Bonifac Lobo A/L Robert Lobo v Dr. Zubaidah Binti Ibrahim & 9 Lagi (W-02(NCVC)(A)-240-02/2016)

JMB SILVERPARK RESORT (By Order of Court dated 26.10.2015)

CHENG TIN KEW (STEWARD) (I.C. NO.: 600903-10-6471) (By Order of Court dated 26.10.2015) ... RESPONDENTS In the Matter of JMB SILVERPARK RESORT; And In the Matter of JMC SILVERPARK RESORT; And In the Matter of Sections 4,6,7,10 and 11 of the Building and Joint Property Act (Maintenance and Management) 2007; And In the Matter paragraph 2(2) in the First Schedule Building and Joint Property Act (Maintenance and Management) 2007; And In the Matter of Sections 37,38,42, 43 and 153 of the Strata Management Act 2013 And In the Matter of Order 7 Rule 3(1), Order 15 Rule 16 and Order 28 of the Rules of Court 2012 And In the Matter of Section 41 Specific Relief Act 1950; And In the Matter of members of the committee appointed as a Committee of the Joint Management in accordance with an Extraordinary Meeting ("EGM") dated 13.6.2015 Between

Dr. Zubaidah Binti Ibrahim (I.C. No.: 520915-06-5240)

Supramaniam A/L Sinnasamy (I.C. No.: 510824-10-5527)

Choo Chee Choy (I.C. No.:490930-08-6125)

Festus A/L Christ Dhas (I.C. No.: 510315-71-5157)

Kong Khai Yeng (I.C. No.:490620-08-5653)

Julie Hoh Kwai Ngor (I.C. No.: 500305-10-5016)

Hiew Kem Chon (I.C. No.: 530626-07-5193)

Teoh Guek Yean (I.C. No.: 511026-01-5492) ... Plaintiffs And

Bonifac Lobo A/L Robert Lobo

JMB Silverpark Resort (By order of Court dated 26.10.2015)

Cheng Tin Kew (Steward) (I.C. No.: 600903-10-6471) (By Order of Court dated 26.10.2015) ... Defendants] CORAM: HAMID SULTAN BIN ABU BACKER, JCA BADARIAH BINTI SAHAMID, JCA MARY LIM THIAM SUAN, JCA JUDGMENT OF THE COURT [1] This appeal concerns a narrow point of interpretation of specific legislation, namely the Building and Common Property (Maintenance and Management) Act 2007 [Act 663] ["the 2007 Act"] and the Strata Management Act 2013 [Act 757] ["the 2013 Act"]. We allowed the appeal after careful consideration of the submissions and more importantly, our understanding and interpretation of the law. Factual background [2] The appellant and the respondents are owners of their respective parcels in a property known as "JMB Silverpark Resort, Bukit Fraser". Under section 4 of the Building and Common Property (Maintenance and Management) Act 2007 [Act 663] ["the 2007 Act"], a Joint Management Body [JMB] was first established. As its name suggests, it was for the purpose of inter alia managing the building, that is, JMB Silverpark Resort. The JMB then elected a Joint Management Committee [JMC]. [3] Pursuant to an Annual General Meeting on 28.10.2014, the appellant together with four others were elected members of the JMC. Under section 11(1) of the 2007 Act, the members of the JMC hold office for a period not exceeding three years or until the dissolution of the JMB in accordance with section 15, whichever is earlier. [4] On three different dates in November 2014, three of the five members of the JMC resigned. The remaining two members invoked paragraph 2(2) of the First Schedule to the 2007 Act to appoint three new members, bringing the total number of members to five. [5] The $ 1^{\mathrm{st}} $ respondent took the position that the resignations left the JMC without quorum and referred the matter to the Commissioner of Buildings in November 2014. The Commissioner's first response on 20.1.2015 was to authorize the conduct of an EGM to appoint a JMB under section 10(3) of the 2007 Act stating further that the persons appointed will hold office for a period of three years or until the dissolution of the JMB under section 11(2) - see page 152 of the Record of Appeal 2/2. An EGM was then scheduled for 7.2.2015. [6] However, by letter dated 3.2.2015, the Commissioner retracted his authorization stating this time that pursuant to paragraph 2(2) of the First Schedule, the JMB was still valid despite comprising of only two members. The Commissioner further stated that the remaining members were authorized to appoint new members until the next AGM. [7] As a result of this letter, the EGM scheduled for 7.2.2015 was called off. [8] In May 2015, four members resigned, the last member leaving on 26.5.2015. With these resignations, the appellant was left as the lone member of the JMC. [9] On 27.5.2015, the first respondent gave notice pursuant to section 10(2) of the 2007 Act for the requisition of an Extraordinary General Meeting [EGM] for inter alia, the election of new members of the JMC. It would appear that this requisition was not referred to the Commissioner, unlike the earlier EGM of 7.2.2015. [10] The EGM was scheduled for 13.6.2015. The EGM proceeded as scheduled. At that EGM, the $ 2^{n d} $ to the $ 8^{th} $ respondents were appointed as the new committee members for the JMC. [11] The appellant maintained that he remained as chairman of the JMC despite the vacancies. He further challenged the validity of the appointment of the new members contending that the EGM was invalid as it was conducted under the 2007 Act which was repealed and replaced by the Strata Management Act 2013 with effect from 1.6.2015. [12] The respondents filed an Originating Summons seeking determination of the Court on two primary questions of law, namely: i. When the committee members of the JMC falls below five in number, whether the remaining members have any power or authority to elect new members pursuant to paragraph 2(2) of the 2007 Act; ii. Whether the election of the JMC members at the EGM on 13.6.2015 was valid having regard to the fact that the EGM was called pursuant to the 2007 Act which was already repealed at the material time of the EGM. [13] The learned Judge answered both questions in the affirmative. [14] We note that neither party has referred the decisions of the then Commissioner of Buildings found in letters dated 20.1.2015 and 3.2.2015 respectively for determination. Those letters will be referred to in this appeal, only for the purpose of record. Section 11 of the 2007 Act [15] The first question concerns the interpretation and application of section 11 of the 2007 Act which reads as follows:

