Wisma Coway Management Corp v Dubon Bhd [2019] 2 MLJ 649

Case Review: Wisma Coway Management Corp v Dubon Bhd [2019] 2 MLJ 649

Court: Court of Appeal (Putrajaya)

Topic: Applicability of Limitation Act in Strata Tribunal

Facts 1.     The Appellant is the management corporation for a strata development known as ‘Wisma Coway’ while the Respondent owned a parcel unit on the 22nd Floor of Wisma Coway (“the Unit”).

2.     On 18 January 2000, the Respondent as a company was wound up by the High Court wherein two liquidators were appointed to liquidate the Respondent’s assets.

3.     According to the Strata Management Act 2013 (“Act 757”), the Appellant is entitled to receive monthly maintenance charges from the Respondent.   However, the Respondent has not paid these charges so far, claiming that it has been wound up.

4.     On 27 July 2017, the Respondent initiated legal proceeding against the Appellant and a developer known as Stephen Properties Sdn. Bhd by filing a claim at the Strata Tribunal to liquidate its assets.  The claim sought two things-

(a)  to force the developer to transfer the Unit without charging any administrative or application fees.

(b)  to compel the Appellant to issue a clearance letter to the Respondent after the Respondent has paid RM43,805.34, which was the outstanding amount owed to the Appellant as of May 31, 2017.

5.     Subsequently, the Appellant filed an application in High Court for leave to proceed with a defence and counterclaim against the Respondent in the Strata tribunal to claim for the outstanding sum of RM183,201.37 from 1 August 2002 until 3 August 2017 being the sum owed by the Respondent for maintenance fee and other charges in respect of the Unit.

6.     However, the leave application was dismissed by the judicial commissioner on the ground that, inter alia, the Appellant’s claim for outgoings against the Respondent as at 31 May 2017 is time barred under Section 6(1)(d) of the Limitation Act 1953 (“Act 254”), hence this appeal.

Issue 1.     Whether the Limitation Act 1953 is applicable for proceedings of Strata Tribunal?
Ratios 1.     In deciding the issue, it is pertinent for the Court of Appeal to look into Section 105(2) of Act 757 which read as follows:

Jurisdiction of Tribunal

“For the avoidance of doubt, the Limitation Act 1953 shall not apply to the proceedings of the Tribunal”   [Emphasis Added]

2.     It was decided by the Court of Appeal that the aforementioned provision has clearly stipulated that the Limitation Act shall not apply to proceedings of the tribunal.

3.     Having correctly referred to the legislation, the Court of Appeal held in favour of the Appellant’s submission wherein the payment of management charges is equivalent to a running account and as such the limitation is not applicable.

Decision 1.     The Limitation Act 1953 is not applicable for proceedings of the Strata Tribunal.
Key Take Away 1.     It shall be noted that the payment of management charges such as maintenance fees, sinking fund and others is equivalent to a running account and as such it cannot be time-barred.

2.     To put the cherry on top, it is pertinent to look into the Malaysian case of Malaysian Banking Bhd v Wembley Industries Holdings Bhd [2012] 5 CLJ 956 where the law was unequivocally stated as follows:

“a running account is a single account and not a composite of its various parts. A payment made on account of a running account is in respect of the entire outstanding balance, with the result that time is extended for the whole of the debt. It appears, therefore, that a running account will become statue barred only if more than six years lapse between the supply of the last article under it and the last payment on account.”   [Emphasis added]

3.     Applying the principle above, it has been enunciated that the running account is not time-barred because the last payment was made in 2017, hence the period of 6 years has not lapsed.

4.     Since Section 105(2) of the Act 757 also makes it clear that the Limitation Act does not apply to tribunal proceedings, therefore the decision on the limitation issue is affirmed.

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