1. ) Ng Shih Shing v 1. ) Nusmetro Property Sdn Bhd (BA-25-99-06/2024)

NG SHIH SHING (No K/P: 680521-08-5487)

RICHARD IM (No Pasport Australia: PE0396144 … PEMOHON-PEMOHON

NUSMETRO PROPERTY SDN BHD (No Syarikat: 543117-D)

TRIBUNAL PENGURUSAN STRATA, PUTRAJAYA ... RESPONDEN-RESPONDEN GROUNDS OF JUDGMENT (Enclosure 12)

On 23.10.2024, the Applicants were granted leave to file an application for judicial review against the Respondents.

Enclosure 12 is the Applicants’ substantive application for –

a declaration that the 2nd Respondent’s award in Claim No: TPS/W-8178-12/2023 dated 18.3.2024 (Impugned Award) is an error of law, irrational dan unreasonable;

(ii) an order of certiorari to quash the Impugned Award;

(iii) a mandatory injunction to compel the First Respondent to convene the Annual General Meeting (AGM) of the Joint Management Body (JMB) for Arte Mont Kiara (Condo) within 1 month from the date of this Court’s decision; and

(iv) costs.

After considering the cause papers and submissions by the parties, this Court allowed the Applicants’ application. The following are the reasons for the decision. Background facts

The facts leading to the Impugned Award and this application are as follows. The Applicants are the registered proprietors of a unit in the Condo and were given vacant possession on 30.10.2020.

The First Respondent failed to convene the AGM of the JMB as required under section 17(1) Strata Management Act 2013 (Act 757) (all references to the various sections hereinafter will be that of Act 757 unless the contrary is indicated). They instituted a claim at the 2nd Respondent to compel the First Respondent to convene the first AGM of the JMB.

The First Respondent maintained that it was unnecessary to hold the first AGM of the JMB as the Management Corporation

had already been established on 11.11.2022. They had been given a certificate to that effect by the Federal Territory Land and Mines Office.

On 18.3.2024, their claim was dismissed by the 2nd Respondent who held – “Secara dasarnya Tribunal bersetuju dengan PP, selepas hak milik strata dikeluarkan oleh pejabat tanah dan pembukaan daftar strata, Perbadanan Pengurusan (MC) telah terbentuk pada tarikh yang sama mengikut seksyen 17(3) Akta Pengurusan Strata 2013 (Akta 757) dan tempoh permulaan bermula dari tarikh penubuhan MC tersebut. Tempoh permulaan tamat apabila terdapat pemilik petak yang jumlah unit syernya adalah sekurang-kurangnya 25% daripada unit syer agregat. Tempoh awal biasanya apabila pemaju menjalankan penyempurnaan pemindahan hak milik strata dengan setiap pembeli petak. Tempoh permulaan tamat apabila pemaju telah memindahkan hak milik strata yang mencukupi kepada pembeli petak yang membentuk sekurang-kurangnya 25% daripada jumlah unit saham dalam pembangunan skim strata. Dalam tempoh 1 bulan selepas tamat tempoh awal, pemaju mempunyai kewajipan untuk mengadakan AGM pertama MC.”

The Applicants referred to the section 17(1) which mandated the First Respondent to hold the first AGM of the JMB within 12 months of delivery of vacant possession. Section 18 made a failure to do so, an offence punishable with a substantial fine, a term of imprisonment or both.

The Applicants referred to section 17(5) and argued that 2nd Respondent was wrong to hold that the provision exempted the First Respondent from holding the first AGM of the JMB.

The Impugned Award which ignored the statutory framework of Act 757 was an error of law (Syarikat Kenderaan Melayu Kelantan Berhad v. Transport Workers Union [1995[ 2 CLJ 748), irrational and unreasonable.

The First Respondent on the other hand placed complete reliance on section 17(5) which they argued was crystal clear. With the establishment of the MC, there was no longer a requirement or duty for them to convene the first AGM of the

They submitted this provision rendered the Applicants’ argument to the contrary untenable in law.

The First Respondent also submitted that the JMB was an interim body prior to the establishment of the MC. Section 27(1) made it clear that the JMB was not intended to subsist concurrently with the MC (Palm Spring Joint Management Body & Anor v. Muafakat Kekal Sdn Bhd & Anor [2016] 3 CLJ 665 at 674).

Lastly the First Respondent submitted that Part V Chapter 2 provided for the strata management of the Condo where no JMB was established. This portion of the Act expressly entrusted them with the responsibility for strata management of the Condo during this preliminary management period. Principles of law

Judicial review of administrative tribunal decisions play a pivotal role in ensuring that administrative bodies exercise their powers lawfully and fairly. While tribunals are established to provide specialised and accessible forums for resolving disputes within specific legislation, their decisions remain subject to the supervisory jurisdiction of the Courts.

In judicial review proceedings, this Court is tasked with the responsibility to examine whether the tribunal has acted within its legal authority, observed the principles of natural justice and reached its decision in a manner that is reasonable and in compliance of its procedurally requirements. This is to ensure that the administrative decision-making adheres to the fundamental tenets of legality, rationality and fairness.

The principal grounds for judicial review of administrative tribunal decisions are traditionally categorised as illegality, irrationality and procedural impropriety (Council of Civil Service Unions v. Minister of the Civil Service [1985] AC 374 at 410; [1984] 3 All ER 935).

Within the ground of illegality, a key basis for judicial intervention is the error of law, which arises when a tribunal misinterprets or misapplies a legal principle or statutory provision or fails to properly direct itself on a question of law.

