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2025 MarsdenLR 2587
COURT OF APPEAL PUTRAJAYA
LIM CHONG FONG, JCA
PERBADANAN PENGURUSAN PD1 – Appellant
Versus
SCP ASSETS SDN BHD – Respondent
[Civil Appeal No: B-02(NCVC)(W)-2002-11/2023]
Management corporations must adhere to approved maintenance charges unless legally challenged; failure to do so renders any new rates unlawful.
Headnote:(A) Strata Titles Act 1985 - Strata Management Act 2013 - Dispute over maintenance charges in a mixed commercial development - The Appellant, a management corporation, imposed new maintenance rates contrary to established approvals, leading to a lawsuit by the Respondent, a private limited company - The High Court found the Appellant's actions unlawful and invalid. (Paras 18, 63)
(B) Legal Authority - The Management Corporation must adhere to approved rates unless a valid challenge is made to the allocation of share units - The burden of proof lies on the Appellant to demonstrate inequitable allocation, which was not achieved. (Paras 40, 63)
(C) Judicial Review - The appropriate remedy for challenging the share unit allocation lies in judicial review, not through collateral attacks in civil suits. (Paras 47, 63)
(D) Appellate Review - The appellate court emphasized that it would not intervene unless the trial court was plainly wrong, reaffirming the need for proper judicial appreciation of evidence. (Paras 20, 22)
Findings of Court:
The High Court's decision to declare the Appellant's Private Motion No 1 unlawful was upheld, and the imposition of higher maintenance charges was deemed unjustified.
Issues: The main issues were whether the Appellant had the authority to impose different maintenance rates and whether the Respondent's claims against the Appellant were valid.
Ratio Decidendi: The court ruled that the Appellant's imposition of varied maintenance rates was unlawful due to the lack of a valid challenge to the existing share unit allocation, which was established by the Director of Lands and Mines.
Result: Appeal dismissed, and the Appellant ordered to pay costs.
| Table of Content |
|---|
| 1. introduction of parties and appeal context. (Para 1 , 2 , 3) |
| 2. factual background of the development and dispute. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 3. respondent's claims and appellant's defenses. (Para 14 , 15 , 16 , 17) |
| 4. court's review of the high court's decision. (Para 18 , 20 , 21) |
| 5. legal framework for maintenance charges. (Para 24 , 25 , 27 , 34 , 35) |
| 6. court's analysis of the appellant's arguments. (Para 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43) |
Introduction
[1] This is an appeal concerning a dispute over the rates of maintenance charges imposed on car parks in a mixed commercial development project.
[2] The Appellant, who was the defendant in the High Court below is a management corporation constituted pursuant to the Strata Titles Act 1985 (" STA ").
[3] The Respondent, who was the plaintiff in the High Court below is a private limited company incorporated pursuant to the Companies Act 2016 .
[4] We heard the appeal on 5 February 2025 and 26 March 2025, and thereafter adjourned our decision to deliberate on the contentions advanced by the parties.
[5] Now having done so, we give our decision below together with the reasons in support thereof.
Background
[6] The factual background to this dispute begins with a commercial development project known as Pusat Dagangan Phileo Damansara 1 ("PD1 Complex"), which was developed by AAB Damansara Sdn Bhd (formerly known as Phileo Damansara Sdn Bhd) ("the Developer").
[7] The PD1 Complex comprises seven blocks containing 72 ground floor shop parcels and 551 upper floor office parcels, one block of a 7- storey office tower ("Bangunan Yin"), surface car park bays at ground level, and three levels of basement car park bays located beneath the aforementioned seven blocks and Bangunan Yin.
[8] By a sale and purchase agreement dated 6 September 2000, the Developer sold the basement car park bays of the seven blocks to PD1 Corporate Parking Sdn Bhd ("PD1 Corporate Parking") for a purchase price of RM39,375,000.00
[9] Further, by a supplemental sale and purchase agreement dated 26 September 2002, the Developer sold the ground floor surface car park bays of the seven blocks to PD1 Corporate Parking for a purchase price of RM1,905,000.00.
[10] Additionally, by another sale and purchase agreement dated 15 March 2006, the Developer and Intershine Sdn Bhd sold the basement car park bays of Bangunan Yin to PD1 Corporate Parking for a purchase price of RM2,520,000.00.
[11] Subsequently, pursuant to a corporate restructuring exercise, the Respondent acquired all the car park bays from PD1 Corporate Parking.
[12] Upon the establishment of the Appellant and the convening of its first annual general meeting held on 30 November 2017, the Appellant, following a vote by way of private motion ("Private Motion No 1"), implemented and imposed different rates of maintenance charges from those previously imposed by the Developer.
[13] As a result, the Respondent commenced Shah Alam High Court Suit SCP Assets Sdn Bhd v. Perbadanan Pengurusan PD1 [2024] MLRHU 111 Civil Suit No: BA-22NCVC-44-01/2018 ("the Suit") against the Appellant on 29 January 2018.
In The High Court
[14] The Respondent primarily contended that the vote poll conducted by the Appellant is unlawful as it was in contravention of the STA as well as the Strata Management Act 2013 (" SMA ") because the rates of maintenance charges have been established and approved by the relevant statutory authority.
[15] As such the Respondent claimed the following reliefs:
(a) a declaration that Private Motion No 1 set out in para 6 (a) of the Statement of Claim is unlawful, invalid and/or void;
(b) an injunction restraining the Defendant whether by itself or through its agent or servant from putting into effect and enforcing the rate of Charges in Private Motion No 1 passed at the annual General Meeting of the Defendant held on 30 November 2018;
(c) an injunction ordering and directing the Defendant to immediately cancel all the
