Ho Phoy Kwang & Anor v The Summit Subang USJ Management Corporation & Ors

Appellant(s):

• Ho Phoy Kwang
• Ho Phoy Chuin

Respondent(s):

• The Summit Subang Usj Management Corporation
• Maybank Trustees Berhad
• Swan Property Sdn Bhd
• Teh Gi Ya
• Liew Kwek Leong
• Law Ki Leng
• Ong Bee Lee
• Lim Kar Hoi
• Nancy Tan
• Ooi Choon Wan
• Yong Cheang Pin
• Yong Cheang Yee
• Lam Kok Weng
• Ivy Wong Yee Lee
• Cheong Yin Theng
• Cheong Yoke Theng

• YA Datuk Azhahari Kamal bin Ramli
• YA Dato' Ahmad Kamal Bin Md. Shahid
• YA Dato' Nadzarin Bin Wok Nordin

• The appellants, co-proprietors of a parcel in a mixed commercial development comprising retail, office, hotel and car park parcels, challenged resolutions passed at various AGMs/EGMs of the management corporation imposing different maintenance and sinking fund charge rates for different types of parcels.
• The management corporation, in which a major proprietor held an 87% share unit majority, had also passed a resolution designating certain common property as "Exclusive Common Property" (for use by specific component owners) and "Shared Common Property".
• The appellants sought declarations that the differential rates and related resolutions were ultra vires the Strata Titles Act 1985 and Strata Management Act 2013, void ab initio, and sought orders for a single uniform rate and appointment of an administrator under section 76 of the SMA; the High Court dismissed the originating summons, and the appellants appealed.

• Whether a management corporation may lawfully determine and impose different maintenance/sinking fund charge rates for different types of parcels (retail, office, hotel, car park) within a single mixed development under section 60(3)(b) of the SMA.
• Whether the phrase "used for significantly different purposes" in section 60(3)(b) SMA refers only to broad categories (residential/commercial/industrial) as opposed to different types of parcels within the same broad category (e.g., all commercial).
• Whether designation of "Exclusive Common Property" and "Shared Common Property" under section 70 of the SMA and the Strata Management Regulations can validly justify differentiated charges among proprietors.

• The Court of Appeal held that section 60(3)(b) of the SMA permits a management corporation to impose different rates of charges where parcels are used for "significantly different purposes," and that "in proportion to share units" means "in accordance with" share units rather than mandating a single uniform rate; this was supported by unrebutted expert and supplier evidence showing each component (retail, office, hotel, car park) used substantially different facilities and services.
• The Court distinguished the authority relied upon by the appellants as it concerned a Joint Management Body (not empowered to fix differential rates) rather than a Management Corporation, and found the share units here were validly certified via the SIFUS formula by the Director of Land and Mines rather than a weightage formula under the SMA.
• The Court found the "Exclusive Common Property" designation was properly effected under section 70(3) of the SMA and regulation 4 of the Third Schedule to the Strata Management Regulations 2015, that the appellants had failed to utilise available statutory remedies to challenge the resolutions earlier, and dismissed the appeal with costs of RM30,000, holding the differential rates were "just and reasonable" and not an abuse of the management corporation's powers.