Badan Pengurusan Bersama Arte Plus @ Jalan Ampang v 1. ) Ampang Property Sdn. Bhd. (WA-24NCvC-4892-12/2024)

AMPANG PROPERTY SDN BHD [COMPANY NO.:201101045319 (973439-A)]

N JAYA SDN BHD [COMPANY NO.:200001000103(502708-K)] ... DEFENDANTS

In the gleaming high-rises of modern Klang Valley, the transition from a developer's control to a homeowner self-governance is meant to be a precise, almost mechanical procedure. But for the joint management body of Arte Plus @ Jalan Ampang, this handover was anything but smooth. What should have been a straightforward transfer of control and funds instead descended into a protracted legal standoff, turning the corridors of the condominium into a battlefield of contested identities and withheld millions.

This matter comes before the Court for the final determination of the plaintiff's originating summons filed on 9 December 2024. The plaintiff is the joint management body ("JMB") established in respect of a stratified development known as Arte Plus @ Jalan Ampang. By the summons, the JMB seeks mandatory relief compelling the defendants, as developers within the meaning of the Strata Management Act 2013 ("Act 757"), to:

transfer all balances standing to the credit of the maintenance account and the sinking fund accounts;

(ii) deliver a duly executed Form 4; and

(iii) provide audited accounts in accordance with the statutory scheme.

Although the substantive relief sought is, in form, straightforward and grounded squarely upon section 15 of Act 757, the procedural path of this action has been shaped by two interlocutory challenges, each of which required careful adjudication and which now form the essential juridical foundation of the present determination.

The first defendant applied to strike out the proceedings, contending that it was not the developer of the subject property and therefore bore no statutory obligation under Act 757. That application was dismissed by this Court on 24 November 2025. The second defendant, for its part, sought an order converting the originating summons into a writ action on the footing that substantial disputes of fact had arisen, principally by reason of a counterclaim advanced for alleged transit losses. That application was likewise dismissed by this Court on 9 January 2026.

It is both necessary and appropriate, before turning to the merits, to recapitulate in measured terms the conclusions reached in those interlocutory decisions, for they delimit the issues now properly open for determination.

In dismissing the first defendant's striking out application, I held that the question whether an entity falls within the statutory definition of developer under section 2 of Act 757 is not resolved merely by reference to corporate labels or internal arrangements. The inquiry is one of substance. Having examined the contractual matrix, the first defendant's conduct in relation to the development, and its administrative and financial roles, I concluded that it fell squarely within the statutory definition.

The second interlocutory application concerned the procedural propriety of proceeding by way of originating summons. The second defendant contended that its counterclaim for alleged transit losses generated substantial disputes of fact unsuitable for summary determination on affidavit evidence, and that the matter ought therefore to be converted to a writ action.

In my earlier ruling, I held that the plaintiff's claim under section 15 of Act 757 is, at its core, one of statutory construction and statutory obligation. The duty imposed upon a developer to transfer moneys, documents and accounts upon the establishment of a JMB is defined by the statute. The essential question is whether that duty has been discharged in accordance with the statutory command. Such a question is, in principle, apt for determination on affidavit evidence.

More fundamentally, I concluded that the second defendant's counterclaim for alleged transit losses, said to arise post developer's management period, was procedurally incompatible with the originating summons process. It sought affirmative relief founded upon disputed factual assertions extending beyond the statutory handover mechanism contemplated by section 15. In the exercise of the Court's inherent jurisdiction to prevent procedural distortion, I struck out the counterclaim, with liberty to the second defendant to pursue any such claim by way of a fresh writ action.

With the counterclaim removed from the procedural landscape, and with the defendants properly characterised as developers within the meaning of Act 757, the ambit of the present inquiry is correspondingly confined.

