Serai Saujana Management Corporation v 1. ) Serai Saujana Development Sdn Bhd (BA-12B-65-06/2024)

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N-RESPONDEN [DALAM MAHKAMAH SESYEN DI SHAH ALAM RAYUAN SIVIL NO: BA-B52-96-12/2019 SERAI SAUJANA MANAGEMENT CORPORATION (PTG. SEL. 51/1/1-P/10-11)

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(NO. SYARIKAT: 198301001834) PIHAK-PIHAK KETIGA] Didengar bersama DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAM RAYUAN SIVIL NO: BA-12B-75-07/2024 (NO. SYARIKAT: 199001009294)

(NO. SYARIKAT:198301001834) N-RESPONDEN [DALAM MAHKAMAH SESYEN DI SHAH ALAM RAYUAN SIVIL NO: BA-B52-96-12/2019 SERAI SAUJANA MANAGEMENT CORPORATION (PTG. SEL. 51/1/1-P/10-11)

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(NO. SYARIKAT: 198301001834) PIHAK-PIHAK KETIGA] GROUNDS OF JUDGMENT Introduction [1] Arising from the Judgment of the Sessions Court on 11-6-2024 in a claim by Serai Plaintiff Serai Saujana Development Sdn Bhd (the 1st Defendant, ), Management Corporation of The Villa @ Serai Saujana (the 2nd Defendant, ) and Tenaga Nasional Berhad (the 3rd Defendant, ), 2 appeals were filed:

Appeal No. BA-12B-65-06/2024 by the Plaintiff, the Management Corporation of a condominium known as The View built on land held under Geran 274388 Lot 325 Bandar Saujana, Petaling District, State of Selangor ( );

Appeal No. BA-12B-75-07/2024 by TNB against the Developer and Saujana Resort (M) Berhad, the previous landowner of Lot 325, in third party proceedings for an indemnity. [2] The Sessions Court had dismissed claim for trespass against the Developer, Vila MC and TNB and recovery of vacant possession of the part of Lot 325 on which TNB maintains an electrical installation for power distribution ( - ). The Sessions Court also dismissed third party claim for indemnity against the Developer and Saujana Resort (M) Berhad. Background facts [3] The Developer built the Disputed TNB Sub-station and handed it over to TNB to house its electrical installation. The Villa MC is the the Developer on the land adjoining Lot 325 ( ) and the alleged beneficiary of power supply from the Disputed TNB Sub-station. [4] Lots 325 and 328 were previously held under temporary titles HS(D) 238922 No. PT 483 and 484 respectively. Before subdivision, Lot 325 and part of Lot 328 were registered under master title Geran 40276 Lot 82 Bandar Saujana, Petaling District, State of Selangor ( . The sub-division to Lots 325 and 328 took place on 4-1-2010. [5] The Master Title was originally registered to Saujana Resort (M) Berhad who appears on the title as the landowner, although it claims to be a bare trustee of the land beneficially owned by one Handal Dinamis Sdn Bhd. It is undisputed that the Developer had a Power of Attorney from Saujana Resort (M) Berhad to undertake the development of the land. [6] Majlis Bandaraya Shah Alam approved the development plan for The View which was submitted based on the Master Title before the subdivision. The development plan provided for the construction of 2 TNB sub-stations on Lot 325, one of which is the Disputed TNB Sub-station. [7] Construction of The View with the 2 TNB sub-stations was completed, and the Certificate of Fitness was issued on 18-2-2010. Purchasers received their units and in the usual order, the Joint Management Body of ( ) was established on 18-6-2011 and the Plaintiff was thereafter incorporated on 30-5-2013. [8] The Plaintiff became the registered proprietor of Lot 325 when title was transferred from Saujana Resort (M) Berhad on 20-7-2013. The Plaintiff subsequently learned through a survey that the Disputed TNB Sub-station was on Lot 325, although labels on the structure indicated that it served to power [9] The Plaintiff sued the Developer, Villa MC and TNB for trespass. The principal grounds upon which the Sessions Court dismissed the action were that the Disputed TNB Sub-station was built according to the approved development plan, there was an undertaking given by the Developer to lease the affected land to TNB, the Plaintiff is bound by that equitable lease and that the claim is in any event time barred. Analysis and findings Appeal 65 [10] Section 17B of the Strata Titles Act 1985 ( ) provides that the management corporation shall, on coming into existence, become the proprietor of the common property and be the custodian of the issue document of title of the lot. The management corporation shall have in relation to the common property the powers conferred by the National Land Code 1965 ( on a proprietor in relation to its land. [11] In an action for trespass to land, the Plaintiff as the registered proprietor, must prove that the Developer, Villa MC and TNB entered and/or remained on Lot 325 unlawfully. In this case, the alleged trespass is manifested by the existence of the Disputed TNB Sub-station on Lot

