Management Corporations can impose different maintenance charges only if based on significantly different purposes according to the Strata Management Act, but any method deviating from statutory provisions is unlawful.

Indera Mohd Arief Emran Arifin JC:

[1] This case concerns the application of the Strata Title Management Act 2013 (Act 757) and the Strata Titles Act 1985 (Act 318).

A. Material Facts

[2] The material facts are as follows:-

2.1 The dispute arises out of the mixed development known as 1 Mont Kiara Development ("the Development") that was constructed on a single lot known as Lot 60493 and held under Geran 70251, Mukim Batu, Daerah Kuala Lumpur ("Lot 60493").

2.2 The Development is made of a (i) I-Zen Kiara II ("Kiara 2"), a 33-storey serviced apartment block containing residential parcels and commercial parcels; (ii) Menara 1 MK ("Menara 1 MK"), a 34-storey high office block containing premier office suites and office suites; (iii) Wisma Mont Kiara ("Wisma Kiara"), a 19-storey office block; and (iv) 1 Mont Kiara, a 4-storey retail mall and all basement and upper-level carparks.

2.3 The Management Corporation, the 1st Defendant, came into being on 5 December 2015 under s 56 of the Strata Management Act 2015. The duty of the Management Corporation ("MC") was, among others, to manage and maintain the subdivided building or land and the common property and keep it in a state of good and serviceable repair. (see s 59 of the Strata Title Management Act 2015)

2.4 3 separate Subsidiary Management Corporation ("SMC") was set up on 9 April 2019 following s 17A of the Strata Titles Act 1985 to take over the management and control of the limited common properties under the purview of each SMC.

The 3 SMCs are as follows:-

(i) Izen Kiara 2 SMC

(ii) Menara 1MK SMC

(iii) 1 Mont Kiara and Wisma Mont Kiara SMC

This Court notes that these 3 SMCs are not parties to this proceeding.

2.5 Because of a dispute as to the amount of maintenance charges and the sinking fund sums chargeable on the proprietors of Wisma Mont Kiara and 1 Mont Kiara, that was earlier imposed by the Developer, Ireka Land Sdn Bhd, the then Joint Management Body ("JMB"), the predecessor to MC, had retained the services of Burgess Rawson Management Sdn Bhd ("BRM").

2.6 BRM was engaged by the JMB to provide its opinion on the correct apportionment of income and expenses for Menara 1MK.

2.7 BRM issued its report on 30 January 2015 which can be seen in Exhibit KY-1 in the Plaintiff's Affidavit in Support ("BRM Report").

2.8 The BRM report suggested 2 options be adopted. They are entitled Method A and Method B as seen on pp 19 to 110 and at Schedules 2 and 3 of the aforesaid report.

2.9 On 5 December 2015, the Developer convened the 1st Annual General Meeting of the MC. At the aforesaid meeting, the proprietors passed and adopted the Ordinary Resolution 4 under Agenda 5 to use Method B as the basis to levy and collect maintenance charges as set out in Table 1 under item 6.5 of the Minutes of the 1st AGM.

2.10 Method B is provided in Schedule B of the BRM report, and the detailed explanation could be found in paras 6.2, 8.1, 8.2, 8.3 and 8 April For our purposes, it is important to note para 8.3 of the BRM report, which explains the finding on what they found to be "significantly different purposes" and the suggested charges in para 8.4 of the said document.

2.11 As stated earlier, the charges that were adopted are based on the opinions contained in paras 8.1 to 8.4 of the BRM report.

B. Questions To Be Answered By This Court

[3] The High Court had earlier struck out the Originating Summons under O 18 r 19 of the Rules of on 10 May 2019. The Plaintiff dissatisfied with the said order appealed to the Court of Appeal.

[4] The Plaintiff's appeal was partly allowed by the Court of Appeal as seen in the order dated 2 December 2020. The Court of Appeal however limited the issues to be decided by this Court to the following questions:

(I) Whether the 1st Defendant has the power to apply different unit rates to calculate and to impose charges concerning the maintenance charges and sinking fund contributions on the parcel owners; and

(II) Whether the 1st Defendant has the power, under the relevant laws,