Lee Wee Kang v Khoo Soon Lee Realty Sdn Bhd (BA-22NCvC-186-04/2021)

LEE WEE KANG (No. K/P: 600510-01-5501)

CHAN CHEE HONG (No. K/P: 730407-14-5207)

LIM SIOK HUI (No. K/P: 570212-04-5548)

SUBRAMANIAM A/L SUNNATHAMBY (No. K/P: 650717-01-5977)

BOO HOOI PING (No. K/P: 790802-02-5154) (Plaintif Pertama Hingga Kelima Menyaman

LIM SIOK HUI (No. K/P: 570212-04-5548) [Selaku Pegawai Awam Persatuan Penduduk Taman Canary 15/01/2026 16:31:19 BA-22NCvC-186-04/2021 Kand. 122 (No Pendaftaran PPM-024-10-09012017) Selaras dengan Seksyen 9 (c) Akta Pertubuhan 1966] …PLAINTIF-PLAINTIF

KHOO SOON LEE REALTY SDN. BHD. (No. Syarikat.: 66384-P)

SKY JEWEL SDN. BHD. (No. Syarikat: 1089758-T) …DEFENDAN-DEFENDAN DIDENGAR BERSAMA GUAMAN NO. BA-22NCVC-329-08/2021 GUAMAN NO. BL-A72-19-07/2020) GUAMAN NO. BA-22NCVC-231-06/2022 GUAMAN NO. BL-A72NCVC-392-09/2021) GUAMAN NO. BA-22NCVC-313-08/2021 GUAMAN NO. BL-A72NCVC-463-10/2021) GROUNDS OF JUDGMENT

This case concerns a dispute over the management and operation of a gated and guarded scheme at Taman Canary, Bandar Bestari, Klang. The Plaintiffs, comprising individual homeowners and an officer of the residents’ association, challenged the Defendants’ continued collection of maintenance charges and their management of the scheme. They also sought an account of alleged surplus funds retained by the Defendants.

The First Defendant, Khoo Soon Lee Realty Sdn Bhd (KSL), was the developer and the original manager of the scheme. The Second Defendant, Sky Jewel Sdn Bhd (Sky Jewel), was subsequently appointed to manage and operate the gated and guarded scheme.

In the main action, Civil Suit No. BA-22NCVC-186-04/2021 (Suit 186), the Plaintiffs commenced the action both in their individual capacities and purportedly in a representative capacity on behalf of all homeowners in Phase 1 of Taman Canary, excluding units owned by KSL. They sought various declarations and reliefs, including a declaration that the Defendants were not entitled to collect maintenance charges, an order requiring the Defendants to render accounts, and other consequential reliefs.

The Defendants denied the claims, asserting that the Plaintiffs were bound by the Deeds of Mutual Covenants (DMCs) executed upon the purchase of their properties. They counterclaimed for outstanding maintenance charges and damages for inducing breaches of the DMCs.

The Plaintiffs initially pleaded that the DMCs were void ab initio on grounds of illegality. However, during submissions, they withdrew this contention, leaving for determination the issues of the validity of the representative action, the Defendants’ entitlement to maintenance charges, the claim for accounts, and the counterclaim.

Several related suits originally filed in the Magistrates’ Court to recover maintenance charges were transferred to this Court and ordered to be heard together with Suit 186. By order of the Court, Suits 186, 329, 231 and 313 were consolidated and tried together.

Having heard the evidence and considered the parties’ submissions, this Court dismissed the Plaintiffs’ claim in Suit 186 and the Defendants’ counterclaim. The Defendants’ claims in the related maintenance charge suits were allowed.

My reasons are set out below.

At all material times, the First Defendant, KSL, was the developer and registered owner of the land on which a residential development known as Canary Garden @ Bandar Bestari, Klang, was constructed. The project comprises condominium blocks, commercial units, and landed housing schemes, including Phase 1, which is the subject of these proceedings.

The Second Defendant, Sky Jewel, is the management company appointed by KSL to undertake duties relating to the operation, maintenance, and management of services under the DMCs, including the collection of maintenance charges.

