1. ) Perbadanan Pengurusan the Usj 19 City Mall v 1. ) Tiow Weng Theong (BA-22NCvC-506-12/2020)

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1 IN THE HIGH COURT OF MALAYA AT SHAH ALAM IN THE STATE OF SELANGOR DARUL EHSAN SUIT NO: BA-22NCVC-506-12/2020

Lampiran

Lampiran A dibayar oleh United Overseas Bank (Malaysia) kepada pihak-pihak yang dinamakan dalam Lampiran A.” (refer to B1, Enc 130, pages 575-579).” 18. Another ad-interim injunction order dated 26-11-2019 states as follows: “18.1 satu perintah injunksi interim terhadap defendan pertama untuk mengisukan Notis untuk memanggil AGM ke-5 dalam masa 7 hari dari tarikh perintah Mahkamah ini kepada kesemua pemilik-pemilik dan Notis tersebut kepada pemilik-pemilik ditandatangani oleh Rimbun Corporate Advisory Sdn Bhd (Pelikuidasi mewakili Pemaju) untuk mengadakan AGM ke-5 bagi defendan pertama; 18.2 satu perintah bahawa kesemua pemilik-pemilik dalam pembangunan berstrata tersebut layak menghadiri dan mengundi dalam AGM ke-5; dan 18.3 satu perintah injunksi interim terhadap defendan ke-2 hingga ke-4 samada melalui dirinya sendiri, ejen-ejennya, orang-orang gajinya termasuk pengurus harta mereka atau sebaliknya daripada menghalang AGM ke-5 diadakan pada tarikh yang dinyatakan dalam Notis AGM ke-5 tersebut.” (refer to B1, Enc 130, pages 580-582) 19. On or around 20-1-2021, the three defendants successfully obtained the suspension of the United Overseas Bank (Malaysia) accounts and fixed deposits, pursuant to their letter dated 15-10- 2021. This action caused significant disruptions to payments to service providers, employees, and utility providers. 20. The plaintiff also asserts that the three defendants issued fraudulent notices and invoices to solicit cash from the proprietors. 21. The three defendants also failed several lawsuits to prevent the plaintiff from holding its 1st AGM, which they failed miserably. 22. On 8-9-2021, two injunction orders favouring the plaintiff were made as follows: Suit No: BA-22NCVC-506-12/2020 22.1 satu perintah injunksi interim terhadap defendan pertama hingga ke-3 samada melalui dirinya sendiri, orang-orang gajinya atau ejen-ejennya daripada mengutip segala wang tunai menggunakan nama THE 19 USJ CITY MALL AND RHYTHM AVENUE JMB daripada pemilik-pemilik bagi RHYTHM AVENUE JMB daripada pemilik-pemilik bagi Rhythm Avenue Condominium dan THE 19 USJ CITY MALL sehingga pelupusan guaman ini; 22.2 satu perintah injunksi interim terhadap defendan pertama hingga ke-3 samada melalui dirinya sendiri, orang-orang gajinya atau ejen-ejennya daripada menggunakan nama THE 19 USJ CITY MALL AND RHYTHM AVENUE JMB untuk mengeluarkan apa-apa notis dan/atau meletakkan notis-notis sehingga pelupusan guaman ini; 22.3 satu perintah injunksi interim terhadap defendan pertama hingga ke-3 samada melalui dirinya sendiri, orang-orang gajinya atau ejen-ejennya daripada mengganggu pengendalian akaun bank plaintif pertama yang dipegang di bawah United Overseas Bank (Malaysia) menggunakan nama THE 19 USJ CITY MALL AND RHYTHM AVENUE JMB dan atau memegang dirinya sebagai pengerusi, bendahari dan setiausaha bagi THE 19 USJ CITY MALL RHYTHM AVENUE JMB untuk meminta menggantung akaun bank plaintif pertama sehingga pelupusan guaman ini; 22.4 satu perintah injunksi interim terhadap defendan pertama hingga ke-3 samada melalui dirinya sendiri, orang-orang gajinya atau ejen-ejennya daripada menggunakan alat tulis dan cop rasmi THE 19 USJ CITY MALL AND RHYTHM AVENUE JMB sehingga pelupusan guaman ini; 22.5 satu perintah injunksi interim terhadap defendan pertama hingga ke-3 samada melalui dirinya sendiri, orang-orang gajinya atau ejen-ejennya daripada memegang dirinya sebagai pengerusi, bendahari dan setiausaha bagi THE 19 USJ CITY MALL AND RHYTHM AVENUE JMB sehingga pelupusan guaman ini; 22.6 satu perintah injunksi interim terhadap defendan pertama hingga ke-3 samada melalui dirinya sendiri, orang-orang gajinya atau ejen-ejennya daripada mengeluarkan apa-apa resit menggunakan nama bagi THE 19 USJ CITY MALL AND RHYTHM AVENUE JMB sehingga pelupusan guaman ini. (refer to B3, Enc133, page 235-239). Suit No: BA-22NCVC-530-12/2020 22.7 satu perintah terhadap defendan pertama hingga ke-3 untuk menyerahkan semua aset-aset dan dokumen-dokumen milikan JMB kepada plaintif melalui Tetuan Hals & Associates; 22.8 satu perintah injunksi interim terhadap defendan pertama hingga ke-3 samada melalui dirinya sendiri, orang-orang gajinya atau ejen-ejennya daripada memasuki mana-mana pejabat plaintif termasuk yang terletak di L6-18, The Management Office, The 19 USJ City Mall & Rhythm Avenue JMB, Jalan Persiaran Kewajipan USJ1 19, 47620, Subang Jaya, Selangor Darul Ehsan, sehingga penyerahan kepada Tetuan Hals & Associates dan sehingga pelupusan pengauditan oleh Tetuan Hals & Associates. (refer to B3, Enc 133, pages 240-243) 23. In accordance with a court order dated 8-9-2021, the three defendants relinquished control and handed over the JMB’s office to Messrs Hals & Associates on 21-9-2021. 