The location of the Disputed TNB Sub-station is on Lot 325 was not a disputed fact. As noted, it was built by the Developer and handed over to TNB to house electrical installation. [12] It is noted at the outset that there were no facts pleaded or proved that establishes a case for trespass against Villa MC. Villa MC was not yet formed when the Disputed TNB Sub-station was erected and had at no time asserted any ownership or possessory rights over the Disputed TNB Sub-station. Even if the Disputed TNB Sub-station only serves to distribute electricity to The Villa, that fact alone cannot make Villa MC liable in law for trespass. [13] As for the Developer, the only allegation made against it, is that it built the Disputed TNB Sub-station and handed it over to TNB in its capacity as the developer. However, the Developer did so under a valid power of attorney from the original landowner to do all things necessary for the development of The View and The Villa. [14] The timeline showed that the development of Lot 325 was substantially completed before sub-division. Subject to regulatory approvals, it was entirely the prerogative of the Developer to draw up the development plan and locate the Disputed TNB Sub-station wherever it deems fit. The development plan was approved by Majlis Bandaraya Shah Alam after all technical consultations were undertaken. Thereafter, construction was completed and Certificate of Fitness issued was in 2010, all before the Plaintiff was formed. [15] Therefore, the Developer committed no trespass on Lot 325 when it built and handed the Disputed TNB Sub-station to TNB with full authority. [16] That leaves TNB. In an action for trespass, it is irrelevant that the Disputed TNB Sub-station was built in compliance with all technical requirements and according to the approved development plan. The only issues for determination are what unregistered interest on Lot 325 is and whether the Plaintiff, as the registered proprietor of the land, must recognize it. Nature of 3rd Defendant [17] The pleaded defence of the Developer and TNB is that there was a lease of the Disputed TNB Sub-station land to TNB. As established by S&M Jewellery Trading Sdn Bhd & Ors v Fui Lian-Kwong Hing Sdn Bhd [2015] 5 MLJ 717, a lease is imperfect without registration and unless perfected, it will not operate to transfer any rights in rem to the lessee. [18] In this case, there were 2 forms of application submitted by the Developer and acted upon by TNB for power supply:

(a)Borang A dated 19-10-2006 for supply to the 169-unit condominium block on the yet to be subdivided Master Title;

