APPLICANT’S WRITTEN SUBMISSION NO.

1
(Leave to Appeal)

“[29] Interpretations of statutory provisions are

important but again in such a case leave is not to be
given as a matter of course. When a statutory
interpretation is in issue, it raises questions such
as how important those provisions are to the
public, or whether the interpretations are so
obviously right that the Federal Court can only uphold
the Court of Appeal's decision.

[30] Similar to the issue of statutory interpretation is

the issue of interpretation of the terms of an
agreement. As was said in Syed Kechik unless it
can be shown that the interpretation of that term
is important to the relevant trade or industry and
likely to be raised in other cases, leave should not be
allowed.”

- Terengganu Forest Products Sdn Bhd V.

Cosco Container Lines Co Ltd & Anor &
Other Applications [2011] 1 CLJ 511
-

1. The duties and obligations owed by a management corporation to

the residents and tenants such as the Respondent is a matter of
public importance. This appeal if allowed will for the first time enjoy
a decision of the Federal Court to clarify the present confusion that
persist over which party bears responsibility for leakages in
individual lots.
1
2. This leave application is not just limited to the interpretation of
common property under sec. 2 Strata Management Act 2013 but
requires it to be read together with sec. 59 of the Strata
Management Act 2013, Regulation 3 (2) of the Third Schedule to
the Strata Management (Maintenance and Management)
Regulations 2015 and Regulation 58, Part XV of the Strata
Management (Maintenance and Management) Regulations 2015.

3. There is a dearth of authorities on guidelines and policy

considerations applicable for the duties and responsibilities of the
management corporation to manage and maintain common
property pursuant to sec. 59 Strata Management Act 2013. These
are important to the property management industry and suits
involving residents and/or tenants at strata titled properties.

A. CRUX OF THE APPLICATION

4. This application poses questions which would be relevant for all

future suits involving the duties and responsibilities of the
management corporation pursuant to sec. 59 Strata Management
Act 2013, the applicability of Regulation 3 (2) of the Third
Schedule to the Strata Management (Maintenance and
Management) Regulations 2015 and the parties who are
responsible for inter-floor leakages pursuant to Regulation 58, Part
XV of the Strata Management (Maintenance and Management)
Regulations 2015.
5. Sec. 59 (1) Strata Management Act 2013 sets out the duties and
powers of the management corporation in addition to setting out
other obligations, functions and powers in other sections of the Act
and the Second Schedule. The functions of a management
corporation is outlined in Part 2 of the prescribed By-laws with the
Third Schedule of the Strata Management (Maintenance and
Management) Regulations 2015. The management corporation
has the duty to enforce the said By-laws. This is as stated in sec.
59 (1)(h) Strata Management Act 2013.

6. In this case, the Respondent/tenant relied on Regulation 3 (2) of

the Third Schedule to the Strata Management (Maintenance and
Management) Regulations 2015, which sets out the functions of
the management corporation, to impose common law liability upon
the Applicant management corporation for the maintenance of
common property.

7. The definition of common property is found in sec. 2 Strata

Management Act 2013 which provides that where the common
property relates to a subdivided building or land, meaning land as
not contained in the parcel, including accessory parcels, or
temporary blocks as indicated in the certified strata plan whereas
sec. 4 Strata Titles Act 1985 (as amended in 2016) defines
common property as ‘means so much of the lot as is not
comprised in any parcel (including accessory parcel), or any
provisional block as shown in an approved strata plan’.

8. Under sec. 2 Strata Management Act 2013, the definition of parcel

is one of the individual units in the subdivided building.
9. Thus, following the definition of common property in sec. 2 Strata
Management Act 2013 and sec. 4 Strata Titles Act 1985 (as
amended in 2016), read together with the provisions of sec. 59 (1)
of the Strata Management Act 2013, the statutory duties of the
Applicant, as the management corporation, in relation to
maintaining and managing the common property and keeping it in
a state of good and serviceable repair, is only with regards to the
lot not comprised in any parcel.

10. The applicability of Regulation 3 (2) of the Third Schedule to the

Strata Management (Maintenance and Management) Regulations
2015 is only confined to management by the developer during the
developer’s management period as stated in Regulation 1 (2) (d)
and Regulation 2 of the Third Schedule to the Strata Management
(Maintenance and Management) Regulations 2015 and does not
apply to a management corporation. The Applicant is a
management corporation or MC.

