Disputes during an annual general meeting (AGM) can paralyse a strata development, making it essential to know when and how to lawfully challenge procedural irregularities and unlawful takeovers in Malaysian courts. Strata living relies fundamentally on collective decision-making and majority rule. Consequently, the Strata Management Act 2013 (SMA) sets strict rules for conducting AGMs. However, disagreements over voting rights, meeting procedures, and attempted leadership takeovers frequently disrupt these sessions.
When an impasse occurs, or a rogue faction attempts an unlawful takeover, aggrieved owners, the joint management body (JMB) or management corporation (MC) can seek declarations and injunctions to protect their rights and restore orderly governance, as demonstrated by our firm’s recent win at the Court of Appeal.
The Danger of Unlawful Takeovers
While the SMA prescribes procedures governing the conduct of AGMs and the election of the management committee, strata governance ultimately operates as a democratic process through the exercise of voting rights by parcel owners. In developments where ownership is dispersed among residential purchasers, corporate investors, and developers, disputes may arise when a minority faction attempts to circumvent statutory procedures to seize control of the management committee.
MWKA recently successfully defended our client facing this exact scenario. In this case, a faction of parcel owners attempted to take over the AGM by force after refusing to accept explanations about a car park owner’s eligibility to vote.
When an attendee unilaterally declared herself the “chairlady” without a proper vote, the JMB chairman adjourned the meeting to prevent further chaos. The JMB chairman, with a majority of the committee, together with the property manager, legal advisor and auditor, then left the venue. A group of owners, led by the self-appointed “chairlady”, continued the meeting, purportedly electing committee members from among themselves. They later attempted to take over management of the JMB and attempted to change the signatories on the JMB’s bank accounts.
The Power to Adjourn an Annual General Meeting
Can the JMB chairman lawfully and unilaterally adjourn an AGM before a presiding chairman is formally elected? The SMA does not expressly prohibit the adjournment of an AGM. The power to adjourn is inherent in the chairman’s duty to preserve order and ensure the proper conduct of meetings.
In situations where a meeting becomes unruly, taking a forceful approach to physically remove disruptive attendees would risk violence and expose the JMB to civil liability for assault. In our case, the High Court and Court of Appeal ruled that prior to the election of a presiding chairman under paragraph 16 of the Second Schedule of the SMA, the outgoing JMB chairman presides over the AGM. The word “chairman” in paragraph 17(5) of the Second Schedule refers to either the JMB chairman or the presiding chairman, depending on the context. This interpretation gives the JMB chairman the express or implied power and authority to decide on matters and make procedural rulings at the AGM, including adjourning the meeting to prevent untoward incidents and avoid disorder.
Once an AGM is adjourned, it may be reconvened by the JMC by giving due notice to the proprietors. That was done in our matter, and the High Court and Court of Appeal confirmed the legitimacy of the reconvened AGM.
Voting Methods: By Way of A Poll vs Show of Hands
Does the election of the presiding chairman have to be conducted by a show of hands? Under paragraph 17(1) of the Second Schedule of the SMA, any matter that requires a decision at a general meeting shall be decided on a show of hands unless a poll is demanded by a proprietor.
A valid demand for a poll was made by an owner. Some other owners objected and demanded a show of hands so that a majority share unit holder could not override the wishes of the majority of owners present.
The High Court and Court of Appeal agreed that paragraph 17(1) of the Second Schedule of the SMA applies equally to the election of the presiding chairman. Once a poll is lawfully demanded, a poll must be conducted.
The Role of the Commissioner of Buildings
When an AGM descends into chaos, factions often write to the local Commissioner of Buildings (COB) seeking validation. In our case, the self-appointed chairlady and her purportedly appointed committee members relied on letters from the COB expressing the opinion that their continued meeting was valid. However, as established by the Federal Court in Innab Salil & Ors v Verve Suites Mont Kiara Management Corp, letters from administrative bodies like the COB are merely opinions and do not have the binding force of law. The COB acknowledged that it does not owe, nor has, a statutory duty to investigate or validate the convening of an AGM, and that the dispute should be brought to court for determination.
Our Success at the High Court
We were engaged by the JMB, represented by the JMC appointed at the preceding AGM to commence an Originating Summons in the Shah Alam High Court to challenge the appointment of the competing committee members.
In July 2025, the High Court ruled in favour of our client. The High Court declared that the AGM that was subsequently reconvened, as well as the appointment of the joint management committee (JMC) at the reconvened AGM, were valid. Furthermore, the High Court granted an injunction to restrain the unlawful faction from claiming to be JMC members and from interfering with the operations of the JMB. The High Court held that there was no justification for the disruptive actions of the attendees, and given the unruly conduct, the JMB chairman rightfully exercised the power to adjourn the AGM.
Our Success at the Court of Appeal
The unlawful committee members subsequently appealed the High Court’s decision. The Court of Appeal unanimously dismissed the appeal and affirmed the High Court’s decision. The Court of Appeal ruled that the JMB chairman was right in adjourning the meeting due to the attendees’ refusal to accept explanations and their disruptive demands. The subsequent reconvened AGM by our client and all resolutions passed therein were ruled to be fully valid and lawful.
Impact on Malaysia’s Strata Community
The Court of Appeal’s decision sets a crucial precedent for strata governance in Malaysia. While the SMA is social legislation intended to protect the interests of all proprietors, it does not mean minority share unit holders can override the principle of majority rule. Collective decision-making through voting at a duly convened AGM is a cornerstone of strata living.
By affirming the JMB chairman’s power to adjourn a chaotic meeting and upholding the mandatory nature of a poll vote, the Court of Appeal clarified that statutory provisions governing AGMs cannot be bypassed by force or procedural ambush. This decision ensures order, predictability, and fairness in administering strata developments across the country.
Conclusion
A well-chaired and valid AGM is the bedrock of strata management. When procedural safeguards are ignored, or minority factions attempt to hijack the democratic process, the law provides robust mechanisms to challenge these irregularities. However, successfully navigating an AGM dispute requires more than just reading the SMA. It requires a deep understanding of litigation strategy, injunctions, and the commercial realities of building management.
By Rachel Ng
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.
