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1 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF KUALA LUMPUR CIVIL SUIT NO: WA-22 NCVC- 298-06/2017 Between TARGET TERM SDN. BHD. …PLAINTIFF And
WA-22NCVC-298-06/2017
High Court of Malaysia21 Oct 2021
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“4, 34(2) and 69 STA. [b] Whether the Sale and Purchase Agreement (SPA) dated 18.3.2009 between the Intervener and the Plaintiff is unlawful or otherwise null, void and unenforceable under Section 24 Contract Act 1950. [c] Whether the Strata Title is defeasible and liable to be set aside under the provisions of Section”
“declaration that the SPA is unlawful for contravening Sections 4, 34(2) and/or 69 of the Strata Title Act (“STA”) and is null, void and unenforceable under Section 24(a), (b), (c), (d) and/or (e) of Contracts Act 1950 (CA); 7 [b] A declaration that the Plaintiff is not the registered owner and/or beneficial owner of th”
“because the Plaintiff did not carry out any independent dealing in respect of the 414 Car Parks. The usage of the 414 Car Parks as commercial car parks is not a registrable dealing under Sec 340 (1) National Land Code (NLC) and thus not contrary to Sec 4, 34(2) and/or 69 STA. The Defendant must prove that the Plaintiff”
“d; and [b] The charges (the maintenance fees & sinking fund) imposed on the Plaintiff from 1.1.2017 until the date of judgment to be fixed at RM0.09 per share unit pursuant to Section 60(3)(b) of the Strata Management Act 2013. D. DEFENDANT’S DEFENCE AND COUNTERCLAIM [11] The Defendant did not dispute that the Plaintif”
“the Plaintiff's ownership of the B21-03 and the 414 Car Parks and sought for, inter alia, the following: [a] A declaration that the SPA is unlawful for contravening Sections 4, 34(2) and/or 69 of the Strata Title Act (“STA”) and is null, void and unenforceable under Section 24(a), (b), (c), (d) and/or (e) of Contracts”
“Orders and/or Submissions Drawings and/or As Built Drawings. [d] There has been no dealings or transaction of the 414 Car Parks independently of B-21-03 contrary to sections 4, 34(2) and/or 69 of the Strata Titles Act 1985. [e] B-21-03 was not intended or used as a Service Apartment unit, but, as a commercial unit whic”
“(2) The National Land Code and the rules made thereunder, in so far as they are not inconsistent with the provisions of this Act or the rules made thereunder, or are capable of applying to parcels, shall apply in all respects”
“STA 1985, where the word "dealt with" appears in sections 34 (2) and 69 of the STA 1985. These provisions are to be read together with sections 5 (1) and 5 (2) of the STA 1985 which provide: "5. (1) This Act shall be read and construed with the National Land Code as if it forms part thereof.”
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1 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF KUALA LUMPUR CIVIL SUIT NO: WA-22 NCVC- 298-06/2017 Between TARGET TERM SDN. BHD. …PLAINTIFF And
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WALDORF AND WINDSOR MANAGEMENT CORPORATION …DEFENDANT
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MALAYSIA LAND PROPERTIES SDN …INTERVENER/2ND DEFENDANT IN COUNTER CLAIM GROUNDS OF JUDGMENT A. BACKGROUND FACTS [1] The Plaintiff is the Purchaser of unit no B-21-03 of Waldorf & Windsor Towers (B21-03) together with 420 accessory car parks from the Intervener/2nd Defendant vide the Sale and Purchase Agreement (SPA) 2 dated 18.3.2009. The Defendant is the Management Corporation of the building known as Waldorf & Windsor Towers (WWT). The Intervener/2nd Defendant is the Developer of the WWT. [2]
Preamble
Pursuant to SPA, the Plaintiff purchased from the Intervener/2nd Defendant in counterclaim (Intervener) B21-03 with 420 car parks located at Ground to 4th Floor at WWT with the purchase price of RM3.5 million. Initially, the Strata Title was issued to the Intervener, being the Developer, on 24.1.2011 with 414 car parks (414 Car Parks) as accessory parcel to B21-03 while the remaining six (6) accessory car parks reserved for the handicaps. The purpose of the Intervener selling the 420 car parks to the Plaintiff was with the intention to continue running the car park business. The Strata Title was then transferred to the Plaintiff on 19.03.2018. [3] It was undisputed that the purpose of the SPA is for the Plaintiff is to operate the 414 Car Parks as car parking business. The 414 Car Parks are accessible to the public on hourly basis and also rented out on monthly basis. This arrangement was reflected especially under Preamble F, Clause 6 and 7 of the SPA. 3 [4] However on 16.12.2016, the Defendant discovered that the 414 Car Parks are actually attached to B21-03 and does not belong to the Intervener. As required statutorily, the Defendant then billed the Plaintiff for maintenance charges and sinking fund for the 414 Car Parks including back charges from 11.07.2011. Due to time bar limitation, the Defendant only claimed the back charges calculated from 11.07.2011 i.e. years from the filing of the Counter Claim B. WITNESSES [5] The Plaintiff's had called two (2) witnesses and the Defendants had seven (7) witnesses which includes subpoena witnesses while the Intervener had one (1) witness. C. PLAINTIFF’S CLAIM [6] The Plaintiff claimed that they are the registered owner and have acquired an indefeasible title of B21-03 together with the 414 Car Parks with valuable consideration from the Intervener. The B21-03 was purchased together with the 414 Car Parks with the intention to continue running the car park business and for commercial use. 4 [7] On 23.7.2016, the Defendant convened its first Annual General Meeting (AGM) and it was agreed that the costs of maintenance that needed to be paid by each parcel owner is RM0.40 per square foot (psf) starting 1.1.2017. Prior to the AGM, the maintenance cost and the sinking fund that was imposed by the Joint Management Body (“JMB”) was RM0.31 psf, not including the 414 Car Parks. On 15.8.2016, the Defendant issued a letter addressed to the 11 Valued Owners which was signed by Andrew Chez (DW7), the Chairman of the