The First, Second and Fourth Plaintiffs are registered proprietors of houses in Canary Garden Phase 1. In addition to executing Sale and Purchase Agreements with KSL, they also executed standard-form DMCs with KSL.

The Third Plaintiff discontinued her claim.

The First to the Fifth Plaintiffs are suing on their own behalf and on behalf of all house owners in Phase 1, except units owned by KSL.

The Sixth Plaintiff is an office-bearer of the residents’ association for Phase

1.

The Fifth and Sixth Plaintiffs did not execute any DMCs.

Delivery of vacant possession of the houses in Canary Garden Phase 1 to purchasers took place in or about 2014.

Under the DMCs, KSL agreed, among other things, to erect and maintain perimeter fencing, a guard house, and boom gates, and to provide security services and maintain the common areas within Phase 1.

In consideration of these services, purchasers agreed to pay periodic maintenance charges. The DMCs also provided for a free maintenance period of a specified duration following delivery of vacant possession.

It is not disputed that the First, Second and Fourth Plaintiffs executed DMCs with KSL. It is also stated that some proprietors, including certain sub-sale purchasers, did not execute DMCs.

By a memo issued by KSL on 23 September 2016, purchasers were informed that Sky Jewel had been incorporated or appointed to oversee services under the DMC and collect maintenance charges. Maintenance charges were fixed at RM250.00 per month per house, and collections commenced in 2016.

The services provided under the DMCs included, among others:

maintenance and upkeep of the guard house, perimeter fencing, boom gates, CCTV and other security systems;

engagement of security guards to man the guard house and patrol the residential area; and

landscaping, grass cutting, tree maintenance and general upkeep of common areas.

The Defendants contended that Sky Jewel carried out these services pursuant to the DMCs and that the Plaintiffs’ witness acknowledged during cross-examination that the services were provided.

Following the residents’ association’s registration in January 2017, correspondence was exchanged between the residents and KSL and/or Sky Jewel regarding the management of Phase 1 and the use of maintenance charges.

Over time, dissatisfaction among certain residents grew regarding the performance of services and the transparency of management.

This dissatisfaction later led to further correspondence, representations to the local authority, and efforts by the residents’ association to take over management of the gated and guarded scheme.

As Phase 1 operated as a gated and guarded scheme, incorporating perimeter fencing, a guard house, boom gates, and controlled access, the Plaintiffs contended that the gated and guarded arrangements, including the boom gate and guard house, required approval from the local authority, Majlis Perbandaran Klang (MPK), and that the Defendants had not obtained such approval, rendering the scheme and the DMCs allegedly unlawful.

The Defendants denied this contention and stated that layout plans, including fencing and a guard house, were approved by MPK and that no enforcement action or fine was ever issued by MPK in relation to Phase 1.

The Plaintiffs further stated that the residents’ association (P6) applied to MPK for approval to operate and manage the gated and guarded scheme, and that MPK granted the approval on 26 July 2019.

Following MPK’s approval, the Plaintiffs issued letters to the Defendants, demanding that they cease collecting maintenance charges and hand over the management and operation of the gated and guarded scheme to the residents’ association.

The Defendants declined to do so, citing the existence and continued operation of the DMCs. The Defendants’ position was that KSL remained bound under the DMCs to provide the agreed services unless and until KSL was satisfied that the residents’ association’s request was made with the mandate of all 384 purchasers and owners of units at Canary Garden Phase 1.

After more than seven (7) years following the delivery of vacant possession and the continued operation of the scheme, the Plaintiffs commenced Suit 186, challenging, among other things, the validity and enforceability of the DMCs and the entitlement of KSL and/or Sky Jewel to collect maintenance charges.

Separately, Sky Jewel commenced proceedings against certain proprietors to recover outstanding maintenance charges under the DMCs. These proceedings were later transferred to the High Court and consolidated with Suit 186 for hearing together.

The Defendants also filed counterclaims in Suit 186, alleging, among other things, that the Plaintiffs had conspired to injure the Defendants by inducing breaches of the DMC obligations and interfering with the Defendants’ contractual performance, thereby causing KSL to suffer loss and damage.