Against that background, the questions which now fall for determination may be stated with precision:

whether the defendants have breached their statutory duty under section 15 of Act 757 to transfer all balances in the maintenance and sinking fund accounts, to deliver a duly executed Form 4, and to provide audited accounts;

(ii) whether any deductions for alleged outstanding sums, whether described as transit losses or otherwise, are legally permissible within the statutory scheme; and

(iii) what consequential relief should properly be granted. Background Facts

The plaintiff was established on 28 May 2022 pursuant to Act 757. By virtue of section 7(2) of the Act, the developer's management period ("the DMP"), namely, the period during which the developer was responsible for the maintenance and management of the condominium, expired one month later, on 28 June 2022.

Section 7(2) of Act 757 provides:

In this Part, "developer's management period" means the period commencing from the date of deliver of vacant possession of a parcel to a purchaser by the developer until one month after the establishment of the joint management body or such other time as may be extended by the Commissioner.

The statutory consequence of that date is of central importance. Upon the establishment of the JMB, and in any event before the expiry of the DMP, the developer is placed under a positive obligation by section 15 of Act 757 to transfer to the JMB all balances standing to the credit of the maintenance and sinking fund accounts. The plaintiff's case is that this obligation crystallised, unequivocally and without qualification, on 28 June 2022. It is alleged that the defendants have since failed, refused and/or neglected to effect the transfer of the entirety of the sums held in those accounts ("the Accounts"), thereby acting in breach of statutory duty.

The factual matrix reveals that the second defendant is the electricity supplier to the condominium comprised in Arte Plus @ Jalan Ampang. Prior to the hearing of this originating summons, the second defendant asserted that a sum of RM467,661.12 was outstanding in respect of electricity charges and alleged transit losses. It contended that those sums ought to be deducted from the Accounts before any transfer to the plaintiff is affected.

However, as noted above, the counterclaim underpinning this assertion was struck out by this Court in the ruling delivered on 9 January 2026, with liberty to file a fresh writ action. What remains, therefore, is not an extant cross-claim properly before this Court, but a submission that the statutory transfer obligation is subject to a right of deduction or set-off.

The plaintiff's position is that the defendants hold the monies in the Accounts upon a statutory trust for the benefit of the JMB, and that the duty to transfer under section 15 is mandatory and unconditional. In support of that proposition, reliance is placed upon the decision of the Court of Appeal in Muhamad Nazri bin Muhamad v JMB Menara Rajawali & Anor [2020] 3 MLJ 645, where it was observed: [31] A JMB is established at the first AGM of the JMB which must be convened within 12 months from the date of delivery of vacant possession of a parcel to a purchaser: s 17 of the SMA 2013. Once JMB is established, the developer is required to hand over to the JMB the monies remaining in the maintenance account and the sinking account and various others matters pursuant to s 15 of the SMA 2013. A JMB is a body corporate and it is comprised of the developer and the purchasers...” [Emphasis is mine]

It is further undisputed that certain sums belonging to the plaintiff are held in accounts opened in the name of the first defendant, specifically the RHB cash plan account. This fact is consistent with the finding in the striking out application that the first defendant exercised the financial and administrative control of a developer.

The plaintiff's case is predicated on the mandatory language of section 15(1) of Act 757. It is submitted that the defendants' statutory obligation to transfer all balance moneys in the Accounts crystallised on 28 June 2022, the date the DMP expired. The failure to do so, it is said, constitutes a breach of statutory duty.

The plaintiff further contends that any expenditure capable of being charged to the maintenance or sinking fund accounts must be expenditure properly incurred during the currency of the DMP. On its case, the alleged outstanding electricity charges and transit losses relied upon by the second defendant relate entirely to periods subsequent to 28 June 2022. As such, they cannot lawfully be deducted from the balances required to be transferred under section 15.

In that regard, the plaintiff invokes established trust principles. Where monies are held upon trust for a defined statutory purpose, the trustee cannot unilaterally appropriate them for extraneous liabilities. The trust character of the funds, as recognised in Muhamad Nazri (supra) is said to preclude any right of equitable set-off in respect of post-DMP claims.