Joint Management Committee

Continuation of office.

(a) resigns;

(b) dies;

(c) becomes a bankrupt; or

(d) is no longer a purchaser.

Validity of acts and proceedings No act done or proceedings taken under this Act shall be questioned on the ground of-

(a) any vacancy in the membership of, or any defect in the constitution of the, Committee;

(b) contravention by any member of the Committee of the provisions of paragraph 8; or

(c) any omission, defect or irregularity not affecting the merits of the case. [17] Learned counsel for the appellant submitted that paragraph 2(2) read with paragraph 10 of the First Schedule allowed the appellant and the other remaining members to appoint other purchasers as members until the next general meeting of the joint management body. This argument was rejected by the learned Judge. [18] Learned counsel for the respondents contended otherwise, arguing that the moment the membership of the JMC fell below the statutory minimum of five, that committee no longer had the capacity to appoint any new committee members. Under such circumstances, paragraph 2(2) could not be invoked. [19] The learned Judge agreed with the respondents, forming the view that while paragraph 2(2) of the First Schedule of the 2007 Act allowed for the appointment of new committee members of the JMC, that was only available where the JMC is itself validly constituted with a statutory minimum of five in the first place. The moment that statutory minimum is breached, there was no power to appoint any committee member. In the view of the learned Judge, when the statutory minimum is not met, the JMC "tidak boleh berfungsi dan ahli yang tinggal tidak mempunyai wibawa (authority) atau kuasa untuk melaksanakan tugas-tugas JMC atau JMB, termasuk melantik ahli tambahan." The learned Judge decided that at that point, "JMC akan terbatal kewujudannya apabila jumlah ahli di kalangan pemilik/pembeli menjadi kurang dari lima orang." From that moment, the JMC will cease to validly exist. [20] According to the learned Judge, the vacancy in the JMC could only be filled by way of an EGM requisitioned specifically for that purpose - to appoint new members of the JMC. Consequently, the learned Judge pronounced that the JMC had no authority to appoint the earlier new members on 29.11.2014,28.1.2015 and on 14.2.2015. [21] We disagree. To start with must be the question of which is the applicable law given that the 2007 Act has been repealed and replaced with a new piece of legislation, the Strata Management Act 2015 with effect from 1.6.2015. In our view, it depends on what the question is. [22] Since the appointments under challenge were those made while the 2007 Act was in force, the applicable law must be the 2007 Act. [23] When interpreting any statute, there are certain basic principles that apply. The Federal Court in Chin Choy & Ors v Collector of Stamp Duties [1979] 1 MLJ 69 reminded on those basic principles: "It may be apposite at this stage to recall certain basic principles in the interpretation of statues. Applying the words and phrases of a statute in their ordinary meaning has been said to be the first and most elementary rule of construction and the second is said to be to construe the phrases and sentences according to the rules of grammar. "It is very desirable in all cases to adhere to the words of an Act of Parliament, giving to them that sense which is their natural import in the order in which they are placed," per Bayley J in R v Ramsgate (Inhabitants) (1827) 6 B&C 712. We bear in mind the well-settled rule of law that all charges upon the subject must be imposed by clear and unambiguous language (see Maxwell on the Interpretation of Statutes, $ 1 1^{\mathrm{th}} $ Edn., at p. 278), but this rule of law also means that where the language of an Act of Parliament clearly imposes a charge, then the Court fastened with the duty not merely to interpret that Act but also to apply the law must give expression to the will of Parliament." [24] Where the words used by Parliament are clear and unambiguous, the provision must be given effect - see Federal Court's decision in All Malayan Estates Staff Union v Rajasegaran & Ors [2006] 6 MLJ 97, which was cited with approval by the Federal Court subsequently in Andrew Lee Siew Ling v United Overseas Bank (M) Bhd [2013] 1 MLJ 449. At page 458, although the Federal Court was there dealing with the application of the purposive approach in statutory interpretation under section 17A of the Interpretation Act2 1948 and 1967, the Federal Court also explained on the general approach to statutory interpretation- "On the proper application of the provision of the said s 17A of the Interpretation Act we would refer to the case of All Malayan Estates Staff Union v Rajasegaran & Ors [2006] 6 MLJ 97 wherein this court had laid down the principles, inter alia, as follows: In summarizing the principles governing the application of the purposive approach to interpretation, Craies on Legislation (8th Ed), says at p 566:

Supply of occasional vacancies in office of directors. If any director die, resign, or become disqualified or incompetent to act as a director, or cease to be a director by any other cause than that of going out of office by rotation as aforesaid, the remaining directors, if they think proper to do so, may elect in his place some other shareholder, duly qualified, to be a director; and the shareholder so elected to fill up any such vacancy shall continue in office as a director so long as only as the person in whose place he shall have been elected would have been entitled to continue if he had remained in office.

Informalities in appointment of directors not to invalidate proceedings. All acts done by any meeting of the directors, or of a committee of directors, or by any person acting as a director, shall, notwithstanding it may be afterwards discovered that there was some defect in the appointment of any such directors or persons acting as aforesaid, or that they or any of them were or was disqualified, be as valid as if every person had been duly appointed and was qualified to be a director. [38] The Court of Appeal answered in the affirmative with Lord Cozen Hardy MR explaining the reasons for the conclusion in the following terms as seen at page 510: "There were three directors, Sir WH Crundall, Lord Cowdray, and Sir John Jackson. The number of directors was originally to be five, but that number was properly reduced to three, of which two were to form a quorum. There was a qualification of shares for the directors. For reasons which do not concern us Lord Cowdray and Sir WH Crundall were minded to retire; they transferred their shares and ceased to be eligible to act as or to be directors of the company. Sir John Jackson thus become sole director. What was his power? Under the Companies Clauses Act 1845, as continuing director, he had power to fill up vacancies on the board. The fact that a person exercising that power does not constitute a quorum is not really a relevant matter. The generality of the language used in s 99 is so clear that it is impossible for us to overlook it. Any other view on that point would paralyze many a company. it is very common indeed to have a company the directors of which are merely the quorum, and therefore, unless there is a power for the continuing director or directors to fill up a vacant place in the directorate, the company would be at a deadlock, and nothing could be done except by the intervention of the Court in the manner suggested by Mellish LJ in Macdougall v Gardiner, an intervention which seems to me rather difficult to justify except on the ground of absolute necessity. I think, therefore, that Sir John Jackson had power to fill up the vacancy caused by the retirement of his two colleagues." [39] We appreciate that the above arguments were made in the context of a vacancy in the board of directors, and that the decision also does not involve a situation where legislation has provided for certain minimum number of members. However, the analogy and reliance on the above authority is not at all, misplaced. The JMC is, indeed, akin to a board of directors in a company. In fact, there is specific provision in the 2007 Act to this effect. [40] Under section 4(2), the JMB is "a body corporate having perpetual succession and a common seal". As pointed out earlier, under section 11(1), the JMC, elected by the JMB, performs the JMB's duties, conducts the JMB's business and exercises any of the JMB's powers. Consequently, we are inclined to adopt and follow the interpretation and approach of the English Court of Appeal in Channel Collieries Trust Limited. [41] In our view, having examined the language in section 11(1) and reading that provision with section 11(4) and paragraph 2(2) of the First Schedule, we further find that those provisions allow the remaining members, even if that remaining member is only one, to appoint new members to fill a vacancy under paragraph 2(1). However, that new member who is appointed under such conditions holds office only for the interim period until the next AGM at which time, new elections for the vacancy will take place. At that next AGM, if it so happens that the whole three-year term of the entire JMC has expired, then an entirely new JMC has been elected. This, does not appear to arise in this case. [42] In our view, this power to fill this interim vacancy is only a temporary measure. Such powers to make temporary arrangements must have been intended to allow for the business of the JMC to be conducted with minimum disruption. [43] We are of the further view that the reading suggested by the respondent and reached by the learned Judge, is plainly erroneous as it renders not only paragraph 2(2) redundant; but gives it a construction which runs contrary to the clear language in sections 11(1) and (4). AGMs or even EGMs should not be conducted for the business of filling up a vacancy in the JMC whenever the number of members fall below five. More so when the duration of term as a member of the JMC is for three years and not, one year, which is how often AGMs are held. [44] Before leaving this first question, we return to the two letters written by the Commissioner of Buildings. In the second of the two letters, the Commissioner actually acknowledged that he was in error in his