The Defendants also challenged the capacity and locus standi of the Fifth and Sixth Plaintiffs and disputed that the present action satisfies the requirements for a representative action under Order 15, rule 12 of the Rules of Court 2012.

The issues to be tried are set out in Enclosure 66.

At the trial, the Plaintiffs called one (1) witness, while the Defendants called three (3) witnesses. They are as follows:

Lee Wee Kang – PW1 – the First Plaintiff.

Wong Yuen Ling – DW1 – Senior Manager of the Sales and Marketing Department of the First Defendant.

Lim Ji Hong – DW2 – Project Manager of the First Defendant.

Tan Peck Leng – DW3 – Accounts Manager of the First Defendant. FINDINGS OF THE COURT

The First to Fifth Plaintiffs commenced this suit partly as a representative action, stating that they sued “for themselves and on behalf of all homeowners in Phase 1 of Taman Canary, excluding units owned by KSL”.

Under Order 15 rule 12 of the Rules of Court 2012, a representative proceeding may be brought where numerous persons have “the same interest” in the proceedings. The rule is designed to facilitate convenience and avoid multiplicity of actions. Importantly, as held in Markt & Co Ltd v Knight Steamship Co Ltd [1910] 2 KB 1021, the express consent of every person represented may not be required. A claimant may represent others provided that the class is sufficiently numerous and shares a common interest.

However, although express consent may not be required, the class to be represented must be clearly defined and objectively ascertainable. This ensures that:

The Court can determine with certainty who will be bound by its judgment.

The Defendants know the scope of those affected.

Future litigation is not complicated by uncertainty about who was represented.

In order for a representative action to be maintained, it is a fundamental requirement that the alleged class members share a common interest in the subject matter and that the relief sought is personal or beneficial to the class as a whole.

In the present case, I find that the First to Fifth Plaintiffs in Suit 186 failed to provide clear particulars identifying the persons they purported to represent in the alleged representative or class action. The description relied upon, namely “tuan punya rumah di Fasa 1, Taman Canary, Bandar Bestari, Klang,” is vague and insufficient to define the class members. Without such particulars, it is impossible for the Court to determine whether any given individual qualifies as a member of the purported class. This deficiency is fatal to the representative action.

Furthermore, the Fifth Plaintiff did not execute the DMC. In the absence of such execution, I find that the Fifth Plaintiff had no locus standi to initiate Suit 186, whether on his own behalf or as a representative of the vaguely described group of owners.

With respect to the claim by the Sixth Plaintiff, being the “Persatuan”, I accept the Defendants’ submission that there was no nexus or contractual relationship between the said association and the Defendants, KSL and Sky Jewel. In the absence of any contractual or legal relationship, the Sixth Plaintiff’s claim could not be sustained.

For these reasons alone, I find that the Plaintiffs’ claim in Suit 186, insofar as it was brought in a representative capacity, was not maintainable and ought to be dismissed. The suit could proceed, if at all, only in the First, Second and Fourth Plaintiffs’ individual capacities. Maintenance Charges, Services Rendered, and Claim for

On the evidence before this Court, I find that the operation and management of the gated and guarded scheme within Canary Garden Phase 1 were, at all material times, carried out by KSL in accordance with its contractual obligations and duties as set out in the respective DMCs.

The evidence further demonstrated that KSL and Sky Jewel had duly performed the services contemplated under the DMCs, including the provision of security, refuse collection, cleaning of public drains, and grass cutting. These services were consistently rendered to maintain, upkeep, and manage Phase 1 in good repair and condition, in line with the object of the DMCs, which inter alia was to ensure the peaceful and beneficial occupation of the Common Properties.

The First, Second and Fourth Plaintiffs in Suit 186, Sharvin and Muguthan, in Suits 231 and 313 respectively, had executed the DMCs and enjoyed the benefits of these services. Having accepted and derived benefits therefrom, they were, by their conduct, contractually bound to pay the maintenance charges stipulated in the DMCs. The services already rendered cannot now be “undone” to avoid such obligations.

It is undisputed that KSL and/or Sky Jewel continued to provide these services pursuant to the DMCs up to 15 December 2021. The evidence also showed that KSL had fulfilled its obligations under the DMCs, including maintaining the boom gate access system, intercom, CCTV, perimeter fencing, and guardhouse security system.

