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2021 MarsdenLR 1352
HIGH COURT MALAYA PENANG
THAM SAU HOONG – Appellant
Versus
PERBADANAN PENGURUSAN PANTAI EMAS RESORT – Respondent
[Originating Summons No: PA-24NCvC-927-10/2019]
The court holds that procedural breaches do not invalidate AGM proceedings unless shown to significantly affect the outcome, reinforcing the discretionary nature of declaratory relief.
Headnote:(A) Strata Titles Act 1985 – Section 39 – Strata Management Act 2013 – Sections 56, 59, 106 – Authority of management corporations – Discretionary remedies – Court's refusal to declare AGM null and void due to procedural breaches – Plaintiff's claims lacked sufficient impact on the AGM outcome. (Paras 10-20, 22-30)
(B) Declaratory Relief – The court exercises discretion to refuse declarations that serve no useful purpose and considers the utility of the declaration claimed versus potential inconveniences caused. (Paras 10-12)
Facts of the case: The plaintiff challenged the management corporation's AGM alleging improprieties in the election process and sought to declare the proceedings null, but the court found no impact from the alleged irregularities.
Findings of Court: The court concluded there was no evidence that the alleged breaches importantly affected the integrity or results of the AGM proceedings.
Issues: The core issues included the eligibility of attendees and members elected at the AGM amidst purported breaches of by-laws.
Ratio Decidendi: The court emphasized that merely citing non-compliance with procedural aspects does not automatically invalidate proceedings unless substantial evidence shows an impact on outcomes.
Result: Application dismissed with costs.
Based on the provided legal document, here are the key points with their corresponding references:
- Case Citation and Parties: The case is Tham Sau Hoong – Appellant versus Perbadanan Pengurusan Pantai Emas Resort – Respondent, decided on 21-01-2021, regarding an originating summons concerning the defendant's 11th Annual General Meeting ( (!) (!) ).
- Orders Sought and Refused: The plaintiff sought a declaration that the 11th AGM proceedings were null and void, an order for a fresh AGM, and a declaration that the election of new management committee members was null and void; however, the court refused these orders ( (!) (!) (!) ).
- Background on Management Corporation: The defendant is a management corporation created under subsection (1) of s 39 of the Strata Titles Act 1985, possessing legal personality and the power to sue and be sued ( (!) ).
- Statutory Duties: The management corporation's duties include maintaining the building, preparing the strata roll, and complying with by-laws, as per s 59 of the Strata Management Act 2013 ( (!) ).
- Management Committee Authority: The duties and powers of the management corporation are exercised by a management committee elected at the annual general meeting, pursuant to subsection (2) of s 56 of the Strata Management Act 2013 ( (!) ).
- Enforcement of By-laws: Breaches of by-laws can be enforced by applying to the Strata Management Tribunal or the Courts for an order to enforce performance or restrain the breach, under subsection (7) of s 70 of the Strata Management Act 2013 ( (!) ).
- Plaintiff's Allegations regarding Breaches: The plaintiff alleged that certain committee members failed to rectify breaches regarding unauthorized changes to parcel appearance, encroachment on common property, and unapproved renovation works, citing the Commissioner of Buildings' initial notice ( (!) (!) (!) (!) (!) (!) (!) (!) ).
- Plaintiff's Claim against the Tribunal: The plaintiff filed a claim with the Tribunal to compel enforcement against offending proprietors, which was initially dismissed but later quashed by the High Court and remitted for reconsideration ( (!) (!) ).
- Trigger for Current Action: The 11th AGM was held while the Tribunal was rehearing the breach claim; four proprietors alleged to be in breach were elected to the management committee, prompting the plaintiff to seek a declaration nullifying the AGM and the election ( (!) (!) ).
- Grounds for Nullification Claimed: The plaintiff argued that non-registered proprietors were listed as attendees, defective proxy forms were used, and ineligible proprietors (due to alleged breaches) were elected ( (!) (!) (!) ).
- Discretionary Nature of Declaratory Relief: The court emphasized that declaratory relief is discretionary, requiring a consideration of the utility of the declaration against the inconvenience it may cause ( (!) (!) ).
- Requirement for Useful Purpose: A declaration will be refused if it serves no useful purpose, distinguishing between the court's jurisdiction to hear the case and its discretion to grant relief ( (!) (!) (!) ).
- Exhaustion of Alternative Remedies: The court noted that if a statute provides a specific remedy or tribunal (like the Strata Management Tribunal), a party must resort to that remedy first before approaching the court ( (!) (!) (!) ).
