PERBADANAN PENGURUSAN PD I v SCP ASSETS SDN. BHD.

Case Significance

Illustrates the primacy of the share-unit basis for levying strata maintenance charges under the Strata Titles Act 1985 framework, and the limits on a management corporation's power to fix charges by usage as a collateral attack on the share-unit allocation.

This Court of Appeal decision concerns a dispute over the rates of maintenance charges imposed on car parks in a mixed commercial development known as the PD1 Complex. The appellant, Perbadanan Pengurusan PD1, was a management corporation constituted under the Strata Titles Act 1985, and the respondent, SCP Assets Sdn Bhd, was a proprietor within the development. In the High Court the respondent had succeeded, and the management corporation appealed, contending that the maintenance charges levied on the car parks were unfair and that different rates ought to apply based on the usage of the car parks rather than on the share units allocated to them. The issue for the court was whether a management corporation may depart from the share-unit basis for levying maintenance charges and instead fix charges by reference to usage, and whether the appellant's proposed computation was a legitimate exercise of its powers or an impermissible collateral attack on the allocation of share units. The panel of Nantha Balan, Lim Chong Fong and Ahmad Kamal bin Md Shahid JJCA considered the statutory scheme, under which maintenance charges are ordinarily levied in proportion to the share units assigned to each parcel, and the authorities on a management body's power to determine charges. The court found that the appellant's computation was arbitrary and amounted to a collateral attempt to redress perceived inequities in the allocation of share units, which was not a proper basis for recalculating the charges. It dismissed the appeal and upheld the decision of the High Court, ordering the appellant to pay the respondent RM40,000. The judgment is a useful illustration of the primacy of the share-unit basis for levying strata maintenance charges and of the limits on a management corporation's power to depart from it. The judgment reinforces that grievances about the fairness of a share-unit allocation are to be pursued through the proper statutory channels rather than by unilaterally recomputing maintenance charges, and that a management corporation exercising its charging power must do so within the framework the strata legislation prescribes rather than by reference to its own view of what is equitable.