As to the first defendant's status, the plaintiff submits that the issue has been conclusively determined in the earlier ruling. It is argued that the first defendant, having been found to fall within the statutory definition of developer by virtue of its conduct and control of the Accounts, cannot now resile from that position in the absence of fresh evidence. The existence of the RHB cash plan account in its name is said to fortify the conclusion that it bears joint and several responsibility for the transfer of the funds.

The first defendant reiterates that it is merely a project manager and not the developer. It maintains that it lacks authority to transfer funds held in the second defendant's name and that its role was confined to administrative functions undertaken on behalf of the second defendant. However, no new material has been placed before the Court capable of displacing the earlier finding that the first defendant falls within the statutory definition of a developer under section 2 of Act 757.

The second defendant, notwithstanding the striking out of its counterclaim, persists in its submission that the outstanding electricity charges ought properly to be deducted from the Accounts. It relies upon section 15(1)(a) read together with section 10(4)(c) of Act 757 to contend that electricity charges constitute expenditure properly chargeable to the maintenance account.

In support of that proposition, reliance is placed upon the decision of the Court of Appeal in AUM Capital Sdn Bhd v Menara UOA Bangsar Management Corp [2024] 3 MLJ 527, where the Court recognised that maintenance account funds may be utilised for electricity costs incurred for the common property. The second defendant submits that, as electricity is a quintessential common property expense, it is entitled to set off the alleged arrears against the sums otherwise transferable under section 15.

It is necessary at the outset to emphasise that the terrain upon which the present application falls to be decided has already been substantially defined by the Court's earlier determinations. It bears reiterating that the two interlocutory rulings were not peripheral skirmishes, they resolved foundational questions as to status and procedural propriety. The defendants cannot now reopen those matters in the guise of substantive argument.

In the striking out application determined on 24 November 2025, I held, after a functional and purposive analysis of section 2 of Act 757, that the first defendant fell within the statutory definition of developer. That conclusion was reached upon consideration of the project management agreement, the first defendant's role in convening the first annual general meeting, its control over the Accounts, and its practical assumption of management responsibilities in respect of Arte Plus @ Jalan Ampang. That finding was one of substance, not mere form. It was not provisional, nor has any fresh evidence been adduced capable of displacing it. The first defendant is therefore precluded from re-litigating the issue. The statutory duties imposed by Act 757, including the obligation under section 15 to transfer all balances of moneys, apply to it with full force.

In the conversion application decided on 9 January 2026, I struck out the second defendant's counterclaim. The rationale for that decision is crucial to the present application. I held that the counterclaim for transit losses, said to be incurred between September 2022 to December 2024, was a distinct cause of action arising after the expiry of the DMP. Allowing it to proceed within the originating summons would be procedurally unfair. Furthermore, I noted that the second defendant's reliance on the Personal Data Protection Act 2010 ("PDPA") to withhold evidence was untenable, citing sections 6(2)(e) and 45(2)(d) of the PDPA which permit disclosure for the administration of justice.

The cumulative effect of those rulings is this. The first defendant is a developer for the purposes of Act 757, and the second defendant's claim for post-DMP transit losses is not before this Court. The present inquiry must therefore proceed on that footing.

Turning to the substantive claim, section 15(1) of Act 757 is unambiguous:

Handing over by developer to the joint management body

A developer shall, before the developer's management period expires —

transfer all balances of moneys in the maintenance account and the sinking fund account, after payment of all the expenditure which have been properly charged to the accounts, to the joint management body;" [Emphasis is mine]

The language admits of no equivocation. The verb "shall" denote a mandatory obligation. The temporal requirement "before the developer's management period expires" is equally clear. The statutory command is that the transfer must occur before the DMP comes to an end. In the present case, that date was 28 June 2022. By that date, the duty had crystallised.

It follows that any failure to effect the transfer by 28 June 2022 constitutes a breach of statutory duty, unless the defendants can demonstrate that the sums retained fall within the limited qualification expressly permitted by the statute, namely, payment of all the expenditure which have been properly charged to the accounts.