(b)Borang A dated 30-4-2008 for supply to the 43 units of villas on the temporary title Lot 484 of the subdivided Master Title, which corresponds to Lot 328. [19] Borang A is also the form that evidenced undertaking in the following terms: diatas kepada TNB selama 30 tahun dengan bayaran nominal RM10 sahaja dengan pilhan bagi TNB untuk membaharui pajakan selama 30 tahun It is accepted that the above was a condition for approval to provide electricity supply. [20] The Developer and TNB both relied on the undertaking in the 30-4- 2008 Borang A in their pleading. However, neither properly addressed what the Plaintiff contends to be a discrepancy in the intended location of the sub-station and therefore the location of the intended lease evidenced by that Borang A. The 30-4-2008 Borang A sets out the following: Berhubung dengan perkara di atas, berikut adalah maklumat lengkap mengenai tanah tapak pencawang yang diperlukan TNB and set out particulars of the land to be developed i.e. Lot 328, and the size of the sub-station land required by TNB. There was no attached plan that identified the exact location of the intended sub-station land. [21] The 30-4-2008 Borang A does not evidence an undertaking to lease TNB because the location of that intended sub-station is ambiguous in the form. Thus, there is no written agreement or undertaking to lease land on Lot 325 for the Disputed TNB Sub-station. [22] Also for reasons that are unclear, a form of statutory lease ( ) was prepared for lease of 41.81 square meters of land on Lot 325 and forwarded by TNB to the Developer, but it was never executed and returned to TNB to be registered on the title. Thus, there is also no registrable instrument in Borang 15A for the lease of the Disputed TNB Sub-station land to speak of. [23] For the above reasons, it must be found on the pleaded case and the evidence adduced that there was no agreement in writing to lease land on Lot 325 for the Disputed TNB Sub-station or a registrable Borang 15A as proof of an antecedent agreement to lease any part of Lot 325 for that purpose. [24] On a review of the pleadings, the Developer and TNB did not specifically plead the factual basis for the existence of an equitable lease other than the facts set out above including the 30-4-2008 Borang A, the completed but unsigned Borang 15A, the approved development plan and Certificate of Fitness. This leaves the Court to consider whether on the facts pleaded, it can infer the existence of an agreement to lease that may be treated as if it is registered and enforced in personam by a court of equity as also envisaged by Section 206 of the NLC: bject to the following provisions of this section:

every dealing under this Act shall be effected by an instrument complying with the requirements of sections 207 to 212; and

no instrument effecting any such dealing shall operate to transfer the title to any alienated land or, as the case may be, to create, transfer or otherwise affect any interest therein, until it has been registered under Part Eighteen. ...

Nothing in subsection (1) shall affect the contractual operation of any transaction re [25] In order for section 206(3) of the NLC to operate, there must be in existence a transaction for the lease of the Disputed TNB Sub-station land that is valid and enforceable as a contract (per Kimlin Housing Development Sdn Bhd v Bank Bumiputra Malaysia Bhd & Ors [1997] 3 CLJ 274), but there is no requirement in law that such an agreement to lease must take any particular form or even be in writing. The parties may still prove the existence of an enforceable agreement to lease the Disputed TNB Sub-station land to TNB. [26] Based on the undisputed facts of the case:

The Developer had identified the locations of the 2 TNB sub-stations on the Master Title and this was approved by all regulatory authorities;

The development plan was also sent to TNB for feedback on the number of sub-stations, electrical cables and other installations for the expected energy load of the new development;

The 30-4-2008 Borang A was an application for supply of electricity to the development on Lot 328 and an undertaking to lease 41.81 square meters to TNB to operate a sub-station to supply power to that development;

The 30-4-2008 Borang A does not identify the location of the intended 41.81 square meter sub-station, but the development plan and the unsigned Borang 15A from TNB do;

The Developer built the sub-station buildings according to the approved development plan and handed them to TNB so neither were under any misapprehension about the location of the Disputed TNB Sub-station;

Based on the form of Borang A and correspondence between the Developer and TNB, the Developer was also under no misapprehension about the conditions for TNB upply of electricity to Lot 328; and

