The Court of Appeal in Ideal City Development Sdn Bhd v Tribunal Pengurusan Strata Putrajaya, Wilayah Persekutuan considered the issue of whether the Strata Management Tribunal can grant an order to compel a developer to supply documents to an individual parcel owner in a stratified development.
Facts
The 2nd Respondent (the unit owner) filed a complaint against Appellant (the developer) with the 1st Respondent (the Strata Management Tribunal) alleging mismanagement of the accounts by the developer. The unit owner sought that the Tribunal compel the developer to prepare management accounts, to allow access to the financial records of the public area account and to provide the architect’s approved plans.
The Tribunal allowed the unit owner’s application and ordered that the developer furnish financial records including a specified bank statement, access to the accounting software used by the developer as well as all the plans approved by the local authorities in relation to the development project. The developer challenged this award by way of a judicial review application at the High Court, where the application was dismissed. The developer then appealed to the Court of Appeal.
The Grounds Of Appeal
In seeking to quash the Tribunal’s award, the developer submitted two grounds of appeal. Firstly, procedural impropriety committed by the Tribunal that infringed the developer’s right to be heard and secondly, that the Tribunal committed serious error of law and facts which rendered its award irrational or illegal.
Related to the 2nd ground, the developer further argued that:
(a) The ownership, custody, care and control of the documents sought by the unit owner had already been passed to the joint management body (JMB); and
(b) That whilst the Tribunal had the power to grant an order to compel the developer to supply the documents, it had no jurisdiction to make such an order in favour of individual parcel owners, particularly when the JMB had already been incorporated.
Analysis And Findings Of The Court of Appeal
A. The provisions of the Strata Management Act 2013 (SMA 2013) did not authorise the supply of information and documents to an individual parcel owner
The Court of Appeal’s starting point was that the Tribunal was a creature of statute and therefore, its jurisdiction must be defined by the provisions of the SMA 2013. The unit
owner submitted that the SMA 2013 authorised the supply of documents and information to individual parcel owners. The extracts of the relevant provisions are reproduced below:
Section 105:
“(1) The Tribunal shall have the jurisdiction to hear and determine any claims specified in Part 1 of the Fourth Schedule and where the total amount in respect of which an award of the Tribunal is sought does not exceed two hundred and fifty thousand ringgit or such other amount as may be prescribed to substitute the total amount.”
Paragraph 12 of Part 1 of the 4th Schedule
“12. A claim for compelling a developer, joint management body, management corporation or subsidiary management corporation to supply information or documents.”
Paragraph 8 of Part 2 of the 4th Schedule
“8. The Tribunal may make any order of which it has the jurisdiction to make under Part 1 of this Schedule or any other order as it deems just and expedient.”
The Court of Appeal stated that Section 105 did permit a Tribunal to hear and make determinations including compelling a developer to supply information and accounts pursuant to paragraph 12 of Part 1 of the 4th Schedule. Similarly, paragraph 8 of Part 2 of the 4th Schedule also gave the Tribunal authority to make any order which it has the jurisdiction to make under Part 1 of the 4th Schedule. However, the literal and ordinary natural meaning of the words in paragraph 12 of Part 1 of the 4th Schedule was silent on the recipient of the information or documents.
As such, the Court of Appeal held that the statutory provisions did “not go far enough to authorise that supply be made to an individual parcel owner”, like the unit owner in the present case.
B. Custody and control of the documents vested in the joint management body
The Court of Appeal noted that the “key reason” why the claim of the unit owner ought not to have succeeded was that the JMB had already been established.
This was because the SMA 2013 made it clear that it was mandatory for the developer to furnish relevant documents and information to the JMB pursuant to Section 15 once it was established. Similarly, once the management committee had been established, the JMB was also compelled to furnish documents and information to the management committee pursuant to Section 27. In contrast, the Court of Appeal stated that “there is no provision in the SMA 2013 which states that an individual parcel owner has the right to obtain bank statements and/or approved plans from the developer”. This showed that the right to custody and control of the documents and information was with the JMB (and the management committee thereafter) and never with an individual parcel owner.
As custody and control of the documents and information was with the JMB in the present case, it was for the JMB to decide whether or not to disclose the same to the unit owner. This was no longer under the purview of the developer. As such, the Court of Appeal found that the Tribunal had acted beyond the powers conferred on the Tribunal by Section 105 of the SMA 2013 by making the order that allowed the unit owner to obtain the bank statements and approved plans from the developer when these documents had already been vested in the JMB.
C. The SMA 2013 is clear on the information that an individual parcel owner is entitled to
Section 31 and the 2nd Schedule of the SMA 2013 were also found to be relevant in the present case as they state the relevant information and documents that an individual parcel owner is entitled to obtain under the statute.
Firstly, Section 31 permit an individual parcel owner to obtain only a “summary-like” certificate in respect of key matters relating to the amount of charges, contribution, arrears and sums standing to the credit of the sinking and maintenance charges. Section 31 clearly did not permit for the actual documents to be handed over to individual parcel owners. In addition, the Court of Appeal noted that application for the certificate was to be made to “…the developer or the joint management body, as the case may be”. This showed that the application had to be made to the appropriate party who was in charge of the management at the pertinent time. Thus, as the JMB had already been established, the unit owner was wrong to have insisted that the developer accede to its request for information.
Secondly, the Court of Appeal highlighted the 2nd Schedule, in particular paragraph 7(6)(b) which states that the management committee shall make the books of accounts available for inspection on the application of a proprietor. As observed by the Court of Appeal, this provision only allowed for inspection and did not seem to permit the copies of such documents to be furnished to the individual parcel owners
The Court of Appeal concluded that based on these provisions, the individual parcel owner plainly did not have any legal rights under the SMA 2013 to obtain the bank statements, approved plans or financial statements from the developer, JMB or MC.
Conclusion
The Court of Appeal concluded that paragraph 12 of Part 1 of the 4th Schedule should be construed to mean that the Tribunal had the jurisdiction to compel the developer to supply documents to the JMB, in line with Section 15 of the SMA 2013. The Tribunal’s award in the present case was set aside as it had defeated the purpose of the statute by allowing the unit owner to directly obtain documents and information from the developer when the SMA 2013 did not confer any rights on individual parcel owners to do so.
24 March 2025