Perbadanan Pengurusan 3 Two Square v 3 Two Square Sdn Bhd (22NCVC-510-07/2013)

The Plaintiff commenced its action in the High Court Shah Alam [‘HCSA’] which heard and determined its claim for Maintenance and Sinking Fund Charges [‘M and S/F’] against the Defendant. Being dissatisfied with the HC decision, the Plaintiff lodged an appeal to the Court of Appeal [‘COA’].

On 20.09.2017, the HC dismissed the Plaintiff’s claim for RM1,739,712.00 whereas the Defendant’s counter-claim for refund of M and S/F charges amounting to RM432,853.96 was allowed. 30/11/2023 08:03:55 22NCVC-510-07/2013 Kand. 253 S/N Ef/qVQj4/UeIQcdvPauy7g **Note : Serial number will be used to verify the originality of this document via eFILING portal 2

A further appeal to the Federal Court [‘FC’] followed. Upon hearing the appeal, the FC ordered, inter alia, that: In relation to the present suit [‘Suit 516’] the Respondent [Plaintiff]’s claim be remitted to the HC to hear and decide whether there was contravention of sections 4, 34 and 69 of the Strata Titles Act, 1985 [‘STA’]. In this context, the parties are at liberty to amend their pleadings to enable this issue to be fully decided by the same HC Judge who had originally heard and decided the Plaintiff’s claim in the HC. Both the orders of the HC and the COA were, consequently, set aside.

Hence, the further trial of the same claim remitted to the HC on the limited question posed by the FC. Agreed Issues To Be Tried:

Is the car park business being operated by the Defendant on accessory parcels, illegal pursuant to Sections 4, 34 (2) and 69 of the STA?

Did the Defendant breach the planning permission granted by MBPJ when it had accessorized all the car parks in 32Square to the Penthouse?

Did the Defendant breach the planning permission granted by MBPJ when it did not provide visitor car parks at 32Square?

In the event the car park business is deemed illegal, should the relevant provisions in the sale and purchase agreements between the purchasers and the Defendant, to the effect that the car parks are owned by the Defendant be declared null and void?

If the car park business and excessive allocation of the Car Parks as accessory parcels to the Penthouse is deemed illegal, can the Defendant remain as proprietor of the Car Parks?

If the car park business is deemed illegal, should the business proceeds of the Car Parks be remitted to the Plaintiff?

If the car park business is deemed illegal, will this illegality affect the Plaintiff’s claim for maintenance and sinking fund charges levied on the Car Parks?

Is the Plaintiff entitled to its claim for RM1,739,712.00, being maintenance and sinking fund charges for the Car Parks notwithstanding that such charges were levied on the basis of square feet as opposed to share unit?

Did the Defendant absorb the construction costs of the Car Parks?

Does it make a difference to the application of Sections 4, 34(2) and 69 of the STA that 32Square is a commercial development? [4] Analysis and Finding It is, at the outset, crucial to note what is being sought by the Plaintiff pursuant to the FC order that I have alluded to. [5] As summarised in the Defendant’s Executive Summary, the Plaintiff’s present claim as per the Amended Pleadings adopts a two-pronged approach as follows: 1) The Plaintiff MC is alleging that the Defendant had “taken ownership” (‘mengambil alih’) over all the carpark parcels in 3 Two Square to carry out a commercial business and not to use the same as accessory parcels to support the use of the main parcel, i.e. the Penthouse. The alleged illegality/prohibition is premised on sections 34 and 69 of the Strata Titles Act 1985 [‘STA’]. 2) The relief that is presently sought by the Plaintiff MC in this present case is to impugn the subdivision of titles in 3 Two Square. The MC is even asking for new strata plans to be reissued with the carpark parcels to be reclassified as common property. S/N Ef/qVQj4/UeIQcdvPauy7g [6] In contrast, the Defendant’s position is essentially that the Plaintiff’s present claim is legally unsustainable on the following grounds: 1) It is undisputed that the Defendant had never “taken ownership” of the carpark parcels. The land upon which the carpark parcels stood belonged, and still belongs to the Defendant. What the Defendant did was merely to retain ownership of part of its own land and made an application to subdivide its own land and thus, cannot be said to be a dealing. The Plaintiff MC’s pleaded case is, therefore, legally unconnected to, and/or incongruent, with Sections 34 and 69 of the STA. 2) The relief that is presently sought by the Plaintiff MC in this present case is to impugn the subdivision of titles in 3 Two Square. Consequentially, for new strata plans to be reissued with the carpark parcels to be reclassified as common property under the MC’s management. The language of section 9 of the STA is framed in the negative-“the Director shall not approve” – meaning that if the Director is not satisfied that the abovementioned conditions are fulfilled, then the Director of Lands and Mines has the discretion to reject the application for subdivision by the original proprietor of the land, i.e., the Defendant. The primary relief sought by the Plaintiff MC is to invalidate the subdivision and to reclassify the strata plan. The Plaintiff MC’s pleaded case seeks to unravel the entire statutory process encapsulated in sections 9 to 14 of the STA. [7] It was also contended that the relief sought by the Plaintiff can only be obtained via judicial review proceedings against the decisions of the S/N Ef/qVQj4/UeIQcdvPauy7g Director of Lands and Mines and the Director of Survey. Any possible cause of action to challenge the decision to sub-divide by way of judicial review is time-barred by statute by virtue of section 2(a) of the Public Authorities Protection Act, 1948. [8] The context under which the FC made the present order is all-important. In respect of Suit 516, it arose upon the Defendant’s appeal against the COA’s decision which was in the Plaintiff’s favour as regards the claim for M&S/F charges for the car parks which the HC held to be accessory parcels. However, on appeal by the Respondent to the COA, this decision by the HC was reversed by the COA. For convenience, I reproduce the relevant passage from the judgment of the COA in respect of Suit 516 as follows: “In Suit 516, the plaintiff claimed for the shortfall of management fees and sinking fund charges for the car park owned by the defendant in Block F. The JMB had resolved that the management fees and sinking fund for the car park was RM0.20 per square feet from 2.8.2008 until 15.1.2010. From this date (15.1.2010), the plaintiff had resolved that the said charge would be RM0.30 per square feet. However, the defendant had only been paying RM0.05 per square feet. Hence, the plaintiff sued the defendant to recover the additional sum of RM1,739,712.00 for management fees and sinking fund charges for the said car parks at the two (2) levels of the basement. On the other hand, the defendant had counterclaimed for the refund of maintenance fees and sinking fund charges in the sum of RM432,853.86 (RM143,971.62 + RM288,822.24) that were S/N Ef/qVQj4/UeIQcdvPauy7g imposed on the defendant’s car parks, which the defend claimed to be the accessory parcels to the Penthouse. However, the learned Judge had dismissed plaintiff’s claim, premised on sections 34(2) and 69 of the STA, that the plaintiff cannot levy additional charges on the defendant for the car park, which is an accessory to the defendant’s Penthouse. In paragraph of the Judgement, the learned Judge held that: “[44] Considering the provisions of sections 34(2) and 69 of the STA which expressly prohibit any accessory parcel or any share or interest therein from being dealt with independently of the parcel, I concur with the contention that the plaintiff’s action in charging maintenance and sinking fund charges, on the basis of square footage (sq. ft.) in respect of defendant’s car parks is clearly prohibited in law as such action by the plaintiff amount to treating the defendant’s accessory parcels and its interest therein independently of the parcel to which it was made appurtenant.” The relevant provisions, sections 34(2) and 69 of the STA read as follows: “34 Rights of proprietor in his parcel and common property

