SCP Assets Sdn Bhd v Ang Kim Jhew (BA-22NCvC-617-10/2017)

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1 DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAM DALAM NEGERI SELANGOR DARUL EHSAN, MALAYSIA (BAHAGIAN SIVIL) GUAMAN SIVIL NO.: BA-22NCvC-617-10/2017 ANTARA SCP ASSETS SDN. BHD. (NO. SYARIKAT: 1058403-K) ...PLAINTIF DAN PERBADANAN PENGURUSAN PDII …DEFENDAN (TINDAKAN ASAL) ANTARA PERBADANAN PENGURUSAN PDII …PLAINTIF

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Schedule IV of the Strata Titles Rules 2015 under the Strata Titles Act 1985 (Act 318). The Plaintiff’s case [9] The Plaintiff contends as follows: (i) Ordinary Resolution no. 4 adopted at the 1st AGM runs foul of the Strata Management Act 2013 [Act 757] (“SMA”). The Defendant had acted unlawfully and obliquely in compelling the Plaintiff to pay substantially higher Charges based on different rates compared to other parcel owners; (ii) Only a single rate is to be charged under s. 60 of the SMA. The only exception to the single rate rule allowing for the imposition of different rate of charges is where it can be shown that the parcels are used for significantly different purposes under s.60(3)(b) of the SMA. However, the onus lies on the Defendant to show the exception applies; (iii) Ordinary Resolution no. 4 and the rates of the Charges imposed is a collateral attempt to re-allocate the Plaintiff’s share units. However, the allocation of share units is a matter within the statutory powers of the land office. The Defendant ought to have challenged the allocation by way of Judicial Review proceedings; (iv) The formula adopted in determining the rates to be imposed on the car parks was flawed. The basis of the rates by reference to the formula prescribed in Schedule IV of the Strata Titles Rules 2015 was erroneous; and (v) The imposition of the rates would result in the Plaintiff’s voting rights being disproportionate to the maintenance charges imposed on it. With the new rates, the Plaintiff will have to pay 24% of the total maintenance charges for PD2, but will have only 3% of the voting rights. [10] In view of its contention above, the Plaintiff seeks the primary relief for a declaration that the Ordinary Resolution No. 4 is ultra vires the SMA. In addition, the Plaintiff seeks exemplary damages for the discrimination practised against it by the Defendant following the Ordinary Resolution No. 4 and subjecting the Plaintiff to unnecessary loss and damage including deprivation of voting and participation rights at meetings. The Defendant’s defence [11] In defence of the suit against it, the Defendant takes the following position: (i) The Charges imposed pursuant to Ordinary Resolution No. 4 is allowed by law. The charges were imposed based on share units and is expressly mandated by the strata regime under the SMA; (ii) Section 60(3) of the SMA allows for imposition of different charges on parcels of significantly different use; (iii) The different rates imposed on the Plaintiff satisfies the just and reasonable test. The floor area owned by the Plaintiff was 33% of the entire share units of PD2 development. However, the maintenance charges it was obliged to pay based on the share units owned is a mere 3% of the total maintenance charges of PD2. This would result in the other parcel owners subsidizing the maintenance of the Plaintiff’s parcels; (iv) The Defendant must be allowed to regulate the charges to be imposed on parcel owners by resolution passed at its Annual General Meeting. In other words, it is entitled to implement a self-regulating mechanism; and (v) The formula adopted in arriving at the rate of charges imposed is in accordance with the provisions of the SMA. [12] In addition to the above, the Defendant counterclaims for an amount of RM 113,049.43 as arrears for maintenance and sinking fund charges which is due from the Plaintiff. The arrears resulted from the charges imposed after the rates were adjusted from square foot basis to share unit basis by the JMB (the predecessor of the Defendant) on the Plaintiff’s parcels with effect from June 2014. This amount is not in dispute. The Plaintiff paid this amount on 30.9.2019. At the trial counsels informed that the Defendant had paid back the Plaintiff this amount on 27.5.2021, hence the counterclaim is still a live issue in this proceeding. [13] Although there are 2 other defendants in the counterclaim, namely PD11 Corporate Parking Sdn Bhd and Affinity Land Sdn Bhd, there are no longer live issues against them in the present proceedings. Issues for determination [14] From the contentions of the parties, the central issue that arises for determination is whether the Defendant is entitled by Ordinary Resolution No. 4 to impose multiple rates of charges on the parcels in PD2, with the rates being the highest for the Plaintiff’s parcels. Analysis and decision of this court [15] At the outset, some key principles in relation to maintenance charges by reference to statutory provisions needs to be stated. [16] Firstly, the SMA imposes a