AMBER COURT MANAGEMENT CORPORATION v Lonely Planet Inn Sdn. Bhd. (W-02(NCvC)(W)-1499-08/2024)

ONG PHAIK KOOI (Mendakwa sebagai seorang wasi & wakil kepada si mati, LAW NAM POH)

AMBER GREEN SDN. BHD. ... RESPONDENTS CORAM ISMAIL BIN BRAHIM, JCA EVROL MARIETTE PETERS, JCA ALIZA BINTI SULAIMAN, J GROUNDS OF JUDGMENT 10/03/2026 10:13:44 Kand. 167 10 February 2026 ------------------------------------------------------------------------------------------------------------------------------------- 2 Introduction [1] This appeal arose from the decision of the learned High Court Judge who allowed the Respondents’ claim and ordered the Appellant to pay MYR1,909,920 to the 10th Respondent for the supply of treated water, and who further dismissed the Appellant’s counterclaim which alleged conspiracy and breach of fiduciary duties by the First to Ninth Respondents. The factual background [2] The dispute between the Appellant and Respondents (“the Parties”) concerned the management and payment for treated water supply to the Amber Court Condominium in Genting Highlands, Pahang. [3] The First to Ninth Respondents are owners of individual units at Amber Court Condominium. The Appellant is the statutory management body, namely the Management Corporation (“MC”) for Amber Court Condominium, which was established in January 2013

This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette, and the Minister may appoint different dates-

for the coming into operation of this Act in different parts of

for the coming into operation of different provisions of this Act; or

for the coming into operation of different provisions of this Act in different parts of Peninsular Malaysia and the Federal Territories of Putrajaya and Labuan. [Emphasis added.] [32] In our view, the Appellant had failed to adduce any evidence whatsoever to discharge this burden. It did not produce the relevant gazette notification, legislative provision, or any official document demonstrating the operative date or territorial application of the WSIA. In the absence of such foundational proof, the defence of illegality was not merely weak, it was legally unsustainable, and the learned High Court Judge was fully entitled to reject it on that basis alone. [33] Although not obliged to do so, the Respondents further reinforced the correctness of this conclusion by voluntarily adducing affirmative evidence that unequivocally demonstrated the Appellant had failed to meet its burden. This evidence included official reports from SPAN and extracts from Hansard (the official parliamentary record). 10 February 2026 ------------------------------------------------------------------------------------------------------------------------------------- 11 These documents confirmed, as a matter of public record, that the State of Pahang had not migrated to the WSIA framework until 2020, which was well after the events in question. [34] Such evidence did not create a new basis for the decision but rather served to independently verify and fortify a conclusion that was already compelled by the Appellant's own failure of proof. In essence, the Respondents' evidence merely underscored what the Appellant's omission had already made inevitable: the defence of illegality had no foundation in fact or law. [35] The Appellant’s case, therefore, failed at the threshold, having never established the statutory framework central to its defence. Consequently, the amount claimed by the Respondents was lawful, and that the Appellant was contractually bound to make such payment. [36] In the interest of completeness, however, it was our view that even if a SPAN license was required, its absence would not automatically render the Water Supply Agreement void. This position is supported by the Federal Court case of PJD Regency Sdn Bhd v Tribunal