Defendant, which stated that effective from 1st January 2017, the maintenance charges would be increased from RM0.31 psf to RM0.40 psf. [8] On 1.10.2016, the Plaintiff was issued with an invoice for maintenance charges & sinking fund (Oct-Dec 2016) for the B21-03 calculated at RM0.31 psf. There was no invoice issued in respect of the 414 Car Parks although the Strata Titles have been issued since 24.1.2011. The Plaintiff paid on the invoice and the Defendant issued a receipt. Vide a statement dated 6.1.2017, the Defendant alleged that the Plaintiff is indebted to the Defendant in the sum of RM156,871.67 comprising: 5 [a] An adjustment in calculation of maintenance charges for the period of 1.8.2016 to 31.12.2016 from psf basis to share unit basis amounting to RM81,733.93; [b] An adjustment to the sinking fund; and [c] The maintenance charges and sinking fund from January to March 2017 amounting to RM21,732.87 a month. [9] On 1.3.2017, the statement of account of the Unit including the 414 Car Parks showed an alleged outstanding sum of RM857,882.95. [10] The Plaintiff denied its indebtedness to the Defendant by letter of 7.4.2017 because from day one, when the Plaintiff took possession of the B21-03 and 414 Car Parks, they had been paying the costs of the maintenance including the provision of security, payment for utilities and cleaning services without the involvement of the Defendant or its predecessor, the JMB. The Plaintiff also has been paying for the supply of electricity for the 414 Car Parks which is separately recorded by a sub meter under the control and possession of the Defendant. The Defendant is not entitled to impose the back charges on the Plaintiff as the 414 Car 6 Parks are self-maintained by the Plaintiff at all material time. The Plaintiff then initiated this suit seeking a Declaration that: [a] The back charges imposed on the Plaintiff from 24.1.2011 to 31.12.2016 is null and void; and [b] The charges (the maintenance fees & sinking fund) imposed on the Plaintiff from 1.1.2017 until the date of judgment to be fixed at RM0.09 per share unit pursuant to Section 60(3)(b) of the Strata Management Act 2013. D. DEFENDANT’S DEFENCE AND COUNTERCLAIM [11] The Defendant did not dispute that the Plaintiff having self-maintained the 414 Car Parks at all material times, without the involvement of the Defendant. However, the Defendant challenged the Plaintiff's ownership of the B21-03 and the 414 Car Parks and sought for, inter alia, the following: [a] A declaration that the SPA is unlawful for contravening Sections 4, 34(2) and/or 69 of the Strata Title Act (“STA”) and is null, void and unenforceable under Section 24(a), (b), (c), (d) and/or (e) of Contracts Act 1950 (CA); 7 [b] A declaration that the Plaintiff is not the registered owner and/or beneficial owner of the B21-03 and 414 Car Parks as the strata title was obtained by means of insufficient or void instrument and is thus defeasible; [c] An order that the relevant authority concerned cancel the registration of the strata title of the B21-03; [d] An order that the 414 Car Parks are Common Property of WWT; and [e] Alternatively, if the Court is of the opinion that the SPA is valid and enforceable, the Plaintiff has to pay the Defendant the principal sum of RM806,635.01 and late payment interest of RM2,746.25 being the charges imposed on the Plaintiff. [f] The Defendant statement of account dated 1.3.2017 claims for back charges from 24.1.2017, the date when the Strata Title was issued and the 414 Car Parks became the accessory parcel. E. PLAINTIFF’S DEFENCE TO COUNTER CLAIM [12] The Plaintiff in its Defence pleaded, inter alia as follows: [a] The Defendant is not entitled to impose the back charges on the Plaintiff as the 414 Car Parks are self-maintained by the Plaintiff at all material times. 8 [b] The Defendant is not entitled to commence an action against the Plaintiff basing on the reason that the Development Order, Submission Drawing and As Built Drawing were not complied with by the Intervener. [c] The Defendant has no locus standi to challenge the legality of the SPA as the Defendant is not a party/privy to the same. [d] The Plaintiff as the registered owner has acquired an indefeasible title to the B21-03 together with the 414 Car Parks with valuable consideration from the Intervener. [e] The Plaintiff was not in breach Section 4, 34(2) and/or 69 STA because the Plaintiff did not carry out any independent dealing in respect of the 414 Car Parks. The usage of the 414 Car Parks as commercial car parks is not a registrable dealing under Sec 340 (1) National Land Code (NLC) and thus not contrary to Sec 4, 34(2) and/or 69 STA. The Defendant must prove that the Plaintiff's title is defeasible under any one of the limbs in Sec 340(2) NLC. Even if there is a breach, the effect ought not to defeat the Plaintiff's indefeasible title to the B21-03 and the 414 Car Parks as no such laws have provided for the same. 9 [13] The Plaintiff submitted that the Defendant was fully aware that the 414 Car Parks were been used as commercial car park for the use of public and resident of WWT and self-maintained by the Plaintiff without the involvement of the Defendant and therefore the Defendant is estopped under the principle of estoppel. [14] Clause 26.1 SPA and Section 4.02 Deed of Mutual Covenant (DMC) provides that unsold car parks shall not form part of the Common Property and the ownership shall remain with the Intervener. F. INTERVENER DEFENCE TO COUNTER CLAIM [15] The Intervener opposed the Defendant's counterclaim for the following reasons: [a] The SPA between the Intervener and the Plaintiff is valid and binding and based on commercial terms. The Plaintiff is a bona fide purchaser for value and enjoys indefeasibility of title pursuant to Section 340 of the National Land Code 1965 (NLC) by virtue of the issuance and being registered as the registered owner of the Strata Title Geran 59219/M1-B/22/513 together with the accessory parcels A1 to A414, Lot 56229, Mukim Kuala Lumpur, State of Federal Territory of Kuala Lumpur. 