1. ) Lee Ruen Chien v 1. ) Melodious Empire Sdn. Bhd. (WA-22NCvC-430-06/2019)

LEE RUEN CHIEN

CHENG YEW HONG

LEE TECK HOE

LE ERA SDN BHD

CHONG CHEE KUAN (NO. K/P: 531025-08-6203) …PLAINTIF-PLAINTIF

MELODIUS EMPIRE SDN BHD

PERBDANAN PENGURUSAN LEAP (PTD/WP. 20/1/2972) …DEFENDAN-DEFENDAN 02/08/2022 09:50:01 WA-22NCvC-430-06/2019 Kand. 217 S/N 9XqYoKYivkiAa0MnJU3zrw

The 5 Plaintiffs are purchasers of units of apartment of a project called Pusat Perniagaan Alam Damai (“the project”) developed and sold by the 1st Defendant. The 2nd Defendant is the managing body of the apartments in the project on completion of the project and after handing over of the vacant possession.

The Plaintiffs claim against the 1st Defendant is for breach of contract by way of misrepresentation, which had induced the Plaintiffs to buy the apartments. The claim against the 2nd Defendant is for being unlawfully constituted.

This case went for a full trial whereby both parties called witnesses as well as tendered documentary evidence by way of Bundle of Documents which were filed in Court.

The evidence that can be distilled from the evidence is that the Plaintiffs were induced into buying apartments in the project on the representation by way of brochures as well as a persons from a company called Regahome who claimed to be the sole agent for the 1st Defendant in the sale of the apartment.

The representations which induced the Plaintiffs to buy the apartment as investment was that the apartments came with 4 units of parking lot. This representation to the belief of the Plaintiffs meant that they were buying not only the apartments but also the 4 parking lots. The land on which the 4 parking lots is situated would belong them.

However upon being handed over the vacant possession the Plaintiffs discovered that the land on which the parking lots were situated was not transferred to their names and instead remained in the name of the 1st Defendant.

The fact that the parking lot belonged to the 1st Defendant was further confirmed by the fact that when a portion of the land on which the project was situated was acquired by the government for the building of a highway, the compensation was received and kept by the 1st Defendant without any sum being given to the Plaintiffs for their area of the parking lot.

The evidence also showed that on delivery of vacant possession the Plaintiff were not only given to the apartments but were also given access card to the parking lots. However the Plaintiffs were levied a charge of RM50.00 a month for each of the parking lot by the 1st Defendant. The Plaintiff have refused to pay the levy as they claim that the parking lots belong to them.

The 2nd Defendant the managing body of the apartment was formed to manage the apartments by way of a private limited liability company called the Leap management Sdn Bhd (“leap management”).

The evidence showed that the 2nd Defendant had imposed various charges to the Plaintiffs for the management of the apartments as well as maintenance of common areas. The Plaintiffs have refused to pay this charges as they allege that the charges are illegally imposed.

The 1st Defendant in their defense deny that the 4 parking lots were sold together with the apartments. The 1st Defendant maintain that the land on which the 4 lots belong to them and do not form part of the apartment and this is clear from the description of the property in the Sale and Purchase agreement.

The Defendants also maintain that the Plaintiffs are duty bound to pay all the charges for the maintenance of the apartment and the common area which includes the 4 parking lots.

The 2 main issues for determination in this case in the Court’s view is the representation made by the 1st Defendant in advertising the sale of the apartments to the Plaintiffs and secondly whether the Plaintiffs are obliged to pay the charges imposed by the 2nd Defendant.

The representations made to the Plaintiffs were in 2 forms i.e. representation made in the brochures advertising the sale of the apartment and secondly by way of oral representation made by a person called Andrew Yaw from Regahome to the 1st Plaintiff, a person called Max to the 3rd and 4th Plaintiffs and a person called Paul to the 5th Plaintiff.

The burden of proof lie upon the Plaintiffs to prove misrepresentation as provided under section 101 of the Evidence Act 1950 which states as follows: 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.

When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person.

In discharging the burden of proof it is incumbent upon the Plaintiff to tender all available evidence to prove their assertions of misrepresentation. It is glaring in this case that the named persons who had purportedly made oral representations to the Plaintiffs were not called as witnesses.

This persons Andrew Yaw, max and Paul could have supported the case of the Plaintiff by at least confirming the facts that they were the sole agents acting on behalf of the 1st Defendant. They could also have confirmed that they had made the representations as alleged that the purchasers were to be given 4 parking lots.

Not calling this witnesses without any explanation also gives rise to the adverse inference under section 114 (g) of the Evidence Act 1950 which states as follows: The court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct, and public and private business, in their relation to the facts of the particular case.

that evidence which could be and is not produced would if produced be unfavourable to the person who withholds it;

The Court also looked at the brochure advertising the property despite an objection by the 1st Defendant that since the maker of the brochure was not called the brochure remained a hearsay. In the Court’s view the brochures could be tendered as evidence as the brochure was in the possession of the Plaintiffs and in fact on the direction of the Court the original brochure was produced in Court.

After perusing the brochure especially on the free parking lots, the Court found that nowhere it stated the land on which the 4 lots of parking were situated would belong to the Plaintiffs. What could be inferred is that the 4 parking lots were allotted for the exclusive use of each purchaser. There is also nothing in the brochure to indicate that the land on which the 4 parking lots were situated would be transferred to the Plaintiffs.

