Chuen Puat Chooi Realty Sdn Bhd v Mutiara Johan Properties Sdn Bhd (WA-24NCvC-5491-11/2025)

CHUEN PUAT CHOOI REALTY SDN BHD (No. Syarikat: 106918-H)

LIM YEW SEONG @ TAN YEW SEONG (No. K/P: 7934463 / 470501-71-5167) ...PEMOHON-PEMOHON

MUTIARA JOHAN PROPERTIES SDN BHD

NICE PROPERTIES SDN BHD

MUTIARA GENTING JOINT MANAGEMENT BODY (JMB 049/2008) ...RESPONDEN-RESPONDEN GROUNDS OF JUDGMENT

This is the Plaintiffs’ Originating Summons (Enclosure 1) seeking declaratory and consequential reliefs relating to the establishment of the Management Corporation (“MC”) for the development known as Wisma Mutiara Genting, together with consequential orders relating to the convening of the first annual general meeting (“1st AGM”) and the statutory handover of management.

The dispute principally concerns the legal position following the opening of the strata register on 2.12.2015 and the continued role of the Joint Management Body (“JMB”), namely the 3rd Defendant, thereafter.

The Plaintiffs contend that upon the opening of the strata register, the MC came into existence by operation of law and that the continued exercise of management powers by the JMB over a prolonged period thereafter is inconsistent with the statutory framework governing stratified developments.

The Defendants, on the other hand, contend that the JMB continues to exist pursuant to the transitional framework under the Strata Management Act 2013 (“SMA”), and that steps had in fact been taken to convene the 1st AGM, which ultimately did not proceed.

Having considered the affidavits filed, the contemporaneous documents, the submissions of parties and the statutory framework governing stratified developments, this Court allowed the Plaintiffs’ Originating Summons substantially in terms reflected in the Orders granted, subject to the refusal of Prayer 7.

It is not disputed that the development in question is a stratified development governed by the Strata Titles Act 1985 (“STA”) and the SMA.

It is further not disputed that the strata register for the development was opened on 2.12.2015.

Prior to the establishment of the MC, management of the development was undertaken by the 3rd Defendant as the Joint Management Body.

The Plaintiffs contend that notwithstanding the opening of the strata register in 2015, the Defendants failed to convene the 1st AGM of the MC within a reasonable time and continued to exercise management functions through the JMB for approximately ten years thereafter.

The Defendants do not dispute that the 1st AGM had not been convened for a substantial period. However, the Defendants contend that the statutory framework contemplates a transitional period during which the JMB continues pending the completion of the statutory handover process.

The evidence further discloses that a 1st AGM had eventually been scheduled but did not proceed pursuant to a consent arrangement entered into between the parties pending the disposal of the present Originating Summons.

The issues arising for determination are as follows:

Whether the MC came into existence in law upon the opening of the strata register;

What is the legal status of the JMB following the establishment of the MC;

Whether the prolonged continuation of the JMB in the present case is consistent with the statutory framework;

Whether the Plaintiffs are entitled to the declaratory and consequential reliefs sought. D. APPLICABLE LEGAL PRINCIPLES

Establishment of Management Corporation

It is settled law that a Management Corporation comes into existence by operation of law upon the opening of the strata register under the STA.

This position is well recognised in the authorities, including the decision of the Federal Court in Palm Spring Joint Management Body & Anor v Muafakat Kekal Sdn Bhd & Anor [2016] 2 MLJ 191. The Federal Court recognised that upon the opening of the strata register, the Management Corporation comes into existence by operation of law and assumes the statutory role contemplated under the strata legislation.

The existence of the MC is therefore not dependent upon subsequent acts of the parties, nor contingent upon the convening of the 1st AGM.

Consumer-Protective Nature of the Statutory Regime

The statutory regime governing stratified developments is consumer-protective in nature and intended to safeguard the proprietary and management rights of parcel proprietors.

The legislative framework clearly contemplates that management control is ultimately to vest in a purchaser-controlled body.

The role exercised by the developer or the JMB prior to such transition is therefore transitional and temporary in nature. In this regard, the Court is mindful that the statutory framework governing stratified developments is intended to ensure that management ultimately rests with a body representing parcel proprietors, and not with a developer or intermediary body on a prolonged basis.

Transitional Framework under the SMA

This Court accepts that the SMA contemplates a transitional period during which the JMB continues pending the convening of the 1st AGM and the completion of the statutory handover.

Section 27 of the SMA must however be understood within the broader statutory objective of ensuring the orderly transfer of management control to the MC.

The statutory concept of transition cannot be construed as permitting an indefinite or open-ended continuation of the JMB. A statutory transitional mechanism must be interpreted in a manner consistent with the purpose of the legislation and cannot be utilised to defeat or indefinitely postpone the statutory transfer of management powers to the Management Corporation.

Whether the MC exists in law

In the present case, it is not disputed that the strata register was opened on 2.12.2015.

Accordingly, this Court finds that the MC came into existence on that date as a matter of law.

This legal position must be recognised and given full effect.

Status of the JMB following establishment of the Mr. Chaks

This Court accepts that the statutory framework does not contemplate the immediate disappearance of the JMB upon the establishment of the MC.

However, the continuation of the JMB must be properly understood within the confines of the statutory framework.

