JCW

[Strata Management Act/Whether the AGM or EGM of a Management Corporation can be injuncted and/or postponed by the Court – whether it is an offence and/or holding of AGM or EGM (when called) is mandatory, jurisdiction of the Court ; whether prevention of voting rights in an AGM or EGM in respect of sub-judice matters and/or disputed charges is proper] Justin was the counsel for the Appellants in all 3 Appeals herein. The Court of Appeal allowed all 3 Appeals. The said Court of Appeal decision is of significance and/or importance where amongst others :   (i)     It deals with the issue as to whether the Court has power to injunct and/or postpone an AGM which ought to be held annually under the Strata Management Act 2013  (SMA) and also an EGM which ought to be held when properly requisitioned by proprietors.   (ii)    The Court examined paragraphs 10 and 11 of the 2nd Schedule of the SMA and also Regulations 34 (1) and (2) of the Strata Management (Maintenance and Management) Regulations 2015(SMR) and held that :   “Based on the provisions provided in the SMA and the Schedule, we are  of the considered view that there is no express provision in the SMA to allow for the AGM and/or EGM to be postponed or a blanket prohibition of any AGM or EGM until full and final disposal of the Suit below”   (iii)   The Court of Appeal also referred to the previous High Court decision in Perbadanan Pengurusan Anjung Hijau v Pesuruhjaya Bangunan Dewan Bandaraya Kuala Lumpur [2017] 11 MLJ 554 which held that even if a statutory provision is mandatory, the Court may still be able to extend time under paragraph 8 of the Schedule of the Courts of Judicature Act 1964 and held that this decision could no longer be relied on by the 1st Defendant as it had been reversed by the Court of Appeal  and instead “clearly shows the opposite that no such power or jurisdiction exists”.   (iv)   The Court of Appeal also held that a perusal of the alleged causes of action of both the Statement of Claim and the 1st Defendant’s Co-Defendant Action clearly show that the alleged causes of action have got nothing to do with any alleged issue of AGM and/or EGM. In fact, the Plaintiffs can still pursue their claim against the Defendants even if the AGM and/or EGM is called. The Court also held that “there can be no serious issues relevant for the injunctions ordered by the Learned High Court Judge”   (v)     The Court of Appeal further held that the excuse given by the 1st Defendant that they are unable to prepare proper accounts for the AGM is without basis and the records show that the Report and Financial Statements of Jaya One Management Corporation as at 31/12/2020 have been finalised since on or about 30/8/2021 and  even if the financial report was not fully ready at the material time, the management account is sufficient enough for an AGM (see paragraph 7 of COB’s letter dated 15/11/2021).   (vi)   The Court of Appeal further stated that since 15/12/2021(High Court Orders) until today, there was no AGM held for the Jaya One Development which consists of about 908 parcel proprietors and neither can any parcel proprietors call for any EGM to address any issues concerning the development which may not even concern the Suit.   (vii)  The Court further took the view that it is the statutory duty of the 1st Defendant to hold the AGM yearly and to also hold the EHM required by parcel owners , instead of acting against its duty.   (viii) On the separate issue of an injunction filed by the 2nd Defendant (Appellant) against the dismissal of the said injunction to injunct the 1st Defendant from voting in the AGM by reason of disputed Invoices for sewerage charges imposed by the 1st Defendant, the Court held that the injunction ought to be allowed against the 1st Defendant.   (ix)    The Court of Appeal held that it is not proven that there are such sewerage charges in arrears as the 1st Defendant’s claim is still before the Court and pending determination before the Court. The Court agreed with the 2nd Defendant’s counsel’s submission that the 1st Defendant cannot rely on Paragraph 21(2) of the Second Schedule of the SMA to prevent the 2nd Defendant from voting when the sums due under the purported sewerage charges are disputed and sub-judice pending Court proceedings.   (x)     The Court of Appeal further held that there was no Invoice issued to the 2nd Defendant before the Suit was filed by the Plaintiffs and certainly before the said 1st Defendant’s Notice of Claim was filed and it is trite law that the 1st Defendant cannot improve their claim with facts that transpire after the date of pleading.   (xi)    The Court of Appeal also held that the 1st Defendant’s action shows that the 1st Defendant intends to use such purported outstanding sewerage charges to prevent the 2md Defendant from voting in the AGM and/or any general meeting of the MC and that :   “The aforesaid conduct by the 1st Defendant shows that their Co-Defendant’s Action is wrong and premature without Invoices and it was not bona fide” (xii) The Court of Appeal held that it will cause more prejudice and injustice to the 2nd Defendant by preventing the 2nd Defendant from voting by reason of the alleged sewerage charges which would be irreparable and cannot be adequately compensated by damages. (xiii) The 2nd Defendant also offered to deposit the disputed claim of outstanding sewerage charges into Court pending the disposal of the 1st Defendant’s Co-Defendant claim and there were bona fide issues to be tried and balance of convenience clearly favours the grant of an injunction in favour of the 2nd Defendant.