duty on parcel owners to pay maintenance charges and contribution to the sinking fund. (s. 52). The corollary to that is the management corporation is empowered to collect the charges (s.59 (2)(a) and (b)). [17] Secondly, the maintenance charges are to be utilized towards inter alia, maintaining the common property and to meet the actual and expected expenditure for matters listed in s. 50(3). [18] Thirdly, the rates upon which the maintenance charges are based are determined at the general meeting of the management corporation. (s.58). [19] Fourthly, the charges are determined and collected based on the share units of the parcel owners. (s. 59). The statutory position has also now been settled and affirmed by several decided cases. (See: Ekuiti Setegap Sdn Bhd v Plaza 393 Management Corp [2018] 4 MLJ 284, Perbadanan Pengurusan Endah Parade v Magnificent Diagraph [2013] 6 MLJ 343, Target Term Sdn Bhd v Waldorf and Windsor Management Corporation and anor appeal [2024] 6 MLJ 598). Application of s. 60(3)(b) of the SMA 2013 [20] I now come to the crux of the dispute. The Plaintiff’s grievance is that differential treatment in the imposition of the rates for the Charges is not justified. This is particularly apparent when the Charges imposed for its car park parcel is RM 4.38 per share unit in comparison to the rate of RM 0.44 for Menara Star which also owns car park parcels. It therefore contends the same rate should apply in respect of the same parcels, unless the exception in s. 60(3)(b) of the SMA is attracted. [21] Section 60(3) of the SMA provides, (3) Subject to section 52, for the purpose of establishing and maintaining the maintenance account, the management corporation may at a general meeting – (a) determine from time to time the amount to be raised for the purposes mentioned in subsection 50(3); (b) raise the amounts so determined by imposing Charges on the proprietors in proportion to the share units or provisional share units of their respective parcels or provisional blocks, and the management corporation may determine different rates of Charges to be paid in respect of parcels which are used for significantly different purposes and in respect of the provisional blocks; and (c) determine the amount of interest payable by a proprietor in respect of late payments which shall not exceed the rate of ten per cent per annum. (emphasis added) [22] The import of the above provision was explained by the Court of Appeal in Aikbee Timbers Sdn Bhd & Anor v Yii Sing Chiu & Anor and another appeal [2024] 1 MLJ 948 held, [64] The plain meaning in s 60(3) of the SMA 2013 proffers that, first, the management corporation may increase the amount to meet the actual or expected general or regular expenditure necessary in respect of the expenditure spelled out in s 50(3)(a)–(n) of the SMA 2013. Secondly, if the amount is increased, the management corporation is to adjust the chargeable rate based on the increased amount. Thirdly, the management corporation ‘may determine different rates of the Charges to be paid in respect of parcels which are used for significantly different purposes’ and also ‘in respect of the provisional blocks’. Lastly, the management corporation is to determine the interest chargeable for late payments. [65] Different rates are allowed to be imposed for parcels in relation to a subdivided building which are used for significantly different purposes and for provisional blocks. [66] It is instructive to understand that there are two types of strata title. Section 16 of the Strata Titles Act 1985 (‘the STA 1985’) states that the registrar (registrar of titles or deputy registrar of titles for the state or land administrator for the district, whichever is applicable) shall prepare documents of strata title in respect of (a) a parcel; and (b) a provisional block. In other words, there are strata tiles for parcels in a subdivided building (or land) and strata titles for provisional blocks. [67] With regard to strata titled parcels in a subdivided building, if there are parcels within the subdivided building which are used for significantly different purposes, then the management corporation is empowered to impose different chargeable rates for parcels which are used for significantly different purposes. Likewise, if there are provisional blocks, the management corporation is empowered to impose different chargeable rates for the provisional blocks. It is to be noted that both the words ‘parcels’ and ‘blocks’ were used in plural form. This connotes that the law has envisaged a situation like the instant case, where a building is subdivided into parcels with separate strata titles, and the parcels are used for more than one type of purposes, such as parcels for residential purpose and parcels for commercial purpose within single development, then the management corporation is permitted in law to charge different rates for parcels that are used for significantly different purposes. [23] The operative words in the provision are clearly, “parcels which are used for