2013 =
RM 68,400,00.00.
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(2) RM 2,400.00 per month with effect from 06/2013 and continuing
until delivery up of vacant possession.
[83] Judgment entered for Plaintiff as per prayers a), b) and c), as
amended above, prayer d) at 5% per annum until realisation and prayer e)
for costs as below.
Cost:
1st suit RM 100,000.00 to the Plaintiff.
2nd suit RM 50,000.00 to the Defendant.
3rd suit RM 40,000.00 to the Plaintiff.
Dated: 18 December 2017
(GUNALAN A/L MUNIANDY)
Judge
High Court of Malaya
Shah Alam
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COUNSEL:
For the Plaintiff : Mr. Adrian Silvarajoo together with
Mr. Nik Abdul Matin Fawwaz bin Nik
Safeia and Mr. Mohamad Atif bin
Abdullah
Messrs Ramli Yusuff & Co.
Petaling Jaya, Selangor
For the Defendant : Mr. Oomen Kurien together with
Mr. Jee Hock Hua
Messrs Yip & Co.
Kuala Lumpur