A Joint Management Body cannot be held liable for charges incurred before its formation, nor misallocate maintenance funds contrary to statutory limitations.

[1] There are two appeals before us, they are:

(a) Appeal 1513 which is an appeal by Prestaharta Sdn Bhd (PSB).

(b) Appeal 1685 which is an appeal by Badan Pengurusan Bersama Riviera Bay Condominium (JMB-RBC).

[2] Both appeals relate to a suit taken out by PSB to reclaim for various charges incurred by them from JMB-RBC in respect of a condominium complex known as Riviera Bay Condominium.

[3] The learned Judge sustained part of PSB's claim and rejected the balance of the same. From that judgement, we have appeals from the PSB and JMB-RBC respectively, hence two appeals before us.

[4] After several case management by this Court, it was agreed by the parties (to which this Court is grateful) that the best manner to resolve satisfactorily this appeal is to have the factual dispute between the parties in respect of PSB's claims be referred to the Senior/Deputy Registrar of the High Court to decide and if there is an appeal of the decision of the aforesaid Registrar, such appeal shall be heard by a Judge of the High Court whose decision shall be final and binding on the parties and is not subject to any appeal or review by any Court. As for the legal issues, they will be resolved by this Court and of course subject to appeal to the Federal Court. We will make the relevant orders reflecting the agreement between the parties at the appropriate time.

[5] This judgement hence relates only to the two agreed legal issues to be determined by us and they are these:

(1) Whether JMB-RBC is liable in law for electricity and water charges incurred for the common property prior to the formation of the JMB-RBC on 28 September 2007?

(2) Whether JMB-RBC is entitled in law to utilize collected funds for maintenance and upkeep of the common property for utilities charged incurred by condominium lots owned by PSB, leased back and non-leased back owners in view of s 22(3) of Building & Common Property (Maintenance & Management) Act 2007 (Act 663)?

The factual matrix in which the two legal issues are being determined is this.

Factual Backgrounds:

[6] Riviera Bay Condominium complex (RBC) was developed by Riviera Bay Condominiums Sdn Bhd (developer). The complex consisted of 550 parcels of which 151 were sold to Riveria Bay Resort & Condo Management Sdn Bhd (RCM) a related company of the developer.

[7] To finance its activity, RCM assigned 151 parcels to Malaysian French Bank as security. However when RCM defaulted in its repayment of its financial obligations to the aforesaid bank, Pengurusan Danaharta Nasional Berhad (Danaharta) took over the ownership of the aforesaid lots.

[8] Danaharta is a public company established by the Federal Government under the Companies Act, 1965 and is owned by the Minister of Finance Incorporated. It is a vehicle established by the Government of Malaysia to act as the national asset management company with the prime objective to re-energise the Malaysian financial sector by buying non-performing loans (NPLs) from financial institutions and maximize their recovery value. RCM's financial woes led to appearance of Danaharta in its affairs.

[9] Danaharta then sold the 149 lots to PSB who had also purchased another 22 titled facilities at RBC.

[10] From 25 July 2006, PSB took over the management and maintenance of the common property from RCM and commenced its hotel operation. At that time, the water and electricity meters for RBC were in the sole name of PSB.

[11] PSB had operated a hotel business at RBC using its own condominium lots and lots from owners who had leased to PSB. There are owners who did not lease to PSB for its hotel operation.

[12] On 28 September 2007, the JMB-RBC was formed and PSB on 1 December 2007 handed over the management and maintenance of the common property to JMB-RBC.

[13] Sometime a