….. S/N Ef/qVQj4/UeIQcdvPauy7g

No rights in an accessory parcel shall be dealt with or disposed of independently of the parcel to which such accessory parcel has been made appurtenant.” “69 No dealing in accessory parcel independent of a parcel No accessory parcel or any share or interests therein shall be dealt with independently of the parcel to which such accessory parcel has been made appurtenant as shown on the approved strata plan.” Hence, the issue is whether the defendant’s car park serves as an accessory parcel to the defendant’s Penthouse in Block F. Under section 4 of the STA, accessory parcel means a parcel shown in a strata plan as an accessory parcel which is used or intended to be used in conjunction with a parcel. Therefore the word ‘accessory’ simply means that the usage of the accessory carpark is attached to, connected or dependent on and/or used or intended to be used with the main parcel, the Penthouse. It is not independent on its own. In the present appeal, the ‘accessory parcel’ are the car parks at the two (2) levels of basement of Block F, which according to the defendant is an accessory parcel which is used or intended to be used in conjunction with the Penthouse. It is not in dispute that the defendant is renting out the car park parcels and that these car park parcels are being utilized for commercial purposes, a car park business, to generate an S/N Ef/qVQj4/UeIQcdvPauy7g income to the defendant. The said car parks were used for the car park business, which is independent of the Penthouse. Thus, all the said car parks cannot be said to be used in conjunction with the Penthouse. Therefore, the usage of these car park parcels were not used or intended to be used in conjunction with the Penthouse. As such, the car parks do not fall within the definition of ‘accessory parcel’ under section 4 of the STA. Consequently, the charging of the maintenance fees and sinking fund charges are not prohibited by sections 34(2) and 69 of the STA. (see Ideal Advantage Sdn Bhd v Perbadanan Pengurusan Palm Spring @ Damansara & Another Appeal [2019] 1 LNS 894). In the premise, there is no legal prohibition for the plaintiff to claim for the management fees and sinking fund charges for the car park owned by the defendant. We therefore find that the learned trial Judge fell into error in his interpretation of the application of sections 34(2) and 36 of the STA to the factual matrix of the case.” [9] It would be plainly apparent that the COA in its concluding remarks made reference to sections 34(2) and 69 of the STA as applied in Ideal Advantage Sdn Bhd [‘COA’] in arriving at its decision which was confined to the charging of M & S/F fees/charges for car parks which do not fall within the meaning of accessory parcels. It was this decision against which the Defendant appealed to the FC resulting in the present order on the illegality issue which stemmed from the COA’s reference to Ideal Advantage in regard to sections 34(1) and 36 of the STA. S/N Ef/qVQj4/UeIQcdvPauy7g [10] In view of the COA’s decision on the main suit, the HC’s decision on the Defendant’s counter-claim for refund of M&S/F charges for the car parks was also accordingly set aside. [11] An important question arose in this trial as to whether Ideal Advantage could be distinguished from the instant facts rendering it not wholly applicable to the present dispute on the issue of illegality. According to the Defendant, the Court in Ideal Advantage examined the evidence and found that the whole intention and purpose of Ideal Advantage in its purchase of 439 carparks from the developer was not to use these car parks in conjunction with the 45 units of residential condominium parcels but to deal with the additional carparks independently and separately by renting them out to different individuals: “From the evidence, the 45 parcel units were purchased by D1 together with the 439 accessory car park parcels and the evidence also shows that the whole intention and purpose of D1 purchasing 439 car parks from D2 was not to use these car parks in conjunction with 45 units of parcel condominiums respectively but to deal with the additional car parks independently and separately by renting it out to different individuals. There is no denial by D1 that they are renting out the car park parcels and that these car park parcels are being utilised for commercial purposes to generate a substantial income to D1. Clearly, the intention of D1 at the time of the purchase of the 439 accessory parcels together with the 45 units of condominium was to run a car park business at Palm Spring Condominium. It is never disputed that each of the condominium unit which is about 1,000 sqft at most, would S/N Ef/qVQj4/UeIQcdvPauy7g only require one or two car parks. Clearly, the remaining car parks attached to the particular unit were meant for D1’s car park rental business. The same argument applies to the other condominium units which have between 8–15 accessory car park parcels attached. Therefore, the usage of these car park parcels, namely the excessive car parks, constituted a breach of ss 34(2) and 69 of the STA 1985, namely that the accessory car park parcels is used or intended to be used not in conjunction with a parcel unit and the same was dealt with, independently of the main parcel unit to which such accessory parcel has been made appurtenant thereof.” [12] In support of the Defendant’s position that Ideal Advantage is distinguishable on the facts, it was contended that: i) In that case, the main parcel was a residential unit meant for residence and inhabitation of the residents. ii) In the instant case however, the Penthouse has a commercial title and is meant to be used for commercial purpose. The Defendant is a licensed carpark operator. [13] The Plaintiff brought to my attention that both the High Court and Court of Appeal found Ideal Advantage to have committed an illegality by breaching Sections 4, 34 (2) and 69 of the STA in operating a carpark business and treating accessory parcels independently of the main parcels. In connection thereto, the relevant portions of the judgment in IDEAL ADVANTAGE (COA), against which leave to appeal to the Federal Court, was dismissed is reproduced herein as follows: - S/N Ef/qVQj4/UeIQcdvPauy7g “[40] A harmonious reading of the aforesaid provisions of STA 1985, shows that any accessory parcel to the main parcel of the condominium is not to be dealt with “independently” or “separately” from the main parcel and must be used in conjunction with the main parcel. These “accessory parcels” are parcels shown in an approved strata plan as an accessory parcel which is used or intended to be used in conjunction with a parcel. The plain and ordinary meaning of the words in the relevant provisions reflects the true intent and purport of Parliament in legislating the STA