Tuntutan Pembeli Rumah & Anor and Other Appeals [2021] 2 CLJ In the words of Tengku Maimun Tuan Mat CJ: [54] The law on illegality and contracts is generally provided for in the Contracts Act 1950. Section 10(1) stipulates that all agreements are contracts if they are, inter alia, made with lawful consideration. Section 24 in turn provides, among other grounds, that the consideration or object of an agreement is unlawful if (a) it is forbidden by law; or (b) it is of such a nature that, if permitted, it would defeat any law. Apart from the Contracts Act 1950, the law on illegality in contracts is further supplemented by common law (both Malaysian and English). 10 February 2026 ------------------------------------------------------------------------------------------------------------------------------------- 12 [55] Looking at the transactions herein holistically, we do not consider the agreements to be ex facie illegal as they are based on statutory contracts. There is no question of the scheduled contracts in this case being forbidden by law or that they are of such a nature that, if permitted, would defeat any law because they are themselves prescribed by law. What we have here is an instance whereby one party to the contracts namely the developers, have committed an illegal act in securing the contracts. Thus, it is not the contracts per se that are illegal rather it is their performance which has violated the strict terms of reg. 11(2) of the Housing Developers (Control and Licensing) Regulations 1989 and the schedules to the scheduled contracts. [Emphasis added.] [37] In the present case, the Water Supply Agreement was not ex facie illegal. At most, any alleged invalidity arose from the manner in which the agreement was performed, rather than from the agreement itself. [38] Consequently, the Court retained the power to determine a reasonable rate for the water supplied, and may apply the principle of restitution under section 66 of the Contracts Act, which provides: Section 66 – Obligation of person who has received advantage under void agreement, or contract that becomes void When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under the agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it. [Emphasis added.] [39] Applying this provision, even if the Water Supply Agreement between the Appellant and the 10th Respondent was deemed void, the Appellant would nevertheless be obliged to restore the benefit 10 February 2026 ------------------------------------------------------------------------------------------------------------------------------------- 13 received, that is the water supplied, or to pay compensation for it. The question for the Court would, therefore, be one of quantum, namely, what constitutes reasonable remuneration for the water actually supplied and consumed. [40] In assessing such reasonable remuneration, the Court may have regard to the following facts, which are undisputed, namely, that no objection was raised by the unit owners from 2010 to 2018; partial payments were in fact made by the Appellant to the 10th Respondent in 2014, and that monthly billing records consistently reflected a monthly rate of MYR30 per unit, applied uniformly across all units. [41] In these circumstances, the monthly rate of MYR30 per unit may itself constitute cogent evidence of a reasonable market rate, given that it was the historical rate accepted without protest for approximately eight years, was aligned with the rate previously charged by the earlier service provider, and remained unchallenged until 2018. [42] Accordingly, even on the alternative assumption that the Water Supply Agreement was unenforceable for want of licence, the 10th Respondent would nonetheless be entitled to restitution on a quantum meruit basis. Such restitution would properly be assessed by reference to the established and undisputed monthly rate of RM30 per unit. In the circumstances, there is no basis, contrary to the Appellant’s suggestion, to undertake any recalculation of the sum due to the 10th Respondent. 10 February 2026 ------------------------------------------------------------------------------------------------------------------------------------- 14 Whether the learned High Court Judge had erred in allowing the set-off [43] The Appellant contended that the First to Ninth Respondents, who are individual unit proprietors, were in arrears of maintenance charges and sinking fund contributions. [44] Hence, the set-off referred to by the learned High Court Judge, that the First to Ninth Respondents were entitled to deduct or set off the water charges due from the Appellant against the maintenance charges and sinking fund contributions payable by them to the Appellant. [45] The learned High Court Judge allowed these mutual obligations to be set off against each other. [46] The Appellant’s position was that the set-off should not have been allowed. More specifically, the Appellant argued that the alleged liability for water charges was not a proper basis for set-off against the Respondents’ obligation to pay maintenance charges and sinking fund contributions; and that any set-off must be statutorily grounded; and that there was no provision under the Strata Management Act 2013 (“Strata Management Act”) permitting such a set-off exercise. [47] Accordingly, the Appellant contended that the learned High Court Judge had erred in permitting the Respondents to reduce or extinguish their statutory debt for maintenance and sinking fund fees by relying on a separate and disputed claim relating to water charges. 10 February 2026 ------------------------------------------------------------------------------------------------------------------------------------- 15 [48] At the outset, it bears reiterating that equitable set-off is a doctrine developed by the courts of equity which allows a litigant to set off a cross-claim against his opponent’s claim, notwithstanding that the strict requirements of a legal set-off are not met. Equitable set-off is generally raised as a defence rather than as an independent cause of action. Its function is to reduce or extinguish the litigant’s claim to the extent of the opponent’s cross-claim. The Court’s intervention is discretionary, guided by equitable considerations and the overarching question of whether it would be unconscionable or unjust to permit enforcement of one claim without set-off. [49] The doctrine of equitable set-off is designed to prevent injustice by enabling the Court to look beyond technical rules and to consider whether, in fairness, a claim should be enforced without regard to the opposing claim. [50] The essential requirement for equitable set-off is that the competing claims must be so closely connected that it would be unjust or inequitable to allow one party to enforce its claim without recognising the other. This close connection usually arises where both claims stem from the same transaction, contract, or relationship, or where one claim directly impeaches or undermines the other. [51] Unlike legal set-off, equitable set-off is not confined to liquidated sums or debts that are presently due and ascertainable. It may apply even where one or both claims are unliquidated or where the precise quantum has yet to be determined. What matters is not the form of the claims, but the substantive justice of taking them into account together. 