Lee Ah Hon v Tan Yew Lai Development Sdn Bhd (WA-24NCvC-3204-07/2023)

The 72 plaintiffs are owners and/or beneficial owners of strata units in Taman Kuchai Jaya (Block KP1 and KP2). [“KP1 and KP 2”]. The first defendant is the developer of KP1 and KP2 and also the original owner of the land.

The 72 plaintiffs filed an Originating Summon in Enclosure 1 against the first defendant and the second defendant/Pentadbir Tanah Dan Galian Wilayah Persekutuan Kuala Lumpur due to the refusal of the first defendant to transfer ownership of the strata units to the 72 plaintiffs. The second defendant is a nominal defendant.

The sole ground raised by the first defendant is that the 72 plaintiffs owe the first defendant unpaid maintenance charges. The first defendant alleges the 72 plaintiffs have wrongly paid maintenance charges to the Joint Management Body of KP1 and KP2 [“JMB”] and subsequently to the Management Corporation of KP1 and KP2. [“MC”].

The first defendant contends the JMB, that was set up on 25-03-2012, and the MC are illegal by virtue of Section 7[2] of the Strata Management Act 2013 Act 757. [See first defendant’s Written Submissions Enclosure 24 at paragraphs 14 to 16].

The 72 plaintiffs disagree and refer me to the order of the High Court dated 29-05-2019 in Originating Summon WA-24NCVC-109-01/2019 where the plaintiff there was the JMB and the defendant is the first defendant here.

Justice Mohd Firuz bin Jaffril after hearing the said Originating Summon had granted a declaration that the JMB is legal and entitled to collect maintenance charges from all owners of KP1 and KP2. [See paragraph 3 of order in Supporting Affidavit Enclosure 2 Exhibit LAH-4 at PDF page 108]. [See also Enclosure 22 plaintiffs’ Written Submissions paragraph 5].

The appeal by the first defendant was dismissed by the Court of Appeal on 24-11-2020 in Civil Appeal No. W-02(NCVC)(A)-1218-07/2019. [See paragraph 3 of the Court of Appeal order in Supporting Affidavit Enclosure 2 Exhibit LAH-5 at PDF page 118].

I heard counsel on 09-01-2024 and granted the following orders as prayed for in the Originating Summon prayers 1,2 and 4 -

That the first defendant is to sign the instruments of transfer of ownership (Form 14A) for each plot of the plaintiffs within fourteen

days from order as the developer and original owner of Taman Kuchai Jaya (Block KP1 and KP2) for the purpose of registration of separate strata ownerships in the names of the respective plaintiffs supported by an Application for Permission for blanket consent to be made by the first defendant to the Transfer Authorization Unit of the Office of the Land Director and Mines, Kuala Lumpur including and not limited to the separate and original strata titles in respect of each Plot acquired by the respective plaintiffs (the "Strata Ownership").

That the first defendant is to hand over the transfer instruments (Form 14A), the Strata Titles in respect of each plot acquired by the respective plaintiffs including the blanket consent which are valid and registrable as a transferor to Messrs. Azlan Hadijah & Associates as the plaintiffs’ Solicitor to be implemented and completed by the plaintiffs as the transferees of the parcels in question one day after the expiry of the period stated in paragraph

above for the purpose of adjudication at the Board of Inland Revenue and registration of the Strata Titles at the Office of the Land and Minerals of the Federal Territory of Kuala Lumpur.

Thereafter, the first defendant is ordered to hand over the Strata Title in respect of each Plot acquired by the plaintiffs within fourteen (14) days from the date of this Order to Messrs. Azlan Hadijah & Associates to be delivered to the Second Defendant for the purpose of completion of transfers and registration of the Strata Titles. [9] I also made the following two additional orders - i. Each of the plaintiffs pay fees of RM 500 to the first defendant being management fees for the signing of the Forms 14A and relevant documents. ii. No order as to costs. [10] The first defendant is unhappy and filed an appeal to the Court of Appeal. No appeal has been filed by the second defendant. These are my Grounds of Judgment. Facts of the case [11] The facts of this case can best be gleaned from the Written

