The Joint Management Body cannot impose differing maintenance charges for condominium parcels as it violates the proportionality requirements of the Strata Management Act.

[1] Can a Joint Management Body (JMB) impose different rates of maintenance charges for different types of parcels in a condominium development? That was the issue which presented itself at the High Court concerning the imposition of maintenance charges in a mixed condominium development comprising residential, retail shop and car park parcels.

[2] In this case there are no facts in issue to be determined. However, one question of law emerges clearly and it is this: Whether the Strata Management Act 2013 ( SMA 2013) limits the power of the JMB to determine different rates of maintenance charges for different types of parcels?

The Salient Facts

[3] The mixed condominium development in question is known as Menara Rajawali. The plaintiff is the owner of a residential parcel. The JMB is the 1st defendant. The 2nd defendant is the owner of all the car park parcels in Menara Rajawali.

[4] The dispute can be traced back to the 1st Annual General Meeting of the JMB on 25 June 2016 where it was unanimously resolved, inter alia that mandate be given to the Joint Management Committee (JMC) to fix the maintenance charges for:

i. residential parcels and retail shop parcels at a rate not exceeding RM3.26 per share unit; and

ii. car park parcels at a rate not exceeding RM1.68 per share unit.

(JMB's Resolution)

[5] Pursuant thereto, the JMC fixed the maintenance charges for:

i. residential and retail shop parcels at a rate of RM2.80 per share unit; and

ii. car park parcels at a rate of RM1.68 per share unit.

(JMC's Decision)

[6] On 26 January 2018, the plaintiff filed an action in the High Court seeking declarations that both the JMB's Resolution and the JMC's Decision are null and void ab initio. The plaintiff contended inter alia, that the different rates of maintenance charges discriminated against retail shop and residential parcels and were unlawful in that it went beyond the JMB/JMC's legal power or authority. The High Court dismissed the plaintiff's action. This is the plaintiff's appeal. In this judgment the parties shall be described as they were in the Court below.

Findings Of The High Court

[7] The key findings of the learned judge are as follows:

i. The words "share units" in the SMA 2013 is what would ordinarily be described as the 'multiplier' for purposes of determining the maintenance charge payable, whereas the rate payable as determined by the JMB vide the JMC is the 'multiplicand'. The share unit or multiplier is fixed, whereas the multiplicand or rate can vary depending on what the JMB decides at the AGM;

ii. The phrase "in proportion to the allocated share units" of each parcel (per s 25(3) SMA 2013) or "in proportion to the allocated share units of their respective parcels" (per s 21(2)) cannot be read or construed as fettering the ambit of the JMB's power (as approved by the AGM) to determine such rate of maintenance fee or sinking fund contribution as is deemed appropriate in the circumstances;

iii. There is nothing in the SMA 2013 which prevents the JMB/ JMC from fixing different rates of charges for different types or categories of parcels in the strata project, as long as this is approved by the AGM;

iv. It is for the AGM comprising the owners to decide whether the rate for maintenance charges for all types of parcels should be uniform or otherwise; and

v. As the approval was given by a unanimous resolution at the first AGM, it was perfectly valid and legal for the JMB to fix differing rates of charges for the residential/retail parcels and car park parcels.

Submission Of Parties

[8] Five main points were canvassed by learned counsel for the plaintiff. The first is that the JMB's Resolution and the JMC's Decision are outside of their powers