11. Regulation 58, Part XV of the Strata Management (Maintenance

and Management) Regulations 2015 only applies to inter-floor
leakages whereby Regulation 55, Part XV of the Strata
Management (Maintenance and Management) Regulations 2015
defines inter-floor leakage to mean any evidence of dampness,
moisture or water penetration. It does apply to sewerage pipes
found in an individual unit or parcel.

12. Therefore, the High Court and the Court of Appeal erred in law
when they held that exposed sewerage pipes found in an
 individual unit to fall within the definition of common property
pursuant to sec. 59 (1) Strata Management Act 2013, Regulation 3
(2) of the Third Schedule to the Strata Management (Maintenance
and Management) Regulations 2015 and Regulation 58, Part XV
of the Strata Management (Maintenance and Management)
Regulations 2015, thus, allowing the Respondent’s claim.

13. The questions posed to this Honorable Court are intended to set a
precedent and guidelines for future cases involving sec. 59 (1)
Strata Management Act 2013, Regulation 3 (2) of the Third
Schedule to the Strata Management (Maintenance and
Management) Regulations 2015 and Regulation 58, Part XV of the
Strata Management (Maintenance and Management) Regulations
2015.

14. Without a proper guideline, management corporations, residents

and tenants of Strata titled properties would have difficulty in trying
to determine common property and what amounts to individual lots
and who is responsible for the maintenance and repair of either.

B. QUESTIONS POSED TO THE FEDERAL COURT

15. The Applicant posed the following questions to this Honorable

court in the Notice of Motion dated 21.10.2020:-

Q-1: As a matter of law, is the management corporation

responsible for the sewerage pipes hidden in the
individual parcels;
 Q-2: As a matter of law, does the management corporation
have a duty of care under common law tort of
negligence for sewerage pipes hidden in individual
parcels;

Q-3: As a matter of law, does the management corporation

have responsibility for the loss and damage suffered by
the owners and/or occupants of the parcels under the
law of tort of negligence for sewerage pipes hidden in
individual parcels.

16. We believe that there is no decision by the Federal Court on these

crucial issues.

17. Therefore, any discussion on these issues would be of public

advantage and in satisfaction of sec 96 of the CJA. It would be of
great benefit to clear the uncertainty in the property management
industry and for residents and tenants of Strata titled properties
dealing with the liability of the management corporations for
sewerage pipes found in individual units or parcels.

Factual Background

18. The Respondent in this case, is a tenant of premises known as

A1 / G, Ground Floor, Block A, Jalan USJ 6 / 2L, UEP Subang
Jaya, Selangor, located in a Condominium managed by the
Applicant / Defendant ('the premises').
19. The Respondent is the tenant and the Applicant is the landlord of
the premises vide a rental agreement dated 22.4.2016 (‘the rental
agreement’).

20. The Applicant is also the management corporation (‘MC’) of the

condominium at the premises. On or about 24.2.2017, during the
rental period, a sewerage pipe, hidden in the ceiling of the
premises, broke and sewerage leaked out ('the incident').

21. The Respondent claims damages and losses against the Applicant
on the basis that the Applicant is in breach of statutory obligations
and also under the tort of negligence, and claimed for the loss and
damage of telecommunication equipment stored at the premises.

22. The Respondent claimed that the damage and loss was due to
sewerage water leaking from the pipe that broke in the premises.

23. The Applicant denied the Respondent's claim on the basis that the
sewerage pipe is not a common property as it is a hidden pipe (in
the ceiling) in the premises under the responsibility and care of the
Respondent.

24. The Applicant contention is based on the fact that they did not
have access to the said sewerage pipe as it is in the premises
under the care and custody of the Respondent.

25. The Applicant further contends that the sewerage pipe is in good
condition and that the said pipe is actually a 'service-free' pipe.
26. The Applicant also states that there was no incident of leakage or
complaint regarding the condition of the sewerage pipe from the
Respondent prior to the incident and that the incident was beyond
the contemplation and control of the Applicant.

Conduct of Proceedings

Shah Alam High Court

27. the High Court allowed the Respondent’s claim with costs. A copy
of the Court Judgement and Grounds of Decision is attached and
marked as Exhibit B in the Affidavit in Support of this Motion

Court of Appeal

28. The Applicant filed an appeal against the decision of the High
Court and the Court of Appeal dismissed the Applicant’s appeal on
22 September 2020. The submissions filed by both parties are
attached herein and are marked as Exhibit A in the Affidavit in
Support of this Motion.