… [42] D1’s position has always been that they bought the 45 units together with the 439 accessory car park parcels and there is no legal restriction for an owner of one unit of condominium to purchase more than one accessory car park parcel. We agree that there is no legal restriction for an owner of a condominium to purchase more than one accessory car park parcel, so long as it is used in conjunction with the main parcel unit. From the evidence, the 45 parcel units were purchased by D1 together with the 439 accessory car park parcels and the evidence also shows that the whole intention and purpose of D1 purchasing 439 car parks from D2 was not to use these car parks in conjunction with 45 units of parcel condominiums respectively but to deal with the additional car parks independently and separately by renting it out to different individuals. There is no denial by D1 that they are renting out the car park parcels and that these car park parcels are being utilized for commercial purposes to generate a substantial income to D1. S/N Ef/qVQj4/UeIQcdvPauy7g Clearly, the intention of D1 at the time of the purchase of the 439 accessory parcels together with the 45 units of condominium was to run a car park business at Palm Spring Condominium. It is never disputed that each of the condominium unit which is about 1000 square feet at most, would only require one or two car parks. Clearly, the remaining car parks attached to the particular unit were meant for D1’s car park rental business. The same argument applies to the other condominium units which have between 8-15 accessory car park parcels attached. Therefore, the usage of these car park parcels, namely the excessive car parks, constituted a breach of sections 34 (2) and 69 of the STA 1985, namely that the accessory car park parcels is used or intended to be used not in conjunction with a parcel unit and the same was dealt with, independently of the main parcel unit to which such accessory parcel has been made appurtenant thereof. … [44] The purpose, object and restriction in sections 34 (2) and 69 of the STA 1985 prohibits the dealing/transfer of the accessory parcels separately or independently of the main parcel, as was done by D1 and D2. These car parks were transferred in bulk to D1 by D2. The Hansard of the parliamentary debate in the Senate during the tabling of the STA 1985 is testimony to this, which reads…” [14] On the above reasoning, the COA concluded that the 1st Defendant [‘D.1’]’s purpose and intent clearly constituted a breach of sections 4, 34(2) and 69 of the STA 1985 which led to an illegality. Hence, that the S/N Ef/qVQj4/UeIQcdvPauy7g trial judge had not erred in finding the agreements for the purchase of the accessory parcels to be illegal under section 24 of the Contracts Act, 1950 and ought to be struck down as being void. [15] By reliance on Ideal Advantage, the Plaintiff contended that the fact of the Defendant being in possession of a valid licence from the Petaling Jaya City Council [‘MBPJ’] to operate the car park business which meant that the local authority [‘MBPJ’] had sanctioned the business did not exonerate them from the illegality of the said business. Also, that the ownership of the car park lots was not within the purview of the functions and powers of the MBPJ Licensing Department. [16] Essentially, the Plaintiff’s principal argument was that the issuance of licence by MBPJ cannot override the COA decision in IDEAL ADVANTAGE pertaining the interpretation of Sections 4, 34(2) and 69 of the STA. In any event, should MBPJ discover any illegality in respect of the Defendant’s car park business, MBPJ can revoke or suspend the said licence pursuant to Section 6 of Licensing of Private Car Parks (Petaling Jaya Municipal Council) By-Laws 2005. In effect that the licences issued by the MBPJ were inconsequential to the issues that arose for resolution in this trial emanating from the FC order. [17] The Defendant, on the contrary, contended that Ideal Advantage, on the facts, could be distinguished because the car park business being operated by the Defendant is not illegal simply because the usage of the Car Parks is in conjunction with its main parcel, which is the Penthouse which is indisputably a carpark management office, and therefore, justifies the usage factor in Sections 4, 34(2) and 69 of the STA. S/N Ef/qVQj4/UeIQcdvPauy7g [18] Hence, the determination of the central issue in this trial revolved around the question whether the usage of the Defendant’s car park accessory parcels had been conjunction with its main parcel, i.e., the PH. In essence, the Defendant’s main premise was that the PH and the car parks were involved in a common car park business. However, the Plaintiff’s response was that this line of argument was plainly illogical and ran counter to the purpose and intention of accessory parcels as defined in the STA under the 3 sections that I have alluded to. These sections apparently do not refer to the business being conducted in the main parcel to justify a finding that the accessory parcels were being used in conjunction with the main parcel. As such, the Court should rightly find that the car park business was being illegally perpetrated by the Defendant. [19] On this pivotal issue, it was also incumbent to give due consideration to the Defendant’s position on the burden of proof borne by the Plaintiff MC to prove its case. In this regard, it was submitted that the evidence led by the Plaintiff fell short of establishing the very premise of the Plaintiff’s pleaded claim, namely, that there was contravention of sections 4, 34 and 69 of the STA. It was because: i) PW-1’s evidence fails to show how the business in the Penthouse is disjunct from the carpark business. ii) PW-1 admitted that whilst he could identify that the office in LG2 was used to run the carpark business, he could not verify how the Penthouse was used, whether it was in fact used to operate the carpark business or not. S/N Ef/qVQj4/UeIQcdvPauy7g [20] Reference was also made to the evidence of DW.2 (manager of Defendant’s car park business) which disclosed that the integral part of this business was at all material times and was currently run from the Penthouse [‘PH’]. It was highlighted that the fact that there is a carpark office at LG2 to facilitate carpark users and customer service does not mean that the entire carpark business is run from the carpark office where customers could see the personnel stationed there. [21] It was highlighted that DW.2’s evidence that the car parks business was operated from the PH remained unchallenged in cross-examination. The challenge mounted by the Plaintiff on this point was that the parent company of the Defendant [‘Crest Builders’] also operated its business from the PH and that DW.2’s evidence contradicted with that of another witness given at the previous trial. [22] On the 1st aspect of the challenge the Defendant’s response was that the Plaintiff’s case taken at its highest was that it merely shows that the PH is also used for the business of Crest Builders Sdn Bhd. It does not however prove the converse – that the PH was, and is, not used for the carpark business. [23] It was submitted that the fact that the main parcel is not used solely for the purpose of the carpark business does not mean that the use of the PH is independent from the use of the accessory carpark parcels as they are in fact used in conjunction with the carpark business. In other words, the usage was appurtenant to the main parcel. [24] On the contrary, that the PH was in fact the backbone of the entire carpark business operated by the Defendant as a licensed private S/N Ef/qVQj4/UeIQcdvPauy7g carpark operator sanctioned under the MBPJ by laws. Importantly that factually this case differed greatly from Ideal Advantage where the purpose and intention of the purchase of the car parks was not for use in conjunction with the residential unit which was for inhabitation and not for commercial activity as in the instant case. [25] On the alleged contradiction in the evidence, the Defendant submitted that the witnesses concerned gave evidence on different issues and there was no inconsistency in the evidence on the issue presently in dispute. Importantly, both the witnesses testified that the carpark office on the LG was used for customer service while the witness at the previous trial never testified that the PH was not used to operate the carpark business. [26] By reference to contemporaneous communication between