BRIEF FACTS:

• The Respondent, Marc Service Residence Management Corporation (“MC”) was the management corporation of the Marc Service Residence (“the Apartment”).
  
  
• The 1st Appellant, Wawasan Raya (M) Sdn Bhd (“Wawasan Raya”), is a registered owner of three parcels at the Apartment. Wawasan Raya has also rented five other parcels.
  
  
• On 26.6.2019, the MC organised its Sixth Annual General Meeting of the MC (“the AGM”).
  
  
• During the AGM, a resolution (“Resolution No. 3”) to amend the House Rules. Resolution No. 3 states “The Unit Owner and Lessee shall comply to the guideline (Prosidur Operasi Standard Aktiviti Penginapan Sementara Jangkamasa Pendek Kepada Pemaju/JMB/MC di Wilayah Persekutuan) issued by COB KL in line with the SMA.”
  
  
• The MC filed an action against Wawasan Raya and other parcel owners (collectively, “the Parcel Owners”) seeking for, among others, an injunction to compel the Parcel Owners to comply with the House Rules and the By-laws in the Third Schedule to the Strata Management (Maintenance and Management) Regulations 2015 (“the Regulations”) and to restrain them from using their parcels for STR.
  
  
• On 20.12.2019, the MC obtained an ex parte interlocutory injunction from the High Court to restrain the Parcel Owners from using their parcels for STR until the disposal of the suit.
  
  
• All other Parcel Owners agreed to comply with the injunctions, and accordingly, the MC discontinued the suit against them. Only Wawasan Raya and the 203^rd Defendant opposed the action.

DECISION BY THE HIGH COURT (HC)

• The HC held that based on the reading of the Sale and Purchase Agreements between the Parcel Owners and the Apartment Developer (“the SPAs”), and the Deed of Mutual Covenants (“DMCs”), the parcels are only to be used for residential purposes.
  
  
• The HC also clarified that Resolution No. 3 was meant to impose penalties for violation of the HR due to creations of nuisance of the unsupervised number of persons in the Apartment due to STR. It was not meant to allow STR.
  
  
• The HC also held that the only way to lift the restriction on STR would be for the MC to repeal and terminate both the DMCs and the House Rules.
  
  
• Finally, the HC concluded that the Apartment is strictly private residential accommodation and cannot be used as a hotel or motel for commercial purposes, nor can it be advertised as such.
  
  
• Dissastisfied with the decision of the HC, Wawasan Raya and the 203^rd Defendant filed an appeal to the Court of Appeal.

DECISION BY THE COURT OF APPEAL (COA)

• The COA held that there is nothing in the Strata Management Act (“the Act”) or the Regulations, either expressly or by necessary implication, that prohibits the use of premises for STR. In the absence of such a prohibition, STR cannot be considered unlawful under the Act or the Regulations.
  
  
• The COA held that the duty and power of the Management Corporation (MC) under Section 59 of the Act do not include the authority to regulate the use and occupation of a parcel, much less to prohibit STR with respect to the parcels.
  
  
• Further, the COA also held that nothing in the House Rules grants the MC the authority to prohibit STR with respect to the use of parcels, and that the House Rules provide no power to the MC to impose such a prohibition.
  
  
• The COA also held that the provision in the SPAs and DMCs did not contain any prohibition against STR. In any event, the SPAs and DMCs cease to have effect upon enforcement of the Rules pursuant to Section 148 of Strata Management Act.