Submissions of the first defendant in Enclosure 24 at paragraphs 3 to This is because the plaintiffs’ counsel has failed to narrate the background facts in a detailed and coherent manner in both the plaintiffs’ Supporting Affidavit and in his Written Submissions. What is presented to Court is only a selective narration of facts. It is my hope that counsel do set out the background facts in a detailed and coherent manner in future to assist the Court to arrive at a correct decision. [12] The 72 plaintiffs are owners and/or beneficial owners of strata units in KP1 and KP2. [13] The first defendant is the developer of KP1 and KP2 and also the original owner of the land. [14] On 22-08-1997 the first defendant has given vacant possession of the strata units to the buyers of KP1 and KP2. [See Written Submissions of the first defendant in Enclosure 24 at paragraph 5]. [15] On 25-03-2012 the JMB was set up to manage KP1 and KP2. [See Written Submissions of the first defendant in Enclosure 24 at paragraph 7]. Subsequently, on 24-08-2022 the MC took over the role of the JMB. [16] On 24-08-2022 the individual Strata Titles for the 147 strata units in KP1 and KP2 were issued and registered in the name of the first defendant. [See Written Submissions of the first defendant in Enclosure 24 at paragraph 6]. [17] Before me, the first defendant contends that the JMB and subsequently the MC were illegally set up and has no right to collect maintenance charges and to maintain the building and common property. [18] The first defendant contends that the plaintiffs have not paid the maintenance charges to them as payments were instead made to the JMB and subsequently the MC. [19] The first defendant now refuses to transfer title to the plaintiffs unless and until the plaintiffs pay again to the first defendant all the maintenance charges that were earlier paid to the JMB and MC. [20] As I have mentioned in my introduction above, there is an earlier order of the High Court dated 29-05-2019 in Originating Summon WA- 24NCVC-109-01/2019 where the plaintiff there was the JMB and the defendant is the first defendant here. [21] In that Originating Summon, Justice Mohd Firuz bin Jaffril had declared that the JMB is legal and entitled to collect maintenance charges from all owners of KP1 and KP2. [See paragraph 3 of order in Supporting Affidavit Enclosure 2 Exhibit LAH-4 at PDF page 108]. [22] The appeal by the first defendant was dismissed by the Court of Appeal on 24-11-2020 in Civil Appeal No. W-02(NCVC)(A)-1218-07/2019. [See paragraph 3 of the Court of Appeal order in Supporting Affidavit Enclosure 2 Exhibit LAH-5 at PDF page 118]. [23] Despite the two Court orders, the first defendant still refuses to accept and obey them, but instead submits to me that the JMB that was set up on 25-03-2012 is illegal and despite payments of maintenance charges to the JMB by the plaintiffs, the plaintiffs are still required to pay the same maintenance charges to the first defendant if the plaintiffs want the first defendant to transfer the strata titles to them. Issues before the court [24] There are three [3] issues before the court - i. Whether the first defendant is right in its contention that the JMB and subsequently the MC were illegally set up and has no right to collect maintenance charges and to maintain the building and common property? ii. Whether the first defendant is right in its contention that the plaintiffs should have paid the maintenance charges to them and not to the JMB and subsequently the MC? iii. Whether the first defendant can refuse to transfer title to the plaintiffs unless and until the plaintiffs pay again to the first defendant all the maintenance charges that were earlier paid to the JMB and MC? Issue 1 - Whether the first defendant is right in its contention that the JMB and subsequently the MC were illegally set up and has no right to collect maintenance charges and to maintain the building and common property? Contentions of the plaintiffs [25] The plaintiffs