29. The High Court made the following errors:-

Common Property

30. The Learned High Court Judge held that the duty to maintain,
manage and repair the sewerage pipe in question was on the
Applicant as the sewerage pipe was unquestionably under the sole
 management and control of the Applicant solely because the
Applicant had a duty to maintain and manage common property
and to keep it in a state of good and serviceable repair.

31. The Learned High Court Judge found that sec. 59 (1) (a) of the
Strata Management Act 2013 provides for, inter-alia, the duty on
the Applicant to properly maintain and manage common property
and to keep it in a state of good and serviceable repair.

32. Further, the Learned High Court Judge found that By-Law 3(2) of
the Third Schedule to the Strata Management (Maintenance and
Management) Regulations 2015, among other things, imposes
upon the Applicant the duty to maintain, repair and, where
necessary, renew or upgrade pipes used or capable of being used
in connection with the enjoyment of more than one parcel or the
common property.

The Contention by the Applicant

33. With respect, the definition of common property as stated in the

Strat Management Act 2013, and further reading of the provisions
of sec. 59(1) of the Strata Management Act 2013 (Tab
Appellant’s Bundle of Authorities), the statutory duties of the
Applicant, as the management corporation, in relation to
maintaining and managing the common property and keeping it in
a state of good and serviceable repair, is only with regards to the
lot not comprised in any parcel.
34. The definition of parcel is one of the individual units in the
subdivided building where sec. 2 of the Strata Management Act
2013 (Tab Appellant’s Bundle of Authorities) on the statutory
definition of ‘common property’ states:-

"common property"

(a) in relation to a building or land intended for subdivision into

parcels, means so much of the development area—

(i) as is not comprised in any parcel or proposed parcel; and

(ii) used or capable of being used or enjoyed by occupiers of
two or more parcels or proposed parcels; or

(b) in relation to a subdivided building or land, means so much of

the lot—

(i) as is not comprised in any parcel, including any accessory

parcel, or any provisional block as shown in a certified strata
plan; and
(ii) used or capable of being used or enjoyed by occupiers of two
or more parcels;

Sec. 2 of the Strata Management Act 2013 also defines ‘parcel’ as

"parcel"

(a) in relation to a building intended for subdivision, means one of

the individual units comprised therein, which (except in the case
 of an accessory parcel) is to be held under a separate strata
title;
(b) in relation to a land intended for subdivision, means one of the
individual units of land parcels which is to be held under a
separate strata title;

(c) in relation to a subdivided building, means one of the individual

units comprised therein, which (except in the case of an
accessory parcel) is held under a separate strata title; and

(d) in relation to a subdivided land, means one of the individual

units of land parcels which is held under a separate strata title;

35. Thus, based on the above, the Respondent’s premises fall within
the definition of parcel as per (c) above, which is one the individual
units in the subdivided building. Further, sec. 59(1) provides for
inter-alia the duties of the management corporation to maintain
and manage the subdivided building or land and the common
property and keep it in a state of good and serviceable repair. The
said provision in the Strata Management Act 2013 states as
follows:

59. Duties and powers of management corporation

(1) The duties of a management corporation shall be as follows:

(a) to properly maintain and manage the subdivided building or

land and the common property and keep it in a state of good
and serviceable repair;
(b)to determine and impose the Charges to be deposited into the
maintenance account for the purposes of proper maintenance
and management of the subdivided buildings or lands and the
common property;

(c) to determine and impose the contribution to the sinking fund to

be deposited into the sinking fund account for the purposes of
meeting the actual or expected expenditure specified under
subsection 51(2);

(d) to effect insurance according to this Act or to insure against

such other risks as the proprietors may by special resolution
direct;

(e) to comply with any notice or order given or made by the local
authority or any competent public authority requiring the
abatement of any nuisance on the common property, or
ordering repairs or other work to be done in respect of the
common property or other improvements to the common
property;

(f) to prepare and maintain a strata roll for the subdivided buildings
or lands;

(g) to ensure that the accounts required to be maintained by the

management corporation under this Act are audited and to
provide audited financial statements for the information to its
members;
 (h) to enforce the by-laws; and

(i) to do such other things as may be expedient or necessary for

the proper maintenance and management of the subdivided
buildings or lands and the common property.

