The Strata Management Tribunal provides a cost-effective alternative to court litigation to resolve disputes related to strata properties in Malaysia. The Strata Management Tribunal enables proprietors, joint management bodies (JMBs), management corporations (MCs) and developers to obtain relief for matters related to strata management or strata living.
The jurisdiction of the Strata Management Tribunal is stated in the Fourth Schedule of the Strata Management Act 2013. After a hearing, the Strata Management Tribunal will deliver its decision in the form of a Tribunal Award.
However, what happens if a proprietor, JMB or MC is dissatisfied with the decision of the Strata Management Tribunal? Are they entitled to challenge the Tribunal Award? The short answer is yes. This article will look into how a Tribunal Award can be challenged and under what circumstances a Tribunal Award can be challenged and set aside.
Relevant legislation
A Tribunal Award is deemed to be final and binding on all parties to the tribunal proceedings. A Tribunal Award is also deemed to be an order of a court and can be enforced by any party to the tribunal proceedings.
Nevertheless, Section 121 of the Strata Management Act 2013 specifically provides that any party to the tribunal proceedings may apply to the High Court to challenge a Tribunal Award on grounds of serious irregularity which has affected the Tribunal Award.
The process of challenging a Tribunal Award at the High Court is by way of a judicial review. An application for judicial review must be filed in the High Court within 3 months from the date the award is communicated. A brief explanation of the judicial review process can be found here: Understanding Dispute Resolution in Malaysia
Grounds for Challenging an Award
For a party to the tribunal proceedings to successfully challenge a Tribunal Award in Court, the party must show that there is a serious irregularity that has affected the Tribunal Award.
A serious irregularity under Section 121 of the Strata Management Act 2013 includes the following scenarios which have caused substantial injustice to the applicant:
- The failure by the Strata Management Tribunal to comply with Section 113 of the Strata Management Act 2013, which is to “act fairly and impartially as between the parties, giving each party a reasonable opportunity of presenting his case and dealing with that of his opponent”;
- The failure of the Strata Management Tribunal to deal with all the relevant issues that were put to the Tribunal; or
- There is uncertainty or ambiguity as to the effect of the Tribunal Award.
Powers of the High Court
If the High Court is satisfied that there is serious irregularity affecting a Tribunal Award, the High Court has the power to either:
- Remit the Tribunal Award, in whole or in part, for reconsideration; or
- Set aside the Tribunal Award in whole or in part.
In Tham Sau Hoong v Tribunal Pengurusan Strata & Satu Lagi [2019] 7 CLJ 132, the High Court set aside the award of the Tribunal and ordered the applicant’s claim to be heard by another Chairman in the Strata Management Tribunal.
The applicant, who was also the Chairman of the Gold Coast Resort Condominium Management Corporation (second respondent), filed a complaint to the Office of the Building Commissioner about the breach of the Strata Management (Management and Maintenance) Regulations 2015 by four unit owners, who were later elected as committee members. The issue remained unresolved, and the applicant challenged the eligibility of some of the committee members in the annual general meeting. The AGM referred the qualification issues to the Commissioner of Buildings (COB), which decided that only four of the seven elected members could be on the new committee, provided they remedied the wrongdoing within the specified time. The applicant disputed that the four members remedied the wrongdoing, but the COB confirmed their qualifications as committee members.
The applicant then filed a claim in the Strata Management Tribunal, seeking an order for the management corporation to comply with the Regulations. However, the claim was rejected on the basis that it was academic because the seven unit owners had already retired from their position as committee members. The applicant applied for a judicial review, arguing that the Tribunal committed serious irregularities and did not comply with the requirement to provide reasons for the decision.
The High Court was satisfied that the applicant was successful in proving to the court that the Strata Management Tribunal had committed a “serious irregularity” under Section 121(3)(b) of the Strata Management Act 2013. The court held that the first respondent failed to take into account the relevant facts, misunderstood the facts and issues presented, and relied solely on the COB’s letter as evidence. The High Court allowed the application for a writ of certiorari, quashing and setting aside the entire decision of the Tribunal. The court ordered the applicant’s claim to be heard by another Chairman in the Strata Management Tribunal. The decision highlights the statutory responsibility of the Tribunal to enforce the Regulations and to compel any party to comply with any regulation or to prevent non-compliance with any regulation.
Similarly, in Perbadanan Pengurusan Sunrise Towers v Tribunal Pengurusan Strata & Yang Lain [2019] 3 CLJ 414, the High Court held that the Strata Management Tribunal allowed the applicant’s judicial review and set aside the award of the Tribunal.
The applicant (the management corporation) commenced an action in the Sessions Court against the 2nd and 3rd respondents (parcel owners) on, amongst others, the outstanding maintenance charges, insurance charges, quit rent and late payment interest. The Sessions Court allowed the applicant’s claim. Dissatisfied with the decision of the Sessions Court, the applicant then filed an appeal to the High Court. The High Court allowed the appeal and set aside the Sessions Court’s decision.