24. The facts clearly show that the three defendants had control over the JMB’s affairs and management office from 16-1-2016 until 21-9- 2021. 25. Messrs Hals & Associates and Messrs SC Lim, Ng & Co were unable to audit the JMB’s accounts due to the condition in which the accounts were being maintained. 26. A Verification Report was prepared, confirming that a total of RM1,010,195.61 was received in cash from the proprietors on behalf of the JMB during the period from 1-10-2019 to 30-9-2021, which included maintenance charges and rental collections. 27. In furtherance of all the above, the three defendants entered into contracts with the 4th defendant on behalf of the JMB. The plaintiff settled the matter with the 4th defendant for RM325,000.00 before this court. 28. The 1st defendant denies all allegations made by the plaintiff. According to the 1st defendant, all actions undertaken by himself and the other two defendants are in accordance with the relevant laws and court orders. 29. The 1st defendant also denies any fraudulent intent or conspiracy when contracts were entered into with the 4th defendant on behalf of the JMB. 30. The 2nd and 3rd defendants deny the allegation of misappropriation of funds by the plaintiff. They assert that all monies received by them have been adequately accounted for as salaries paid to the JMB staff and expenses related to the maintenance and management of the strata development. 31. The 2nd and 3rd defendants also raise the issue of the plaintiff's status concerning the questioning of the defendants' position and tenure in office. 32. The 2nd and 3rd defendants argue that the contractual agreement between the Joint Management Body (JMB) and the 4th defendant was established on an annual basis. Given that a consent judgment has been entered into between the plaintiff and the 4th defendant, this court is functus officio and consequently lacks jurisdiction to further adjudicate the matter. 33. Issues to be Tried Whether the 1st to 3rd defendants are jointly and severally liable for the sum of RM1,010,195.61, being cash collected by the JMB for the period from 1-10-2019 to 30-9-2021? 34. Whether the 1st to 3rd defendants had legal capacity and/or authority to represent and act on behalf of the JMB for the period from 1-10- 2019 to 30-9-2021? 35. Whether the 1st to 3rd defendants are liable for damages for entering into contracts with the 4th defendant to bind the JMB for the period from 1-10-2019 to 30-9-2021? 36. Decision of this Court Addressing the first issue, the 1st defendant contends that the plaintiff has failed to establish that the 1st defendant had committed any act of dishonesty or breach of trust in respect of the monies collected. 37. The 1st defendant also contends that there is no documentary proof to substantiate that the 1st defendant personally received, controlled, or misappropriated the funds collected. Moreover, the oral testimonies of PW1 and PW3 lack credibility; PW1’s testimony was marred by hearsay, and PW3 stated that she was unaware of any misappropriation of funds. 38. The 1st defendant also contends that the Verification Report only confirms the total amount of cash collected and does not verify the identity of the person who received, handled, or used the accumulated funds. 39. Regarding the 2nd and 3rd defendants, they argued that the plaintiff had failed to prove the alleged misappropriation of funds. They submitted a print-out from the CSS system showing payments for salaries and utilities. Consequently, they have maintained full transparency concerning all cash collections, including those credited to their own accounts. They also assert that the computation period should be until 1-9-2021. 40. The 2nd and 3rd defendants assert that they represent the Joint Management Body (JMB) responsible for overseeing USJ 19 City Mall & Rhythm Avenue until they are removed by the plaintiff through court orders granting an interim injunction. 41. The 2nd and 3rd defendants also challenged the plaintiff’s locus standi to claim these funds. 42. Regarding the issue of the plaintiff’s locus standi, this court is aware of the period before 7-11-2020, which is prior to the plaintiff’s first AGM, and the period after 7-11-2020. The 2nd and 3rd defendants argued that the plaintiff cannot claim damages for losses incurred before 7-11-2020. 43. Section 27 of the Strata Management Act 2013 states that transfers all of the assets and liabilities of the JMB to the plaintiff within one month of the first AGM. Therefore, the defendants’ argument that the plaintiff lacks locus standi is untenable and fundamentally misguided. In fact, Section 28(2) of the Strata Management Act 2013 empowers the plaintiff with the right to act. 44. The plaintiff has proved before this court that a sum of RM1,010,195.61 was collected during the period from 1-10-2019 to 30-9-2021. 