10 [b] The Defendant has no privity of contract and no basis to seek the declarations as contained in the Defendant's Defence and Amended Counter Claim dated 25.2.2019. [c] The Intervener has complied with the requisite Development Orders and/or Submissions Drawings and/or As Built Drawings. [d] There has been no dealings or transaction of the 414 Car Parks independently of B-21-03 contrary to sections 4, 34(2) and/or 69 of the Strata Titles Act 1985. [e] B-21-03 was not intended or used as a Service Apartment unit, but, as a commercial unit which is likely consistent with the usage of the 414 Car Parks in the manner prescribed in the SPA. [f] There are no elements of illegality that has been established by the Defendant on the balance of probabilities which would render the SPA as null and void or any part thereof based on Section 24 CA. [g] The Defendants is estopped from raising issues in respect of the 414 Car Parks as they are bound by the terms and conditions of the SPA dated 17.6.2005 and the Deed of Assignment dated 17.6.2005. [h] The Defendant has failed to prove on the balance of probabilities any issues of fraud, misrepresentation or forgery or void instruments or any form of unlawfulness. 11 G. ANALYSIS AND FINDING [16] Having heard the facts and the evidences including the submissions from both parties, I conclude that the issues to be determined are as follows: [a] Whether the 414 Car Parks as accessory parcels in the Strata Title Grant 592119/N1-B/22/513 was in contravention of Section 4, 34(2) and 69 STA. [b] Whether the Sale and Purchase Agreement (SPA) dated 18.3.2009 between the Intervener and the Plaintiff is unlawful or otherwise null, void and unenforceable under Section 24 Contract Act 1950. [c] Whether the Strata Title is defeasible and liable to be set aside under the provisions of Section 340(2)(a), (b) and/or (c) of the NLC. [d] Whether the Intervener had failed to comply with the requisites of the Development orders and/or the submissions drawings and/or As built drawings. [e] Whether the Doctrine of Estoppel is applicable on the Defendant. 12 [17] I also took cognizance of the other issues advanced by the parties. Suffice to say here that the declaration by the Plaintiff against the back wages imposed by the Defendant and its adjustment thereto will be the consequential effect after the determination of the above issues. Whether the Car Park as accessory parcels in the Strata Title Grant 592119/N1-B/22/513 was in contravention of Section 4, 34(2) and 69 STA. [18] Under the Section 4 Strata Title Act 1985 (Act 318) [STA] "accessory parcel" means any parcel shown in a strata plan as an accessory parcel which is used or intended to be used in conjunction with a parcel. Section 34(2) STA states that 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. It follows that under Section 69 STA that 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. Therefore, under the STA accessory parcel must be used in conjunction with the unit parcel and it prohibits accessory parcel to be used or dealt with independently or separately from the unit parcel. 13 [18] Now it begs to the question whether the 414 Car Parks had been dealt with independently of B21-03. It is clear that the purpose of the Plaintiff in acquiring B21-03 together with the 414 Car Parks was intended for the use of public and the resident of WWT. [19] The Plaintiff submitted that in consistent with the decision in the case of Innab Salil & Ors v. Verve Suites Mont' Kiara Management Corporation [2020] 10 CLJ 285, the usage of the 414 Car Parks as a commercial car park could not be a 'dealing' within the context of STA. The words “dealing and dealt with” in the NLC and SPA do not rent out the 414 Car Parks because it is not interest capable of being registered under the NLC. Even assuming that the usage of the 414 Car Parks as commercial car parks may be a 'dealing' within the STA, the Plaintiff submitted that the Defendant bears the initial burden of proof to show on a balance of probability how the 414 Car Parks could be used or dealt with dependently and/or independently of the B21-03. In this instant the Defendant failed to adduce any evidence to show how the 414 Car Parks were dealt with independently of B21-03 to support its allegation of breaches of Sections 34(2) and 69 STA. 14 [20] The Defendant on the other hand contended the purchase of 414 Car Parks from the Intervener with the undertaking to continue to operate the public car park facility, indicate that the 414 Car Parks are intended for and being used or dealt with independently and separately from B21-
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The Defendant also cited the Court of Appeal’s finding in Ideal Advantage Sdn. Bhd. v. Perbadanan Pengurusan Palm Spring @ Damansara& Another Appeal [2019] 1 LNS 894 which was upheld by the Federal Court (unreported); "[47] D1 and D2 alleged that the learned trial Judge erred in Jaw and fact when he failed to appreciate the words "dealing" and "dealt with" in the NLC 1965 and sections 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 section 5 of the NLC 1965 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 Jaw, but does not include any caveat or prohibitory order;" Section 205 of the NLC 1965 provides that: "(1) The dealings capable of being "effected" (as opposed to "registered") under this Act with respect to alienated lands and interests therein shall be those specified in Parts Fourteen to Seventeen, and no others." 15 A transaction under "Division JV" of the NLC 1965 includes Part 15 of the same which has provisions on "Tenancy" under sections 223 - 224. Part 14 of the NLC 1965 also deals with "transfer exempt tenancies" pursuant to section 220 of the same. [49] Therefore, by plain and unambiguous language, the term "dealing" in the NLC 1965 includes "tenancy". This definition is imported into the STA 1985, where the word "dealt with" appears in sections 34 (2) and 69 of the STA 1985. These provisions are to be read together with sections 5 (1) and 5 (2) of the STA 1985 which provide: "5. (1) This Act shall be read and construed with the National Land Code as if it forms part thereof.
