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2021 MarsdenLR 3820
HIGH COURT MALAYA KUALA LUMPUR
BADAN PENGURUSAN BERSAMA KOMPLEKS PANDAN SAFARI LAGOON – Appellant
Versus
PARADISE BOULEVARD SDN BHD (ENCLS 12 & 14).... – Respondent
[Suit No: WA-22NCVC-612-09/2020]
Unit owners are strictly liable to pay service charges as mandated by the Sale and Purchase Agreement and Strata Management Act, regardless of performance complaints against the Joint Management Body.
Headnote:(A) Strata Management Act 2013 – Section 25 – Joint Management Body – Joint Management Body claim against unit owner for non-payment of services charges as per Sale and Purchase Agreement – Owner claimed non-payment due to alleged poor maintenance and illegal squatters – Court held unit owner's obligation to pay was not conditional on plaintiff's performance or quality of service. (Paras 12, 29-32, 36, 59)
(B) Summary Judgment – Application for summary judgment under O 14 of RC 2012 – Court confirmed plaintiff satisfied all preliminary requirements allowing judgment without trial as no triable issues were identified by the defendant. (Paras 13-16, 28, 40)
Facts of the case: Plaintiff, the Joint Management Body of the Pandan Safari Lagoon Complex, claimed RM4,856,109.70 from the defendant for unpaid maintenance, despite defendant’s failure to substantiate claims against the plaintiff. (Paras 4, 9, 49)
Findings of Court: Court granted summary judgment for the plaintiff and struck out the defendant's counterclaim for being frivolous and vexatious, emphasizing strict liability for charges irrespective of service quality. (Paras 59, 60)
Issues: Whether the defendant's alleged non-payment was justified by poor maintenance and inability to attend AGM due to arrears. (Paras 28, 29, 37)
Ratio Decidendi: The court found that under the SPA and SMA, the defendant was liable to pay all charges, irrespective of the alleged disputes on maintenance. (Paras 22, 26)
Result: Summary judgment granted in favor of the plaintiff and the defendant's counterclaim struck out.
JUDGMENT
Introduction
[1] This case concerns an application by the plaintiff to strike out the counter-claim filed by the defendant against the plaintiff's statement of claim (encl 12) and another application by the plaintiff for summary judgment against the defendant (encl 14). I allowed both applications at the conclusion of the hearing, and highlighted the primary reasons for my decisions. This judgment contains the full reasons for my decisions.
Key Background Facts
[2] The plaintiff is the Joint Management Board (JMB) of the Pandan Safari Lagoon Complex ("the Complex") which is situated in Pandan Perdana in Selangor. The plaintiff, as the JMB was established under the Strata Management Act 2013 . The defendant, pursuant to a Sale and Purchase Agreement dated 26 May 2017 ("the SPA"), owns 168 units in the Complex. The defendant acquired the said units from CHN Commodity Trade Centre Sdn Bhd (In Liquidation) for a purchase price of RM54,000,000.00, under the terms of the SPA.
[3] According to the SPA, it is the responsibility of the defendant to settle all the assessment, quit rent, maintenance fees and service charges and all other expenses pertaining to the said Complex from the date balance purchase price is paid.
[4] However the defendant had not to date in respect of its units at the Complex, made any payment whatsoever towards quit rent, rates, assessments, service and maintenance charges, contributions to sinking fund, management corporation charges, utilities and other outgoings which totalled to the sum of RM4,856,109.70 as at 31 August 2020.
[5] There is no denying that the SPA imposes the duty of the defendant to make payment for the various charges as owner of the parcels in question. Specifically cl 8 of the SPA reads as follows:
Clause 8 Apportionment of Outgoings
8.1.1 All Quit rent, assessments, service and maintenance charges, contributions to sinking fund, utilities and other outgoings payable in respect of the Property shall be borne by the Purchaser. Any outgoings due from the date of this Agreement shall be paid by the Purchaser to the relevant authority or party entitled to the same on or before the Completion Date.
8.1.2 As from the Completion Date, the Purchaser shall be solely and wholly responsible and liable for any and all quit rent, rates assessments, service and maintenance charges, contributions to sinking fund, management corporation charges, utilities and other outgoings in respect of the Property as well as for all matters arising from or in relation to the Property, regardless of whether vacant possession of the Property shall have been deemed to be delivered in accordance with the provision of this agreement.
[6] Some clarification on the workings of the relevant clauses in the SPA is in order. The term 'Completion Date' referred to in Clause 8 is described in Clause 2.3 to be the date the balance purchase price is paid, and this in turn must be made within 90 days from the unconditional date. 'Unconditional date" according to Clauses 3.1 and 3.3 happens when the solicitors for the vendor and the solicitors for the purchase received the consent from the Liquidator. The same Clause 3.1 stipulates that the consent from the Liquidator must to be obtained within three months from the date of the SPA.
[7] In this case, the Completion Date was in December 2017 because that was when the defendant made payment of the balance purchase price for the parcels. As such the defendant should start paying the quit rent, rates, assessments, service and maintenance charges, utilities and other outgoings in respect of the parcels from January 2018.
[8] The plaintiff in adherence to the SPA in January 2018 started issuing the invoices for the quit rent, rates, assessments, service and maintenance charges, contributions to sinking fund, management corporation charges, utilities and other outgoings in respect of the units or parcels purchased by the defendant.
[9] Nevertheless, the defendant in vi