45. All the cash collected was kept in the safe by the clerks on duty, and the defendants removed this cash on the pretext that it was used for the JMB. 46. I observed that no evidence was submitted to this court regarding the utilisation of the sum RM1,010,195.61 over two years. The Court noted this lack of evidence with dismay. Furthermore, no service provider or staff member was summoned to testify in this matter. 47. It is the defendants' pleaded case that the cash collected can be accounted for. The 1st and 3rd defendants' defence is as follows: “Paragraph 113A - Further, in response to paragraph 65 of the statement of claim that the 1st and 3rd defendant wish to state that any cash collected from the owners are properly and diligently accounted for and recorded by the JMC as a duty imposed on them under the Strata Management Act 2013. (Bundle A, pp103). 48. The 2nd defendant’s defence is as follows: “…………. Selagi Badan Pengurusan Bersama tersebut telah menggunakan wang yang dikutip untuk tujuan-tujuan yang dibenarkan oleh Akta Pengurusan Strata 2013 dan disokong oleh invois-invois serta resit-resit rasmi, tidak terdapat sebarang penyalahgunaan dan/atau penyelewengan oleh defendan kedua.” (Bundle A, pp122) “Defendan kedua akan membekalkan akaun-akaun terperinci menunjukkan penggunaan wang yang dikutip dan Mahkamah yang mulia ini akan mengetahui bahawa penggunaan wang oleh Badan Pengurusan Bersama adalah patut, benar dan munasabah.” (Bundle A, pp124) 49. The fact remains that the defendants failed to produce detailed accounts, including invoices and receipts, as they claimed to verify how the cash collected, amounting to RM1,010,195.61, was used. It is important to note that the independent auditor has examined all documentation and the CSS online system. 50. The independent auditor’s verification report also confirmed that no cash collected from proprietors was deposited into the JMB bank accounts. This is a clear violation of Section 23(1), (2), and 36 of the Strata Management Act 2013. 51. The defendants, including the JMB, are injuncted parties by virtue of a court order dated 12-11-2019, and they are not authorised to handle any cash belonging to the JMB without prior leave of the court. 52. Clear, uncontested documentation further proved that the defendants misappropriated the funds as follows: 52.1 The the sum of RM36,300.00 received from YTL as rental payment for the period from March to August 2021 was deposited into the 2nd defendant’s personal CIMB Bank account. (Refer to Bundle 3, pages 3-9; Bundle 6, page 57). Furthermore, he failed to comply with a Notice to Produce issued against him, which required him to produce his CIMB Bank statements for the period from 1-10-2019 to 30- 9-2021, during court proceedings. This failure provides grounds for the court to invoke Section 114(g) of the Evidence Act 1950 to draw an adverse inference against the 2nd defendant for his failure to produce bank statements that would have demonstrated that the funds belonging to the JMB were held in his bank accounts. The 1st defendant confirmed his awareness that the monies belonging to the JMB were held in the 2nd defendant’s account. 52.2 A payment voucher dated 18-9-2020 was prepared and signed by the 1st and 2nd defendants, authorising the payment for a fixed deposit placement. However, the specified amount was deposited directly into the 2nd defendant’s personal CIMB bank account No. 7016688885. It is essential to note that the injunction order dated 12-11-2019 did not prohibit any funds from being deposited into or placed in fixed deposits. This constitutes a violation of the injunction order dated 11-12- 2019. 53. The obstruction prevented the auditing of the JMB’s accounts by failing to provide essential financial records. As a result, two independent audit firms concluded that the accounts could not be audited due to significant discrepancies and insufficient supporting documentation. Messrs Hals & Associates stated that the accounts could not be audited owing to unexplained balances and the defendants' lack of cooperation, as documented in an email dated 3-2- 2023. Additionally, the second audit firm, Messrs SC Lim, Ng & Co, resigned due to inconsistencies between the accounts and supporting documents, which contained numerous unexplained discrepancies. This situation clearly breaches Section 27 of the Strata Management Act 2013. 