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The National Land Code and the rules made thereunder, in so far as they are not inconsistent with the provisions of this Act or the rules made thereunder, or are capable of applying to parcels, shall apply in all respects to parcels held under the strata titles." A reading of the aforesaid provision shows that the STA 1985 is to be read and construed as part of the NLC 1965. The provisions of the NLC 1965 (which is not inconsistent with the STA 1985) shall apply in all respects to parcels held under the STA 1985, which includes the act of "renting out". Section 4 of the STA 1985 utilizes the words "use" or "intended to be used" which clearly includes the act of "renting out" or "tenancy" of an accessory parcel to a third party. This is consistent with the word "dealt" or "dealing" under the NLC 1965. 16 [50] The act of renting out 394 car parks by D1 independent of the main parcels, constitutes "dealing" of the accessory parcels, which is prohibited by sections 34 (2) and 69 of the STA 1985, which includes any dealings by way of tenancies or the rental of car parks." [21] I am mindful that there is no dispute that the Plaintiff acquired the 414 Car Parks was to enable them to operate a car park rental business at the WWT but according to the Plaintiff such car rental is not “dealing” by relying on the case of Innab Salil”. In other word the usage of the 414 Car Parks could not be a “dealing” within the context of Sections 4, 34(2) and 69 STA the STA. [22] Upon the reading of Innab Salil’s case, it is my considered view that the dispute in Innab Salil was in relation to the validity of additional House Rule No. 3 (that prohibits the use of residential units for business including short-term rental), in contravention of Section 70(5)(a) of the Strata Management Act 2013 (SMA) where the Federal Court held that the short-term online booking rental arrangements are licenses and do not amount to “dealing” within the ambit of Section 70(5) of the SMA. With respect to the Plaintiff’s counsel, Innab Salil’s case only deals in respect of Section 70(5) of the SMA and not with Sections 4, 34(2) and 69 of the STA where 17 the Federal Court clearly stated that its interpretation of “dealing” is for purposes of Section 70(5) of the SMA: “[113] For the above reasons, we hold that the said arrangement are nothing more than mere licences and therefore do not amount in law “dealing” within the ambit of s 70(5) of the SMA 2013.” [23] In my view, the application of Sections 4, 34(2) and 69 of the STA are not limited to interpretation of “dealing”, especially the definition of accessory parcel by its ‘use’ and not just “dealing”. “Accessory parcels” means any parcel shown in a strata plan as an accessory parcel which is used or intended to be used in conjunction with a parcel. In plain and ordinary meaning, the words “used in conjunction with” mean using the accessory parcel together with or for the purposes of the main parcel. As stated in Ideal Advantage Sdn. Bhd. (supra], Section 4 of the STA 1985 utilizes the words "use" or "intended to be used" which clearly includes the act of "renting out" or "tenancy" of an accessory parcel to a third party. To reiterate, the Federal Court affirmed the decision of Ideal Advantage Sdn. Bhd. (supra] which held that: “[50] The act of renting out 394 car parks by D1 independent of the main parcels, constitutes “dealing” of the accessory parcels, which is prohibited by sections 34 (2) and 69 of the STA 1985, which includes any dealings by way of tenancies or the rental of car parks.” 18 [24] Therefore, the renting of the 414 Car Parks amounts to “tenancy” or “tenancy exempt from registration”, which is “dealing”. Thus, the 414 Car Parks are “dealt with” independently of the parcel. The fact that the 414 Car Parks were used for business and let out to third parties are clear violation or in contravention Sections 34(2) and 69 STA. Although the title is a commercial title, the use of the 414 Car Parks is subject to law, i.e. Sections 4, 34(2) and 69 of the STA. The 414 Car Parks as accessory parcels have to be used in conjunction with the main Parcel which the serviced apartment and is meant for dwelling purposes and not a commercial unit. The allocation of 414 Car Parks to the Plaintiff is an illegality because they were not used nor intended to be used in conjunction with the main parcels. Hence the intention and usage of the 414 Car Parks resulted in a breach of Sections 34 (2) and 69 of the STA
1985
[25] Since the 414 Car Parks were not used in conjunction with the B21- 03, and therefore, is not accessory parcels by legal definition in Section 4 of the STA. In view of the illegality and defeasibility of the Strata Title, the 414 Car Parks are not accessory parcels. Therefore, the 414 Car Parks are common property as they are not parcel or accessory parcel. 19 Whether the Sale and Purchase Agreement (SPA) dated 18.3.2009 between the Intervener and the Plaintiff is unlawful or otherwise null, void and unenforceable under Section 24 Contract Act 1950. [26] From the outset, the Plaintiff and the Intervener raised an issue that the Defendant is not a party to the SPA and therefore has no locus standi to challenge the SPA. According to the Defendant, they are not asserting a contractual right under the SPA. In this respect I am guided by the established principle of locus standi in the Federal Court case of Tra Mining (Malaysia) Sdn. Bhd. v. Thien Hong Teck & Ors And Another Appeal [2018] 10 CLJ 438 as follows: “[92] In order to establish that a person or a plaintiff has a locus standi in a proceeding before the court, he must satisfy the court that he possesses an interest in the issue raised in the proceedings. The court has to be satisfied that there was an infringement of a legal right or a breach of a statute which affects the plaintiff's interests substantially or the plaintiff has some genuine interest in having his legal position determined by the court in the proceedings. (see: Boyce v. Paddington Borough Council [1903] 1 Ch 109; Tan Sri Othman Saat v. Mohamad Ismail [1982] 1 LNS 2; [1982] 2 MLJ 177; Government Of Malaysia v. Lim Kit Siang & Another Case [1988] 1 CLJ 219; [1988] 1 CLJ (Rep) 63; [1988] 2 MLJ 12; Dewan Pemuda Masjid Malaysia v. SIS Forum (Malaysia) [2011] 4 CLJ 630; [2012] 1 MLJ 126). 