significantly different purposes”. Whether the parcels were used for significantly different purposes is a question of fact to be determined by evidence led at the trial. [24] At the trial, the Defendant sought to invoke the application of s. 60(3)(b) of the SMA in its written submissions. It was submitted on behalf of the Defendant as follows: “63. In the present case herein, there are different types of parcels in PD2 which are clearly used for different purposes as stated below: (a) The car park parcel is used by the Plaintiff to carry out the car park operation business in PD2. The Plaintiff's car park is open to the public as well as the parcel proprietors in PD2; (b) Menara Star is an en-bloc parcel (which means all facilities were built only for the tower and hence Menara Star will pay solely for those facilities exclusively given to Menara Star). It is 17 storeys' office building and the car park bays, is solely used by The Star for its newspaper publication business; (c) The ground floor shop lots parcel is usually used by the parcel proprietors for the business activities which would involve a higher foot traffic or flow of patrons entering into the premise, for example, food and beverage businesses or retail businesses; (d) Office parcel is used by the parcel proprietors for the commercial activities which would involve lower foot traffic or flow of patrons entering into the premise, for example, travel agency or recruitment agency.” [25] Before proceeding further, I find it necessary to deal with the defence position as it raises a pleading issue. The Plaintiff contends that the Defence cannot rely on s. 60(3)(b) as it has failed to plead the factual matrix upon which it seeks to bring its case. I find merit in the contention. [26] In Karun Klasik Sdn Bhd v Tenaga Nasional Bhd. [2018] MLJU 1301, the Court of Appeal held, [104] Even if the pleading of these statutory provisions is thought to be essential, it ought to be borne in mind that O 18 r 7 requires that all material facts necessary to support a claim are to be pleaded. If a party’s case is premised on a statue, then it is incumbent upon that party to plead all material facts necessary to bring itself within the ambit of that particular statute (see Malaysian Civil Procedure 2015, Vol 1 published by Sweet & Maxwell). Conversely, it would be entirely inadequate for such a party to plead a particular statute but not then plead the necessary facts to fall within its ambit. (See also: Mohamed in Mydin v Gan Kim Keng [1974] 2 MLJ 214 (FC)). [27] Upon a perusal of the Statement of Defence filed, apart from the fact that s. 60(3)(b) was not pleaded, I find a telling absence of facts to support the defence reliance on s. 60(3)(b). [28] The pleaded case of the Defendant shows its defence was on a different premise. In defence of the imposition of the Charges, the Defendant contends that the allocation of share units to the Plaintiff in the strata titles issued was inequitable and incorrect. It was expressly pleaded that the share units for the Plaintiff’s car park parcels was disproportionate and inequitable to the area it occupies. (See paragraphs 10, 10A and 11 of the Defence). Paragraph 11 in particular sets out the percentage of the Plaintiff’s charges in relation to the charges for the parcels in PD2 if a single rate is imposed. The Plaintiff’s contribution is only 3% although it occupies 33% of the total parcel area. This results in the other parcel owners subsidizing the contribution of the Plaintiff. [29] It is trite law that a party is bound by its pleadings. In Iftikar Ahmed Khan (as the executor of the estate for Sardar Mohd Roshan Khan, deceased) v Perwira Affin Bank Bhd (previously known as Perwira Habib Bank Malaysia Bhd) [2018] 2 MLJ 292, the Federal Court had this to say, [22] The function of pleading is to give fair notice of the case which has to be met: Rosita bte Baharom (an infant) v Sabedin bin Salleh [1993] 1 MLJ 393, Perniagaan Kinabalu (S) Sdn Bhd v Sua Ah Yoke & Ham Jon See [2002] MLJU 601. This is to prevent the opposing party from being taken by surprise by evidence which departs from pleaded material facts, for such evidence if allowed, will prejudice and embarrass or mislead the opposing party: see Superintendent of Lands and Surveys (4th Div) & Anor v Hamit bin Matusin & Ors [1994] 3 MLJ 185; [1994] 3 CLJ 567; Raja Abdul Malek Muzaffar Shah bin Raja Shahruzzaman v Setiausaha Suruhanjaya Pasukan Polis & Ors [1995] 1 MLJ 308. …. [27] It is settled law that parties are bound by their pleadings and are not allowed to adduce facts and issues which they have not pleaded: Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1, State Government of Perak v Muniandy [1986] 1 MLJ 490, Veronica Lee Ha Ling & Ors v Maxisegar Sdn Bhd [2011] 2 MLJ 141; [2009] 6 CLJ 232. In Lee Ah Chor v Southern Bank Bhd [1991] 1 MLJ 428; [1991] 1 CLJ Rep 239 it was held that where a vital issue was not raised in the pleadings, it could not be allowed to be granted and to succeed on appeal. [30] The Defendant’s oral evidence