CASE UPDATE: Majlis Bandaraya Melaka Bersejarah v Badan Pengurusan Bersama Plaza Hang Tuah [2024] 10 CLJ 1

Facts:

The Appellant, Majlis Bandaraya Melaka Bersejarah (“MBMB”) is a proprietor of the strata parcels for the food court in Plaza Hang Tuah. The Respondent, Badan Pengurusan Bersama Plaza Hang Tuah (“JMB”) is a statutory body formed pursuant to Building and Common Property (Maintenance and Management) Act 2007 (“BCPA 2007”). The developer of Plaza Hang Tuah is Atlantic Potential Sdn Bhd.

JMB claimed against MBMB for payment of maintenance charges and contribution to the sinking fund for the years between 2012 to 2014. MBMB counterclaimed against JMB to recover the sum paid to the JMB for the total failure of consideration in respect of the maintenance charges and contribution to the sinking fund for year 2015.

Issues:

4 issues determined by the Court of Appeal are as follows:

Whether MBMB is entitled to the limitation period of three years under s. 2 of the PAPA 1948, which is absolute;
Whether MBMB is a ‘purchaser’ under the definition of BCPA 2007 upon whom BCPA 2007 targeted the obligations to pay the maintenance charges and contribution to the sinking fund;
Whether JMB has proven its claim on the ‘share unit’ basis mandated by the BCPA 2007 and Strata Titles Act 1985; and
Whether there is consensus ad idem on the disputed contract alleged to have been entered into between the parties by virtue of the MBMB’s meeting minutes dated 1 April 2015 (2015 agreement).

High Court Decision:

The High Court allowed JMB’s claim and dismissed MBMB’s counterclaim based on the following:

MBMB was not carrying out a public or statutory duty. It follows that the 36-month limitation period prescribed in Section 2 of the Public Authorities Protection Act 1948 (“PAPA 1948“) is not available to MBMB.
Strata Management Act 2013 (“SMA 2013”) is not applicable as the events of the action pre-date the time when SMA 2013 came into force (1.6.2015).
MBMB should not tie up JMB’s obligation to maintain the common property with MBMB’s obligation to pay the maintenance charges and contribution to the sinking fund.

Court of Appeal:

The Court of Appeal set aside the High Court Order which allowed the JMB’s claim against MBMB and allowed MBMB’s appeal on counterclaim in part:

1^st Issue:

MBMB cannot rely on the defence of limitation under PAPA 1948 or the Limitation Act 1953.
Statement of account for the maintenance charges and contribution to the sinking fund are running accounts.
If MBMB is the purchaser of the food court, its duty to pay charges has nothing to do with its public duty.

2^nd Issue:

Unlike Strata Titles Act 1985, the word “purchaser” as interpreted in s. 2 the BCPA 2007 did not include an “owner” or “proprietor” of a parcel. This is in contrast to the SMA 2013 which defines “purchaser” to include “any person or body for the time being registered as a parcel owner in the register of parcel owners under sub-s. 30(1)”.

There is no provision that gave power to JMB to demand payment of the maintenance charges and contribution to the sinking fund from MBMB under the BCPA 2007.

Notwithstanding that MBMB is the owner of the master title, MBMB did not purchase the food court from the developer but owned it via a Joint Venture Agreement with the developer:

MBMB is not a “purchaser” pursuant to s. 2 of the BCPA 2007. The word “purchaser” does not have any other meaning than ‘the purchaser of a parcel’. The same does not refer to the owner of the parcel who did not purchase it from the developer.

MBMB is not a “developer” of the food court. Based on the definition under Section 3 of the Housing Development (Control and Licensing) Act 1966, a housing developer must be a legal entity that constructs a housing development of more than four units of houses for sale, involves the collection of money from buyers, is licensed, and maintains a housing development account.

All provisions involving the right and liability to pay the maintenance charges and contribution to the sinking fund under the BCPA 2007 are only directed to “the developer” and “purchaser”.

In interpreting a statute, the fundamental principle that the words of a statute must be read in their entire context, in their grammatical and ordinary sense, and harmoniously blend with the scheme and the object of the statute and more importantly, the intention of the Legislature.

3^rd issue:

The developer had been wound up and no licensed land surveyor was appointed by the developer at that material time to assign the share units of the parcel.

JMB had taken the right step to appoint the licensed land surveyor to allocate the share units since the developer is no longer in existence.

4^th issue:

The 2015 agreement is void and unenforceable. Contracting out the provision of a statute is forbidden.

MBMB’s agreement to make payment or not, is irrelevant if it is obliged under the law to pay the maintenance charges and contribution to the sinking fund under BCPA 2007. The word “shall” is used in s. 23 of the BCPA 2007, the previous law, and in s. 25 of the SMA 2013, the present law.

MBMB’s Counterclaim:

JMB has no power to collect or make any claim for the payment of the maintenance charges and contribution to the sinking fund from MBMB before 1 June 2015. MBMB is entitled to recover part of the money paid to JMB.

Key Takeaways:

The Court of Appeal has taken a restrictive approach in interpreting BCPA 2007 being the precursor of SMA 2013.

With the coming into force of SMA 2013, the lacuna of BCPA 2007 on whether the obligation to pay charges extend to a parcel owner who is not a purchaser has been filled. SMA 2013 does not draw any distinction between a parcel owner vis-à-vis the purchaser when it comes to the onus to pay charges and contribute to sinking fund.

The law remains clear post 1.6.2015 (and 12.6.2015 in State of Penang) that a purchaser, parcel owner and/or proprietor share similar duties to pay charges and contribution to the sinking fund every month.

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