Management Corporations may only levy charges as defined by the Strata Titles Act, requiring unit holder contributions to be decided at a General Meeting; separate charges beyond this are ultra vires.

Headnote:(A) Strata Titles Act 1985 - Pertinent provisions include Sections 41(3), 41(5)(b), 41(5)(ba), 43(1)(b), and 43(1)(f) -Management Corporation's authority to impose charges on unit holders - Court concluded that Management Corporation cannot levy multiple charges outside of general management fund contributions, which must be determined at a General Meeting. (Paras 6, 9, 10, 11, 27, 35)

(B) Legal principles of strata title management - Management Corporation may only levy charges within the scope defined by statute and cannot act ultra vires. (Paras 7, 27, 39)

(C) Cross-jurisdictions comparison - Singapore courts' interpretation of similar statutes provides persuasive authority for interpreting Malaysian strata law. (Paras 9, 26, 27)

Facts of the case:
The case involved a dispute between a Management Corporation of a commercial complex and a unit proprietor regarding the legality of various charges imposed, which were contested as exceeding the statutory authority provided by the Strata Titles Act 1985. The High Court permitted some charges but disallowed others deemed ultra vires the Act.

Findings of Court:
The court confirmed the High Court's ruling that the Management Corporation can only levy one contribution from unit owners, which must be approved in a General Meeting, and that items such as sinking funds and insurance costs must be covered by this singular management fund.

Issues: The court addressed whether the Management Corporation could impose multiple charges on unit holders outside of the statutory framework.

Ratio Decidendi: The court upheld the lower court's finding that any attempts to levy individual charges beyond the approved management fund contributions are void ab initio, as they exceed the statutory powers of the Management Corporation, thus emphasizing a strict interpretation and adherence to the governing legislation.

Result: Appeals and cross-appeal dismissed; judgment of the High Court affirmed.

Table of Content
1. background facts on charges and parties. (Para 4 , 5 , 6)
2. court's analysis on the high court's interpretation of sta. (Para 7 , 8 , 9 , 11)
3. arguments presented by the appellant. (Para 18 , 19 , 22)
4. respondent's arguments against charges. (Para 24 , 25)

Mohamad Ariff Md Yusof JCA:

[1] Two appeals were before this court initially. Appeal No W-02 (NCVC)(W)- 1549-07-2012 is an action commenced by writ of summons, while Appeal No W-02-(NCVC)-1597-07-2012 is an originating summons action. We recorded an order by consent of the parties to remit the originating summons action back to the High court for retrial since we were of the opinion that this particular action had been dismissed without a proper hearing on the merits and thereby resulted in a mistrial. Thus, presently we are concerned only with the appeal in the writ action.

[2] The subject matter of this appeal concerns an interpretation of some important provisions in the Strata Titles Act 1985 (" STA "), a piece of legislation which has been argued before our courts in some detail only fairly recently with the setting up and the starting of operation of Management Corporations in sub-divided buildings under the . Both parties have requested this court to reserve our judgment and to deliberate and consider the issues before this court in this appeal with a view to providing some guidance on the law since, we are informed, these issues have raised uncertainties and concerns among proprietors or unit holders sub-divided parcels and Management Corporations. In view of the topicality and importance of the issues raised, we agreed with the sentiment expressed by counsel. We now provide our decision and the supporting grounds.

[3] We proceed first and foremost with the salient background facts.

The Facts

[4] The appellant, Perbadanan Pengurusan Endah Parade ("Management Corporation"), is the Management Corporation for a commercial complex known as Endah Parade. It is common ground that the appellant Management Corporation was formed under the Strata Titles Act 1985 on 5 April 2007. It held its first Annual General Meeting on 19 April 2010 some three years later, and its second Annual General Meeting on 7 July 2011. The appellant was the plaintiff in the writ action filed in 2011. The respondent, Magnificient Diagraph Sdn Bhd, and the defendant in the court below, is the proprietor of two strata title parcels within the complex. These are identified as lot LG-001 and lot NEW OFFICE. As at 19 April 2010, ie the date of the first General Meeting of the Management Corporation, there were a total of 271 registered proprietors of the building, and altogether there were and are 469 units of varying sizes. In terms of "share units", the total share units for the two lots owned by the respondent come to 65,636 share units, which comprise 26% of the total share units for the complex. The respondent operates the Carrefour supermarket from these parcels. The dispute between the parties, to put in a nutshell, revolves around the legality of certain charges imposed by the appellant Management Corporation on the respondent. The Management Corporation maintains it is empowered by the STA to levy these charges; the respondent on the other hand disputes the legality of some of the charges, whilst maintaining in respect of the charges it agrees as legitimately levied, ie the service charges, that it has paid them on the evidence adduced. What are these charges in contention between the parties? We start with the appellants' case as pleaded.

The Pleaded Claim

[5] The charges claimed by the appellant as pleaded in its amended statement of claim is for the period between 5 April 2007 and 18 August 2011. As indicated earlier, 5 April 2007 is the date when the Management Corporation was incorporated. The following constitute the accrued charges for the respective lots:

(1) Lot LG-001

Details of Charges

Amount

Accrued Interest

(a) Signage Charges

RM4,000

RM622.77

(b) Administrative Charges for Wate