TNB had acted upon 30-4-2008 Borang A and proceeded with the electrical installations in the Disputed TNB Sub-station at Lot 325 according to the development plan. [27] Considering the above, this Court finds no appealable error in the conclusion of the Sessions Court that there was an equitable lease of the Disputed TNB Sub-station land by the Developer to TNB as there was consensus by both the Developer and TNB on the intention to have a lease and its terms ( ). Despite the lack of clear documentary evidence, the Developer and TNB have also confirmed by their pleadings that such an agreement was made, partly in writing and partly by conduct. Successor in title question [28] However, the matter does not end there. The more consequential inquiry, is whether the Plaintiff is legally bound by the Agreement to Lease. [29] In this case, the JMB was established under the Building and Common Property (Maintenance and Management) Act 2007 (repealed by the Strata Management Act 2013 ( ) that came into force in Selangor on 1-6-2015). The Plaintiff was established under section 39(1) of the STA. [30] Evidently, the Developer and the Plaintiff are separate legal entities and on first principles, the privity of contract doctrine applies as it relates to agreements made between the developer and parcel owners or third parties in relation to the common property. By this, I mean that the Plaintiff as the subsequent registered proprietor of Lot 325, is not necessarily bound by the Agreement to Lease. [31] If the Plaintiff is not bound, then the Federal Court decision in Bayangan Sepadu Sdn Bhd v Jabatan Pengairan dan Saliran Negeri Selangor & Ors [2022] 2 CLJ 1 ( applies. There, the appellant was the successful bidder at an auction who had sued the respondents for trespass. The respondents had fenced up part of the land as a flood mitigation lake and erected various structures with the consent of the previous owner, but the intended surrender of the land to the respondents was not effected and thus, the respondents had no registered interest on the title. [32] The Federal Court in Bayangan Sepadu found for the appellant and held that the appellant was entitled to be awarded damages for trespass on the land on the basis of the conclusiveness of the register: ...a successful bidder at a public auction conducted under the NLC obtains an indefeasible title to the subject property and the unregistered interest is not protected under the NLC. Every dealing or transaction of a land by a party whose interest is unregistered in the registered in the register of document cannot defeat the title of [33] As to the rights of the occupier of land against that of the registered proprietor who is asserting its right of possession over land, the following extracts from the dissenting opinion of the Court of Appeal in Bayangan Sepadu which was affirmed by the Federal Court are relevant and instructive: contract against a party in breach of it in the failure to transfer title or interest or to create some interest in the land as may be permitted under Part Eighteen of the NLC, that is an action in personam and it does not affect the land in an action in rem the moment a third party becomes the new registered proprietor or acquires a registered interest in the land. [113] An unregistered or unregistrable interest can only bind the parties to the contract and this was explained by the Privy Council in Oh Hiam & Ors v Tham Kong [1980] CLJU 53; [1980] 1 LNS 53; [1980] 2 MLJ 159 at p. 164 as follows: The Torrens system is designed to provide simplicity and certitude in transfers of land, which is amply achieved without depriving equity of the ability to exercise its jurisdiction in personam on grounds of conscience. ... [135] Where consent or license has been given by a landowner to place a structure on the land, such license affords a defence as against that owner only. The license may be revoked by the owner, who then has the right to sue for continuing trespass if the structure is not removed within a reasonable time... [34] It must be remembered that occupiers of land that rely on equity for their right of occupation only have the protection of the system of caveats afforded by the NLC. If the Plaintiff is not bound by the Agreement to Lease, then like the respondent in Bayangan Sepadu, TNB would have been a mere licensee of the Plaintiff on Lot 325 at all material times since the Plaintiff became the registered proprietor of the lot because equity only operates in personam. TNB may insist upon proper conduct in accordance with conscience only against the Developer and not against the world. [35] The legal question of succession is also crucial in this case because on the facts, there is no conduct by the Plaintiff that allows TNB to set up an equitable estoppel against it. It was the Developer who allowed TNB to put up its electrical installation at the Disputed TNB Sub-station. The JMB first wrote to the Developer on 21-3-2012 to ask for a copy of the alleged lease agreement for the Disputed TNB Sub-station and was led to believe through correspondence from the Developer on 24-5-2012 that a lease existed. [36] In its pleading, the