The management corporation's refund of mistakenly overpaid maintenance charges was lawful, as proper legal opinions supported the decision, negating claims of breach of trust or fiduciary duty.

JUDGMENT

Introduction

[1]This is a writ action by the plaintiff management corporation against the defendants for breach of trust, breach of fiduciary duty, fraudulent misappropriation of monies and conspiracy to injure on the basis of the payment of a sum of RM2,013,778.13 made by the former management committee to the fourth defendant.

[2]At the conclusion of trial I found that the plaintiff has failed to prove its case and therefore dismissed its claim, and highlighted the main grounds for my decision. This judgment contains the full reasons for the same.

Key Background Facts

[3]The plaintiff, Amber Court Management Corporation is a management corporation incorporated under the Strata Titles Act 1985 to maintain and manage the condominium building known as Amber Court Apartments (“Amber Court”). The plaintiff is a statutory body which performs its duties and powers through its council members of the management committee in accordance with the (before 2013) and Strata Management Act 2013 (after June 2015).

[4]The first and second defendants are individuals and parcel owners in Amber Court. The third defendant is an individual and was a parcel owner in Amber Court before she sold her unit to the second defendant’s wife. The fourth defendant is a locally incorporated private company and is the owner of 88 units in Amber Court.

[5]The first and third defendants became the registered proprietors for their respective apartment units on 23 November 2012 whilst the second defendant became the registered proprietor on 5 March 2012.

[6]As for the fourth defendant, by a sale and purchase agreement dated 25 September 2012, it had purchased 82 residential parcels from the developer, Villa Genting Development Sdn Bhd through its liquidator. And by another sale and purchase agreement of even date, the fourth defendant purchased 11 commercial parcels from Teknik Cekap Sdn Bhd (also through its liquidator) (collectively, “the SPAs”). The transfer of the strata titles of the 93 parcels were completed in batches in November and December 2012. The fourth defendant thereafter became the registered proprietor of the 88 parcels in and around December 2012.

[7]The second defendant became the director of the fourth defendant company on 16 April 2014 and a shareholder subsequently on 17 July 2018. The third defendant was the director and shareholder of the fourth defendant from 6 August 2012 until 21 March 2016.

[8]At the first annual general meeting (AGM) of the plaintiff on 10 January 2013, the elected committee members for the management corporation for the terms of 2013/2014 consisted of six persons. The elected Council Members for 2013/2014 were as follows:

(a)Chairman: Tee Soon Hin (the first defendant) (DW1)

(b)Secretary: Law Nam Poh (the second defendant) (DW2)

(c)Treasurer: Loh Yoke Thye (the third defendant)

(d)Committee Members: Foo Swee Hwa

Wong Chee Kin (PW2)

Tan Sze Ching

[9]At the first management council meeting of the plaintiff held on 16 January 2013, it was decided that the first and third defendants would be the authorized signatories of the plaintiff’s maintenance account and any two of the three could sign the plaintiff’s cheques. A day after, the first to third defendants opened a maintenance account for the plaintiff.

[10]On 21 March 2014 the first and second defendants with the