ASM Development Sdn Bhd v Badan Pengurusan Bersama Lingkaran Maju

Case Significance

Illustrates the obstacles of forum, standing and delay facing a developer that seeks to impugn a joint management body's maintenance-charge resolution under the Strata Management Act 2013 years after the resolution was passed.

This High Court decision at Kuala Lumpur concerns an originating summons by a developer challenging a resolution passed by a joint management body fixing maintenance charges and sinking-fund contributions. The applicant, ASM Development Sdn Bhd, sought declarations that a resolution said to have been made at an annual general meeting in 2017, allowing or authorising the respondent joint management body, Badan Pengurusan Bersama Lingkaran Maju, to charge maintenance fees and sinking-fund contributions at rates referable to the sale and purchase agreements of the owners, was null and void ab initio, together with consequential relief in respect of sums paid or claimed on the footing of that resolution. Several issues arose: whether the proceedings had been filed in the wrong forum such that the court lacked jurisdiction to determine the validity and legality of the resolution, given the statutory scheme for strata management disputes; whether only owners who had signed the sale and purchase agreements, and not the developer who had prepared them, could seek the relief claimed; whether the respondent had breached paragraph 19(1)(c) of the Strata Management Act 2013 in passing the resolution; whether the respondent had acted ultra vires or in a mala fide manner; and whether the sale and purchase agreement should be read together with the deed of mutual covenants. A significant consideration was that the applicant had waited some seven years before bringing the challenge, having failed to raise the issues from the outset. Weighing these matters, the court concluded that the challenge should not succeed and dismissed the applicant's originating summons, with costs of RM7,000. The judgment is a useful illustration of the obstacles, including forum, standing and delay, facing a developer that seeks to impugn a joint management body's charging resolution years after the event. The judgment also illustrates the importance of the correct forum for strata-management disputes, the Strata Management Act 2013 having established a dedicated tribunal and scheme for many such disputes, and the care a court takes before entertaining a High Court challenge to a management body's resolution that could and should have been raised through the statutory machinery at the proper time.