Service charge obligations are independent of the quality of services rendered, ensuring compliance with statutory duties under the Strata Management Act.

JUDGMENT

S Nantha Balan JCA:

Introduction

[1] There are two appeals before us, namely Civil Appeal No: W-02(IM)(NCvC)-734-04/2021 ("Appeal 734") and Civil Appeal No: W-02(IM)(NCvC)-735-04/2021 ("Appeal 735"). The appeals are directed at the decision of the Learned Judge of the High Court ("the Judge") dated 25 March 2021 in allowing an application by the Plaintiff (via encl 12) under O 18 r 19(1)(b) or (d) of the Rules of 2012 ("ROC") to strike out and dismiss the Defence and Counterclaim dated 12 November 2020 with costs of RM3,000.00, and in allowing the Plaintiffs application under O 14 ROC for summary judgment (via encl 14).

[2] The Defendant's appeal against the decision of the Judge in respect of encl 12 is registered as Appeal 734 and the appeal against the decision of the Judge in respect of encl 14 is registered as Appeal 735. The appeals were heard together on 29 November 2021. Having considered the submissions of the parties, we dismissed both appeals with costs of RM5,000.00 to the Plaintiff in respect of each appeal. These are our reasons for dismissing both appeals.

The Facts

[3] The Plaintiff is the Joint Management Body ("JMB") for the Pandan Safari Lagoon retail/commercial complex ("the complex") and was set up under the Strata Management Act 2013 (" SMA ").

[4] The Defendant is the purchaser of 168 units in the complex (equivalent to 90% of the units in the complex) having purchased the same pursuant to a Sale and Purchase Agreement dated 26 May 2017 from the CHN Commodity Trade Centre Sdn Bhd (In Liquidation) for a purchase price of RM54,000,000.00 ("SPA").

[5] Under the terms of the SPA (clause 8 thereof) the Defendant is liable, inter alia, to make payment towards quit rent, rates, assessments, service and maintenance charges, contributions to sinking fund, management corporation charges, utilities and other outgoings with effect from the date of payment of the balance of the purchase price. The facts revealed that the balance of the purchase price was paid in December 2017. Hence, the Defendant's liability to make these payments which are the subject matter of the claim in the High Court crystallized from January 2018 onwards.

[6] The Defendant as the purchaser of 168 units was allotted car parks within the complex. The Defendant purchased the units in the complex, on an "as is where is basis" without vacant possession, and is deemed to have inspected the premises before they purchased the units. The SPA stipulates that it is the Defendant's responsibility to obtain vacant possession.

[7] The nub of the problem is that the Defendant has failed or refused to make payments for, inter alia, the maintenance and service charges and the amount owing is a net sum of RM4,856,109.70 as of 31 August 2020.

[8] The Plaintiff had rented out the Defendants car parks to an entity known as Inter-Pacific Auto Auction Sdn Bhd ("the third party"). The Defendant maintains that they never gave their consent and have no knowledge as regards the rental of their parking lots to the third party.

[9] In his affidavit, affirmed on 9 February 2021, Gan Wai Kong ("Gan") as Chairman of the JMB stated that the car park lots were let out to the third party since 2018 and this was with the consent of the Defendant. The Defendant denies that they gave any consent.

[10] According to Gan's affidavit, in May 2020, the third-party carried out a car auction, without any protest by the Defendant. At any rate, the Plaintiff collected RM238,000.00 as rental income from the third party and this amount was deducted from the amounts that were due and owing by the Defendant to the Plaintiff. The Plaintiff issued invoices and made a demand for payment and thereafter filed the action against the Defendant. It is obvious enough that the Plaintiffs recovery action is expressly sanctioned by s 34 of the SMA . The Plaintiff filed applications for summary judgment and to strike out the Defence and Counterclaim.

[11] In opposing the application for summary judgment