10 February 2026 ------------------------------------------------------------------------------------------------------------------------------------- 16 [52] We have perused the Strata Management Act, and found that it is silent on whether a proprietor or management corporation may set off maintenance fees against other sums owed to them by the other party. This silence leaves room for equitable principles, such as equitable set-off, to apply in the present case. [53] In this regard, we drew guidance from the Federal Court case of Permodalan Plantations Sdn Bhd v Rachuta Sdn Bhd [1985] 1 CLJ 62, which held that in Malaysia an equitable set-off is recognised where there is no statutory equivalent. [54] The set-off, in the present case, was justified by the close factual nexus between the water charges and the maintenance fees. Both obligations arose from the same management relationship between the same parties and related to the same period, namely between 2010 and 2018. [55] During this time, the Appellant acted as the collecting agent for water charges while, at the same time, demanding maintenance fees from the proprietors. Allowing the set-off also avoided duplicative litigation, as the Appellant had previously commenced, and subsequently withdrawn, a separate Sessions Court action in respect of the same maintenance arrears. This prevented the risk of double recovery and promoted judicial economy. [56] Crucially, the set-off did not contravene the Strata Management Act, which regulates the collection and application of maintenance funds but does not preclude the Court from invoking equitable principles to resolve claims that are factually and commercially intertwined. 10 February 2026 ------------------------------------------------------------------------------------------------------------------------------------- 17 [57] As such, we were of the view that the learned High Court Judge was not plainly wrong when he allowed the set-off. Whether the learned High Court Judge had erred in dismissing the Counterclaim [58] The Appellant's contention was that the Counterclaim had not been judicially considered by the learned High Court Judge and as such, there was no basis for dismissing it. [59] However, a perusal of the evidence clearly showed that the learned High Court Judge had not ignored or overlooked the Counterclaim, as the Appellant has alleged. Rather, the learned High Court Judge made a specific and express ruling on it in the sealed Order dated 23 August 2024, which states unequivocally: "Tuntutan Balas Yang Dipinda Defendan adalah ditolak." This formal dismissal left no room for ambiguity regarding the Court's final determination on that issue. [60] Paragraphs 32 to 34 of the Grounds of Judgment of the learned High Court Judge explicitly referred to the Counterclaim, explaining that while the Claim had been proved, the Counterclaim was dismissed with costs. It was undeniable that the Claim and Counterclaim were legally and factually inverse positions. By allowing the Claim for payment under the Water Supply Agreement, the learned High Court Judge had implicitly, and later explicitly, rejected the foundational premise of the counterclaim, that the Water Supply Agreement was part of an unlawful scheme. [61] We were of the view that the Respondents had correctly pointed out that the burden of proof of the Counterclaim rested entirely with the Appellant. The Appellant’s failure to adduce credible and cogent 10 February 2026 ------------------------------------------------------------------------------------------------------------------------------------- 18 evidence in support of its grave allegations of conspiracy and concealment was fatal to its case. Allegations of this nature, by their very seriousness, demand a correspondingly high degree of evidential support. [62] However, after perusal of the relevant documents and notes of proceedings, it was our view that these allegations rested largely on conjecture, suspicion, and the witness’s personal belief, rather than on contemporaneous documents, objective facts, or reliable corroborative testimony. No documentary trail, independent verification, or consistent narrative was produced to substantiate the alleged wrongdoing. [63] The dismissal of the Counterclaim was, therefore, not the result of any omission or oversight by the learned High Court Judge, but a necessary and inevitable consequence of the Appellant’s failure to prove its case on the balance of probabilities. [64] The Appellant cannot now, on appeal, manufacture confusion or allege judicial oversight where the learned High Court Judge had made a clear decision against it. The Respondents, were, therefore correct in asserting that the Counterclaim was duly considered and rightfully dismissed, and that the Appellant’s ground of appeal on this point was without merit. Conclusion [65] In the upshot, based on the aforesaid reasons, and after judicious consideration of all the evidence before this Court, submissions of both Parties, and Grounds of Judgment of the learned High Court Judge, we unanimously dismissed this Appeal with costs. 10 February 2026 ------------------------------------------------------------------------------------------------------------------------------------- 19 Dated: 10 February 2026 ………….…SIGNED…………… (EVROL MARIETTE PETERS) Judge of the Court of Appeal Malaysia Counsel: For the Appellant – Selvarajah Sivalingam, Selwyn Das, Bernard Liew Kin Jong, Hoon Qian Ying, Lee Wan Wei, and James Lopez a/l Marshall Lopez; Messrs Kin Jong & Co For the Respondents – Alvin John, Amanda John, Sharan Chandran, Isaac Pereira, and Tan Li Shern; Messrs Alvin John & Partners