contend this issue has been decided in their favour by the High Court and the Court of Appeal in an earlier Originating Summon between the JMB and the first defendant here. I have set out the facts earlier and do not propose to repeat them here. [See paragraph 3 of High Court order in Supporting Affidavit Enclosure 2 Exhibit LAH-4 at PDF page 108, paragraph 3 of the Court of Appeal order in Supporting Affidavit Enclosure 2 Exhibit LAH-5 at PDF page 118 and Enclosure 22 plaintiffs’ Written Submissions paragraph 5] Contentions of the first defendant [26] The first defendant contends the JMB that was set up on 25-03-2012 is illegal under Section 7[2] of the Strata Management Act 2013 Act 757 which reads - 7(2) In this Part, "developer's management period" means the period commencing from the date of delivery of vacant possession of a parcel to a purchaser by the developer until one month after the establishment of the joint management body or such other time as may be extended by the Commissioner. [Emphasis added] [27] The first defendant contends this is because it was only on 24-08-2022 that the individual Strata Titles for the 147 strata units in KP1 and KP2 were issued and registered in the name of the first defendant. [See first defendant’s Written Submissions Enclosure 24 at paragraphs 14 to 16] Analysis of the Court Res judicata [28] I find the first defendant’s submissions misconceived. With respect, I am unable to agree with the first defendant’s counsel. The High Court and the Court of Appeal in the earlier Originating Summon have decided this precise issue. This issue is res judicata in the narrow as well as the wide sense. [See Mahathir Mohamad Bin Mohd Ali Jinnah & Ors v Jagdish Singh A/L Amir Singh [2022] MLJU 964 HC]. [29] The Federal Court in Asia Commercial Finance (M) Bhd V Kawal Teliti Sdn Bhd [1995] 3 MLJ 189 FC, [1995] 3 CLJ 783 FC recognised that res judicata applies not just to the parties to the action but also “their privies”. Further, a difference in parties does not ipso facto render res judicata inapplicable. This was confirmed by the Court of Appeal in Dato’ Sivananthan a/l Shanmugam v Artisan Fokus Sdn Bhd [2016] 3 MLJ 122 CA. [30] As this issue is the sole ground put up by the first defendant, my decision on this issue is sufficient to dispose of this Originating Summon in favour of the plaintiffs. [31] For completeness, I would however like to set down some thoughts on issues [2] and [3]. Issue 2 - Whether the first defendant is right in its contention that the plaintiffs should have paid the maintenance charges to them and not to the JMB and subsequently the MC? [32] The Strata Management Act 2013 Act 757 provides for a framework for the payment of maintenance charges to the developer until the setting up of the JMB and subsequently the MC. The Act basically provides, and rightly so, that the party who receives the maintenance charges has the corresponding duty to manage the strata development. [33] During the “developer's management period”, as defined, the developer is entitled to collect the maintenance charges. [See Section 9[3] Strata Management Act 2013]. The developer is, however, required to manage the strata development. [See Sections 9[1] and [2] Strata Management Act 2013]. [34] Section 7[2] of the Strata Management Act 2013 Act 757 defines "developer's management period" to mean the period commencing from the date of delivery of vacant possession of a parcel to a purchaser by the developer until one month after the establishment of the joint management body. [35] In our case, on 22-08-1997 the first defendant has given vacant possession of the strata units to the buyers of KP1 and KP2. [36] On 25-03-2012 the JMB was set up to manage KP1 and KP2. [37] The setting up of the JMB on 25-03-2012 to manage KP1 and KP2 is perfectly valid as vacant possession has been handed by the first defendant on 22-08-1997 to the plaintiffs. This is as provided under Section 17 [1] of the Strata Management Act 2013 which reads -

