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2022 MarsdenLR 75
COURT OF APPEAL PUTRAJAYA
SRI KELADI SDN BHD – Appellant
Versus
BUKIT OUG CONDOMINIUM JOINT MANAGEMENT BODY – Respondent
[Civil Appeal No: W-02(NCVC)(W)-2214-11/2019]
The Court ruled that surplus car parks are owned by the developer as they are not part of common property due to the specific terms outlined in Sale and Purchase Agreements.
Headnote:(A) Building and Common Property (Maintenance and Management) Act 2007; Strata Titles Act 1985 – The High Court ruled that surplus car parks are common property, yet the Court of Appeal reversed this decision, ruling ownership belongs to the developer as defined under the Sale and Purchase Agreements, which were binding contracts. The respondent's claim was based on a misinterpretation of common property definitions. The appellant had the right to sell the car parks, as they were not part of common property due to no strata titles being issued and their surplus status. (Paras 10, 14, 31, 34, 41, 64)
Facts of the case:
The appellant developed a condominium with unaccounted car parks identified during a liquidation audit. The respondent claimed these parks as common property based on SPAs, yet the SPA clauses explicitly excluded them from the definition of common property.
Findings of Court:
The surplus car parks rightfully belong to the appellant and are not under the respondent's management.
Issues
: The key questions were the instrument of ownership for the car parks and if they fall under common property as defined in the SPAs.
Ratio Decidendi:
The Court ruled that the determination hinges on the Sale and Purchase Agreements, and since the car parks were surplus and additional, they did not qualify as common property.
Result:
The appeal was allowed, affirming the appellant's ownership of the surplus car parks.
JUDGMENT
Introduction
[1] The dispute in this case is about who has the right to some car parks. The High Court decided these car parks as common property where the respondent has the right to ownership and therefore the right to manage. Aggrieved by the decision of the High Court ("HC"), the appellant came before us for the appeal against that decision.
Background Facts
[2] The appellant is a housing developer and the respondent is a joint management body. The appellant developed 6 blocks of condominiums ("the development") known as Bukit OUG Condominium, comprising 1,536 residential parcels and 74 commercial parcels. Dewan Bandaraya Kuala Lumpur approved the building plans and layout plans for the appellant. The respondent is entrusted to manage the common property of the development.
[3] The development was completed in stages and vacant possession was delivered for the residential parcels.
[4] The appellant was subsequently wound-up. Liquidators were then appointed for the appellant.
[5] The liquidators conducted an audit exercise with the parcel owners of the development and found 149 surplus and unaccounted car parks.
[6] In order to realise the appellant's assets, the liquidators placed an advertisement in the newspaper to sell the 149 surplus car parks. The intended sale of the car parks was by way of tender submission.
[7] The respondent filed the action in Court to claim the surplus car parks as the development's common property and asset. The respondent claimed the surplus car parks as common property, under their management. The respondent applied for a declaration that the car parks are part of common property and it has the ownership of the same. It essentially claimed that the appellants cannot deal in any manner in respect of the car parks. However, to date, strata titles have yet to be issued.
[8] The appellant submitted as no strata titles had been issued, the car parks are not part of the development's common property or asset. As such the appellant contended the respondent cannot claim the car parks to be under their management. As the land owner and developer, the appellant said they have a right to deal with the car parks.
At The HC
[9] The learned HC Judge decided that the respondent had proven that the surplus car parks are part of the property and asset of the development. The appellant did not exclude these car parks prior to its sale to the parcel owners.
[10] The surplus car parks were only discovered by the liquidators during the audit exercise. The liquidators' audit exercise was still pending and the liquidators only came in because the appellant was wound-up.
[11] The learned HC Judge also decided that parcel owners' rights were governed by the Sale and Purchase Agreements ("SPAs") because the same were signed prior to the coming into force of the Building and Common Property (Maintenance and Management) Act 2007 ("the BCPA"). The Development Order and Certificate of Fitness were also issued prior to the BCPA.
[12] Thus, the HC determined that BCPA is not applicable as the SPAs were signed prior to the BCPA. The SPAs should be looked at according to the HC to decide the rights of all parcel owners.
[13] The HC decided the 149 car parks formed part of the development and the same were intended for the exclusive use and enjoyment of the parcel owners.
[14] The definitions of the words "common property", "parcels" and "accessory parcels" in the SPAs meant the appellant cannot claim the car parks as belonging to them. The respondent instead is entitled to manage the car parks. These car parks were contractually agreed by the contracting parties in the SPAs as forming part of the common property.
[15] The appellant did not inform the respondent about these car parks. This is despite the respondent being the authorised body in charge of the common property.
[16] Essentially, the HC decided the surplus car parks do not belong to the appellant. Therefore, the appellant has no right to sell these car par
