Vista Fajar Sdn Bhd v Jmb Menara Rajawali (WA-24NCvC-373-02/2022)

JMB MENARA RAJAWALI (Registration No: MPSJ.COB.BP1-89)

DENFLOW TECHNOLOGY SDN BHD (Company No: 1027535-T) … DEFENDANTS 10/01/2024 10:38:03 WA-24NCvC-373-02/2022 Kand. 133 GROUNDS OF JUDGMENT INTRODUCTION [1] The Plaintiff claims against the Defendants for the following prayers-

A declaration that the 1st Defendant has breached and/or failed to comply with Prayers 3 and 4 of the Kuala Lumpur High Court Originating Summons No.: WA-24NCvC-186-0l/2018 ("OS") which was allowed by the Court of Appeal Order dated 4.10.2019 granted in Civil Appeal No. W- 02(NCVC)(A)-2057-10/2018 ("Court of Appeal Order");

An order that the 1st Defendant (through its Joint Management Committee ("JMC") members, building managers, employees, agents, administrators and/or successors-in-title) shall impose a single rate of maintenance charges of RM2.80 per share unit on the 2nd Defendant's car park parcels in Menara Rajawali for the period from 1.8.2016 to 30.9.2019 pursuant to the Court of Appeal Order which allowed Prayer 3 of the OS;

An order that the 1st Defendant (through its JMC members, building managers, employees, agents, administrators and/or successors-in-title) shall impose a 10% interest per annum on the 2nd Defendant's outstanding maintenance charges and sinking fund contributions for the period of 1.8.2016 to 30.9.2019 pursuant to the Court of Appeal Order which allowed Prayer 3 of the OS;

An order that the 1st Defendant (through its JMC members, building managers, employees, agents, administrators and/or successors-in-title) shall impose a 10% interest per annum on the 2nd Defendant's outstanding maintenance charges and sinking fund contributions for the period from 1.10.2019 onwards (if any) pursuant to the Court of Appeal Order which allowed Prayer 4 of the OS;

An order that the 1st Defendant (through its JMC members, building managers, employees, agents, administrators and/or successors-in-title) shall (i) recalculate, regularize and update the 2nd Defendant's maintenance and sinking fund accounts and balances based on the single rate of maintenance charges of RM2.80 per share unit and 10% interest per annum as ordered by this Court in paragraphs 2 to 4 above, and thereafter (ii) provide to the 2nd Defendant its respective parcel(s)' updated statement(s) of account, within 14 days from the date of service of this judgment;

An order that the 1st Defendant (through its JMC members, building managers, employees, agents, administrators and/or successors-in-title) shall within 21 days from the date of service of this judgment, file and serve on the Plaintiff an affidavit verifying the details and documentary evidence of the 1st Defendant's compliance with paragraphs 2 and 5 above;

A declaration and order that prior to the 1st Defendant's full compliance with paragraphs 2 to 6 above, the 2nd Defendant shall remain in default of maintenance charges and sinking fund contributions owed to the 1st Defendant and therefore:

7.1. Is not entitled to vote in any general meetings of the 1st

7.2. Is not eligible to have its representatives elected as JMC members.

An order that the 1st Defendant (through its JMC members, building managers, employees, agents, administrators and/or successors-in-title) shall make its book of accounts (including but not limited to accounts and records of accounts as will sufficiently explain the transactions of the accounts and enable true and fair balance sheet, income and expenditure statement and profit and loss statement to be prepared) available for inspection by the Plaintiff within 7 days from the date of service of this judgment; 8A A declaration that the 1st Defendant's 5th AGM held on 25.6.2022 and all resolutions approved at the 5th AGM dated 25.6.2022 are unlawful, null and void ab initio (save that the joint management committee members appointed at the 1st Defendant's 5th AGM shall continue in office and be deemed to resign at the reconvened 5th AGM pursuant to paragraph 8C below): 8B A declaration that any other general meeting convened by the 1st Defendant between 25.6.2022 until the date of this judgment and all resolutions approved at such general meetings, if any, are unlawful, null and void ab initio; 8C An order that the 1st Defendant shall reconvene its 5th AGM within 30 days from the date of service of this judgment and at the reconvened 5th AGM propose and vote on the resolutions which were proposed at the general meetings stated in paragraphs 8A and 8B above;