This Court was mindful of Gopal Sri Ram’s JCA (as His Lordship then was) dicta in Syarikat Kenderaan Melayu Berhad (supra) wherein His Lordship held at 765 – “An inferior tribunal or other decision making authority, whether exercising a quasi-judicial function or purely an administrative function has no jurisdiction to commit an error of law. Henceforth, it is no longer of concern whether the error of law is jurisdictional or not. If an inferior tribunal or other public decision takes does make such a an error, then he exceeds his jurisdiction. So too is jurisdiction exceeded where resort is had to an unfair procedure (see Raja Abdul Malek v. Setiausaha Suruhanjaya Pasukan Polis [1995] 1 MLJ 308), or where the decision reached is unreasonable, in the sense that no reasonable tribunal similarly circumstanced would have arrived at the impugned decision. It is neither feasible nor desirable to attempt an exhaustive definition of what amounts to an error of law for the categories of such an error are not closed. But it may be safely said that an error of law would be disclosed if the decision-maker asks himself the wrong question or takes into account irrelevant considerations or omits to take into account relevant consideration (what may be conveniently terms as Anisminic error) or if he misconstrues the terms of any relevant statue, or misapplies or mis-states a rinciple of general law.” Analysis and findings Statutory framework of Act 757

This Court undertook a careful perusal of the provisions of the Act to understand the statutory framework governing the establishment of the JMB and the MC and the timeframe within which the responsibility for the management of a stratified development is transferred from the developer to the JMB, from the JMB to the MC or directly from the developer to the MC as the case may be.

Prior to the formation of the JMB, the developer is entrusted with the responsibility for the strata management as provided under Part V Chapter 2 of the Act.

A JMB is an interim management body formed when the first AGM is held. Section 17(1) mandates that the developer must hold this AGM within 12 months of the delivery of vacant possession.

The JMB which consisted of the developer and the proprietors would be responsible for the strata management as provided under Part IV Chapter 3. The JMB will continue to operate until its dissolution 3 months from the date of the first AGM of the MC as provided under section 27(1).

Section 17(3) Strata Titles Act 1985 (Act 318) provides that an MC is automatically established when the strata register for the stratified development is opened. The MC which is made up of all the proprietors would be responsible for the strata management as provided under Part V Chapter 3 after its first

Section 47 provides that in the event there is no JMB and prior to the MC’s first AGM, the developer continues to be responsible for the strata management as provided in Part V

Ideally, the timeline for the developer, the JMB and the MC to be responsible for the strata management is as follows –

from the date of delivery of vacant possession to a purchaser until one month after the first AGM of the JMB (developer’s management period), the developer;

(ii) from the date of establishment of the JMB until three months after the MC’s first AGM, the JMB; and

(iii) thereafter, the body responsible is the MC.

Alternatively, in the event a JMB is not established, the developer would be responsible from the date of delivery of vacant possession until one month after the first AGM of the MC and thereafter the MC.

The undisputed facts of the present application is that vacant possession was given on 30.10.2020. The First Respondent should have convened the first AGM of the JMB on 1.11.2021. The MC was established on 11.11.2022.

Whilst it is true that the MC has been established, they have not yet assumed responsibility for the strata management of the Condo. They will only take over from the First Respondent after their first AGM.

Under section 57(1), the first AGM of the MC need only be held one month after the expiry of the initial period defined in section 46 to mean “the period commencing on the day on which the management corporation comes into existence and ending on the day on which there are proprietors, …, whose share unit is at least one-quarter of the aggregate of share units.”

As the initial period has yet to expire, the first AGM of the MC has not been convened. This means that from the delivery of the vacant possession in 2020 until the present, the First Respondent has not handed over the strata management of the Condo to the proprietors and they continue to be responsible.

More importantly, the First Respondent continues to exercise control over the proprietors’ contribution to the maintenance and sinking fund accounts and has yet to furnish accounts; audited or otherwise, or hand over the assets and records pertaining to the maintenance and management of the buildings, land and common property of the Condo to the JMB or MC.

The First Respondent is correct to say that the provision in section 17(5) is crystal clear but the key to understanding this provision lies in reading it together with section 17(1).

The provisions read as follows –

section 17(1) – “A joint management body shall be established upon the convening of the first annual general meeting of that joint management body –

…; 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.”; and

(ii) section 17(5) - “If the management corporation comes into existence before the first annual general meeting of the joint management body specified in subsection (1) is convened –

the first annual general meeting shall not be required to be convened and no joint management body shall be established for that development area; and

the provisions in Part V of this Act shall apply to the development area.”. (emphasis added)

The language of these provisions is unequivocal and explicit. Section 17(1) makes it mandatory for the First Respondent to convene the first AGM of the JMB within 12 months of delivering vacant possession.

The phase, “before the first annual general meeting of the joint management body specified in subsection (1)” in section 17(5) must be construed to mean that the First Respondent is only exempt from convening the first AGM of the JMB, if and only if the MC was established within the same 12 months following the delivery of vacant possession.

To hold otherwise would render the phase “specified in subsection (1)” meaningless, as it is trite that Parliament does not legislate in vain.

In this application, the MC was established on 11.11.2022 outside the 12-month period given for the holding of the first AGM of the JMB.

The First Respondent cannot rely on section 17(5) to exempt themselves from the obligation to convene the first AGM of the JMB nor to justify its continued control over the the strata management of the Condo.

This Court rejects the First Respondent’s argument as it reflects a shallow and simplistic reading of section 17(5). The 2nd Respondent committed an error of law when he held that section 17(5) exempted the First Respondent from holding the first AGM of the JMB.