Finally the Court perused the Sale and Purchase agreements between the Plaintiffs and the 1st Defendant and observed that the S/N 9XqYoKYivkiAa0MnJU3zrw description of the apartments sold does not include the 4 parking lots. The agreements are valid contracts and should be read and interpreted as they are worded. The law forbids oral evidence to supplant a written agreement. This is stated in section 92 of the Evidence Act 1950 which provides as follows: When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to section 91, no evidence of any oral agreement or statement shall be admitted as between the parties to any such instrument or their representatives in interest for the purpose of contradicting, varying, adding to, or subtracting from its terms: Provided that-

any fact may be proved which would invalidate any document or which would entitle any person to any decree or order relating thereto, such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, the fact that it is wrongly dated, want or failure of consideration, or mistake in fact or law;

the existence of any separate oral agreement, as to any matter on which a document is silent and which is not inconsistent with its terms, may be proved, and in considering whether or not this proviso applies, the court shall have regard to the degree of formality of the document;

the existence of any separate oral agreement constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved;

the existence of any distinct subsequent oral agreement, to rescind or modify any such contract, grant or disposition of property, may be proved except in cases in which the contract, S/N 9XqYoKYivkiAa0MnJU3zrw grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents;

any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description may be proved if the annexing of any such incident would not be repugnant to or inconsistent with the express terms of the contract; and

any fact may be proved which shows in what manner the language of a document is related to existing facts.

Having regards to the above factors it is the Court’s decision that the Plaintiff have failed to discharge the burden of proof of proving their allegations of misrepresentation against the 1st Defendant. The Charges Imposed by the 2nd Defendant

In this case the Plaintiffs are challenging the validity of the 2nd Defendant itself and therefore in extension challenging the invoices issued by the 2nd Defendant for the various charges. The Court notes that the Plaintiffs are not challenging that they are duty bound to pay the maintenance and the other charges but are disputing the fact that the 2nd Defendant are the correct entity to collect these charges.

The law on management of high rise building is provided under the Strata management Act 2013 (“the Act”). This Act clearly spells out the provisions as to the manner a high rise building with strata title is to be managed.

The most glaring provision of the Act in relation to this case is Part IV and part V of the Act. Part IV provides for management before the formation of the Management Corporation and part V is for management after the formation of Management Corporation. The S/N 9XqYoKYivkiAa0MnJU3zrw Act therefore differentiates a situation of management before and after the formation of the Management Corporation.

In this case it is an undisputed fact that the Management Corporation was formed before the 2nd Defendant was formed. It is clear the law disallows for the setting up of any management body after the Management Corporation is set up. In fact the Developer is given only 1 month to manage the property before handing over to the Management Corporation.

It is clear from the evidence in this case none of the provisions under Part V of the Act were complied with on the incorporation of the Management Corporation. The explanation given by the 2nd Defendant in not activating the Management Corporation is that there was lack of quorum to call for the 1st meeting of the Management Corporation. This explanation is clearly untenable in the face of clear statutory provisions.

Even before the Act came into force the law preceding the Act contained in Building & Common property Act (Maintenance and Management) Act 2007 provided under section 15 for the dissolution of the joint management body on the Management Corporation being incorporated.

The Court also agrees with the submission of the Plaintiffs that the formation of the 2nd Defendant was a sham and was in fact a front for the 1st Defendant to continue to manage the property to their own benefit and to a detriment of the purchasers.

The Court therefore rules that the 2nd Defendant is an unlawful body and has no legal right to issue the invoices for the various charges.

Taking into account the factors above the Court made the following decision with regards to the relief asked for by the Plaintiff in paragraph 100 of their Statement of Claim: S/N 9XqYoKYivkiAa0MnJU3zrw i) The Court dismissed the Plaintiffs claim for declarations as contained in paragraphs (a) to (d) and (f) to (i). The reason for dismissing this reliefs asked for is because the Plaintiffs had failed to prove any misrepresentations on the part of the 1st Defendant. In view of this the Plaintiffs had no propriety rights over the 4 parking lots. Further, as they had no propriety rights the Plaintiffs were also not entitled to any compensation received by the 1st Defendant for the part acquisition of the land. ii) The Court allowed the Plaintiffs claim in paragraph (e) that they are not bound to pay any charges or fees as to the parking lots as claimed by the 2nd Defendant. The reason for this is that the 2nd Defendant were unlawfully constituted and therefore ineligible to collect any charges and dues. iii) For the same reason above, that the 2nd Defendant was unlawfully constituted the Court dismissed the counterclaim of the 2nd Defendant.

Both parties were asked to bear their own costs. Dated: 1.8.2022 sgd DATO’ HAJI AKHTAR BIN TAHIR Judge High Court of Malaya, Kuala Lumpur S/N 9XqYoKYivkiAa0MnJU3zrw PARTIES: For the Plaintiffs: Tetuan A J Ariffin, Yeo & Harpal Tingkat 3 Wisma Cheong Hin 116-118 Jalan Pudu 55100 Kuala Lumpur For the Defendants: Tetuan Yap Siew Yee & Co Suite 1222, Tingkat 12, Block A (Lobby 5) Damansara Intan Business Centre No. 1 Jalan SS 20/27 474000 Petaling Jaya Selangor Tetuan Elyne Choo & Koong B3-01 The Street Mall One South Taman Serdang Perdana Seksyen 6 Jalan OS 43300 Seri Kembangan