adduced is also in line with its pleaded case of inequitable share unit allocation. DW1, a committee member of the Defendant for the term 2019/2020 testified. His witness statement expressly stated as follows: “Multiple service charge rates was proposed for the following reasons:- (a) disproportionate allocation of share units to the different types of parcels in PD2 Development area (b) incorrect allocation of share units to the different parcels in PD2 Development area.” [31] These were precisely the reasons which prompted the tabling of the Ordinary Resolution No. 4, the terms of which had been set out in paragraph 8 above. [32] Therefore, the reliance on s. 60(3)(b) was never the defence position. To reiterate, nowhere was it pleaded that the imposition of the multiple rates was because the parcels were being used for significantly different purposes. On this ground alone, the defence reliance on this provision ought to be disregarded. [33] Nonetheless, for the sake of completeness, I will deal with the respective contentions in relation to s. 60(3)(b). [34] As the Defendant is the party imposing the different rates of Charges, it follows that the onus is on the Defendant to prove that the multiple rates was justified based on the significantly different use to which the parcel was put. [35] The case of Aikbee Timbers Sdn Bhd & Anor v Yii Sing Chiu & Anor and another appeal (supra) illustrates when multiple rates are justified. [36] The facts are as follows. The development concerned was an integrated mixed development project known as Pearl Suria — Menara Pearl Point 2. The development comprised of three parts; residential units known as Pearl Suria Residence, shopping mall known as Pearl Suria Shopping Mall, and the third, a car park block. In other words, the development had commercial parcels as well as residential parcels. The mall was owned by the developer, whereas the residential parcels were sold to individual owners. One of the residential owners discovered that the owners of the residential parcels were paying higher rates for the maintenance charges and contribution to the sinking fund as compared to the commercial parcels. He then took out an action to challenge the different rates imposed. [37] The Court of Appeal examined the formula utilised for calculation of the chargeable rate for maintenance and held as follows, [41] The formula for the calculation of the chargeable rate for the maintenance charges in the Second Schedule of the SPA must be understood to apply to a group of common proprietors who have the same rights and enjoy the same benefits of the same common facilities and common property. Therefore, they share the same responsibilities to maintain these common facilities and common property. …. [53] In a mixed development, like the one before us, the exclusive common facilities are exclusively for the benefit and enjoyment of the residential parcels’ owners. The expenditure for the maintenance and management of these exclusive common facilities which are exclusively for the benefit of the residential parcels’ owners should not be included in the formula for the chargeable rate for the commercial parcels owners who have no right to enjoy such exclusive common facilities. The rigid imposition of only one chargeable rate for maintenance charges for residential parcels and commercial parcels would not reflect the true construction of a social legislation. … [69] If one is to take the total expenses (or estimated expenses), including the expenses for the common properties which are exclusively for the use of the residents of the residential parcels and divide by the entire share units in the development as the only denominator, the result could only produce a single rate. If this approach is the only approach, why then did the law provide that the management corporation ‘may determine different rates of Charges’? The only plausible answer lies in the words ‘used for significantly different purposes’. The phrase ‘used for significantly different purposes’ simply connotes the use of the parcels is distinctly different. Residential parcels and commercial parcels are used for significantly different purposes. [70] The management corporation could demarcate those expenses (or estimated expenses) for the residential parcels and the commercial parcels. Once the total expenses (or estimated expenses) are demarcated and determined, the same formula can be used to determine the rate of charges, namely the specific expenses are to be divided by the total share units of the residential parcels and commercial parcels respectively, i.e., in proportion to the share units of their respective parcels. [38] Thus, the principles that can be distilled from the above passage is that: (i) the law allows different rates to apply if it can be shown that the use of the parcels in the same development are significantly different. This is because the expenses to maintain parcels of different use will vary depending on the type of parcel; (ii) expenses incurred to maintain