interpretation of the application of section 11(1) and that paragraph 2 applies. We add this not that we require the support of the Commissioner for our view as expressed above, but to indicate that there was no challenge on the Commissioner's position. [45] Given our answer to the first question, the earlier appointments by the remaining members of the JMC are therefore valid. As a further corollary to our decision, as the sole remaining member elected at the last AGM of 28.10.2014, the appellant has authority and power under paragraph (92) to appoint new members, but such new members will only hold office until the next AGM. [46] Consequently, the decision of the learned Judge on this first question is clearly erroneous and must be set aside. The EGM [47] We move next to the second question and this concerns the validity of both the EGM and the election of the $ 2^{n d} $ to the $ 8^{th} $ respondents as the new committee members of the JMC. [48] The facts again were these - the $ 1^{\mathrm{st}} $ respondent had, on 26.5.2015, requisitioned for an EGM under the 2007 Act. With effect from 1.6.2015, the Strata Management Act 2013 [2013 Act] came into force. The EGM, requisitioned under the 2007 Act was conducted on 13.6.2015, under the terms of the 2007 Act. The $ 2^{\mathrm{nd}} $ to the $ 8^{\mathrm{th}} $ respondents were elected as new members in that EGM. [49] There are actually two aspects to this question: the validity of the notice as well as the validity of the EGM and thereby the appointment of the new members to the JMC. [50] The learned Judge did not make any distinction between these two aspects. Instead, the learned Judge went directly to the question of the validity of the EGM by reference to section 37(2) of the 2013 Act. The learned Judge agreed with the contention of the respondent that the EGM and the election of new members were valid by virtue of section 37(2) of the 2013 Act. The appellant contended otherwise; that section 37(2) is intended to deal with acts which were done before the 2013 came into operation. Since the EGM was conducted after the 2013 Act came into force, section 37(2) does not apply. [51] We find the submissions of the appellant in this respect of merit. [52] Although the 2013 Act received Royal Assent on 5.2.2013, it did not come into force until 1.6.2013. With the enactment of the 2013 Act, the 2007 Act was repealed - see section 153. [53] Amongst the new concepts under the 2013 Act is the establishment of a strata management corporation in place of the JMB and JMC. We do not propose to deal with those matters in this appeal. What is relevant for the purpose of this appeal is the question of the validity of acts done under the repealed law and to what extent are those acts saved. Put in another way, can an EGM called under the 2007 Act be nevertheless conducted under that Act when at the time of the EGM, the 2007 Act has been repealed and replaced by the 2013 Act? [54] With the inception of the concept of strata management corporations under the 2013 Act, Parliament decided to deal with the ofttricky issue of transitional and savings matters; what happens to and how does one deal with existing bodies and committees established under the previous regime, that is, under the 2007 Act; and pending matters etc. And, it does so in Part IV of the 2013 Act especially in Chapter 5. This Chapter contains specific transitional and savings provisions due to the repeal of the 2007 Act. [55] Chapter 5 has provisions dealing with the effect of the new Act on nine specific matters: i. s37 - references to repealed Act and savings provision ii. s 38 existing body and committee iii. s39 existing managing agent iv.s40-existing accounts or fundsv.s41-incumbent Commissioner of Buildings and other officersvi.s42-existing notices, orders etc.vii.s43-pending applicationsviii.s44-pending appealsxi.s45-existing regulations [56] Broadly, the effect of these provisions is to deem these various matters done under the 2007 Act to be matters done or carried out under the new Act. However, the sections must be carefully examined in order to appreciate their application. In this case, the learned Judge only looked at section 37 and even then, it was only section 37(2). We find that the learned Judge failed to take into consideration the whole of section 37 as well as sections 38 and 42. Had his Lordship considered those provisions, it will be clear that the reading suggested by the respondent was untenable. [57] Section 37 reads as follows: References to repealed Act and savings provision

(1) All references to the repealed Act in any written law or document shall, when this Act comes into operation, be construed as references to this Act.

A Joint Management Body established or a Joint Management Committee elected under the repealed Act shall be deemed to have been established or elected under this Act except that after the commencement of this Act the provisions of this Act shall apply to such Body or Committee. Existing notices, orders etc.

(1) Any notice, order, action, direction or other document prepared, issued or made by the Commissioner under the repealed Act shall, in so far as it is not inconsistent with the provisions of this Act, continue and be deemed to have been prepared, issued or made under the corresponding provisions of this Act.