36. On the facts of the case, the Applicant is already a Management

Corporation (‘MC’) and the property concerned has been sub-
divided. Thus, from the above, it is clear that the definition of
common property for sub-divided building or land, is well defined in
the statute as firstly; must not be comprised in any parcel and
secondly, used or capable of being used or enjoyed by occupiers
of two or more parcels.

37. In the Court of Appeal case of E & O Trading Sdn. Bhd. v

Americk Singh Sidhu & Ors and another appeal (2018) 6 MLJ
783, (Tab Applicant’s Bundle of Authorities) His Lordship Idrus
Harun JCA noted the provisions of both the Strata Titles Act 1985
(Act 318) and the provisions of the SMA 2013 on the definition of
‘common property’, wherein his Lordship observed:-

“[21] We now turn to the second ground taken in this appeal.

Learned counsel for the Defendants submitted that the proposed
amendments which seek to plead that the Annex is common
property is unsustainable in law and in fact. The reasoning of
learned counsel for the Defendants, as we understand it, is that
under s 2 of the Strata Titles Act 1985 (Act 318) and s 4 of the
Strata Management Act 2013 (Act 757), a lot becomes common
property when the lot is within the development area, it does not
form part of any parcel within the development area and it is
capable of being used and enjoyed by occupiers of two or more
parcels. However, learned counsel submitted, the development
area of dua residency in the sale agreements and deeds of mutual
covenants that were entered into between the unit owners of Dua
Residency and Edisi Utama clearly showed that the annexe did not
form part of the development area. We now quote from ss 4 and 2
of the Strata Titles Act 1985 (Act 318) and the Strata Management
Act 2013 (Act 757) respectively on the definitions of common
property:

(a)s 4 of the Strata Titles Act 1985:

‘common property’ means so much of the lot as is not comprised in

any parcel [2018] 6 MLJ 783 at 794 (including any accessory
parcel), or any provisional block as shown in a certified strata plan;

(b)s 2 of the Strata Management Act 2013:

‘common property’ —

(a) in relation to a building or land intended for subdivision into

parcels, means so much of the development area —

(i)as is not comprised in any parcel or proposed parcel; and

(ii)used or capable of being used or enjoyed by occupiers of two or
more parcels or proposed parcels; or
 (b)in relation to a subdivided building or land, means so much of
the lot —
(i) as is not comprised in any parcel, including any accessory
parcel, or any provisional block as shown in a certified strata
plan; and
(ii) used or capable of being used or enjoyed by occupiers of
two or more parcels; (Emphasis added.)

[22]  Based on the above definitions, clearly the law, we

apprehend, is that common property refers to the lot which is not
comprised in any parcel. In relation to a subdivided building, parcel
means one of the individual units comprised in a subdivided
building.”

38. Thus, based on the above authority and the definition of common
property as stated in the Strata Management Act 2013, and further
reading of the provisions of sec. 59(1) of the Strata Management
Act 2013, the statutory duties of the Applicant, as the management
corporation, in relation to maintain and manage the common
property and keep it in a state of good and serviceable repair, is
only with regards to the lot not comprised in any parcel.

39. As stated above, the definition of parcel is one of the individual

units in the subdivided building. Thus, based on the above, there is
no statutory duty imposed on the Applicant as per sec. 59 (1)
Strata Management Act 2013 as there is no duty to manage and
maintain that which is found within the said premises because it is
not common property.
40. Further, Regulation 3 (2) of the Third Schedule to the Strata
Management (Maintenance and Management) Regulations 2015
(Tab Applicant’s Bundle of Authorities) which reads:-

‘3. Functions of the management corporation

The management corporation shall—

(2) maintain, repair and, where necessary, renew or upgrade

sewers, pipes, wires, cables and ducts existing in the development
area and used or capable of being used in connection with the
enjoyment of more than one parcel or the common property;’

41. The application of the Third Schedule to the Strata Management

(Maintenance and Management) Regulations 2015 is found at
Regulation 1 (2) (d) (Tab Applicant’s Bundle of Authorities)
which reads:

‘1. Application

(2) These by-laws shall apply to any development area:

(d) during the management by the management corporation

after the first annual general meeting of the management
corporation under Chapter 3 of Part V of the Act; and’