The First, Second and Fourth Plaintiffs in Suit 186, and the Defendants in Suits 231, 313 and 329, failed to adduce any credible evidence to establish that the monthly maintenance charges of RM250.00 were “exorbitant.” On the contrary, during cross-examination, the First Plaintiff admitted that he, together with the other purchasers, including the Second and Fourth Plaintiffs, had made payments for the services rendered by the Defendants, and that they are currently paying the same amount.

50.

It was also not disputed that the Strata Management Act 2013 and the Strata Titles Act 1985 were inapplicable to this case. Consequently, the Plaintiffs could not rely on these statutes to support their claim.

Upon consideration of the evidence, I am satisfied that the Defendants produced the relevant accounts, which sufficiently demonstrated that the collection and expenditure of the maintenance charges were properly accounted for. There was no evidence of any misappropriation of the monies collected.

The Plaintiffs’ sole witness did not dispute that KSL had incurred expenses in performing the services required under the DMCs. This fact reinforced the Defendants’ position that the maintenance charges collected were used for the upkeep and management of Canary Garden Phase 1.

The Plaintiffs contended that, since the maintenance fee was fixed at RM250.00 per unit, the maximum revenue collectible would be RM1,152,000.00 per annum.

Regarding this, the Defendants’ witness, DW3, explained that the figure of RM1,152,000.00 represented the theoretical maximum based on all units paying in full, which was not reflective of the actual collections. DW3 further testified that earlier audited reports did not show certain financial figures because the Defendants used a “cash basis” method, under which revenue and expenses were recorded only when monies were collected or paid. However, from 2020 onwards, the accounting method shifted to an “accrual basis,” recording revenue and expenses when billed or incurred.

DW3 also clarified that it was possible to ascertain both the amounts collected and the outstanding sums, as invoices were recorded as revenue and any unpaid amounts were clearly reflected as receivables in the financial statements.

Having considered DW3’s testimony, I find her explanation credible and accept it. Accordingly, since the Plaintiffs did not adduce any evidence to rebut DW3’s explanation, I hold that the Plaintiffs failed to prove any mismanagement or misappropriation of the maintenance charges collected by the Defendants. Based on the evidence from DW3, I find the Plaintiffs’ assertion misconceived and speculative. The figure the Plaintiffs contended had failed to account for unpaid charges, arrears, and the actual collection pattern.

Additionally, the Plaintiffs asserted that the Defendants were not entitled to collect maintenance charges for the gated and guarded scheme on the basis that KSL had allegedly lost the right to manage after P6 obtained MPK’s approval on 26 July

They further claimed that the Defendants failed to account for surplus maintenance funds collected, thereby breaching the non-profit clause in the DMCs.

The Defendants, in contrast, contended that the DMCs remained binding contracts, expressly providing that the owners were to pay maintenance charges of RM250.00 per month. The obligation to pay continued so long as services were rendered. They adduced documentary evidence of expenses incurred, including invoices, security contracts, and records of payments made to service providers.

This Court also considered the evidence that, from 2014 to December 2021, the Defendants continuously provided services, including security guard patrols, boom gates, CCTV monitoring, perimeter fencing, and other facilities stipulated under the DMCs. Under cross-examination, PW1 admitted that these services were received and utilised by the residents.

The Plaintiffs argued that the Defendants’ collection became unlawful after P6 obtained MPK approval. However, this Court finds that the MPK’s approval, by itself, did not extinguish or terminate the contractual obligations under the DMCs. There was no evidence of novation, termination, or substitution of the contractual parties. The Defendants were therefore contractually entitled to continue collecting the agreed charges (see: Office Park Development Sdn Bhd v Surinder Singh Sewa Singh [2013] 1 LNS 1443).

The Court further accepted the Defendants’ submission that the Plaintiffs’ continued enjoyment of services while withholding payment constituted unjust enrichment. To allow the Plaintiffs to benefit from services without contributing to their cost would be inequitable and contrary to the principles of contract and fairness.

