Syarikat East Coast & Ors v Makna Mujur Sdn Bhd & Ors [2020] 2 MLRA 440

Court of Appeal

Land law – Strata title – Common property

1.    This case involved purchasers of shophouse units (“the Appellants”) in KL Plaza (currently known as “Fahrenheit 88”) who were dissatisfied with renovations carried out by the developer (“the Respondents”).

2.    The Respondents in this case consists of the first Respondent (a private limited company which is part of the Pavilion Group of Companies).

3.    They alleged trespass and nuisance on common property and seek to compel the developer to revert certain corridors in the building to their original condition.  The Appellants also claimed that the Joint Management Corporation (“JMC”) had breached statutory duties by approving renovations without a general meeting with all parcel owners to determine their preferences and obtain their approval for the renovation works undertaken by the Respondents.

4.    The Court of Appeal dismissed their claims, stating that the JMC’s actions were within its powers under the Building and Common Property (Maintenance and Management) Act 2007 (BCPA). The court also held that individual parcel owners lacked the legal standing to pursue claims related to common property; such actions should be undertaken by the Joint Management Body (JMB) for the benefit of all parcel owners.

5.    The High Court dismissed the Appellants’ claims, leading them to appeal to the Court of Appeal.

1.    Whether the approval for the renovation/redevelopment ought to have been obtained at a general meeting by the Joint Management Corporation (“JMC”) on behalf of the Joint Management Body (“JMB”); and

2.    Whether the appellants, as purchasers, had the right to enforce claims concerning the common property

1.    Whether the approval for the renovation/redevelopment ought to have been obtained at a general meeting by the Joint Management Corporation (“JMC”) on behalf of the Joint Management Body (“JMB”)

(a) Under the Building and Common Property (Maintenance and Management) Act 2007 [Act 663], the JMC is vested with powers to manage and administer common property. The Court held that the JMC, in exercising its statutory duties and powers under Sections 8 and 11 of the Act 663, is not required to obtain specific approval at a general meeting for renovation or redevelopment works.

(b) Section 8 of Act 663 provides that-

“(2) The powers of the Body shall include the following:

(a) to collect from purchasers’ maintenance and management charges in proportion to the allocated share units of their respective parcels;

(b) to authorize expenditure for the carrying out of the maintenance and management of the common property;

(c)  to recover from any purchaser any sum expended by the Body in respect of that parcel in complying with any such notices or orders as are referred to under paragraph (1)(e);

(d) to purchase, hire or otherwise acquire movable or immovable property for use by the purchasers in connection with their enjoyment of the common property;

(e)  to arrange and secure the services of any person or agent to undertake the maintenance and management of the common property of the building;

(f)   to make house rules for the proper maintenance and management of the building; and

(g) to do all things reasonably necessary for the performance of its duties under this Act….”

(c)  Meanwhile, section 11 of Act 663 provides that –

“(1) The Body shall elect a Joint Management Committee who, subject to any restriction imposed or direction given by the Body at a general meeting, may perform the Body’s duties and conduct the Body’s business on its behalf, and may for that purpose exercise any of the Body’s powers.

(2) The Committee shall consist of the developer and not less than five and not more than twelve purchasers, who shall be elected at the annual general meeting of the Body and shall hold office for a period not exceeding three years or until the dissolution of the Body in accordance with section 15, whichever is earlier.

(3) From among the members of the Committee elected under subsection (2), there shall be elected a chairman, a secretary and a treasurer.

(4) The provisions of the First Schedule shall apply to the Committee.

(5) The State Authority may amend the First Schedule by order published in the Gazette.”

(d) As such, the JMC’s decisions and actions in this context are deemed valid if they align with the broader responsibilities entrusted to it for the proper maintenance and management of the property.

2.    Whether the Appellants, as purchasers, had the right to enforce claims concerning the common property

(a)   Under Section 8 of the Act 663 the JMB holds exclusive authority over the control and management of the common property at KL Plaza.

(b)   As the legal custodian of the common property, the JMB is the sole entity empowered to initiate claims against third parties concerning the common property. Individual parcel owners, whether acting alone or collectively, are not entitled to bring such claims, as seen in the present case.

(c)   The responsibility to pursue these claims lies solely with the JMB, which does so for the collective benefit of all parcel owners.  This is why the JMB is granted the legal right to initiate or defend actions in its own name.

(d)   The Court of Appeal held that the reference made on the case of Poh Kiong Kok v Management Corporation Strata Title Plan No 581 [1990] 5 MLRH 179 does not provide any support for the Appellants in this case because the action was directed not at a third party but at the management corporation for violating the Plaintiff’s right to enjoy the common property.

(e)   In the referenced case, the Plaintiff was denied use of the common property, specifically his preferred parking space and he was rightly entitled to assert that all proprietors have equal rights to the use and enjoyment of the common property.

(f)     However, this does not imply that each proprietor, despite having equal rights, can independently initiate actions against third parties concerning the common property. Such rights are defined and restricted by law.

The Appeal was dismissed with costs, and the High Court’s decision was upheld.

1.    This case underscores the balance between individual rights and collective governance in managing common properties.

2.    Act 663 establishes that the JMB has exclusive authority over the management, control and administration of common property.  Individual parcel owners cannot act independently or collectively to bring claims related to the common property.  Only the JMB can pursue such actions on behalf of all proprietors.

3.    While all co-proprietors have equal rights to the use and enjoyment of the common property, these rights do not extend to enforcing claims or taking legal action against third parties independently.  Legal action concerning the common property must align with statutory provisions.

4.    The decision reinforces the importance of adhering to the statutory framework governing the management of common properties.  Decisions, approvals and actions taken by the JMB or JMC must comply with the law, but individual proprietors are bound by the governance structure established by the Act 663.