An order that personal service of this judgment on the 1st Defendant's JMC members be dispensed with and that this judgment be effected by serving a copy of the sealed judgment addressed to each JMC member at the 1st Defendant's registered address and 1st Defendant's solicitors' address of service;

An order that personal service of this judgment on the 2nd Defendant's directors be dispensed with and that this judgment be effected by way of service on the 2nd Defendant's solicitors and by posting a copy of the judgment to the 2nd Defendant's directors at their address as registered with the Companies Commission of Malaysia by way of certificate of posting;

Costs;

That parties shall be at liberty to apply for further and necessary orders and/or directions; and

Any other and/or further relief that deems fit and just. BRIEF FACTS The Parties [2] Menara Rajawali is a mixed strata development comprising residential, retail and car park parcels. There are approximately 208 parcel owners in Menara Rajawali. [3] The Plaintiff is the parcel owner of Units A-01-2, A-02-2 and A-02- 3 in Menara Rajawali. [4] The 1st Defendant is the Joint Management Body (JMB) of Menara Rajawali. [5] The 2nd Defendant is the parcel owner of 242 car park units located in the Basement Level and Levels 1 to 6 in Menara Rajawali. The 2nd Defendantʼs car park units comprise of 6,267 share units. This represents 27% of the total share units in Menara Rajawali. Maintenance charges rate [6] At the 1st Annual General Meeting (AGM) of the 1st Defendant on 25.6.2016, by resolution, mandate was given to the Joint Management Committee (JMC) to fix maintenance charges for:

Residential and retail units at a rate of not more than RM3.26 per share unit;

Car park units at a rate not more than RM1.68 per share unit. [7] At the 3rd JMC Meeting on 12.8.2016, the JMC fixed the maintenance charges rate for:

Residential and retails units at a rate of RM2.80 per share unit; and

Car park units of a rate of RM1.68 per share unit. PLAINTIFF’S CONTENTION [8] The Plaintiff relied on the case of Muhamad Nazri Bin Muhamad v JMB Menara Rajawali & Anor, [2019] 10 CLJ 547 (CA), [2018] 9 CLJ 547 (HC) (Muhamad Nazri’s case) stating that the Defendants in Muhamad Nazri’s case were also the same Defendants as in this Originating Summons (OS) and that the issues were also the same. Thus, the decision in Muhamad Nazri’s case must be complied with by the Defendants in this suit, pursuant to section 143(3) of the Strata Management Act 2013 (SMA). [9] The Plaintiff contended that-

The 1st Defendant has imposed a single rate of maintenance charges of RM2.80 per share unit on the 2nd Defendant’s parcel(s) starting from 1.10.2019 onwards only;

The 1st Defendant has failed, refused and/or neglected to impose, adjust and/or regularize the single rate of maintenance charges of RM2.80 per share unit on the 2nd Defendant’s maintenance charges and sinking fund contributions for the period from 1.8.2016 to 30.9.2019 and 10% interest per annum for the said period; and

The 1st Defendant has failed, refused and/or neglected to impose the 10% interest per annum on any of the 2nd Defendant’s outstanding maintenance charges and sinking fund contributions for the recent period from 1.10.2019 onwards. [10] The Plaintiff further contended that the Defendants have failed to comply with the Order of the Court of Appeal in Muhamad Nazri’s case. [11] The Plaintiff also contended that pursuant to paragraph 21(2) of the Second Schedule of SMA, the 2nd Defendant shall not be entitled to vote in any general meetings of the 1st Defendant because it is in arrears of maintenance charges and sinking fund contributions. [12] Further, pursuant to paragraph 2(9) of the Second Schedule of SMA, the 2nd Defendant shall not be eligible to have its representative elected as a member of the JMC because it is in arrears of the maintenance charges and sinking fund contributions. DEFENDANTS’ CONTENTION [13] The Defendants contended that they have complied accordingly to the Order of the Court of Appeal in Muhamad Nazri’s case and also questioned the locus standi of the Plaintiff to bring the claim. ANALYSIS AND FINDINGS Locus Standi [14] Section 143(3) of the SMA provides for representations in proceedings- “143. Representation in proceedings

Where all or some of the parcel owners or proprietors of the parcels in a development area—

are jointly entitled to take proceedings for or with respect to the common property in that development area against any person or are liable to have such proceedings taken against them jointly; or

are jointly entitled to take proceedings for or with respect to any limited common property in that development area against any person or are liable to have such proceedings taken against them jointly, the proceedings may be taken—

in the case of paragraph (2)(a), by or against the joint management body or management corporation; or

in the case of paragraph (2)(b), the subsidiary management corporation constituted for that limited common property, as if the joint management body, management corporation or subsidiary management corporation, as the case may be, were the parcel owners or the proprietors of the parcels concerned.