Based on the High Court’s decision to set aside the Sessions Court’s decision, the applicant filed the Tribunal claim against the 2nd and 3rd respondents to recover the outstanding charges. The Tribunal dismissed the claims against the 2nd and 3rd respondents. The applicant then filed a judicial review application at the High Court.
The High Court in allowing the judicial review, held that the Strata Management Tribunal failed to take into account the following relevant facts:
- That the management corporation had a statutory duty to collect maintenance charges that are in arrears;
- That there is a statutory duty on the 2nd and 3rd respondents as co-proprietors of a unit in the strata development to pay maintenance charges and it is unjust for the 2nd and 3rd respondents to enjoy the facilities in the strata development without paying maintenance charges; and
- That the 2nd and 3rd respondents admitted that they are liable to pay the arrears in maintenance charges.
As a result of the Strata Management Tribunal’s failure to consider these relevant issues, the High Court held that the Tribunal Award was irregular, set aside the Tribunal Award and ordered the applicant’s claims to be reheard by another President of the Tribunal.
In the case of Law Hock Hua v PJ8 Joint Management Body & Ors [2019] MLJU 350, the applicant, a parcel owner of three units in PJ8 Service Suite and former treasurer of the PJ8 Joint Management Body (JMB), filed a tribunal claim against the JMB seeking to nullify resolutions passed by the JMB to revise the service charge for unit owners of Block A and C at the rate of 11 cents psf and 44 cents psf for unit owners for Block D. In response, the JMB filed a defence and counterclaim, to claim for the shortfall of services charges in the sum of RM314,086 and to prevent the applicant from participating, voting, or serving on any committee related to PJ8 Service Suite.
However, the applicant’s claim was struck off as he had mistakenly gone to the wrong tribunal for the hearing. He applied to reinstate the claim but was denied. The JMB’s counterclaim was heard and dismissed, but the tribunal still ordered the applicant to pay RM250,000 and costs of RM1,000 to the JMB. The applicant then filed a judicial review in the High Court, arguing that the tribunal had no jurisdiction to hear the JMB’s counterclaim because it exceeded the jurisdiction limit of RM250,000 and was related to a breach of fiduciary duty, which the tribunal had no authority to decide.
The High Court allowed the judicial review and held that the tribunal’s decision was tainted by errors of law, irrationality, and serious irregularities that warranted court intervention. Specifically, the court found that the JMB’s counterclaim for RM314,086 exceeded the tribunal’s jurisdiction limit of RM250,000 and was in any event, not supported by any evidence.
In the case of Commissioner of Buildings Hang Tuah Jaya Municipal Council v Joint Management Body of Ixora Apartments & Anor [2020] MLJU 1374, the High Court allowed the applicant’s judicial review application and held that the Strata Management Tribunal erred in law and fact when it failed to deal with all the relevant issues that were put to it.
The 1st respondent (the Joint Management Body), applied to the applicant (the Commission of Buildings) for payment of allowances to some committee members of the JMB particularly the Chairman, the Secretary and the Treasurer. The COB refused the applicant on the grounds, amongst others, that the application for payment of the allowances was neither discussed nor put forward in any general meeting, and was not made known to all parcel owners who paid the maintenance fees to the JMB. The COB found that there was no transparency in the decision to pay allowances to selected committee members.
The JMB filed a case at the Strata Management Tribunal to challenge the decision of the COB. The Tribunal set aside the COB’s decision and ordered the JMB to submit a new application to the COB for the payment of allowances.
The COB then filed a judicial review application against the decision of the Tribunal. The High Court allowed the applicant’s judicial review application on the following grounds:
- Although the decision of the Strata Management Tribunal is said to be final, the decision is still subject to review by the Court under Section 121 of the Strata Management Act 2013 and the inherent jurisdiction of the Court to do justice;
- The COB has no right to determine the payment of any expenditure because the exercise of that power is subject to public scrutiny by the parcel owners; and
- A general meeting is required to approve the payment of allowances to comply with public accountability and good corporate governance.
Conclusion
The Strata Management Tribunal provides a useful forum for resolving disputes related to strata properties in Malaysia. However, parties who are dissatisfied with a Tribunal Award have the right to challenge it under certain circumstances. To challenge a Tribunal Award, the dissatisfied party must demonstrate a serious irregularity that has affected the Tribunal Award. If successful, the High Court may set aside the award or remit it for reconsideration.
It is important to note that challenging a Tribunal Award requires prompt action, adherence to proper procedures, and seeking legal advice. By understanding the grounds for challenging an award and the process involved, strata property owners can protect their rights and interests.
By Raymond Mah and Fung Kar Men
Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.
