Badan Pengurusan Bersama Gurney Paragon Residental v Hunza Properties (Gurney) Sdn Bhd & Ors

Appellant(s): Badan Pengurusan Bersama Gurney Paragon Residential

Respondent(s):

• Hunza Properties (Gurney) Sdn Bhd
• Hunza Properties (Penang) Sdn Bhd
• Beachfront Services Sdn Bhd

• YA Datuk Azhahari Kamal bin Ramli
• YA Dato' Ahmad Kamal Bin Md. Shahid
• YA Dato' Ong Chee Kwan

• The appellant, a joint management body (JMB) for a stratified mixed development (residential and commercial components) established under the Building and Common Property (Maintenance and Management) Act 2007 (BCPA 2007), sought to recover maintenance charges and contributions from the developer and commercial parcel owners.
• At its first Annual General Meeting (AGM) in 2014, resolutions were passed to establish separate maintenance funds and management for the residential and commercial components, with the commercial component managed by its respective proprietors.
• The developer and commercial parcel owners did not participate in the appellant's AGMs or the determination of charges, maintaining separate management and accounts for the commercial component, which the Commissioner of Buildings (COB) had initially affirmed.
• The High Court dismissed the appellant's claim, holding that it was not "just and reasonable" to impose charges determined solely by residential parcel owners on the developer and commercial parcel owners, and permitted the continued separate management of the commercial common property.

• Whether a bifurcated management structure, with separate maintenance accounts and management for residential and commercial components in a mixed development, is valid under the BCPA 2007 and Strata Management Act 2013 (SMA 2013) during the JMB management period.
• Whether the appellant is entitled to demand the surrender of the commercial common property and recover retrospective arrears of maintenance charges and sinking fund contributions from the developer and commercial parcel owners.
• What are the legal consequences for residential parcel owners who made payments under the impugned resolutions, and whether refunds or adjustments are the appropriate remedy.

• The Court of Appeal held that the resolutions establishing separate management and maintenance accounts for the residential and commercial components were ultra vires and void, as both BCPA 2007 and SMA 2013 mandate a single JMB managing all common property with one maintenance and sinking fund account for the entire development area during the JMB period.
• The Court ordered the appellant to convene a general meeting with all parcel owners (residential and commercial) to determine proper, potentially differential, maintenance charges and sinking fund contributions retrospectively from October 2011, based on share units and usage.
• Residential parcel owners are prohibited from claiming refunds for past payments; instead, adjustments (credits for overpayments or arrears for underpayments) will be made based on the new, validly determined rates, and the respondents may seek reimbursement for necessary and reasonably incurred expenses for the commercial common property.
• The respondents were directed to surrender the management and maintenance of the common property within the commercial component and all relevant documents (strata plans, schedule of parcels, register of owners, facilities details) to the appellant within 14 days.