The second defendant places reliance upon AUM Capital (supra) for the proposition that maintenance account funds may be utilised for electricity costs relating to common property. That proposition, stated at that level of generality, is unobjectionable. Electricity charges for common areas are quintessential maintenance expenses.

However, the present question is not whether electricity costs may in principle be charged to a maintenance account. It is whether sums said to arise after the expiry of the DMP, and forming the subject of a distinct cause of action already struck out from these proceedings, may be invoked to reduce the balance which section 15 mandates be transferred to the JMB.

In my judgment, the proper construction of section 15(1)(a) confines permissible deductions to expenditure "properly charged" prior to the expiry of the DMP. The statutory structure contemplates a clean and definitive handover. Once the JMB is established and the DMP has expired, the developer's managerial authority ceases, and the statutory duty to transfer crystallises in full.

This conclusion is reinforced by the decision in Jabar Khan @ Yasser Arafat Bin Napi v Jebcon Sdn Bhd [2021] MLJU 532 where the Court held: "[33] Under the Strata Management Act 2013, whatever moneys or collectibles or chose in action which the developer had vis-à-vis the original purchasers would, upon the formation of the joint management body, forthwith be transferred to or vested in the joint management body. Our law of strata management does not countenance a situation where, after the joint management body's takeover of the management and maintenance of the strata development, a developer could still retain any money from service charges or sinking fund, collectibles or right to claim service charges against any purchaser or assignee or beneficial owner of any strata unit in the strata development. Such money or right in respect of service charges or sinking fund, if any, would become vested in the joint management body by operation of law." [Emphasis is mine]

That passage captures with clarity the legislative intent. Upon the formation of the JMB, the residual funds vest in it by operation of law. The statutory regime does not envisage a lingering entitlement in the developer to retain or deploy those monies as security for subsequent claims.

The second defendant's position, in substance, seeks to achieve indirectly what it may no longer pursue directly within these proceedings, that is to say, to leverage the maintenance and sinking fund balances as a form of self-help set-off against an alleged post-DMP indebtedness. That approach is inconsistent with both the text and the policy of section 15.

The funds in question are impressed with a statutory trust for the benefit of the JMB and the parcel proprietors. They are not fungible assets available to satisfy unrelated claims. If the second defendant maintains that it has a viable cause of action for transit losses incurred after June 2022, the appropriate course, precisely the route I preserved for the second defendant when I struck out its counterclaim, is to pursue that claim in a separate writ action. It cannot unilaterally appropriate or withhold trust monies pending such determination.

Accordingly, I find that the defendants were under a mandatory statutory obligation to transfer all balances standing to the credit of the maintenance and sinking fund accounts as at 28 June 2022, subject only to expenditure properly charged prior to that date. The reliance on alleged post-DMP liabilities affords no lawful justification for non-compliance.

I turn next to the refusal to deliver Form 4. The defendants' position is that they were justified in withholding the document because the plaintiff declined to execute it in a form incorporating the disputed deductions. In my judgment, that stance is fundamentally misconceived.

Regulation 11 of the Strata Management (Maintenance and Management) Regulations 2015 imposes a mandatory obligation upon the developer to complete and furnish Form 4 upon handover:

Handing over by developer to joint management body. The handing over by the developer to the joint management body under subsection 15(1) of the Act shall be with Form 4

The handover, in statutory contemplation, occurred upon the expiry of the developer's management period on 28 June 2022. The regulatory duty is not expressed to be contingent upon consensus as to disputed liabilities. It is a component of the statutory transition mechanism.

The insertion of contested deductions into Form 4, coupled with a refusal to deliver the document unless the plaintiff acceded to them, was in substance an attempt to condition or delay the statutory handover. As I observed in the grounds delivered in the conversion application, the defendants cannot be permitted to approbate and reprobate, to insist upon the procedural propriety of their position in one breath, yet seek to leverage the statutory documentation in another. The statutory regime does not contemplate a negotiated handover; it prescribes a mandatory one.