Developer alleged in the main action that it overlooked formalising the lease which TNB prepared and first sent to the Developer on 19-11-2009. In the third party proceedings, it blamed the JMB (of which it was an instrumental member) for inaction. However, there is no evidence to either effect because the Developer did not participate in the trial and offered no witness. In the result, it cannot be said that there was any conduct by the Plaintiff amounting to acquiescence or waiver of any land rights leading up to the action filed at the Sessions Court. [37] The legal basis for the proposition that the Plaintiff must be bound by the Agreement to Lease is elusive. [38] Provisions of the SMA apply by virtue of section 38 of the SMA, but the statutory provision framework for strata properties do not provide for obligations to the joint management body and/or the management corporation even in respect of the control, management and maintenance of common property. Specifically, section 16(2) of the SMA provides: Part in respect of the Charges, contribution to the sinking fund, and any other assets of the maintenance account and the sinking fund account, shall vest in the joint management body on the date of the expiry of the developer's management period, and the joint management body shall have the same right, power or remedy as if it had at all times been a right, power or remedy of the joint management body, including those rights in respect of any legal proceedings or applications to any authority by the developer pending immediately before the expiry of the developer's [39] The SMA only has specific provisions for the transfer of control and vesting of monies in the maintenance and sinking fund accounts and the handover of records and assets. Further, section 9(4)(b) of the SMA appears to limit the contract period for any maintenance and management contracts management period. Based on these observations, this Court queried the proposition that by operation of the SMA, the management corporation is bound by all contracts entered into by the developer with third parties in respect of the common property. [40] Counsel also referred to RSP Architects Planners & Engineers v Ocean Front Pte Ltd and anor [1995] SGCA 79 cited in Dua Residency Management Corporation v Edisi Utama Sdn Bhd & Anor [2021] MLJU 140 to argue that at common law, the management corporation not only succeeds the developer but is the alter ego of the developer. These cases concern negligence claims by the management corporation against the developer and considerations whether in the circumstances, there was sufficient proximity in the relationship to give rise to a duty of care in the construction of the common property. The alter ego remark in RSP Architects does not represent a position at common law about developers and management corporations, as it was made in the context of section 33(1) of the Singapore statute where, at one stage of the creation of the management corporation, the developer alone constitutes it before sales to purchasers are completed. [41] On this point therefore, the only relevant authority is Perbadanan Pengurusan Endah Parade v Magnificient Diagraph Sdn Bhd [2014] 5 CLJ 881 Perbadanan Pengurusan Endah Parade Court of Appeal considered the powers of the management corporation to impose charges on parcel owners and in that context, the question was raised whether the rights of parcel owners that are embodied in the SPA with the developer at the point of purchase such as free signage rights on the common property, would bind the management corporation. The Court of Appeal held: We also cannot agree with the appellant's submission that upon incorporation the management corporation assumes the common property free from all encumbrances. Our law does not have the equivalent of s. 18 of the Australian Strata Schemes (Freehold Development) Act 1973. The better view surely is that the management corporation is a successor-in-title to the developer. If there had been an agreement to allow free signage use in the sale and purchase agreement, then the present management corporation should be bound by it [Emphasis added] [42] As noted however, there was no discussion in Perbadanan Pengurusan Endah Parade on the basis for the determination that the management corporation is the successor of the developer in respect of agreements made with a parcel owner or with a third party generally in relation to the common property. The submissions on this point yielded no other persuasive authority. There were also no authorities that ruled it to be in percuriam and non-binding. In fact, a number of cases have followed it (Magnificient Diagraph Sdn Bhd v Perbadanan Pengurusan Endah Parade [2014] 1 LNS 1109, Meru Valley Resort Bhd v Perbadanan Pengurusan Golf Vista Apartment [2024] MLJU 2604, Medical Office Management Corporation Block v Parkway Life Malaysia Sdn Bhd [2015] 10 MLJ 332). [43] Based on the doctrine of stare decisis, this Court therefore considers itself bound by Perbadanan Pengurusan Endah Parade despite the reservations expressed above. As such, the Sessions Court Judge also correctly concluded that the Plaintiff