residential parcels are expected to be higher than commercial parcels. These arise from having to maintain common facilities that are for the exclusive use of the residential parcel owners; and (iii) The different rates are determined by reference to the statutory formula which in turn is determined on the basis of the expenditure arising from the different parcels. The total expenses for different parcels are taken into account separately. It is then divided by the total share units of the parcels similarly used, to arrive at the rate to be imposed. [39] The facts of the present case are distinctly different. Firstly, the strata titles issued for PD2 are commercial in nature. It is not in dispute that PD2 is a commercial development. It is also not in dispute that the parcels in that development comprise of shops, offices and car park parcels which are all for commercial use. [40] Secondly, all the common facilities and property in PD2 are for the benefit and use of all the parcel owners. In other words, there is no exclusivity of benefit or use or enjoyment of any of the common facilities and property. The Defendant did not adduce cogent evidence to show otherwise. [41] The Defendant called DW2, the area manager of Henry Butcher Malaysia Sdn Bhd. (“Henry Butcher”), to testify. Henry Butcher was appointed property manager for PD2 at the material time. DW2 was tasked with determining the rates for the proposed charges to be included in Ordinary Resolution no. 4. [42] In her evidence, she explained the method adopted to arrive at the rates. Her evidence can be summarised as follows. She would first determine the expenses incurred for PD2. Next, she allocated the costs incurred in maintaining the common property to the respective parcels using the direct cost allocation and shared costs allocation methodology. This would be done by reference to the area occupied by the parcels, which she termed adjusted area. Finally, based on the above, she then arrived at the service charge rates. [43] In arriving at the adjusted area, she utilised the formula prescribed in Schedule IV of the Strata Title Rules 2015. However, in cross examination she conceded that she was in fact utilising a formula that was intended for the allocation of share units of parcels. [44] Her rationale for employing an adjusted area for the purposes of her computation was this, “I wish to clarify that the area of some developments may be adjusted (“adjusted area”) as the share units to the parcels in those developments had been allocated before the relevant First Schedule to the Strata Management Act 2013 or the Schedule IV to the Strata Titles Rules (which sets out the share units formula) came into force. The share unit allocation in those developments had been determined without taking into account the parcel areas and the weightage factors as prescribed by the First Schedule to the Strata Management Act 2013 or the

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Schedule IV to the Strata Titles Rules 2015.” [45] Her method and approach in determining the rates was criticised by the Plaintiff on the ground that the Schedule IV of the Strata Title Rules 2015 was not even in force at the material time when the strata titles were issued for PD2. I find merit in the objection of the Plaintiff. [46] Crucially, Schedule IV of the Strata Title Rules 2015 prescribes the formula for allocation of share units. It cannot be adopted for the purpose of determining rates of charges as different considerations apply. Whilst the allocation of share units after the Strata Titles Rules 2015 came into force takes into consideration the area of the parcel, the share units in the present case had already been determined. The utilisation of the share units formula in the Strata Titles Rules 2015 to compute maintenance charges cannot be justified even if she disagreed with the allocation of share units for the parcels in PD2. [47] In cross examination, she conceded that the common property of PD2 was accessible to all the parcel owners, regardless of whether the parcel is a retail shop or a car park. There is no exclusivity in usage. With this concession, there is no justification for proposing different rates for the parcels in PD2. More importantly, she did not satisfactorily explain why Menara Star which has car park parcels had a different rate applying to it from the Plaintiff. It would appear that her proposal for multiple rates to be charged on the parcels in PD2 was principally based on the floor area occupied. [48] Counsel for the Plaintiff drew my attention to the case of SCP Assets Sdn Bhd v Perbadanan Pengurusan PD-1 [2024] MLJU 168 the facts of which are similar to the instant case. PD-1 is also a stratified mixed commercial development. The High Court held that the imposition of the multiple rates on different parcels (similar to the present) by way of Private Motion no. 1 at the 1st AGM of the management corporation, was void. [49] DW2 was also the witness in that case. She adopted the same method of