54. The JMB held its last Annual General Meeting on 16-1-2016. It is important to emphasise that, in accordance with the Strata Management Act 2013 and its related regulations, the JMB was legally required to conduct an Annual General Meeting to approve the annual budget and authorise any expenses incurred. The defendants had breached Regulation 34 of the Strata Management (Maintenance and Management) Regulations 2015. 55. It is also unlawful and unauthorised for the defendants to handle funds for expenditure without prior approval from the AGM. The law prohibited the defendants from collecting or using funds for the benefit of the JMB without convening a proper Annual General Meeting (AGM) after its expiry. 56. This Court also finds as a fact that the defendants failed to transfer the assets and liabilities of the JMB to the plaintiff on 6-12-2020, and also did not submit their audited accounts within three months by 6- 2-2021 to the plaintiff. 57. The defendants ceased to be members of the management committee of the JMB on 15-1-2019. The other five elected proprietors of the Management Committee did not resume their roles as committee members when their terms expired on 15-1- 2019, in accordance with the statutory requirements of the Strata Management Act 2013. The defendants' refusal to relinquish their posts only heightens suspicion and tarnishes their intentions, which is further worsened by their lack of accountability for the missing funds that have accumulated. 58. The only conclusion the court can reach from the details mentioned is that the defendants, both jointly and individually, misappropriated the sum of RM1,010,195.61. The principle established in the Federal Court case of U Television Sdn Bhd v Comintel Sdn Bhd [2017] 10 CLJ 580 is duly referenced. 59. Moving on to the second issue, the 1st defendant argued that he was elected as Chairman of the JMB on 16-1-2016. The defendants acted based on a court order that placed them under interim management while civil suits were pending. Their position is that no court order states they lack the legal authority to present themselves as Chairman, Treasurer, and Secretary of the JMB. 60. It is also the 1st defendant’s argument that any technical irregularity regarding non-compliance with existing statutory requirements cannot invalidate the roles and functions of the defendants. 61. In response to the second issue, the 2nd and 3rd defendants contended the following: 61.1 A court order dated 18-3-2016 mandated two teams to prepare audited accounts, which were subsequently to be consolidated. Following this, an Annual General Meeting (AGM) or Extraordinary General Meeting (EGM) was to be convened. However, the accounts were not successfully prepared, and the AGM could not be held. Consequently, the defendants diligently managed the strata development administration. 61.2 The inaugural Annual General Meeting was held on 7-11-2020. As a result, the defendants were responsible for the administration of strata development from 1-10-2019 until 7-11- 2020. Given the statutory requirement that the Joint Management Committee (JMC) must consist of at least three members, the defendants continued in office "as someone has to manage the place." It was essential for the defendants to act in the best interests of the proprietors, as they held de facto authority under the circumstances. 61.3 It is alleged that the 1st plaintiff lacks the locus standi to bring this suit against the defendants, as it was not incorporated during the relevant period. The individual owners of the strata development are considered the proper parties authorised to initiate legal proceedings against the defendants. 62. The 1st defendant’s argument relies solely on a court order dated 26-11-2019. The said court order states as follows: “(1) Satu perintah injunksi interim terhadap defendan pertama untuk mengisukan Notis untuk memanggil AGM ke-5 dalam masa 7 hari dari tarikh perintah Mahkamah ini kepada kesemua pemilik-pemilik ditandatangani oleh Rimbun Corporate Advisory Sdn Bhd (Pelikuidasi mewakili Pemaju) untuk mengadakan AGM ke-5 bagi Defendan Pertama; (2) Satu perintah bahawa kesemua pemilik-pemilik dalam pembangunan berstrata tersebut layak menghadiri dan mengundi dalam AGM ke-5; dan (3) Satu perintah injunksi interim terhadap Defendan ke-2 dan Defendan ke-4 samada melalui dirinya sendiri, ejen-ejennya, orang-orang gajinya termasuk pengurus harta mereka atau sebaliknya daripada menghalang AGM ke-5 diadakan pada tarikh yang dinyatakan dalam Notis AGM ke-5 tersebut. (Bundle B1, pages 580-582) 63. The 1st defendant admitted during cross-examination that there was no court order authorising him as Chairman, nor for the other two defendants in the JMB beyond two years. 64. The 2nd and 3rd defendants confirmed the testimony of the 1st defendant in court, stating that there was no court order permitting them to hold office in the JMB from 1-10-2019 to 30- 9-2021. 