Suntharalingam A/L Veluppillai v Icon City JMB & 2 others
Full grounds can be downloaded below:
as reported by Edge Newspaper
Facts:
1. The Development
Icon City is a mixed-use stratified development in Selangor consisting of residential towers, office towers, shop offices, and other commercial components like the “Volt” and “Arc” (pp. 2-3).
2. The Parties
- Plaintiffs: 216 parcel proprietors within Icon City (p. 1).
- Defendants: The Joint Management Body (JMB), the Developer, and a major parcel proprietor (Pelaburan Hartanah Berhad) (pp. 1-2).
3. The Core Dispute
The Plaintiffs challenged the legality of several resolutions passed at the JMB’s Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs) between 2017 and 2021 (pp. 2, 6). These resolutions established and maintained different maintenance charge rates for different components of the development (pp. 2, 7).
4. Exclusive Facilities (Limited Common Property)
Certain facilities were designated for exclusive use:
- Residential Towers (1 & 2): Exclusive access to the swimming pool, gym, sauna, and roof garden (p. 4).
- Office Towers (3 & 3A): Exclusive access to business centers and executive lounges (p. 4).
- Commercial/En Bloc Components: Did not have access to these exclusive facilities (p. 4).
5. The Plaintiffs’ Argument
The Plaintiffs argued that under the Strata Management Act 2013, the JMB was legally bound to impose a single uniform rate for all parcels, regardless of usage or access to facilities (p. 7). They claimed that any contractual agreement (like the DMC) to the contrary was void (p. 9).
6. The Defendants’ Argument
The Defendants contended that because specific components enjoyed exclusive facilities, it was just and equitable for those owners to pay additional charges (pp. 8, 10). They argued that forcing commercial owners to subsidize residential facilities they cannot use would be unfair (pp. 16, 24).
Decision of the High Court:
YA Puan Jamirah, the High Court Judge affirmed that Joint Management Body (JMB) is entitled to impose different maintenance charges and sinking fund contributions for different components within a mixed-use development, provided the differential rates are fair and reasonable and reflect the exclusive use of Limited (restricted) Common Property. (pp. 17, 30)
1. Statutory Authority to Create By-Laws
The Court highlighted that Section 32(3) of the SMA 2013 explicitly allows a JMB to make additional by-laws via special resolution to manage and restrict the use of common property (pp. 13-14). By passing such resolutions, the Icon City JMB legally created “Restricted Common Property,” which justified charging the owners who had exclusive access to those areas more than those who did not (pp. 13, 30).
2. Rejection of the “Uniform Rate” Doctrine
The Judge distinguished this case from Menara Rajawali, which the Plaintiffs relied on to argue for a single rate (p. 12). The Court noted that Menara Rajawali involved a single building without exclusive facilities (p. 13). In contrast, Icon City is a complex mixed development where applying a single rate would be inequitable, as it would force commercial owners to subsidize luxury residential facilities (like pools and saunas) they cannot access (pp. 16-17, 22).
3. Contractual Estoppel
The Court found that the Plaintiffs were bound by the Sale and Purchase Agreements (SPAs) and Deeds of Mutual Covenants (DMCs) they had signed (pp. 14-15). Since these documents explicitly disclosed the existence of exclusive facilities and the obligation to pay for them, the Court ruled it would be “unconscionable” for the Plaintiffs to now challenge those very terms (p. 15).
4. Regulatory Acceptance
The Court placed weight on the fact that the Commissioner of Buildings (COB) and the Ministry of Housing and Local Government (KPKT) had been consulted and did not object to the JMB’s differential rate structure, provided it was approved at a general meeting (pp. 18, 29).
5. The “Just and Reasonable” Standard
Ultimately, the Court ruled that the primary test under the SMA 2013 is not “uniformity” but whether the charges are “just and reasonable” (pp. 17, 29). Since the JMB provided detailed budgets showing that the higher rates directly correlated to the actual expenses of the exclusive facilities, the court found the apportionment to be fair (pp. 21, 29).
The decision in Suntharalingam a/l V Veluppillai & 215 Lain-Lain v. Icon City JMB & Ors (p. 1) reinforces the principles set out in the Court of Appeal case of Aikbee Timbers Sdn Bhd & Anor v Yii Sing Chiu & Anor (Pearl Suria). (pp. 8, 10)
The High Court then dismissed the plaintiffs’ application, finding the JMB was entitled to implement the different rates based on the specific facts of the mixed development and the governing legal framework as clarified by the Pearl Suria decision. (pp. 12, 30).
Icon Development Sdn Bhd is represented by Lai Chee Hoe (Messrs Ricky Tan & Co)
Key Takeaways
- “Just and Reasonable” Test Overrides Rigid Uniformity: The core principle under the Strata Management Act 2013 (SMA 2013) is that charges must be “just and reasonable,” not mechanically uniform for all parcels regardless of the facilities they use. (pp. 17, 26)
- Limited Common Property is Key: Where a development has designated Limited Common Property (LCP) for the exclusive use of specific parcel owners (e.g., residential towers with an exclusive pool), those owners alone should bear the costs of maintaining that LCP. (pp. 13, 22) It would be inequitable to force owners of components that do not benefit from these facilities (e.g., commercial lots) to cross-subsidize them. (pp. 4, 16)
- Contractual Agreements are Binding: Sale and Purchase Agreements (SPAs) and Deeds of Mutual Covenants (DMCs) that stipulate differential charges and the existence of LCP are binding on the parcel owners. (p. 15)
- Budgetary Proof Required: JMBs must prepare detailed and comprehensive operating budgets that clearly differentiate between expenses for general common property and those solely for LCP. (pp. 21, 29)
- COB Oversight: The Commissioner of Buildings (COB) has the power to review disputed charges to ensure they are just and reasonable, indicating flexibility in the application of the statutory formula. (pp. 25, 28)
For further details on the High Court’s reasoning, the full grounds of judgment can be downloaded above.