computation. In the appeal by the management corporation, the Court of Appeal in Perbadanan Pengurusan PD1 v SCP Assets Sdn Bhd [2025] 6 MLJ 283 commented on the computation adopted as follows, [38] Be that as it may, we have nonetheless scrutinised the appellant’s computation in its attempt to justify that the different parcels in PD1 complex need the incurrence of different common property maintenance expenditure. We however find that the computation using the direct cost allocation methodology is hypothetical as well as arbitrary. This has been done principally based on the differences in size of the office, shop and carpark parcels in the PD1 complex. The computation has not however been cogently done based on the actual maintenance costs of the common property reasonably required by the office, shop and carpark parcels respectively for their differing usage over the preceding years. [50] More importantly, the Court of Appeal in upholding the decision of the High Court held, [35] Based on our reading of the STA and the SMA, we find that the sharing of maintenance charges in a stratified development is generally determined by the share units of a parcel owner, in proportion to the total annual maintenance expenditure for the common property of the entire development, which is collectively borne by all parcel owners. [36] Notwithstanding the general rule, s 60(3) of the SMA provides for the imposition of different rates of maintenance charges in respect of parcels that are used for significantly different purposes. This principle was recognised in Aikbee Timbers Sdn Bhd & Anor v Yii Sing Chiu & Anor and another appeal (Pearl Suria’s case), which concerned Pearl Suria, a mixed commercial and residential development. …. [37] We are mindful that the appellant heavily relies on the Pearl Suria’s case in support of its proposition to convince us. However, and whilst we agree with the findings made by this court in Pearl Suria’s case, there is the obvious difference between Pearl Suria and PD1 complex. The former is a mixed commercial cum residential development but the latter is solely a commercial development. In this respect, we can appreciate that Pearl Suria has a distinct and different residential block and commercial block that required separate common property maintenance expenditure; thus, justifying the invocation of s. 60(3) of the SMA because the parcels of the development are used significantly for different purposes. Hence, the Pearl Suria’s case is distinguishable here because it is not in dispute that all the parcels in this PD1 complex are commercial only which warrants sharing from a sole common property maintenance expenditure. (emphasis added) [51] There being no distinguishing facts to preclude the application of the decision to the present case, I am bound by the decision of the Court of Appeal. I therefore find no justification supported by evidence for the imposition of the multiple rate of charges. Collateral attack on the allocation of the share units [52] DW1 candidly admitted in cross examination that the underlying reason for the multiple rates was because the share units was disproportionately allocated. Given the allocation, the Plaintiff will only be accountable for 3% of the total maintenance costs in PD2 although the car park parcels occupy approximately 33% of the total built up area. In view of this, DW1 said that it was not feasible to apply a flat service charge rate. Ordinary Resolution No. 4 was then proposed to be tabled. [53] I am of the view that the reason proffered is neither sanctioned nor justified in law. The Defendant is obliged to collect maintenance and sinking fund charges in proportion to the share units of the parcels. Having found that the share units allocated for the Plaintiff’s parcels is not proportionate to the area occupied, it cannot then attempt to redress this inequality by increasing the Charges. This is tantamount to a collateral attack on the allocation of share units by the land office. [54] The High Court in SCP Assets Sdn Bhd v Perbadanan Pengurusan PD-1 (supra) had this to say, [47] By challenging the impugned decision in this suit, the defendant is, in effect, initiating a collateral attack against the decision-maker, in this case, the Selangor Director of Lands and Mines, who is not even made a party. With respect, I do not think that this is allowed. The impugned decision is not even a mixture of public and private law. It is purely within the ambit of public law. [48] To begin with, the Director of Lands and Mines is a public authority. Any challenge against his decision must be commenced by way of a judicial review under O 53 of the Rules of Court 2012 (‘the ROC’). [49] It is therefore too late in the day for the defendant to assert that the allocation of the share units is inequitable and to use this argument to seek refuge under s 60(3)(b). I would even venture further to state that the failure of the defendant to challenge the impugned decision makes the whole exercise of relying on s 60(3)(b) premature. ... [52] Applying