20 [27] I am satisfied that the Defendant possesses an interest of the issue raised as to the infringement of a legal right or a breach of a statute which affects the Defendant’s interests substantially or has some genuine interest in having their legal position determined by the court in this proceeding. Therefore, I am of the view that the Defendant has the locus standi to challenge the SPA for the determination of whether the SPA has contravened the law. [28] It should be noted that the SPA was entered on 18.03.2009 and thereafter, the Strata Title was caused to be issued by the Intervener on 24.01.2011 with the 414 Car Parks to B21-03. I have the liberty to examine the SPA especially Clause 7.1.2 where the intent and purpose of the SPA is to sell the car parks to the Plaintiff by the Intervener to deal with it as car parking business. "7.
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UNDERTAKING BY PURCHASER 1 The Purchaser hereby takes cognizance that the Vendor is the developer and owner of the Service Apartments, and in respect of which the car parks as comprised under the Sale Parcel are constructed to serve, and that the operation of the same as a car park facility in a prudent and efficient manner is essential for the Service Apartments. In consideration of the Vendor agreeing to sell 21 the car parks as comprised under the Sale Parcel to the Purchaser, the Purchaser hereby represents, warrants, undertakes as follows"-
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7.1.1 It shall not use the car parks as comprised under the Sale Parcel for any purpose other than as approved by the relevant authority;
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7.1.2 It shall operate the car parks as comprised under the Sale Parcel as car park facility provider, and make available the same for public use at all times;
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7.1.3 it shall not close off part of the car park facilities or otherwise not make available the car park facilities for public use save and except where such closure of car park facilities is in respect of car park bays not exceeding 25% of the total car park bays comprised with the Sale Parcel;
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7.14 it shall not impose exorbitant parking rate price/rental price;
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7.1.5 it shall not do any act or omits or neglects to maintain the Sale Parcel which could adversely affect the Service Apartments." 22 [29] PW 1 also admitted the reason for the purchase of B21-03 by the Plaintiff from the Intervener is for the Plaintiff to operate a car park facility or business using the 414 Car Parks. PW1 agreed that the 414 Car Parks although attached to that one singular Service Apartment but is being operated for the whole commercial development. According to DW 1, although the apartment was built under commercial title but is normally termed as Serviced Apartment. The B21-03 is not a commercial unit but a Serviced Apartment which was meant for dwelling purposes just like its neighbouring units and was not meant for running car parking business. [30] The Intervener submitted that the land search at Pejabat Tanah dan Galian in respect of Grant 59219/M1B/22/513 clearly states that the lot's usage has been categorised as building and the express condition (syarat nyata) is that the land shall be used a commercial building for Service Apartment and business only. There is nothing illegal about the Intervener previously carrying out the public car park business using the B21-03 together with the 414 Car Parks until it was sold pursuant to the SPA to the Plaintiff. Having taking into account of the Intervener submission, it is my considered view that although the title is a commercial title, the use of the car parks is subject to law particularly under Sections 4, 34(2) and 69 23 of the STA. Therefore, the 414 Car Parks being the accessory parcel, must be used in conjunction with the main Parcel. [31] Relying on the above, there was no doubts in the minds of the Intervener and the Plaintiff that the 414 Car Parks are to be used separately and independently from the Service Apartment. In fact, the Plaintiff and the Intervener admitted that the 414 Car Parks are not used in conjunction with the B21-03. As I stated earlier, Sections 34 (2) and 69 of the STA prohibits the dealing/transfer of the accessory parcels separately or independently of the main parcel. Therefore, it follows that any part of the building that is not parcel or accessory parcel, is Common Property by definition of Section 4 STA. The legislature has clearly defined that anything that is not comprised in a parcel is Common Property which is to be used or enjoyed in common by all occupiers of the building. The intent of the legislature is that Common Property cannot be disposed of, sold or contracted away. It is contrary to the law to create more parcels out of the Common Property. Once Common Property it is always Common Property. 