Establishment of a joint management body

A joint management body shall be established upon the convening of the first annual general meeting of that joint management body —

if vacant possession was delivered before the commencement of this Act, not later than twelve months from the commencement of this Act; or

if vacant possession is delivered after the commencement of this Act, not later than twelve months from the date of delivery of vacant possession of a parcel to a purchaser. [Emphasis added] [38] Therefore, the first defendant is only entitled to collect the maintenance charges from the plaintiffs who were owners from 22-08-1997 to 25- 04-2012. From 26-04-2012 onwards the JMB and subsequently the MC are legally entitled to collect the maintenance charges from the owners. [See Section 9[3] Strata Management Act 2013] [See also Setali Development Sdn Bhd & Anor v Lim You Keng [1983] 2 CLJ 250 FC and Fintree Capital Sdn Bhd v Tetuan Syed Ibrahim & Co [2023] 5 CLJ 733 HC which held that a calendar month is a month which ends on the same date as it commenced on the previous month]. [39] As I understand it, and I have to say I have great difficulty understanding the first defendant’s submissions, the first defendant is contending that it is entitled to collect maintenance charges until the date of issuance of individual Strata Titles in its name. [40] This is because the first defendant says, and I quote “this is because it was only on 24-08-2022 that the individual Strata Titles for the 147 strata units in KP1 and KP2 were issued and registered in the name of the first defendant.”, unquote. [See first defendant’s Written Submissions Enclosure 24 at paragraphs 14 to 16] [41] From the above analysis by me, it can be seen that the date of issuance of individual Strata Titles is irrelevant to the issue at hand. [42] In conclusion, I hold that the JMB and subsequently the MC were legally set up and has the right from 26-04-2012 onwards to collect maintenance charges from the owners and to maintain the building and common property. Issue 3 - Whether the first defendant can refuse to transfer title to the plaintiffs unless and until the plaintiffs pay again to the first defendant all the maintenance charges that were earlier paid to the JMB and MC? [43] The accounts in the form of a table produced by the first defendant do not show the periods of alleged arrears. What the table shows is just an alleged amount outstanding as at June 2022 from each of the plaintiffs. [See first defendant’s Reply Affidavit Enclosure 11 at paragraph 8 and Exhibit TYL-1 PDF pages 21 - 29]. [44] I view the first defendant’s table as a bare allegation unsupported by particulars. In any event, this Court will not allow the first defendant to hold the 72 plaintiffs here to ransom. If the first defendant feels it has a valid claim, which is not proven to me at this stage, as I can see a defence of limitation available to the plaintiffs since the alleged arrears claimed by the First defendant accrued on 26-04-2012, the first defendant is perfectly entitled to file a suit and prove its claim in a court of law. I draw support for this proposition from Lee Ming Chong Sdn Bhd v Prudential Properties Sdn Bhd [2012] 8 MLJ 1 HC Lee Swee Seng JC. [45] In Lee Ming Chong Sdn Bhd v Prudential Properties Sdn Bhd [2012] 8 MLJ 1 HC Lee Swee Seng JC said - [22] Had the developer applied for strata titles timeously to the whole Imbi Plaza, purchasers would not have this problem seeing that the principal SPA was signed as long ago as 17 October 1992. Why should a purchaser be subject to more conditions to fulfill when a similar purchaser of an office lot with a strata title issued would not ever need to seek the developer's consent for anything when the purchaser should want to dispose of his property? [23] Even if there is room for the developer to reserve a residue of discretion to withhold consent, such a clause is totally inconsistent with the whole scheme and structure of the sale of the property where a strata title is to be issued seeing that the purchaser having paid the full purchase price to the developer owes the developer no further obligation consistent with the purchaser's right as the absolute beneficial owner of the property with the developer being a bare trustee. [24] Judging the conduct of the giving or withholding consent to the assignment in the conveyancing context of a purchaser who had paid the full purchase price to the property, I would say any imposition of any conditions should be viewed with much circumspection as the only reason for coming back to the developer is more for administrative expediency than having to fulfill any continuing obligations on the part of the purchaser. The developer will have the continuing obligation to ensure that the strata title once issued is duly registered in the name of the purchaser and for so long as the developer delays in applying for the strata title it will be saddled with this continuing obligation. [25] It was further argued for the developer that the purchaser has a continuing obligation to pay service charges quarterly in advance to the developer in as much as the developer has an obligation to maintain the common properties under section 4.01(b) of the principal SPA. Whilst that may be so, any dispute between the two must be sorted out in a court of law and any non-payment must be by way of the developer suing under a debt due to it. [26] Even under the new scheme of the Building and Common Property (Maintenance and Management) Act 2007 which came into force on 12 April 2007, a joint management body ('JMB') comes into being pending the issuance of the strata titles where the JMB provides the service of maintaining the common properties and any non-payment is to be sorted out either by a quick system of attachment of the moveables in the property and by way of recovery as a civil debt. [27] Likewise when strata titles are issued and the management corporation comes into being under the Strata Titles Act 1985, it takes over the obligation to maintain the common properties and there is no provision where if a purchaser has service charges in arrears then he cannot dispose of his property now held under a strata title. [28] How a developer can arrogate to itself the power to hold a purchaser to ransom until it settles what in this case is disputed service charges before granting its consent to the property to be disposed of, smacks of high-handedness and not a little haughtiness. [Emphasis added] [46] In conclusion, on issue 3, I hold that a developer, like the first defendant here, cannot refuse to transfer titles to purchasers who have fully paid up their purchase prices, like the plaintiffs here, on the alleged ground that maintenance charges are still owed to the developer. If there is such a dispute the developer should sue to establish his claim in a court of law. The developer should put his money where his mouth is.

