Court of Appeal: A parcel owner is not entitled to documents within the custody of a Joint Management Body

Case update: Ideal City Development Sdn Bhd v Chimes AG Sdn Bhd & Anor [2024] CLJU 2898

Facts

This dispute originated from a Tribunal claim filed by Chimes AG Sdn Bhd [“CASB”], a parcel owner of a project known as Infinity Tower [“Infinity Tower”], seeking access to financial records, including bank statements, accounting software records, and approved plans for the lower ground basement carpark, from Ideal City Development Sdn Bhd [“ICD”], the developer of Infinity Tower.

The Tribunal ruled in favor of CASB and ordered ICD to supply the requested documents.

ICD challenged the Tribunal’s decision by way of a judicial review in the High Court, however was unsuccessful. ICD then appealed against the decision at the Court of Appeal.

Court of Appeal

The key issue deliberated by the Court of Appeal was whether Section 107 and the Fourth Schedule of the Strata Management Act 2013 [“SMA 2013”], given a purposive approach taking into account the legislative intent of the SMA 2013, conferred on the Tribunal the powers to order a developer to supply documents to an individual parcel owner?

The Court of Appeal held that this was not within the Tribunal’s jurisdiction because to allow that would be ultra vires the SMA 2013.

Further, the Court of Appeal held that in any case:

1. The JMB had been established and the JMB had acknowledged that all the requested documents had been handed over from ICD to the JMB through the requisite Form 4;
2. Custody and control of the requested documents are with the JMB, and never with any individual parcel owner; and
3. The inspection provision in the SMA 2013 does not permit copies of books of accounts to be furnished to a parcel owner, and only allows them to inspect the books at a fee. Therefore, CASB does not have any legal right to obtain bank account statements, approved plans, or other financial records.

The Court of Appeal concluded that the errors of law made by the High Court warranted the quashing of the Tribunal Award, and therefore set aside the decision of the High Court.

Takeaway

The Court of Appeal has clarified the position in law in holding that individual parcel owners do not have entitlement to documents within the custody and control of the JMB.

The Court has also attempted to curtail parcel owners filing frivolous suits against the developer after a JMB has been formed.