24 [32] Based on the above, I am of the view that the sale of the 414 Car Parks by the Intervener to the Plaintiff together with B21-03 with the object for those 414 Car Parks to be rented out or in a commercial manner and not being used in conjunction with the B21-03 had contravened Section 24 CA as the consideration and object of these agreements is unlawful and therefore the SPA is null, void and unenforceable. Whether the Strata Title is defeasible and liable to be set aside under the provisions of Section 340(2)(a), (b) and/or (c) of the NLC [33] My next point relates to the applicability of the provisions of the NLC to the parcels which are registered under the STA. The law places on the Defendant to discharge the burden of dislodging the indefeasibility of title of the registered proprietor. It requires a clear and unequivocal evidence to discharge the standard of proof to dislodge the indefeasible title of the Plaintiff. [34] Section 5(1) of STA provides that the provisions of STA shall be read and construed with the NLC as if it forms part thereof. Section 5(2) STA further provides the NLC and the rules made thereunder, in so far as they are not inconsistent with the provisions of STA or the rules made 25 thereunder, or are capable of applying to parcels, shall apply in all respects to parcels held under strata titles. The relevant provision of the NLC which relates to the issue of defeasibility of title is Section 340 NLC. Applying to our case, the registration of the 414 Car Parks in the name of the Plaintiff shall be indefeasible and could not be challenged unless if it be shown that the title was obtained under the circumstances illustrated in Section 340(2)(a), (b) and (c) NLC. Section 340(3) NLC further provides that where the title or interest of any person is defeasible under any of the illustrations mentioned under Section 340(2) NLC, such title could be set aside. However, the proviso to Section 340 NLC protects the interest of bona fide purchaser for valuable consideration. [35] On the totality of evidence before me, the details of which are as illustrated above and with a clear admission by PW1 especially during cross-examination pertaining to the purpose of the transfer of B21-03 and the 414 Car Parks the Plaintiff, I am satisfied that the Defendant had discharged the burden placed on them by the law. [36] On the contrary I could not find any evidence in respect of payment of RM3.5 million for the purchase of B21-03 and 414 Car Parks as a valuable consideration. Despite being challenged by the Defendant the 26 Plaintiff failed to comply with the Notice to Produce the documents as proof of payment and the proof of the income tax return for the said purchase. I am unable to reasonably accept the reasons of the Plaintiff and the Intervener for the said non-compliance on the basis that it is a non-issue and not relevant to the Court. The excuse given by them was that the documents requested were not available due to the fact that they did not have a good filing system and unable to extract the documents. In my view, the Intervener cannot on one hand asserts “bona-fide purchaser with valuable consideration” but on the other hand claims that the “proof of consideration is a non-issue. With the absence of the evidence, I find that the Intervener and the Plaintiff are not bona fide purchasers with value and their claims are untenable and a mere bare assertion. [37] Earlier, it was my finding that the SPA had contravened Section 24 CA and the registration of the 414 Car Parks in the name of the Plaintiff was in contravention of the STA. Therefore, the Plaintiff had unlawfully acquired such titles from the Intervener and/or such titles had been obtained by the Plaintiff by means of insufficient or void instrument. From the factual matrix, the Plaintiff also did not or unable to show B21-03 and the 414 Car Parks were obtained in good faith and for valuable consideration to qualify the benefit under the proviso to Section 340 NLC. 27 In view of this, I find that the titles obtained by the Plaintiff in respect of the 414 Car Parks are defeasible. Whether the Intervener had failed to comply with the requisites of the Development orders and/or the submissions drawings and/or As built drawings [38] I took cognizance that the strata title for B21-03 together with the 414 Car Parks had been issued by Pejabat Tanah Galian under Grant No. 59219/M1-B/22/513 was issued in conformity to Sections 9 and 10 of the STA. The approval for the Submission Drawing (that consists the car park calculation) was granted under Akta Jalan, Parit dan Bangunan 1974 dan
1985
The requirement for car parks for Serviced Apartment is a requirement under the law. The Intervener procured the issuance of at least 660 car parks to be provided for the Serviced Apartments and obtained approval for the “As Built Drawing”. The Development Order dated 27.09.2005 read with the approved Submission Drawing and As Built Drawing required the car parks to be used for Service Apartments, and not as public car parks. Vide the As Built Drawing, the Intervener presented 660 car parks for Serviced Apartments but in actual fact, the 28 Plaintiff was using 420 bays (414 + 6) of the car parks to run a public car park business out of 660 car parks. [39] The Plaintiff and the Intervener submitted that the Development Order was properly issued based on DW1 testimony. To my mind, the conclusion by DW 1 was based on the fact that he only checks the construction of the building but on the usage of the car parks for Service Apartment or commercial use. [40] Since the finding of facts with respect to the process of the Strata title Geran 59219/M1-B/22/513 are the same Strata Title before me, I therefore took judicial notice of the decision by the Court of Appeal in Malaysia Land Properties Sdn. Bhd. v. Waldorf & Windsor Joint Management Body [2014] 6 CLJ 821.