[47] For the reasons above, I grant the following orders in favour of the plaintiffs -

That the first defendant is to sign the instruments of transfer of ownership (Form 14A) for each plot of the plaintiffs within fourteen (14) days from order as the developer and original owner of Taman Kuchai Jaya (Block KP1 and KP2) for the purpose of registration of separate strata ownerships in the names of the respective plaintiffs supported by an Application for Permission for blanket consent to be made by the first defendant to the Transfer Authorization Unit of the Office of the Land Director and Mines, Kuala Lumpur including and not limited to the separate and original strata titles in respect of each Plot acquired by the respective plaintiffs (the "Strata Ownership")

That the First Defendant is to hand over the transfer instruments (Form 14A), the Strata Titles in respect of each plot acquired by the respective Plaintiffs including the blanket consent which are valid and registrable as a transferor to Messrs. Azlan Hadijah & Associates as the plaintiffs’ Solicitor to be implemented and completed by the plaintiffs as the transferees of the parcels in question one day after the expiry of the period stated in paragraph (1) above for the purpose of adjudication at the Board of Inland Revenue and registration of the Strata Titles at the Office of the Land and Minerals of the Federal Territory of Kuala Lumpur.

Thereafter, the first defendant is ordered to hand over the Strata Title in respect of each Plot acquired by the plaintiffs within fourteen (14) days from the date of this Order to Messrs. Azlan Hadijah & Associates to be delivered to the Second Defendant for the purpose of completion of transfers and registration of the Strata Titles.

Each of the plaintiffs pay fees of RM 500 to the first defendant being management fees for the signing of the Forms 14A and relevant documents.

No order as to costs. ………(signed)……….. Leong Wai Hong Judicial Commissioner High Court of Malaya Kuala Lumpur (NCVC 10) Dated: 07th March 2024 COUNSEL: 1) Siti Hadijah, Nabila Sulaiman & Alfitri Azman (Pupil in Chamber) for plaintiff. (Azlan Hadijah & Associates (Kuala Lumpur)) 2) Noormah binti Mohd Noordin together with Ivan Ang for 1st defendant. (Kamil Hashim Raj & Lim (Klang)) 3) Rohaiza Hamzah for 2nd defendant. (Jabatan Peguam Negara, Wilayah Persekutuan Kuala Lumpur (Kuala Lumpur)) CASES REFERRED TO: 1) Asia Commercial Finance (M) Bhd V Kawal Teliti Sdn Bhd [1995] 3 MLJ 189 FC, [1995] 3 CLJ 783 FC 2) Dato’ Sivananthan a/l Shanmugam v Artisan Fokus Sdn Bhd [2016] 3 MLJ 122 CA. 3) Fintree Capital Sdn Bhd v Tetuan Syed Ibrahim & Co [2023] 5 CLJ 733 HC. 4) Lee Ming Chong Sdn Bhd v Prudential Properties Sdn Bhd [2012] 8 MLJ 1 HC. 5) Mahathir Mohamad Bin Mohd Ali Jinnah & Ors v Jagdish Singh A/L Amir Singh [2022] MLJU 964 HC. 6) Setali Development Sdn Bhd & Anor v Lim You Keng [1983] 2 CLJ 250 FC. LEGISLATION REFERRED TO: 1) Section 7[2] of the Strata Management Act 2013 Act 757. 2) Section 9[1] Strata Management Act 2013. 3) Section 9 [2] Strata Management Act 2013. 4) Section 9[3] Strata Management Act 2013. 5) Section 17 [1] of the Strata Management Act 2013.