65. It is clearly evident that the court order on which the 1st defendant relies to justify his conduct does not specify that the defendants are responsible for managing and controlling the JMB. 66. On 8-9-2021, the defendants were removed following a court-issued injunction. This underscores that they lacked proper standing to act during the disputed period. 67. At this point, I refer to the decision of the Federal Court in Innab Salil & Ors v Verve Suites Mont Kiara Management Corporation [2020] 10 CLJ 285, which states that the Strata Management Act 2013 constitutes a form of social legislation enacted for the welfare and protection of strata proprietors. Additionally, the Court of Appeal decision in Ideal City Development Sdn Bhd v Tribunal Pengurusan Strata Putrajaya & Anor [2025] 5 CLJ 20 is also cited. 68. It is uncontested in court that the defendants chose not to follow the advice of their legal representatives from Messrs Rajinder & Goh, who advised that the defendants lacked the legal authority to continue representing or act on behalf of the JMB without a court order. 69. I fully concur with the plaintiff’s position that the refusal of all three defendants to resign, because “someone had to manage the place,” is both legally and morally indefensible. 70. There is invariably no court order invalidating the plaintiff or any of its AGMS or EGMS. Therefore, the defendants' argument that the plaintiff only became effective after 7-11-2020, and that this negates their liability, is untenable and contradicts the statutory framework established as social legislation that facilitates and safeguards the interests of strata title property owners. 71. Addressing the final issue, the 1st defendant contended that he and the other defendants were managing the JMB pursuant to court orders. 72. He further argued that the claims for payment by the 4th defendant do not establish any wrongdoing on his part. 73. Regarding the 2nd and 3rd defendants, they contend that the plaintiffs entered into a consent judgment with the 4th defendant, which indicates that there is finality concerning the allegations against the defendants in relation to the 4th defendant. Consequently, the plaintiffs cannot seek reimbursement from the defendants for payments made to the 4th defendant. 74. The defendants' primary argument is that these contacts must be entered to sustain the operations of the strata development. 75. Regarding this matter, I observed the following: 75.1 These agreements were entered after the JMB bank account had been injuncted on 12-11- 2019; 75.2 There was no court order or EGM convened to secure proprietors' approval regarding the agreements entered into; 75.3 The 1st defendant was aware that his term as Chairman had long expired pursuant to the laws enacted under the Strata Management Act 2013; 75.4 The contracts were entered into for a fixed term of two years, which constitutes a direct violation of Section 21(3) of the Strata Management Act 2013 and Regulation 21 of the Strata Management (Maintenance and Management) Regulations 2015. 75.5 The amount involved was RM939,642.99, which was not supported by maintenance logs, service reports or relevant documentation. 75.6 The fact is that an injunction order dated 12-1- 2021 removed the 4th defendant. Additionally, a consent order was entered on 2-2-2024 to prevent prolonged litigation. 76. All the above facts contradict the assertion by the 1st and 3rd defendants that the outstanding amount claimed by the 4th defendant was verified and genuine. 77. Moreover, during the proceedings, the defendants failed to produce any form of competitive quotations, due diligence carried out, or approval from the JMB or proprietors before entering into the contracts. 78. Therefore, the defendants must be held liable for the settlement sum of RM325,000.00 paid to the fourth defendant by the plaintiff. Reference is made to the decision of the Federal Court in Taiping Poly (M) Sdn Bhd v Wong Fook Toh & Ors [2011] 3 CLJ 837. 79. Conclusion On the balance of probabilities, I find that the 1st to 3rd defendants are jointly and severally liable for the unauthorised collection, misuse of funds, and entering into contracts that were beyond their lawful capacity. 80. Permitting the conduct of defendants is tantamount to neglecting the function of the Strata Management Act 2013 as a safeguard that safeguards innocent proprietors in strata developments. 81. The plaintiff’s cause of action was allowed with costs. Dated: 28th October 2025 (INDRA NEHRU SAVANDIAH) Judge High Court of Malaya Shah Alam Selangor Date of Decision: 21st August 2025 Counsels: For the Plaintiffs : Sivabalan Karupiah & Goh Wan Ping Messrs Mastura Partnership For Defendant 1 : Harneshpal Singh Bhullar, Chandni Anantha Krishanan & Sophia Au May San Messrs Lui & Bhullar For Defendant 2 & 3 : Patrick Samuel Sebastian The Law Office of Patrick Samuel