the Plaintiff MC and the Defendant’s staff in relation to issues involving the carpark, the Defendant’s proposition was that the relevant contemporaneous evidence ought to take precedence over the Plaintiff MC’s bare averment that the carpark business was not run from the PH. It was stressed that the burden of proof rested with the Plaintiff to establish, on a balance of probabilities, that the PH and the 1370 carpark parcels are used independently of each other. [27] Next for consideration is the second part of the contravention Issue as pleaded by the Plaintiff MC, the point of contention being that the Defendant’s act of accessorising all 1370 carpark parcels to the PH is a breach of the planning permission granted by MBPJ. S/N Ef/qVQj4/UeIQcdvPauy7g [28] As summarised by the Defendant, the Plaintiff [‘MC’] was essentially building a case that since the floor area of the Penthouse is only 169,728 square feet, to accessorise 1370 carparks to the Penthouse is in breach of the said planning permission on that basis that the Plaintiff MC alleges that there has been a contravention of section 9(1)(d) of the STA and section 20 of the Town and Country Planning Act 1976. [29] However, the Appellant raised a preliminary objection that this contention goes beyond the order of the Federal Court [‘FC’] dated 7.11.2022 that ought to be strictly adhered to. It was reemphasised that this is not a retrial, and the ambit of the trial must be limited to the specific issue and provisions identified by the FC, and nothing beyond. According to the Defendant if the Court was to consider this contention, it would mean that the High Court was making a determination on an issue that went beyond and in excess of, the specific jurisdiction as directed by the FC. [30] It was reiterated that the issue as identified by the FC to be tried is limited only to any potential contravention with regard to sections 4, 34 and 69 of the STA. [31] I would state my view on the above PO in relation to breach of the Planning Permission at the summing up stage of this judgment on the principal issue as to whether the accessary parcels should be declared common properties. [32] I will proceed to deliberate on the core issue pertaining to the liability of the Defendant to pay M & S/F charges for the car parks parcels. In essence, the contention of a Plaintiff is this: S/N Ef/qVQj4/UeIQcdvPauy7g “When the Defendant chose to treat the car parks independently of the main parcel, the car parks can no longer be considered as accessory parcels as they fail to come within the ambit of section 4, 34(2) and 69 STA. As a result, the car parks were treated as parcels and would lose the protection of section 4, 34(2) and 69 STA, hence, susceptible to maintenance and sinking fund charges as per normal parcels. The maintenance and sinking fund charges for parcels have already been fixed in numerous prior AGMs since the JMB period.” [33] As such, the determinative question in this trial is simply whether the Defendant had acted in contravention of sections 4, 34(2) and 69, STA by treating the car parks independently of the main parcel, i.e., PH. This is indisputably a factual question. Basically, on this vital issue the position of the Defendant was that the car Parks are being used in conjunction to the main parcel because both the car Parks and the PH are involved in the same car park business. [34] The Plaintiff’s contrary position was that merely because the PH is allegedly a carpark management office, and thus, the Defendant is allowed to use the car parks to run a carpark business, is completely illogical and defeats the purpose and intention of accessory parcels as defined in the STA considering that Sections 4, 34(2) and 69 of the STA do not refer to the business being operated in the main parcel to justify whether the accessory parcels are being used in conjunction to the main parcel. [35] On the basis that the Defendant’s interpretation of the said provisions of the STA was illogical and untenable as to the nature of the S/N Ef/qVQj4/UeIQcdvPauy7g business conducted in the main parcel being the main criterion for accessorising car park parcels, the Plaintiff urged the Court to conclude that the said business did not in law determine the allocation of accessory parcels. Amongst others, because the demarcation of a car park parcels must strictly be pursuant to the requirements of the Planning Permission and Guidelines of the local authority. As such, that the car park business was an illegally perpetrated by the Defendant entitling the Plaintiff to the declaratory order sought to declare the sub-division as done in this case null and void following the decision in Ideal Advantage. [36] The Plaintiff alleged that the Defendant had breached the PP granted by MBPJ when it had accessorised all the car parks in 3TS to the PH. It was submitted that the Defendant does not have a free hand in determining the number of car parks to be provided for the development nor the amount of car parks that can be accessorized to a single unit because the planning stage of the development the Defendant will have to comply with the requirements of the local authority which is MBPJ, in respect of the minimum amount of car parks that should be provided for the development and the number of car parks that can be allocated as accessory parcels to the various parcels. [37] It emanates from the fact that in Selangor, the approval for any given development including 32Square comes in the form of Planning Permission [‘PP’] which is approved and granted by MBPJ pursuant to the Sections 19 and 22 of the Town and Country Planning Act 1976 (TCPA). It is the PP as represented by the Approved Layout Plan [‘Ex P.2’] will contain the conditions upon which approval for the development is given by MBPJ. S/N Ef/qVQj4/UeIQcdvPauy7g [38] I have adverted to the Defendant’s contention that the alleged breach of the PP and TCPA is outside the purview and ambit of the FC order and as such, this Court would exceed its jurisdiction if a determination is made on the issue of illegality in respect of this breach. I would state my view of this contention at the conclusion of this judgment. For the record, the Plaintiff did not dispute that the Defendant by providing 1,370 car parks was more than the minimum requirement under the Layout Plan and MBPJ Guidelines. However, the Plaintiff’s position was that the carparks were not provided in the best interest of the development and parcel owners but was intentionally done to run a car park business wholly for profit. [39] I will now proceed to the crucial ownership issue of the car park parcels arising from the alleged illegality of the car park business run from the PH by the Plaintiff. In the event that the Court finds that there was contravention of sections 4, 34 and 69 of the STA and/or the planning permission the Plaintiff submitted that the Plaintiff MC must further prove that the 1370 carpark parcels belong to the MC as common property; and are not the property of the Defendant. Reference was made to the constitutional guarantee that no person can be deprived of his sacrosanct constitutional right to property guaranteed under Article 13 of the Federal Constitution save in accordance with the process designated by law. [40] It is important to note thrust of the Plaintiff’s ownership claim, which was that as the Defendant had used or intended to use the accessory parcels independently of the main parcel and had as well contravened the PP, its property was liable to be forfeited and strikingly, the ownership S/N Ef/qVQj4/UeIQcdvPauy7g of almost all its car parks had to be gifted to the Plaintiff MC as common properties. [41] The Defendant pointed out that it was the Defendant which was the original proprietor of land upon which 3 Two Square [‘3TS’] stood. The Defendant constructed the development, consisting of parcels, accessory parcels and common property out of which most of parcels were sold to new strata proprietors while some were not. Not only the car park parcels but all the corporate offices in the development were not sold by the Defendant but retained as its investment property. In effect, the Plaintiff MC’s proposition was said to be a usurpation of another person’s property and as such the claim for another person’s property must be supported by sufficient particulars which must be proved to sustain such a fur-reaching claim. [42] Instead, the averments in the Plaintiff’s pleadings were pointed out to be only these:

There were contraventions by the Defendant of the law;

Losses suffered by the Plaintiff and other parcel owners were the charges levied on them for usage of the car parks.

By using the carpark parcels for business since 2007 it had made unlawful profits.

Losses resulted to the Plaintiff because of the Defendant’s unfair profit. S/N Ef/qVQj4/UeIQcdvPauy7g [43] In recent COA decision Sri Keladi Sdn Bhd (in liquidation) v Bukit OUG Condominium Joint Management Body [2023] 1 MLJ 34 where a distinction between residential and commercial developments was recognised, it was held that: “There was no dispute by the respondent that ownership of the car parks should be determined by the SPAs as they were binding contracts between the developer and purchasers or parcel owners. Therefore, the determination of whether the car parks should be considered as common property depended on the terms of the SPA (see paras 31–33). The definition of ‘common property’ in cl 31(c) of the SPA was not intended to include the ‘additional’ 149 car parks as they were in excess of what was already catered for the parcel owners and therefore could not and must not be enjoyed by parcel owners as common property. In respect of the SPA for commercial units, the provisions differed from the Schedule H, particularly cl 32 where it clearly provided that the appellant shall retain the ownership of the car parks as the word ‘vendor’ referred to the appellant. Further, in reference to cl 31(c) read with the Second Schedule of Schedule H of the SPA and cl 32 read with the Fifth Schedule, it became clearer that they were not intended to form part of common property under the SPA since the unaccounted car parks were not listed as ‘common facilities’ (see paras 36, 39 & 42–53). The High Court judge failed to properly evaluate the respondent’s own testimony as the witness testified that the ownership of surplus car parks belonged to the appellant vis a vis the Second Schedule of Schedule H of SPA and cl 32 of SPA for commercial units.” S/N Ef/qVQj4/UeIQcdvPauy7g [44] Further, as regards the SPAs being binding on the parties, it was emphasized that: “Besides, the SPAs are binding contracts between the developer and purchasers or parcel owners. The Court of Appeal case of Perantara Properties Sdn Bhd v JMC-Kelana Square & another appeal [2016] MLJU 1598; [2016] 5 CLJ 367 is relevant in this regard. This case is also a dispute about car parks and whether the same should be considered as forming part of the common property. The SPA is also referred to in this case. The relevant excerpt of this case states: [15] The effect of the learned judge’s construction of s 44 read with the definition of ‘common properties’ in s 2 of the BCPA 2007 is a blatant amendment to the terms and conditions of the 1995 sales and purchase agreements. That said, His Lordship’s view on face value can be said to have merit as s 44 of the BCPA 2007 does contain the words ‘shall cease to have effect’, giving rise to a reasonable inference that the BCPA 2007 is a retrospective legislation to eradicate the practise of developers like the appellant from retaining car parks as common properties. … [18] Further it is significant that the 1995 sales and purchase agreements at that particular time were perfectly legal agreements. There were no common law or statute law which prohibited the same. Hence when the purchasers and the S/N Ef/qVQj4/UeIQcdvPauy7g appellant entered into those agreements they were exercising their rights pursuant to the concept of ‘freedom of contract’ as submitted by learned counsel. These rights are fundamental rights and the courts must presume that the Parliament would not invade such rights unless clear words are used. We find no such clear words in the BCPA 2007. The parties knew exactly what the bargains were when they entered into the 1995 sales and purchase agreements and it is trite law the courts cannot rewrite contracts when they are freely entered into.” [45] Reverting to Ideal Advantage, the COA in coming to a determination whether the carparks had in fact become common property within the meaning S.4 of the STA held the view that the determinative plan was the strata plan. It was identified as a vital consideration and factor as follows: “In pith and substance, the claim by the plaintiff vis a vis 394 car parks is a claim for the recovery of ownership of car parks as ‘common property’. Section 4 of the STA 1985 define ‘common property’ as: ‘common property’ means so much of the lot as is not comprised in any parcel (including any accessory parcel), or any provisional block as shown in a certified strata plan. Therefore, ‘car parks which are indicated on an approved strata plan as accessory parcels will not be common property. Also, such car parks which would have been made S/N Ef/qVQj4/UeIQcdvPauy7g appurtenant to the respective parcels shown on the approved strata plan cannot be dealt with independently of such parcels. Where they are not so indicated on the approved strata plan, they would form part of the common property’ (Strata Title in Singapore and Malaysia (4th Ed) by Teo Keang Sood, at p 158).” [46] In essence, on the ownership issue, I uphold the Defendant’s contention that in Ideal Advantage, the COA arrived at its decision as to the 394 carparks being common property based on the view that the strata plan was conclusive. If it is so indicated in the strata plan that a particular property is a parcel or accessory parcel, then it would be a common property under the ownership of the MC. [47] It was apparent that in Ideal Advantage, in the absence of the strata plan which would conclusively prove the contrary, the carparks were regarded in law as “unsold property” pursuant to the operation of the STA 1985, i.e. by operation of law as the developer was unable to prove that it was retained as its own property by virtue of the strata plan. [48] As pointed out by the Defendant, a converse situation applied in our case where all the carpark parcels were identified by parcel numbers as necessary parcels under the ownership of the Developer. [49] The Defendant also sought support from another COA case, Perantara Properties Sdn Bhd v JMC - Kelana Square & Another Appeal [2016] 5 CLJ 367 where the JMB challenged the Developer’s contractual right to retain its beneficial interest in the carparks. The purchasers gave no consideration for the purchase of the carparks as in S/N Ef/qVQj4/UeIQcdvPauy7g this instance. In its judgment, the COA stressed the constitutional right to property under Article 13 of the Federal Constitution and held: “Upon the forming of the respondent, the appellant handed over to the same various facilities of the development to the respondent save and except the car parks. The reason for the exclusion of the car parks was that they had been excluded from the common property through the sales and purchase agreements of the commercial units in Kelana Square entered between the purchasers and the appellant around 1995. The appellant was then able to rent the car parks out back to the purchasers or third parties for a fee… …[18] Further it is significant that the 1995 sales and purchase agreements at that particular time were perfectly legal agreements. There were no common law or statute law which prohibited the same. Hence when the purchasers and the appellant entered into those agreements they were exercising their rights pursuant to the concept of "freedom of contract" as submitted by learned counsel. These rights are fundamental rights and the courts must presume that Parliament would not invade such rights unless clear words are used. We find no such clear words in BCPA 2007. The parties knew exactly what the bargains were when they entered into the 1995 sales and purchase agreements and it is trite law the courts cannot rewrite contracts when they are freely entered into. [19] There is no doubt that should we sustain the respondent's contention, we would be taking away the proprietary rights in the car parks of the appellant. Could this be done by an Act of S/N Ef/qVQj4/UeIQcdvPauy7g Parliament? It must not be forgotten that we have a democratic system where the Federal Constitution is supreme as opposed to Parliamentary democracy where Parliament is supreme. Hence in construing provisions of statute regard must be given to the Federal Constitution. The relevant presumption here is simply that Parliament did not intend to invade the rights accorded in the Federal Constitution. The relevant article in the Federal Constitution here is art. 13 which reads as follows:

No person shall be deprived of property save in accordance with law.” [50] Importantly, the COA in Perantara Properties drew a distinction between a residential development and a commercial development, which the present development undoubtedly is. Amongst others, a residential development which was the case in Ideal Advantage, is governed under the Housing Development (Control and Licensing) Act 1966 [‘HDA’]. It is a statute enacted to protect the interest of house purchasers and matters connected to the same. Even more vital for consideration in the present context is the concept of freedom of contract and the principle governing the fundamental right not to be deprived of one’s property save in accordance with law. [51] I would conclude my deliberation on the 2nd core issue for determination, i.e. the claim for ownership of the properties by the Plaintiff, namely, the car parks, by stating my considered view to be that it be traverses beyond the original claim which was restricted to M & S/F charges. It clearly has no connection with the claim for ownership. More importantly, it does not relate to the new issue of law identified by the FC. S/N Ef/qVQj4/UeIQcdvPauy7g Clearly, in my judgment, this claim of ownership has gone beyond the scope of the FC order which binds this trial. This trial was patently not meant for the dispute or claim to be heard afresh or relitigated but for the same Court to make a determination on a specific issue as identified. [52] In my view, the Plaintiff in misconstruing the purport and intention of the FC order, in particular, the terms of reference, had vide its Amended Statement of Claim [‘SOC’] made extensive inappropriate amendments in respect of its original cause of action for M & S/F, particularly, in seeking ownership of the accessory parcels to be transferred to the MC from the registered proprietor. Undeniably, an amendment to this extent went beyond the scope of the FC order and the new reliefs therein were not open for consideration under the limited jurisdiction provided by the order. [53] It is also important to take note that what the Plaintiff is effectively challenging is the process of law governing an application for sub-division. It is within the discretionary powers of the Director of Land and Mines [‘DLM’] under the NLC. The discretion to grant approval is to be exercised subject to fulfilment of conditions prescribed in several provisions of the STA, the details of which I do not propose to go into. There are express requirements under the law that must be complied with which the DLM must consider in the process of making his decision whether to grant the approval. So must he consider the restrictions imposed as authorised by law to the sub-division applied for. [54] On this point, it would be useful to refer for guidance to an authoritative textbook on the subject at hand, Strata Title in Singapore and Malaysia, 6th Edition, Teo Keang Sood, p.59 [2.81], where the S/N Ef/qVQj4/UeIQcdvPauy7g learned author commented on the same provisions in section 10 of the Strata Titles Act 1985 (post-2015) as follows: “4. Conditions for sub-division approval and related matters [2.81] Where an application for sub-division of any building or land into parcels has been made to the Land Administrator in Form 1, it will only be approved by the Director if the following conditions are satisfied: -

The Director of Survey has issued the certificate of proposed strata plan as discussed above,

The sub-division would not contravene any condition or restriction in interest to which the land comprised in that lot is for the time being subject. For example, proprietors of buildings erected on the land maybe prohibited from sub-diving them because of planning restrictions:

The sub-division would not be contrary to the provisions of any written law for the time being in force and that any requirements imposed with respect thereto by or under any such written law have been complied with. Examples of such written laws are the Town and Country Planning Act 1976, the Street Drainage and Building Act 1974 and the Federal Territory (Planning) Act, 1982.” [55] These restrictions would include potential planning restrictions imposed by the local authority under planning laws such as the Town and Country Planning Act, 1971. It was correct in law for the Defendant to S/N Ef/qVQj4/UeIQcdvPauy7g contend that for the Plaintiff to succeed in its claim that sub-division in this instance was unlawful, it must support its claim with sufficient particulars to the Court’s satisfaction that the decision made by 2 public officers, the Director of Lands and Mines and the Director of Survey was wrong in law and fact warranting the Court’s intervention. This is the burden of proof that has to be discharged by the Plaintiff that the sub-division was in non-compliance with the conditions prescribed in S.9 of the STA. It is my considered view that for the decision and/or action 2 abovenamed Directors to be impugned, they should necessarily have been brought as parties to this action for a proper determination to be made judicially whether the application for sub-division was approved in accordance with law. [56] In the above circumstances, the