is bound by the Agreement to Lease between the Developer and TNB. As an equitable lease, it is enforceable against the Plaintiff and consequently, TNB cannot be considered a trespasser on Lot 325. The statutory time bar [44] For completeness, the time bar defence was also pleaded to defeat claim. It is addressed briefly, even though it does not ultimately affect the outcome of this appeal. [45] It was contended that this action is time-barred as it was commenced more than 6 years after the Certificate of Fitness for The View s discoverable. The Plaintiff argued that the action is not time-barred because the relevant limitation period is 12 years as an action for recovery of land governed by section 9 of the Limitation Act 1953. [46] Bayangan Sepadu also dealt with the issue of delay, laches and the statutory time bar. In that case, the Federal Court affirmed the dissenting opinion of the Court of Appeal that the cause of action in trespass is complete only when the consent of the previous landowner was revoked by the new landowner, and there is refusal to quit the land despite demand. The following extract is from the dissenting opinion of the Court of Appeal: ...where there is continuing trespass, no laches, title or interest in land as provided in S.341 NLC as follows: whatsoever shall not constitute a bar to the bringing of any action for the recovery thereof by the proprietor or any person or body entitled to an interest therein and accordingly the Limitation Act 1953 shall in no circumstances operate to [175] The Court of Appeal in Ahmad Shazilly Ismail Bakti v Nik Salma Zaidah Hj Wan Mohd Zaid [2014] 5 CLJ 817 applied both the concept of indefeasibility of title and the concept of non-applicability of adverse possession to preserve the right of a registered proprietor to assert his rights over his land as follows: [89] We further note that the defendant in her pleading and testimony had claimed that she had been staying in the house since it was constructed in 1985 and has the right to remain on the said house and the said land. In our view, the idea of a gratuitous licensee being able to occupy an alienated land owned by someone else permanently or perpetually, after being given due notice to quit, is repugnant to the concept of indefeasibility of title of a registered proprietor as provided under s. 340 and the concept against adverse possession of land by occupation, as explicitly stated in s. 341 of the NLC... [47] It is trite that an action for trespass is a tort and falls within section 6(1)(a) of the Limitation Act 1953 which prescribes a 6-year time limit from the date the cause of action is complete, to sue on it. As TNB had entered into possession of Lot 325 with the express or tacit consent of the Developer, it was not a trespasser to begin with. Even if all that TNB had was a license at will rather than an equitable lease, it would have continued in occupation after 2013 with the tacit consent of the Plaintiff, until that consent was revoked. [48] Trespass is a tort of strict liability and so the cause of action is complete as soon as the Plaintiff revoked the consent and demanded the removal of the Disputed TNB Sub-station and TNB refused. As noted, this happened on a date after 9-1-2018 when the Plaintiff demanded for vacant possession. Based on Bayangan Sepadu, TNB would have only become a trespasser and the cause of action accrued after that date. [49] As action in the Sessions Court commenced in December 2019, action was not time-barred, but not for the reasons argued by the Plaintiff. Appeal 75 [50] As the Defendants in the main action, the third party claim by TNB for indemnity was also dismissed. The appeal by TNB against that dismissal is similarly dismissed by reason of Conclusions [51] There was an Agreement to Lease between the Developer and TNB giving rise to an equitable lease of the Disputed TNB Sub-station land by TNB since 2010. The Plaintiff is a body corporate created by statute and is a legal entity separate from the Developer. Based on Pengurusan Perbadanan Endah Parade which binds this Court, the Plaintiff is a successor in title of the Developer and is bound to the same effect by the Agreement to Lease. [52] Accordingly, the Judgment of the Sessions Court dismissing the claim is affirmed and both Appeal 65 and Appeal 75 are dismissed with costs following the event. The Court awards costs of RM5,000 for each of the respondents in Appeal 65 and costs of RM3,000 for each of the respondents in Appeal 75. Bertarikh : 16 Mei 2025 SGD ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM Peguam untuk Rayuan BA-12B-65-06/2024 Untuk Perayu: Thisinayagam A/L A. Somasundram, Messrs Nayagam & Partners Untuk Responden Pertama: Wee Choo Keong (with Yeo Wei Min), Messrs Wee Choo Keong & Faaiz Untuk Responden Kedua Chong Ian Shin, Messrs Arulampalam & Co. Untuk Responden Ketiga Gurmel Singh A/L Jit Singh, Messrs Kenth Partnership Peguam untuk Rayuan BA-12B-75-07/2024 Untuk Perayu: Gurmel Singh A/L Jit Singh, Messrs Kenth Partnership Untuk Responden Pertama: Wee Choo Keong (with Yeo Wei Min), Messrs Wee Choo Keong & Faaiz Untuk Responden Kedua Bahari Yeow, Messrs Rosli