Any judgment or order given or made in favour of or against the joint management body, management corporation or subsidiary management corporation, as the case may be, in any proceedings referred to in subsection (2) shall have effect as if it were a judgment or an order given or made in favour of or against the parcel owners or the proprietors, as the case may be.” (Emphasis added) [15] Thus, based on this provision, this Court finds that the Plaintiff as parcels owner, has locus standi to commence and pursue this action against the Defendants. [16] Further, in the case of 3 Two Square Sdn Bhd v Perbadanan Pengurusan 3 Two Square & Ors; Yong Shang Ming (Third Party) [2018] 4 CLJ 458 (HC) the Court deliberated on section 143(3) of the SMA and held that the judgment against the management corporation takes effect as though it was a judgment against a proprietor that is liable to make contributions- “[126] Section 143(4)(a) prescribes the manner in which a proprietor is liable to make contributions where another proprietor has successfully obtained judgment against the management corporation. By s. 143(3), the judgment against the management corporation takes effect as though it was a judgment against the proprietors personally. The proportion of contribution is determined based on the proportion of share units held by a proprietor as a fraction of the total share units in the development area.”. [17] In Muhamad Nazri’s case, it was held that- “[38] There is also no provision under the SMA 2013 and the STA 1985 which empowers the JMB to fix different rates for different types of parcels. In contrast, such a power is expressly conferred on a MC in respect of 2 specific situations, (i) parcels which are used for significantly different purposes, and (ii) provisional blocks; sub-section 60(3)(b) of the SMA

Therefore, if Parliament had intended for the JMB to have the power to fix different rates of maintenance charges, that intention would have been clearly reflected in the provisions of the SMA 2013; and because there is no such provision it must have been Parliament's presumed intention and wisdom not to confer such power on the JMB.”. [18] It was also held in Muhamad Nazri’s case that-

The fact that JMB’s resolution was carried by a unanimous vote did not make it legal and valid for the JMB and JMC to fix and collect the different rates of the maintenance charges. The JMB as a body corporate under statute could only determine charges which were mandated under the SMA 2013. It would be ultra vires the SMA 2013 for the JMB and the JMC to fix and impose the different rates which were not sanctioned by statute. Further, the JMB did not have the inherent power nor could it arrogate to itself such power, even if the approval was obtained in a unanimous resolution at the AGM. The JMB's Resolution and the JMC's Decision should be set aside for being invalid, null and void. [19] The Court of Appeal in allowing Muhamad Nazriʼs appeal (see [2020] 3 MLJ 645), expressly held that- “Decision [15] The main thrust of the plaintiffʼs argument is twofold. One, the second defendant is enjoying a double discount on his share of contribution of the maintenance charges. This argument is premised on the ground that the allocation of share units to every parcel owner has already taken into account the types of parcels, frequency of usage and general maintenance of the common property, whole floor parcel including or excluding area of vertical transportation core, and accessory parcels inside or outside building. Since the share value of the second defendant has already factored in the weightages, fixing a lower rate of maintenance charges for the car park units as opposed to a standard rate for all types of parcels would in effect be giving the second defendant a double discount. Two, the provisions of the SMA 2013 cannot be read as giving the JMB and the JMC the power to determine different rates of maintenance charges for different parcels. … [27] We therefore take the view that on a proper construction of the said sections, the JMB is required to determine and fix only a single rate of maintenance charges to be applied to all types of parcels in proportion to the allocated share units. Accordingly, we do not think that the JMBʼs resolution in fixing different rates for different types of parcels is in conformity with ss. 21 and 25 of the SMA 2013 … [41] For the foregoing reasons, the JMBʼs resolution and the JMCʼs decision are hereby set aside for being invalid, null and void. The order of the High Court is set aside. We therefore allow prayers 1, 2, 3 and 4 of the originating summons. The appeal is allowed with costs.” (Emphasis added) [20] Pursuant to paragraph 21(2), Second Schedule of the SMA, the 2nd Defendant shall not be entitled to vote in any general meetings of the 1st Defendant because it is in arrears of maintenance charges and sinking fund contributions: “21. Voting rights of proprietor

