The operation of a commercial carpark business does not constitute a 'dealing' under the Strata Titles Act, thereby validating the sale agreement for the apartment and accessory carpark units.

Azizul Azmi Adnan JCA:

Introduction

[1] There are two appeals before the court. The appellant in Appeal No 1929 is Malaysia Land Properties Sdn Bhd (referred to here as "Mayland"). It was the developer of a mixed development complex in Taman Sri Hartamas, Kuala Lumpur, within which were comprised the Waldorf & Windsor Towers apartments. In 2009, Mayland entered into a sale and purchase agreement (the "SPA") to sell to Target Term Sdn Bhd ("Target Term") one of the apartment units, unit B-21-03. The sale included 420 carpark units.

[2] Even though on paper Target Term did not appear as being owned by Mayland, before us in the appeal, counsel for Target Term and Mayland conceded that they were related corporations. By this, we understood that both companies were controlled by the same ultimate beneficial owner. Target Term is also the appellant in Appeal No 1890.

[3] It was not in material dispute that the intent of the sale to Target Term of the single apartment unit together with the 420 carpark units was in furtherance of a plan for Target Term to undertake a commercial carpark business. The strata title to unit B-21-03 was issued to Target Term on 19 March 2018. In the strata plan, 414 carpark units have been accessorised to the parcel identified as unit B-21-03.

[4] The respondent in both appeals is Waldorf and Windsor Management Corporation, referred to in this judgment as the "MC". It is the management corporation in respect of the Waldorf & Windsor Towers, established under the Strata Management Act 2013 .

[5] In 2017, the MC billed Target Term for arrears in management charges and sinking fund contributions amounting to over RM850,000.00. This prompted Target Term to sue the MC in June 2017. It sought, among others, for a declaration that the back charges were null and void. Target Term's pleaded position was that the MC had not provided any maintenance services in respect of the cark park accessory parcels, and that all maintenance and other charges (such as electricity, security and cleaning costs) had been borne by Target Term.

[6] In response, the MC raised a counterclaim against Target Term and against Mayland. It sought to defeat the title of Target Term to the accessory parcels on the basis that (among others) the SPA contravened the applicable provisions of the Strata Titles Act 1985 .

[7] The High court dismissed the claim of Target Term in the main action, and allowed the counterclaim, declaring (among others) that the sale and purchase agreement for unit B-21-03 entered into between Target Term and Mayland was null, void and unenforceable and that the 414 carpark units were not accessory parcels but were in fact and law common property.

[8] In coming to this decision, the High court (among others) held that:

(a) the use of the 414 carpark parcels in the commercial carpark business undertaken by Target Term contravened ss 34(2) and 69 of the Strata Titles Act 1985 ; and

(b) the provisions of the Strata Titles Act 1985 require an accessory parcel to be used in conjunction with the parcel to which they have been accessorised (B-21-03), and since they not used in conjunction with unit B-21-03, this illegality defeated the title of Target Term to the carpark parcels, which in turn meant that the carpark units were common property within the meaning of .

The Strata Titles Act 1985

[9] Section 34 of the Strata Titles Act 1985 provides for the rights of a proprietor of a strata title. Subsection (2) prohibits independent dealing of an accessory parcel, and reads as follows:

(2) No rights in an accessory parcel shall be dealt with or disposed of independently of the parcel to which such accessory parcel has been made appurtenant.

[10] This proscription is repeated in s 69, which contains an express reference to the strata plan:

Section 69 . No dealing in accessory parcel independent of a parcel.

No accessory parcel or any share or interests therein shall be dealt with independently of the parcel to which such ac