k
In our judgment we are of the view that the appellant had obtained the strata title through fraud and/or misrepresentation perpetrated on the land office (and JUPEM) being the issuing authority. Had the land office not been wrongfully induced by the drawings and plans submitted by PW1 in respect of the whole of the 7th Floor which included the disputed area, it is without doubt that the land office would not have issued the strata title to the appellant. 29 It must be remembered that DW1 and DW2 from the land office had testified that the land office does not carry out field checks but relies on the confirmation from JUPEM that the said application for strata title is in order. DW3 and DW5 from JUPEM in turn testified that the site visit carried out by JUPEM officers was merely to check the boundaries at random and that JUPEM largely relies on the proposed strata plans prepared by a surveyor. In this case, JUPEM and the land office both relied on the drawings and plans submitted by PW1 the Surveyor on behalf of the appellant. PW1 in turn had admitted in evidence that he had been instructed by the appellant to include the disputed area forming part of the 7th Floor wholly belonging to the appellant so that the strata title can be issued. There is no just cause or legal basis for the appellant to apply for a strata title to the disputed area as well when all along the disputed area was intended and acknowledged by the appellant to be common property. The purchaser who was deemed to have inspected the building plan and location plan at the time of purchase had every legitimate right to expect the appellant to keep the whole of the 7th Floor as common property;
m
The court has no issue with the submission of counsel for the appellant that for the claim of fraud to succeed in the context of s. 340(2)(a) of the National Land Code, it must be proved to be actual and not constructive or equitable fraud on the part of the person where title or interest is being impeached. It must involve dishonesty of some sort which was committed prior to or at the time of registration (see Tai Lee Finance Co Sdn. Bhd. v. The Official Assignee Of The Property Of Ngan Kim Yong & Ors [1983] 1 CLJ 183; [1983] CLJ (Rep) 387; [1983] 1 MLJ 81). Here, 30 in the present case the court is satisfied beyond reasonable doubt that the appellant is guilty of fraud and/or false misrepresentation (and not just through mistake or negligence) when it submitted the drawings and plans effectively showing to the land office and JUPEM that the disputed area had been included as part of the whole of the 7th Floor of the W&W tower belonging to the appellant. The court therefore declares that the right, title and interest in and to "Area A" is not indefeasible. [41] Here I find that the Intervener has misrepresented to the Land Office in leading to believe that the 414 Car Parks are used or intended to be used in conjunction with the B21-03, where in actual fact they are not. The Intervener had led the DBKL and/or the Land Office to believe that the required car parks for Serviced Apartment has been complied with. Having said that it is immaterial whether the authorities had made a complaint or not. It is incumbent on the Intervener to present the actual status of the 414 Car Parks. [42] Even if the Development Order and the Approved Plan were properly issued, but in the finality, there was undeniable shortage of car parks since the 414 Car Parks were used to run a public car parking business out of 660 car parks allocated for the Serviced Apartment as 31 required in the approved plans. This position constitutes a breached of the Development Order that was approved by the DBKL by the Intervener and Plaintiff. Whether the Doctrine of Estoppel is applicable on the Defendant. [43] The Intervener submitted that they had made full disclosure at the outset as contained in the SPA dated 17.6.2005 and the DOA dated 17.6.2005 and there has been acquiescence by all the Purchasers of the WWT who later constituted the Defendant. Its acquiescence is also reflected in its position taken in the various meetings including the previous General Meetings. Due to such knowledge, the Defendant is estopped from taking the position to challenge the validity of the SPA with respect to the 414 Car Parks. Therefore, doctrine of estoppel would arise against the Defendant from denying the numerous acquiescence's and are accordingly bound by the Minutes of the General Meetings. [44] In deciding the issue of estoppel I refer the case of Chee Pok Choy & Ors v. Scotch Leasing Sdn. Bhd. [2001] 2 CLJ 321; [2001] 4 MLJ 346 where the Court of Appeal described as follows: 32 Since the doctrine (whether in its narrow or broader sense) is designed to achieve justice, a court may decline to apply it where to do so would lead to an unjust result. [45] It is clear as I alluded earlier that the SPA as to the 414 Car Parks has breached the STA and CA. Be that as it may, in any event, there is knowledge on the part of the Defendant it cannot neutralize the illegality and breaches of law on the part of the Intervener and the Plaintiff. In a plain sense that such an act does not allow the doctrine of estoppel to operate against a statute or there can be no estoppel when considerations of public interest are involved. The law is clear that estoppel does not operate against a statutory