Plaintiff’s claim for ownership of the car park parcels to vest in the MC based on its challenge to the process of sub-division of the 3TS development and reclassification of the strata plan should be put to rest essentially because of failure to discharge its burden of proof. CONCLUSION [57] Having made my finding on the core issue of ownership of the subject properties, I would proceed to state the Court’s view on the primary core issue identified in the FC’s order, namely, the contravention of the STA by the Defendant arising from assuming ownership of the car park parcels pursuant to the SPA and Deeds of Mutual Covenants [‘DMC’] with the unit owners, particularly SS.4, 34 and 69 of the STA. S/N Ef/qVQj4/UeIQcdvPauy7g [58] It is first and foremost crucial in this regard to scrutinise the Plaintiff’s pleaded cause of action in the Amended SOC. An analysis of the peculiar factual matrix of the instant case is called for and application of the principles enunciated in several authorities cited by both parties to the Court, in particular, Ideal Advantage, Perantara Properties and Sri Keladi. As stressed by counsel for the Plaintiff, the lynchpin of its Amended Claim is the decision, reasoning and orders made in Ideal Advantage. [59] The substratum of the Appellant/Defendant’s in opposition to the Amended Claim was that the claim was legally unsustainable because the very basis of the Plaintiff’s cause of action was erroneous in that the Plaintiff’s allegation was that the Defendant had “taken ownership” (mengambil milik) over all the carpark parcels in 3 Two Square to carry out a commercial business and not to use the same as accessory parcels to support the use of the main parcel, i.e., the PH or appurtenant to the latter. [60] It is expressly pleaded in paragraphs 36 and 37 of the Amended SOC that the Defendant’s wrongful act and/or contravention on of the provisions of the STA 1985 in relation to the car park accessory parcels in the 3TS development was the taking ownership and control of all the said parcels to carry out a commercial business and not as parcels appurtenant to the use and purpose of the main parcel. It was further pleaded that the commercial business suffered from illegality due to contravention of strata law under the STA 1985. S/N Ef/qVQj4/UeIQcdvPauy7g [61] It was indisputable that the reliefs sought by the Plaintiff arose primarily from the complaint that the Defendant had ‘taken ownership’ of the carpark parcels. On that score it was sought that the sub-division by the local authorities and causing all the carpark parcels to be accessorised to the PH be declared null and void. Plainly, the alleged illegality could only have occurred at the sub-division stage at which point the Defendant had allegedly taken ownership of the carpark parcels. [62] For a plain reading of the Plaintiff’s own pleadings, the Defendant’s alleged illegality was at the sub-division stage arising from its wrongful act of taking ownership of the carpark parcels. It was the act of sub-dividing and accessorising the carpark to the PH, that allegedly constituted the contravention of sections 34 and 39 of the STA, 1985. [63] To my mind, in the final analysis, the determinative question boiled down to whether the Defendant had as alleged in the Amended SOC ‘taken ownership’ of the carpark parcels. It was a crucial consideration that the land upon which the carpark parcels stood at all material times belonged, and still belongs to the Defendant, or in other words, the Defendant had always retained ownership of the carpark parcels. Upon retaining ownership, all that the Defendant did was to apply to the authorities for sub-division of its own land and not to take ownership of properties belonging to parcel owners in the development. An accessory parcel is made appurtenant to the main parcel and is prohibited from being dealt with or disposed of independently of the main parcel [‘Sections 34 and 69, STA’]. [64] As the declaration sought against the Defendant is against its act in sub-dividing its own land in contravention of sections 34 and 69 of the S/N Ef/qVQj4/UeIQcdvPauy7g STA, the question ultimately was whether it was a ‘dealing’ within the meaning of the said section. [65] Bearing in mind that the present claim was reliant on the judgment in Ideal Advantage, it would be instructive to consider how the COA interpreted ‘dealt with’ by reference to SS.5 and 205 of the National Land Code [‘NLC’] as follows: “The interpretation of the word ‘dealt with’ in the context of section 34(2) and section 69 of the Strata Titles Act 1985 [47] D1 and D2 alleged that the learned trial judge erred in law and fact when he failed to appreciate the words ‘dealing’ and ‘dealt with’ in the NLC and ss 34(2) and 69 of the STA 1985 do not include ‘tenancy’ which cannot be registered. [48] On this issue, we refer to the provisions of s 5 of the NLC which defines ‘dealing’ as follows: ‘dealing’ means any transaction with respect to alienated land effected under the powers conferred by Division IV, and any like transaction effected under the provisions of any previous land law, but does not include any caveat or prohibitory order; Section 205 of the NLC provides that:

