Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 MarsdenLR 1933

COURT OF APPEAL PUTRAJAYA
AIKBEE TIMBERS SDN BHD & ANOR – Appellant
Versus
YII SING CHIU & ANOR AND ANOTHER APPEAL – Respondent
[Civil Appeal Nos: W-02(NCVC)(A)-1323-07-2022 & W-02(NCVC)(A)-1389-07-2022]

Petitioner Advocates:Michael Chow Keat Thye,Neoh Kai Sheng ,Respondent Advocate: VL Decruz,Claudia Lynette Silva,Leon Fernandez

The Strata Management Act 2013 permits different maintenance charges for residential and commercial parcels in a mixed development based on their distinct purposes.

Headnote:(A) Strata Management Act 2013 - Sections 52 and 60 - Housing Development (Control and Licensing) Act 1966 - Validity of different maintenance charges for residential and commercial parcels - The court found that differing rates imposed during the preliminary management period were lawful, emphasizing that charges must reflect actual expenses and the distinct nature of the parcels. (Paras 59, 93)

(B) The High Court's interpretation of the law was deemed incorrect, as it failed to recognize that the SMA 2013 permits different rates based on the purpose of the parcels. (Paras 78, 93)

Facts of the case:
The appeals arose from a High Court ruling that mandated uniform maintenance charges for residential and commercial parcels in a mixed development. The developer and management corporation contested the legality of this ruling.

Findings of Court:
The court determined that the developer and management corporation were entitled to impose different chargeable rates for maintenance charges based on the distinct purposes of the parcels involved.

Issues: The main issues were whether differing maintenance charges could be imposed between residential and commercial parcels and the interpretation of relevant provisions of the SMA 2013.

Ratio Decidendi: The court ruled that the SMA 2013 allows for different rates based on the nature of the parcels, as they are used for significantly different purposes.

Result: Appeals allowed; High Court order set aside.

Table of Content
1. introduction of appeals and legal questions. (Para 1 , 2 , 3)
2. identification of parties involved in the case. (Para 4 , 5 , 6 , 7 , 8)
3. background on differing maintenance charges. (Para 9 , 10 , 11 , 12)
4. high court's ruling on maintenance charges. (Para 13 , 14 , 15)
5. parties' dissatisfaction leading to appeals. (Para 16 , 17 , 18 , 19)
6. applicable laws governing the case. (Para 20 , 21 , 22 , 23 , 24 , 25 , 26)
7. calculation of charges and expenses. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34)
8. responsibilities of owners regarding common facilities. (Para 35 , 36 , 37 , 38 , 39 , 40 , 41)
9. definition and implications of common property. (Para 43 , 44 , 45 , 46 , 47)
10. ratio decidendi from previous case. (Para 48 , 49)
11. interpretation of relevant legislation. (Para 52 , 53 , 54 , 55 , 56)
12. review of charges by commissioner of buildings. (Para 57 , 58 , 59)
13. management corporation's powers under law. (Para 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67)
14. justification for different rates based on use. (Para 68 , 69 , 70 , 71)
15. details on proposed chargeable rates. (Para 72 , 73 , 74)
16. court's view on high court's interpretation. (Para 75 , 76 , 77)
17. clarification on the meaning of 'significantly different purposes'. (Para 78 , 79 , 80 , 81)
18. test for determining chargeable rates. (Para 82 , 83 , 84 , 85)
19. commissioner's approval of different rates. (Para 86 , 87 , 88 , 89)
20. conclusion on parties' voting rights. (Para 90 , 91)
21. locus standi of the applicant. (Para 92)
22. final conclusion and order of the court. (Para 93)

Choo Kah Sing JCA:

Introduction

[1] There are two appeals before us, namely Appeal No W-02(NCVC)(A)-1323-07/2022 ("Appeal 1323") and Appeal No W02(NCVC)(A)-1389-07/2022 ("Appeal 1389").

[2] The respective appellants in both the appeals were the respondents in an Originating Summons filed by the 1st respondent in both the appeals via suit No WA-24NCVC-2452-12/2020 ("the OS action"). In the OS action, two questions of law were posed before the High Court for determination. The two questions of law were as follows:

"Whether on the true construction of the provisions of the Strata Management Act 2013 ("SMA"), the Strata Titles Act 1985 (" STA "), the Housing Development (Control & Licensing) Act 1966, the Housing Development (Control And Licensing) Regulations 1989, in particular, Schedule H as prescribed in reg 11:

(a) the determination of and imposition of the different rates of maintenance charges and contribution to the sinking fund between apartment parcels and commercial parcels by the 1st respondent as the developer of Pearl Suria is valid in law; and

(b) the determination of different rates of the maintenance charges and contribution to the sinking fund by the 3rd respondent as the management corporation of Pearl Suria is valid in law?"

[3] On 23 June 2022, the learned High Court Judge answered both the questions of law (a) and (b) in the negative. Consequently, the learned High Court Judge granted an order to the effect that all parcel owners of residential and commercial parcels have to pay the same rates of charges for the payments of maintenance charges and contribution to the sinking fund in the development. Salient Facts

The Parties

[4] Aikbee Timbers Sdn Bhd ("the Developer") was the 1st respondent in the OS action. The Developer is the owner and developer of an integrated development project known as PEARL SURIA - MENARA PEARL POINT 2 ("the development").

[5] The development comprises three parts. The first part comprises residential units known as "Pearl Suria Residence" ("the residential parcels"). The second part is a shopping mall known as "Pearl Suria Shopping Mall", and the third part is a car park block (the mall and the car park block shall collectively be referred to as "the commercial parcels"; or respectively referred to as "the Mall" and "Car Park parcel"). The Mall is owned by the Developer, whereas, the residential parcels were sold to individual owners

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2023 MarsdenLR 1933

COURT OF APPEAL PUTRAJAYAAIKBEE TIMBERS SDN BHD & ANOR – AppellantVersusYII SING CHIU & ANOR AND ANOTHER APPEAL – Respondent[Civil Appeal Nos: W-02(NCVC)(A)-1323-07-2022 & W-02(NCVC)(A)-1389-07-2022]

The Strata Management Act 2013 permits different maintenance charges for residential and commercial parcels in a mixed development based on their distinct purposes.

Cases Referred (2)

COURT OF APPEAL PUTRAJAYA
AIKBEE TIMBERS SDN BHD & ANOR – Appellant
Versus
YII SING CHIU & ANOR AND ANOTHER APPEAL – Respondent
[Civil Appeal Nos: W-02(NCVC)(A)-1323-07-2022 & W-02(NCVC)(A)-1389-07-2022]