provision/requirement. In Kok Hoong v. Leong Cheong Kweng Mines Ltd. [1963] 1 LNS 61; [1964] 1 MLJ 49 at 54, the Privy Council said: “a party cannot set up an estoppel in the face of a statute. Thus, a corporation upon which there is imposed a statutory duty to carry out certain acts in the interest of the public cannot preclude itself by estoppel in pais from performing its duty and asserting legal rights accordingly.... Given a "statutory obligation of an unconditional character' it is not open to the court to allow the party bound by that obligation to be barred from carrying it out by the operation of estoppel. Similarly, there is, in most cases, no estoppel against a defendant who wishes to set up the statutory 33 invalidity of some contract or transaction upon which he is being sued, despite the fact that by conduct or other means, he would otherwise be bound by estoppel." [46] Further, the Intervener and the Plaintiff did not come to court with clean hands and is therefore not entitled to rely on the equitable doctrine of estoppel against the Defendant (see Federal Court in Cheng Chuan Development Sdn. Bhd. v. Ng Ah Hock [1982] 1 LNS 48; [1982] 2 MLJ 222, Ho Weng Leong v. Ng Kee Chin [1996] 1 LNS 89; [1996] 5 MLJ 139 and Boo Are Ngor (p) v. Chua Mee Liang (p) (sued as public officer of Kim Leng Tze Temple) [2009] 6 CLJ 617; [2009] 6 MLJ 145). [47] This principle was applied by the Federal Court in Public Textiles Berhad v. Lembaga Letrik Negara [1976] 1 LNS 120; [1976] 2 MLJ 58. In that case, the respondent Board had contracted to supply electricity to the appellants. By mistake, the Board had considerably undercharged the appellants and claimed the underpaid amount from the appellants. The High Court gave judgment in favour of the Board and held that the Board was not estopped although the appellants had utilised the accounts rendered by the Board for the purpose of costing their products. In dismissing the appellants' appeal, the Federal Court said: 34 "The principle on which the decision rests is that a corporation cannot indirectly do, by placing itself under the disability of estoppel, what it could not have directly done by reason of statutory prohibitions. [48] Thus, the Intervener and the Plaintiff cannot avoid the statutory duties in the face of an estoppel. It is our bounden duty to obey the law which is enacted in the interests of the general public or a section of it. In other words, if the plea of estoppel is allowed, that the Plaintiff to operate the 414 Car Parks as business in renting of car parks, it would definitely nullify the statutory provisions of the relevant Acts as in matter of Common Properties and benefits to the public concerned. The Intervener and the Plaintiff statutory role concerns primarily on the preservation and upkeep of assets in the common interest of all proprietors. Its establishment is not for private gain, but for the benefit of all proprietors at large. Accordingly, the statutory prohibitions against independent dealings of accessory parcels must be enforced. Thus, the doctrine of estoppel ought to be excluded in the present case. 35 H. CONCLUSION [49] Based on the foregoing, I am satisfied that the Plaintiff had failed to prove its case against the Defendants on the balance of probabilities. In view of the above, I dismissed the Plaintiff claim with costs. On the totality of evidence before me, I am satisfied that the Defendant had proved its counterclaim on the balance of probabilities. I therefore allowed the Defendant's counterclaim with costs against the Plaintiff and the Intervener as stated in paragraphs 24 Amended Defence and Counterclaim. Sgd. Rozana binti Ali Yusoff Judge High Court Kuala Lumpur Dated: 21 September 2021 36 SOLICITORS FOR THE PLAINTIFF: MESSRS RINGO LOW & ASSOCIATES Advocates & Solicitors D-03-03, Phileo Damasara 1 Off Jalan Damansara 46350 Petaling Jaya SELANGOR DARUL EHSAN SOLICITORS FOR THE DEFENDANT: MESSRS L P GEE & CO. Advocates & Solicitors G-1-7, Plaza Damas No. 60, Jalan Sri Hartamas 1 50480 KUALA LUMPUR SOLICITORS FOR THE INTERVENER/2nd DEFENDANT IN COUNTER CLAIM: MESSRS ANDREW DAVIS & CO. P-3-13, No. 60, Plaza Damas Jalan Sri Hartamas 1 (1/70A) Sri Hartamas 50480 KUALA LUMPUR 37 CASE(S) REFERRED TO:
1
Innab Salil & Ors V. Verve Suites Mont' Kiara Management Corporation [2020] 10 CLJ 285.
2
Ideal Advantage Sdn. Bhd. v. Perbadanan Pengurusan Palm Spring @ Damansara& Another Appeal [2019] 1 LNS 894.
3
Tra Mining (Malaysia) Sdn. Bhd. v. Thien Hong Teck & Ors And Another Appeal [2018] 10 CLJ 438.
4
Malaysia Land Properties Sdn. Bhd. v. Waldorf & Windsor Joint Management Body [2014] 6 CLJ 821.
5
Chee Pok Choy & Ors v. Scotch Leasing Sdn. Bhd. [2001] 2 CLJ 321; [2001] 4 MLJ 346.
6
Kok Hoong v. Leong Cheong Kweng Mines Ltd. [1963] 1 LNS 61; [1964] 1 MLJ 49 at 54.
7
Cheng Chuan Development Sdn. Bhd. v. Ng Ah Hock [1982] 1 LNS 48; [1982] 2 MLJ 222.
8
Ho Weng Leong v. Ng Kee Chin [1996] 1 LNS 89; [1996] 5 MLJ 139.
9
Boo Are Ngor (p) v. Chua Mee Liang (p) (sued as public officer of Kim Leng Tze Temple) [2009] 6 CLJ 617; [2009] 6 MLJ 145).
10
Public Textiles Berhad v. Lembaga Letrik Negara [1976] 1 LNS 120; [1976] 2 MLJ 58.
1
National Land Code (NLC) 1965.
2
Contract Act 1950.
3
Section 4 Strata Title Act 1985 (Act 318) [STA].
4
Strata Management Act 2013 (SMA).
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