The Plaintiffs also claimed that the Defendants breached the non-profit clause in the DMCs by failing to render accounts and return any surplus collected. They alleged that the Defendants profited from the maintenance charges rather than applying them exclusively to the gated and guarded scheme.

The Court observed that the Plaintiffs bore the burden of proving, on a balance of probabilities, that there was indeed a surplus unlawfully retained by the Defendants. However, the Plaintiffs produced no evidence of the alleged surplus. Their assertion remained a bare allegation, unsupported by substantive proof.

Conversely, the Defendants tendered documents showing how the collected funds were spent. Witnesses testified that the charges collected were applied to security contracts, equipment maintenance, and operational costs. The Plaintiffs did not establish any evidence of misappropriation or profit.

This Court accepts that under the DMCs, KSL was required to use the charges solely for the maintenance and security of Phase 1. Additionally, the evidence demonstrated compliance with this obligation. The Plaintiffs’ claim for an account of surplus was not substantiated.

On the totality of the evidence, I find that the claims advanced by the First, Second, and Fourth Plaintiffs and the Defendants in Suit 231, 313 and 329 were based on mere dissatisfaction with the services provided, unsupported by any concrete evidence of breach or wrongdoing by KSL and/or Sky Jewels. The Defendants duly performed their obligations under the DMCs, and the Plaintiffs, having failed to establish a cause of action, were not entitled to the reliefs sought.

In any case, paragraph 60 of the Amended Statement of Claim reveals that the First, Second, and Fourth Plaintiffs did not seek the relief in their individual capacities but purported to act in a representative capacity, which this Court finds to be defective.

The Court therefore finds that:

The DMCs remained binding on the First, Second, Fourth Plaintiffs, Sharvin and Muguthan.

The Defendants were entitled to collect maintenance charges for the services provided.

The Plaintiffs’, Sharvin’s and Muguthan’s refusal to pay the maintenance charges constituted a breach of contract and resulted in unjust enrichment.

The Plaintiffs failed to prove that the Defendants unlawfully retained any surplus or profited from the charges.

Therefore, based on the totality of the evidence, this Court finds that, on a balance of probabilities:

In Suit 186, the Plaintiffs have failed to prove their claim against the Defendants, and therefore, the Plaintiffs’ claim against the Defendants is hereby dismissed.

In Suit 329, the Plaintiff (Sky Jewels) has proved its case against the Defendant (Lee Wee Kang), and therefore, the Plaintiff’s claim against the said Defendant is hereby allowed.

In Suit 231, the Plaintiff (Sky Jewel) has proved its case against the Defendant (Sharvin a/l Ragavan) and, accordingly, the Plaintiff’s claim against the said Defendant is hereby allowed.

In Suit 313, the Plaintiff (Sky Jewel) has proved its case against the Defendant (G. Muguthan a/l Gangatharan) and, therefore, the Plaintiff’s claim against the said Defendant is hereby allowed.

On the Counterclaim by the Defendants in Suit 186, this Court finds that the Defendants have failed to prove their claim for conspiracy to injure on the balance of probabilities.

As for the Defendants’ claim for maintenance charges, I have found that the Plaintiffs’ representation action is not maintainable. Accordingly, the Defendants’ claim against the Plaintiffs in the representation action is also not maintainable. The Defendants are at liberty to make their separate claims accordingly.

As for costs, I order that the First, Second, Fourth, Fifth and Sixth Plaintiffs in Suit 186 and the Defendants in Suits 231, 329 and 313 pay the Defendants in Suit 186 and the Plaintiffs in Suits 231, 329 and 313 (KSL and Sky Jewel) a global sum of

As for the counterclaim, the Defendants in Suit 186 are ordered to pay the First, Second, Fourth, Fifth, and Sixth Plaintiffs in Suit 186 the costs of RM15,000.00. Dated 15 January 2025 -sgd-JAMHIRAH ALI JUDGE HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN To the parties’ solicitors: For the Plaintiff : Balbir Singh a/l Shingara Singh (Messrs Najiana Wan Balbir) For the Defendant : Bahari Yeow Tien Hong & Lee Hon Jinn (Messrs