Management corporations must adhere to statutory provisions when imposing by-laws and maintenance charges, ensuring charges are lawful and justified under the Strata Management Act.

Wong Kian Kheong JCA:

A. Introduction

[1] These three appeals (3 Appeals) emanated from three originating summonses (OS) disposed of together in the High Court. We heard together the 3 Appeals, namely-

(1) Civil Appeal No P-02(NCvC)(A)-2408-12/2022 (1st Appeal) had been filed by two co-proprietors of one parcel of apartment no. 8-27-1 [Appellants (1st Appeal)] in a "development area" known as Springtide Residences (Development Area) against the management corporation of the Development Area (MC);

(2) Civil Appeal No P-02(NCvC)(A)-234-02/2023 (2nd Appeal) had been filed by the same appellants in the 1st Appeal against the MC [Appellants (2nd Appeal)]; and

(3) Civil Appeal No P-02(NCvC)(A)-235-02/2023 (3rd Appeal) had been filed by owners of six parcels of apartments in the Development Area [Appellants (3rd Appeal)] against the MC.

[2] A draft copy of this judgment (Draft) had been previously forwarded to Che Mohd Ruzima bin Ghazali and Azahari Kamal bin Ramli JJCA. Both my learned brothers had agreed with the Draft.

B. Background

B(1). The 1st Appeal

[3] The Development Area consists of two tower blocks [2 Towers (Apartments)] of 74 parcels of apartments (Apartments) and three landed residential four-storey bungalows (Villas).

[4] In the first Annual General Meeting of the MC on 26 April 2013 (1st AGM), a resolution was passed as follows - where any parcel proprietor has breached any By-Law passed by MC at the MC's AGM and where the MC has incurred any costs, fees or expenses whatsoever in the enforcement of the By-Law, the MC shall recover as a debt on an indemnity basis all such costs, fees or expenses in defending any legal suit brought by the parcel proprietor [By-Law (MC's Indemnity)].

[5] On 25 October 2019, the first appellant in the 1st Appeal [1st Appellant (1st Appeal)] filed a claim in the Strata Management Tribunal (SMT) against the MC and Allied Property Services Sdn Bhd (the company which managed the Development Area) (Property Management Co) for an award by SMT that the MC shall follow the rate of maintenance charges as stipulated in s 60(3) of the Strata Management Act 2013 ( SMA ).

[6] The SMT dismissed the claim of the 1st Appellant (1st Appeal) on the ground that the 1st Appellant (1st Appeal) had claimed against the wrong parties (SMT's Award). The SMT also awarded costs of RM250.00 to be paid by the 1st Appellant (1st Appeal) to each of the MC and Property Management Co [Costs (SMT)]. The 1st Appellant (1st Appeal) had paid the Costs (SMT) to the MC and Property Management Co.

[7] The MC issued an invoice dated 1 December 2020 to the Appellants (1st Appeal) for a sum of RM11,234.95 [the amount of legal fees paid by the MC to the MC's solicitors for defending the MC in the claim by the 1st Appellant (1st Appeal) in SMT] [MC's Indemnity Claim (Legal Fees)].

[8] The Appellants (1st Appeal) filed an OS in the High Court (1st Suit) for, among others, a declaration that the By-Law (MC's Indemnity) is invalid under SMA and/or the Strata Management (Maintenance and Management) Regulations 2015 (SMR).

[9] The 1st Suit was dismissed by the High Court with costs of RM5,000.00 [High Court's Decision (1st Suit)]. The 1st Appeal was lodged against the High Court's Decision (1st Suit).

[10] According to the High Court's Decision (1st Suit), among others-

(1) the learned High Court Judge relied on-

(a) ss 59(1)(h), (2)(j), (6)(a), 70(2)(g), 77(1) and 143(3) SMA ; and

(b) the High Court's judgment in Chew Chin Tai lwn. Perbadanan Pengurusan Kondominium Selat Horizon (Kand 1) [2015] MLRHU 1007

- to decide that the By-Law (MC's Indemnity) is valid; and

(2) the High Court relied on the judgment of Augustine Paul FCJ in the Federal Court case of Akitek Tenggara Sdn Bhd v. Mid Valley City Sdn Bhd 2007 MarsdenLR 840; ; , at [31] and [32], which held that by virtue of the doctrine of res judicata, the SMT's Award estopped the Appellants (1st Appeal) from commencing the 1st Suit.

B(2). The 2nd Appeal

[11] In the Development Area, the