Property – Whether a Joint Management Body (“JMB”) can be formed after and/or co-exist with an existing Management Corporation (“MC”).

Palm Spring Joint Management Body & Anor v Muafakat Kekal Sdn Bhd & Anor [Civil Appeal No. 02(F)-14-02/2015(W)] (FC)

• The 1st respondent (“Muafakat Kekal”) was the developer of the residential condominium development known as Palm Spring Condominium @ Damansara (“the Condominium”).
• The 2nd appellant is the Management Corporation (“MC”) which was established under the Strata Titles Act 1985 (“Act 318”) on 8.1.2008.
• The 1st appellant (“JMB”) was a statutory body purportedly established under the Building and Common Property (Maintenance and Management) Act 2007 (“Act 663”) on 5.4.2008.
• Muafakat Kekal, as the original proprietor of the Condominium, called for the first general meeting (“AGM”) of the MC on 4.9.2011.
• The JMB contested the validity of the establishment and authority of the MC and applied to the High Court for an injunction to refrain Muafakat Kekal from holding the AGM.
• Despite the injunction being rejected by the Court, JMB proceeded to hold its own AGM on 11.9.2011 and had appointed council members to manage the affairs of the Condominium.
• The MC only managed to hold its AGM on 15.10.2011 at a different venue after several postponements due to alleged disturbances caused by members of the JMB.
• The dispute between the MC and the JMB eventually led to a meeting convened by the Federal Director General of Land and Mines.
• The meeting resulted in Muafakat Kekal being directed to produce the company’s audited accounts from 2008 until the current period, failing which the JMB’s AGM would be declared valid alongside all appointment of council members made during that AGM.
• Muafakat Kekal claimed it could not produce the required audited accounts as the JMB had obtained an injunction against it.
• Muafakat Kekal further claimed that the JMB had also excluded it from the management of the Condominium.
• Thereafter, Muafakat Kekal initiated a suit against the JMB to declare the establishment of the JMB invalid.
• The High Court held in favour of the JMB, but the decision was overruled by the Court of Appeal.
• Hence the present appeal to the Federal Court by the JMB.

• Section 4 of Act 663 provided that a JMB shall be established before a management corporation comes into existence.
• On the present facts, it was undisputed that the MC was in fact established prior to the JMB.
• The JMB is intended to be an interim body to cater for instances where there has been a delay in the issuance of strata titles.
• In the present case where strata titles have in fact been issued and the book of strata register has been duly opened, the establishment of a JMB was unnecessary.
• The preparation and maintenance of strata titles would come under the sole purview of the MC by virtue of Act 318.
• As such, it is clear that the MC and the JMB was never intended to co-exist side by side at one and the same time.
• Hence, the Federal Court agreed with the Court of Appeal that the JMB was unlawfully constituted and its establishment is thus null and void ab initio (i.e. void from the beginning).