Upon the establishment of the MC:

the MC becomes the statutory repository of management powers;

the JMB continues only in a transitional and limited capacity; and

the functions of the JMB are confined to facilitating the orderly transition towards the MC.

The Court therefore rejects any suggestion that the JMB may continue indefinitely as though no MC had come into existence. To hold otherwise would effectively permit a transitional body to assume a permanent management role contrary to the legislative intent underlying the SMA.

Prolonged delay in transition

The evidence before this Court shows that although the strata register was opened in 2015, the 1st AGM was only sought to be convened some ten years later.

No satisfactory explanation has been provided for this prolonged delay.

In the Court’s view, such delay is wholly inconsistent with the statutory objective of ensuring that management control is placed under a purchaser-controlled body within a reasonable time.

The statutory concept of transition cannot be invoked to justify a prolonged retention of management control over an indefinite period.

The Court is therefore satisfied that judicial intervention is warranted in order to give effect to the statutory scheme contemplated under the STA and SMA.

The Court’s intervention in the present case is therefore directed not at invalidating the statutory transition itself, but at ensuring that such transition is completed within a manner consistent with the legislative framework and purpose of the SMA.

Prayer 7

The Plaintiffs further seek a declaration that the 3rd Defendant is unlawful, was dissolved upon the establishment of the MC on 2.12.2015 and has no locus standi to manage the development.

This Court is unable to accept such a proposition in its absolute form.

While it is settled that the MC came into existence by operation of law upon the opening of the strata register, the statutory framework under the SMA nevertheless contemplates a transitional period during which the JMB continues pending the convening of the 1st AGM and the completion of the statutory handover.

Accordingly, the 3rd Defendant cannot be said to be unlawful or void ab initio merely because the MC had been established. The Court therefore declines to adopt an interpretation that would retrospectively invalidate all acts undertaken by the JMB following the establishment of the MC, particularly where the statute itself contemplates a transitional process.

However, the Court reiterates that such continuation is transitional and limited in nature.

The prolonged continuation of the JMB over approximately ten years without completing the statutory transition is inconsistent with the statutory objective underlying the SMA.

In those circumstances, while the existence of the JMB is recognised for transitional purposes, its continued exercise of management control beyond what is reasonably necessary for transition cannot be justified.

Accordingly, Prayer 7 is refused.

Effect of consent arrangement concerning the earlier AGM

The Court notes that a 1st AGM had earlier been scheduled but did not proceed pursuant to a consent arrangement entered into between the parties pending the disposal of the present proceedings.

In the Court’s view, such arrangement was intended to preserve the subject matter of the dispute pending determination by the Court.

Accordingly, the non-convening of the earlier AGM cannot be attributed solely to either party.

However, such arrangement does not cure or justify the prolonged delay preceding it. F.

For the reasons stated above, this Court finds that:

the MC came into existence in law upon the opening of the strata register on 2.12.2015;

the JMB continues only in a transitional capacity under the SMA;

the prolonged delay in convening the 1st AGM is inconsistent with the statutory scheme governing stratified developments; and

judicial intervention is warranted to give effect to the statutory framework and to bring the transitional period to an end. G. ORDERS OF THE COURT

Accordingly, this Court makes the following orders:

Declaration It is declared that the Management Corporation for the development known as Wisma Mutiara Genting was established upon the opening of the strata register on 2.12.2015.

Status of JMB It is declared that the 3rd Defendant (JMB) continues to exist only in a transitional capacity pursuant to the Strata Management Act 2013, and its functions are limited to facilitating the orderly transition of management to the Management Corporation, including the convening of the 1st AGM and the handover of accounts, records and assets. The 3rd Defendant shall not continue to exercise management control beyond what is reasonably necessary for such transition. Any continued exercise of management functions beyond such transitional purpose would be contrary to the statutory scheme.

First AGM The 1st and/or 2nd Defendants shall convene the 1st AGM of the Management Corporation within thirty (30) days from the date of this Order.

Handover The 3rd Defendant shall deliver all accounts, records, assets and liabilities and effect the statutory handover in accordance with the SMA within the prescribed timeframe following the 1st AGM.

Clarification For the avoidance of doubt, nothing in this Order shall invalidate acts of the JMB carried out in good faith during the transitional period.

Prayer 7 The Plaintiffs’ prayer for a declaration that the 3rd Defendant is unlawful and dissolved as at 2.12.2015 is refused.

Costs Costs of RM3,000 are awarded to the Plaintiffs, jointly payable by the Defendants Dated: 15th May 2026 ………………………………………………….. (YA PUAN MAHAZAN BINTI MAT TAIB) JUDGE HIGH COURT OF MALAYA KUALA LUMPUR Counsel for The Applicants : Ivanpal Singh Grewal, Dhanesh Subramaniam, Datin Harwinder Kaur & Jesrina Kaur Messrs. A J Ariffin Yeo & Harpal (Kuala Lumpur) Advocates & Solicitors Counsel for The Respondent : Liew Kwok Han 1 & 2 Messrs. K B Chua & Co. (Kuala Lumpur) Advocates & Solicitors Counsel for The Respondent : Wong Chun Keat & Respondent 3 Nur Laila Azwa Messrs. Wong & Wong (Kuala Lumpur)