The obligation to furnish audited accounts stands on similar footing. Transparency as to the financial position of the maintenance and sinking fund accounts is intrinsic to the statutory scheme. A handover without accounts would be illusory.

In Ideal City Development Sdn Bhd v Tribunal Pengurusan Strata Putrajaya, Wilayah Persekutuan & Anor [2024] MLJU 3408, the Court of Appeal underscored the mandatory nature of compliance with section 15 and the prescribed Form 4, emphasising that the statutory duties imposed upon a developer at the point of transition are not discretionary. The principle emerging from that authority is that the developer must effect a complete and proper handover, both in substance and in form. The Court held: [66] Regard must accordingly be had to section 15 of the SMA 2013, pursuant to which, when read together with Form 4 of Regulation 11, Strata Management (Maintenance and Management) Regulation 2015, in fact compel a developer to furnish all the documents identified therein including all bank statements and approved plans to the JMB, non-compliance with which is a criminal offence under section 15(4). But section 15 does not mention, and we say neither does it envisage, such furnishing of documents could be made to any individual parcel owners."

The plaintiff, as the lawful successor in management, is entitled to a full and accurate account of the monies transferred. That entitlement is not ancillary, it is integral to the statutory vesting of responsibility. I therefore find that the defendants are under a continuing obligation to deliver Form 4 duly executed and to furnish audited accounts reflecting the position as at the date of transfer.

The plaintiff claims interest at the rate of 5% per annum from 28 June 2022. From that date, the defendants were in breach of a time-bound statutory obligation. The monies in question were impressed with a statutory trust and ought to have been transferred before the expiry of the DMP.

Where trust monies are wrongfully retained, equity proceeds upon the footing that the beneficiary is entitled to compensation for the loss of use of those funds. The award of interest in such circumstances is not punitive, it is restitutive. It reflects the time value of money and the deprivation suffered.

In the circumstances of this case, I am satisfied that interest at 5% per annum is fair, moderate, and just. It accords with commercial reality and does no more than compensate the plaintiff for the period during which it was wrongfully kept out of funds which, by operation of law, had vested in it.

The saga of Arte Plus @ Jalan Ampang serves as a potent reminder of the delicate balance of power in strata living. The law governing the handover of management is not a mere set of administrative suggestions, it is a rigid framework designed to protect the collective interest of homeowners against the lingering hold of developers.

For all the foregoing reasons, the plaintiff is entitled to the reliefs sought. The defendants' statutory obligation to transfer the funds was crystal clear and time-bound. Their attempt to withhold funds on the basis of a counterclaim that has been struck out, or on the basis of a denial of developer status, in the case of the first defendant, fails entirely. The time for negotiation has long passed, the time for compliance has arrived.

Accordingly, I allow the plaintiff's originating summons and make the following orders:

The defendants are directed to transfer all balances of moneys in the maintenance and sinking fund accounts, including all funds held in the RHB cash plan account, to the plaintiff with immediate effect.

(ii) The defendants are directed to deliver to the plaintiff the Form 4 duly signed by their representatives with immediate effect.

(iii) The defendants are directed to deliver to the plaintiff the audited accounts for the maintenance and sinking fund accounts as at the date of the transfer within twenty-eight days from the date of this order.

(iv) The defendants shall jointly and severally pay the plaintiff interest at the rate of 5% per annum on the amount transferred, calculated from 28 June 2022 until the date of full and final settlement.

The defendants shall pay the plaintiff costs of this originating summons fixed in the sum of RM15,000, subject to allocator. Dated the $ 2 7^{th} $ day of March 2026 ... SGN ... MOH KOK WAI JUDICIAL COMMISSIONER OF THE HIGH COURT HIGH COURT (CIVIL DIVISION NCvC14) HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF MALAYSIA Counsel for the Plaintiff:Philip Ryan Mathew Messrs Philip MathewCounsel for the Defendants:Masitah binti Alias and Noreen binti