A proprietor shall not be entitled to vote if, on the seventh day before the date of the meeting, all or any part of the Charges, or contribution to the sinking fund, or any other money due and payable to the management corporation in respect of his parcel are in arrears.” [21] Accordingly, paragraph 2(9), Second Schedule of the SMA, the 2nd Defendant shall not be eligible to have its representative elected as a member of the JMC because it is in arrears of maintenance charges and sinking fund contributions: “(9) Notwithstanding subparagraph (7), an individual referred to in that subparagraph shall not be eligible for election as a member of the management committee of a management corporation if, on the seventh day before the date of election-

where he is a proprietor or co-proprietor of a parcel, all or any part of the Charges, or contribution to the sinking fund, in respect of that parcel are in arrears;

where he is nominated for election by a proprietor of a parcel which is a company, society, statutory body or any other body, all or any part of the Charges, or contribution to the sinking fund, in respect of that parcel are in arrears; or

where he is a member of the immediate family of a proprietor who owns two or more parcels and is nominated for election by that proprietor, all or any part of the Charges, or contribution to the sinking fund, in respect of any parcel are in arrears.” [22] In Badan Pengurusan Bersama Kompleks Pandan Safari Lagoon v Paradise Boulevard Sdn Bhd [2021] 1 LNS 1224, it was held that the SMA is unmistakable in prescribing that parcel owners who have not fully paid maintenance and other charges to the JMB shall not be entitled to vote at a general meeting of the JMB: “[31] The statute is unmistakable in prescribing that parcel owners who have not fully paid maintenance and other charges in respect of their parcels to the committee of the JMB shall not be entitled to vote at a general meeting of the JMB. That is the consequence for non-payment as prescribed by statute.” [23] Further, pursuant to Paragraph 2(6), Second Schedule of the SMA, representative shall not hold office for more than three consecutive terms- “(6) All the members of the management committee of a management corporation shall retire from office at the conclusion of the next annual general meeting. A retiring member of the management committee shall be eligible for re-election but no member of the management committee shall hold office for more than three consecutive terms.” [24] In terms of inspection of the account books, this Court finds that the Plaintiff as a parcel owner in Menara Rajawali has the right to do so as provided under paragraph 7(6), Second Schedule of the SMA- “7. Keeping of records and accounts of management corporation

The management committee shall-cause to be prepared such accounts and records of accounts as will sufficiently explain the transactions of the accounts and enable true and fair balance sheet, income and expenditure statement and profit and loss statement to be prepared; and on the application of a proprietor or chargee of a parcel or a proprietor of a provisional block (or any person authorized in writing by him), make the books of accounts available for inspection during office hours of the management corporation, at a fee not exceeding fifty ringgit for each inspection.”. CONCLUSION [25] Based on the foregoing reasons, this Court granted the following Orders-

The 1st Defendant (through its Joint Management Committee ("JMC") members, building managers, employees, agents, administrators and/or successors-in-title) shall impose a single rate of maintenance charges of RM2.80 per share unit on the 2nd Defendant's car park parcels in Menara Rajawali for the period from 1.8.2016 to 30.9.2019;

The 1st Defendant (through its JMC members, building managers, employees, agents, administrators and/or successors-in-title) shall impose a 10% interest per annum on the 2nd Defendant's outstanding maintenance charges and sinking fund contributions for the period of 1.8.2016 to 30.9.2019;

The 1st Defendant (through its JMC members, building managers, employees, agents, administrators and/or successors-in-title) shall impose a 10% interest per annum on the 2nd Defendant's outstanding maintenance charges and sinking fund contributions for the period from 1.10.2019 onwards;

Prayers 5, 6, 7, 8, 8A, 8B, 8C, 9, 10 & 11 of the OS are allowed including cost of RM12,000 subject to allocator's fee to be paid to the Plaintiff by the Defendants jointly and severally. (SUZANA BINTI MUHAMAD SAID) JUDICIAL COMMISSIONER NCVC 1 KUALA LUMPUR HIGH COURT Dated: 4 January 2024 COUNSELS For the Plaintiff Mah Weng Kwai & Associates Level 10-1, Tower B, Menara Prima Jalan PJU 1/39, Dataran Prima 47301 Petaling Jaya, Selangor. For the Defendants Onn & Partners 13, Jalan Kemuja