- Analysis of Ineligible Attendees: The court agreed that only registered proprietors are entitled to vote, but found that even if ineligible persons attended, their presence had no impact on the uncontested election of the management committee ( (!) (!) (!) (!) ).
- Refusal of Declaration on Attendees: Due to the lack of impact on the meeting's outcome and the absence of utility in declaring the meeting void, the declaration regarding the nullity of the 11th AGM was refused ( (!) (!) (!) ).
- Eligibility to Contest: The court found no statutory provision disqualifying a proprietor from contesting solely based on unremedied breaches of specific maintenance regulations ( (!) (!) ).
- Interpretation of Disqualification Clause: The court interpreted para 3(1)(l) of the Second Schedule of the Strata Management Act 2013 as applying to members who vacate office after election due to failure to remedy breaches, not as a bar to contesting in the first place ( (!) (!) (!) ).
- Correction of Strata Roll Errors: The allegation that one elected member was not a registered proprietor was dismissed as the strata roll had been corrected, revealing the member to be a registered proprietor ( (!) ).
- Prohibition on Duplicate Proceedings: The plaintiff was barred from seeking this declaration in court because the matter of breaching by-laws was already before the Strata Management Tribunal, invoking subsection (1) of s 106 of the Strata Management Act 2013 ( (!) (!) (!) (!) ).
- Correct Procedure for Breach Enforcement: The correct process involves the Tribunal ordering rectification; only upon refusal to rectify within 14 days are the members deemed to have vacated their seats by operation of law ( (!) (!) ).
- Final Outcome: The application was dismissed with costs ( (!) ).
JUDGMENT
Introduction
[1] In this judgment I only state the reasons in respect of the orders that I had refused to grant the plaintiff in the instant originating summons. The orders sought and not granted concern the defendant's 11th Annual General Meeting held on 30 June 2019 ("11th AGM") and are as follows:
(i) a declaration that all proceedings at the defendant's 11th AGM is null and void and consequently an order that a fresh 11th AGM is held within one month thereof; and
(ii) a declaration that the election and appointment of the new members of the management committee at the defendant's 11th AGM are null and void;
Background Facts
[2] The plaintiff is the proprietor of a parcel in a condominium known as Gold Coast Resort in Penang. The defendant is the management corporation of the condominium which is a subdivided building consisting of parcels. The condominium is therefore regulated by the Strata Titles Act 1985 and other related statutes. The defendant came into existence by operation of law, namely, subsection (1) of s 39 of the , which states that upon the opening of a book of the strata register in respect of a subdivided building by the Registrar of Titles there shall come into existence a management corporation consisting of all parcel proprietors. Subsection (2) confers upon such management corporation legal personality of a body corporate having perpetual succession and a common seal while subsection (3) provides that the management corporation can sue and be sued in its name.
[3] The duties and powers of a management corporation is provided by s 59 of the Strata Management Act 2013 . Amongst others, its duties are to properly maintain and manage the building, to prepare and maintain a strata roll which contains, inter alia, the names and addresses of every registered proprietor and to comply with all by-laws relating to a subdivided building, its land and common property. The duties, powers and business of a management corporation are according to subsection (2) of s 56 of the to be exercised by a management committee elected at its annual general meeting. In this regard the detailed workings and matters of the management corporation and management committee are provided in the Second Schedule of the . The by-laws that govern the management corporation and its management committee are either those by-laws made by the Minister or by the management corporation itself by special resolution. In the event of any breach or violation of any of the by-laws by persons bound to comply with the by-laws subsection (7) of s 70 entitles the management corporation or a parcel proprietor to apply to the Strata Management Tribunal ("the Tribunal") or to the Courts for an order to enforce the performance of or restrain the breach of any of the by-laws.
[4] In the instant originating summons the plaintiff averred that upon a referral by him the Commissioner of Buildings ("the Commissioner") informed on 31 May 2016 that four committee members of the defendant for the year 2016/2017 were to relinquish their posts as management committee members if they fail to rectify the breaches of either paras 11, 22(1) and 27(1) of the Third Schedule of the Strata Management (Maintenance and Management) Regulations 2015 committed by them. For a clearer picture the said paragraphs of the Third Schedule are reproduced below:
Paragraph 11:
A proprietor shall not change the appearance, colour code and fapade to any part on the exterior of his parcel without the prior written approval of the management corporation and, where necessary, the approval of the appropriate authority.
Paragraph 22(1):
A proprietor shall not do anything to his parcel which may encroach on any part of the common property or any other parcel.
Paragraph 27(1):
A proprietor shall not carry out any renovation works to his parcel without first obtaining a prior written approval from the management corporation and, where necessary, from the appropriate authority.