42. The interpretation of management corporation for the purposes of

giving effect to the above subparagraph 1 (2) is found at
 Regulation 2 (Tab Applicant’s Bundle of Authorities) which
reads:

‘2. Interpretation
(1)For the purposes of giving effect to subparagraph 1(2) of these
by-laws:

(a) a reference to the “management corporation” shall be

construed as a reference to the developer (during the
developer’s management period and during the preliminary
management period), joint management body or the
subsidiary management corporation, as the case may be;’

43. The Applicant is management corporation which came into

existence under the Strata Titles Act 1985, specifically sec.39 of
the Strata Title Act (Tab Applicant’s Bundle of Authorities). The
Applicant is not a subsidiary management corporation. A principal
management corporation (MC) may create one or more subsidiary
management corporations (SMC) to represent different parcel
proprietors.

44. The definition of a subsidiary management corporation is found is

at sec.17A of the Strata Titles Act 2013 (Tab Applicant’s
Bundle of Authorities).

45. Thus, based on the above, Regulation 3 (2) of the Third Schedule
to the Strata Management (Maintenance and Management)
Regulations 2015 does not apply to the Applicant.
46. The Court of Appeal made the following errors:-

Common Property

47. The Court of Appeal agreed with the decision of the Learned
Judge of the High Court that sec. 59 (1) (a) of the Strata
Management Act 2013 provides for, inter-alia, the duty on the
Applicant to properly maintain and manage common property and
to keep it in a state of good and serviceable repair.

48. Further, the Court of Appeal agreed with the Learned Judge and
found that By-Law 3(2) of the Third Schedule to the Strata
Management (Maintenance and Management) Regulations 2015,
among other things, imposes upon the Applicant the duty to
maintain, repair and, where necessary, renew or upgrade pipes
used or capable of being used in connection with the enjoyment of
more than one parcel or the common property.

49. Further, the Court of Appeal found that Regulation 58, Part XV of
the Strata Management (Maintenance and Management)
Regulations 2015 applies to the facts of the matter.

50. Regulation 58 is related only to inter-floor leakages whereby

Regulation 55 provides the meaning of inter-floor leakage reads:

Part XV

INTER-FLOOR LEAKAGE

’55. Meaning of inter-floor leakage

 (1)For the purpose of this Part, “inter-floor leakage” means any
evidence of dampness, moisture or water penetration-

(a)On the ceiling that forms part of the interior of a parcel,

common property or limited common property, as the case
may be, or
(b)on any furnishing material, including plaster, panel or
gypsum board attached, glued, laid or applied to the ceiling
that forms part of the interior of a parcel, common property or
limited common property, as the case may be.’

51. Under Regulation 58, the management corporation must take into
account matters to be considered in determining the cause of the
leakage and there is a presumption that the defect is within the
parcel above the effected parcel, common property or limited
common property it doesn’t make the management corporation
liable.

52. The present case does not concern inter-floor leakage but rather a
sewerage pipe that was found in the affected unit/parcel.

C. CONCLUSION

53. This case is a case of public interest and further argument and the
decision of the Federal Court will benefit the property management
 industry, residents and tenants of Strata titled properties as well as
the public based on the legal questions applied by the Applicant as
clarification from this Honorable Court.

54. The Applicant meets the criteria set out in Section 96 of the Courts
of Judicature Act 1964 for the granting of leave to appeal to the
Federal Court as there are questions of public interest and/or
important questions decided for the first time and the decision of
the Federal Court will benefit the public at large.

55. From the submissions herein, it is clear that the Court of Appeal
has erred and misinterpreted the duties and responsibilities of the
management corporation to manage and maintain common
property according to the Strata Management Act 2013 as well as
Strata Management Regulations (Maintenance and Management)
2015.

56. For these reasons, the Applicant prays for the Notice of Motion for
leave to be granted.

Dated January 2021

………………………………….
Messrs Murali B Pillai & Assoc.
Solicitors for the Applicant

This Applicant’s Written Submissions is filed by Messrs Murali B Pillai &

Associates, Solicitors for all the Defendants in this matter of Suite
1504/5, 15th Floor, Wisma Lim Foo Yong, 86, Jalan Raja Chulan, 50200
Kuala Lumpur. Tel 03-21419073 fax 03-21441205.