the said proposition, it is my considered view that by failing to take the matter up via O 53 of the ROC, the defendant has effectively squandered the opportunity to ventilate on the issue of whether the allocation of the share units is inequitable. [53] There has to be a finality in the impugned decision made by the Selangor Director of Lands and Mines in April 2017. The defendant uses this suit, which was filed in January 2018, to mount a collateral challenge against the impugned decision when the Director was not even a party to the suit. To begin with, this approach is certainly not desirable. [55] The Court of Appeal in Perbadanan Pengurusan PD1 v SCP Assets Sdn Bhd (supra) in agreeing with the reasoning of the High Court stated, [39] That notwithstanding and albeit the appellant has alluded to the fact that the appellant is not contesting the share units of the PD1 complex carpark parcel bays allocated by the Director of Lands and Mines of Selangor, we nonetheless find that the appellant’s computation is, in fact, a collateral attempt by the appellant to redress the inequities of the share units that have been allocated by the Director of Lands and Mines of Selangor in respect of the PD1 complex. [56] The imposition of the Charges on the Plaintiff is a back door attempt to overcome the lesser amount of charges the Plaintiff is obliged to pay based on the share units allocated for its parcels. This action is however tantamount to questioning the allocation of the share units which falls within the purview of the authority responsible for the issuance of strata titles. [57] In the result, the Defendant’s contention that should it be allowed a self-regulating mechanism by obtaining the requisite approval of members at an AGM is without merit. Any decision taken at its AGM in respect of the Charges must be permissible in law. Whilst the Defendant is allowed to determine the rate for the Charges to be collected, it must act within the confines of the law. The fact that the Defendant was of the view that the Charges was just and equitable is irrelevant unless it is expressly sanctioned by the provisions in the SMA. [58] For the above reasons, the Plaintiff’s contention that the Charges are ultra vires the SMA is upheld. The Defendant’s counterclaim [59] The Defendant’s counterclaim arises from a previous litigation involving both parties. In 2015, the Plaintiff filed Originating Summons No. 24-1173-09/2015 (“Suit 1173”) in the Shah Alam High Court challenging the imposition of maintenance charges premised on floor area by the JMB. [60] The suit was settled by consent of the parties on 20.4.2016. At the 4th AGM of the Defendant, the JMB announced that the Charges imposed on the Plaintiff’s parcels will be based on the allocated share units of those parcels with effect from June 2014. Based on the adjusted rates, the Defendant back charged the Plaintiff an amount of RM 113,049.43 (which included late payment interest charged by the Defendant). However, the same treatment did not apply to the other parcel owners whose rates were adjusted only with effect from October 2016. The Plaintiff therefore claims there was discrimination and victimisation practised by the Defendant. [61] The Plaintiff paid the amount of RM 113,049.43. The amount was later repaid by Defendant on 27.5.2021. [62] The Plaintiff does not dispute the back charged amount. Counsel for the Plaintiff candidly informed the court that the only reason for the Plaintiff’s refusal to pay was that it was discriminated against, as the other parcel owners were not back charged the revised rates. [63] The fact that the Plaintiff was the only parcel owner who was back charged is not a valid ground to contest the counterclaim. The Plaintiff’s duty to pay maintenance and sinking fund charges arises from statute (s. 52 of the SMA). As the Plaintiff has no defence to the counterclaim, it must be allowed. [64] The Plaintiff’s claim for exemplary damages premised on discrimination appears to have been abandoned, as it was not pursued in the oral evidence adduced and submission by counsel. In any event, at the trial, PW1 admitted that the allegations of harassment and discrimination had been resolved by consent in Suit 1173. Conclusion [65] Premised on the foregoing findings and the reasons stated, I therefore make the following orders: (i) The Plaintiff’s claim for a declaration that the Ordinary Resolution No. 4 is ultra vires Act 757 is allowed; (ii) The Defendant’s counterclaim for the sum of RM 113,049.43 is allowed. Interest at 5% on the judgment sum is to run from 27.5.2021 until realization; and (iii) Costs of RM 30,000.00 to be paid by the Defendant to the Plaintiff. Dated: 27th of November 2025 -sgd-Alice Loke Yee Ching Judge High Court Shah Alam Counsels for Plaintiff: Mr. Ashok Kandiah (Mr. Ling Chee Wei and Ms. Celline Teh together with him) Tetuan Ho, Loke & Koh Counsels for Defendant: Mr. Lai Chee Hoe (Ms. Angeline Ang Mei Fong and Mr. Vignash Selvam together with him) Tetuan Chee Hoe & Associates