(1)The dealings capable of being ‘effected’ (as opposed to ‘registered') under this Act with respect to S/N Ef/qVQj4/UeIQcdvPauy7g alienated lands and interests therein shall be those specified in Parts Fourteen to Seventeen, and no others. A transaction under 'Division IV' of the NLC includes Part 15 of the same which has provisions on ‘Tenancy’ under ss 223–

Part 14 of the NLC also deals with ‘transfer exempt tenancies’ pursuant to s 220 of the same.” [66] It was amply clear to me that in Ideal Advantage the Court had to decide a different and distinct legal issue on facts that are distinguishable from the present, namely, whether the act of operating a carpark business within a residential condominium, by way of “tenancy” to a 3rd party constitutes a “dealing”. Section 5 of the NLC defines “dealing” as any transaction with respect to alienated land effected under powers conferred by Division IV of the NLC. [67] It is beyond dispute that the act of sub-dividing concerns creation and registration of title. It has no connection with dealing with the rights of alienated land under an existing title. On the same issue, another important distinguishing factor between the instant case was that in Ideal Advantage, the pleaded case of the MC was to impugn an unlawful transfer with the intention to let out for rent the car park parcels, both transactions being ‘dealings’ under Division IV, NLC, whereas in the instant case the claim was to essentially to impugn the Defendant’s act of sub-dividing its own property. The said act cannot from a plain reading of the NLC be construed as a ‘dealing’ within the meaning of Division IV of the NLC. A proper perusal of the Plaintiff’s pleaded case would S/N Ef/qVQj4/UeIQcdvPauy7g disclose that it is primarily unconnected with any contravention of SS.34 and 69 of the STA, 1985. [68] In reliance on the principle adopted in Ideal Advantage in relation to the registration of the carparks in the strata titles having been irregularly obtained under the NLC 1965 for non-compliance with statutory provisions, the Plaintiff contended that the application for sub-division was via Form 9A, which is declared as an instrument under S.207(1), NLC. As it was a void instrument for contravention of SS.4, 34 and 69, STA, the Defendant’s title to the carparks purportedly lost its indefeasibility and is void by operation of law by virtue of section 24 of the Contracts Act, 1950. I concur with the Defendant’s proposition that what rendered Ideal Advantage’s title defeasible was not the fact that its title has excessive carparks or how the carparks were being used. The Court of Appeal did not cancel the registration because Ideal Advantage used the accessory carpark parcels for a carpark business. Rather, what the Court of Appeal set aside was the instrument of dealing that culminated in Ideal Advantage’s proprietary rights via the SPA between Ideal Advantage and Muafakat Kekal becoming defeasible. As such section 340(2)(b) of the NLC is applicable to cancel Ideal Advantage’s title over the excessive carparks. What Section 340(2)(b) of the NLC cancels is a dealing that culminates in registration of title. It does not cancel the registration. [69] As my view is that that the Defendant’s title to the ownership of the carparks is not open to challenge based on the Plaintiff’s pleaded claim and the specific issue of law referred to this Court for determination, the above contention does not merit further consideration in this trial, S/N Ef/qVQj4/UeIQcdvPauy7g [70] In the final analysis, for the aforesaid reasons and under the circumstances adverted to, in my judgment, the Plaintiff’s pleaded case has not been proved on a balance of probabilities and is legally unsustainable. The Plaintiff’s claim is, therefore, dismissed with costs. [71] Based on the same grounds, the Defendant’s counter-claim for the relevant reliefs as pronounced at the conclusion of the trial has to be allowed and accordingly, it is so ordered with costs. Dated: 22 November 2023 - sgd - GUNALAN A/L MUNIANDY Judge High Court COUNSEL FOR THE APPELLANT: David Samuel (Together with L.S.Leonard and Sheena Stephanie Sebastian [Messrs Chambers of Firdaus] COUNSEL FOR THE RESPONDENTS: Dato' Gurdial Singh Nijar (Together with Raymond Mah, Abraham Au Tian Hui, Raymond Mah, Daphne Rethual and Tharani Kunasekaran (Pdk)) [Messrs Mah Weng Kwai & Associates]