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Case Update: Surplus car parks in Condominium not necessarily common property

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29 July 2022

LAND LAW
Car Park – Common Property – Condominium – Winding Up – Liquidators – Sale – Strata Title – Ownership

Sri Keladi Sdn Bhd (In Liquidation) v Bukit OUG Condominium Joint Management Body
Civil Appeal No: W-02(NCvC)(W)-2214-11/2019 |Court of Appeal
- see the grounds of judgment here

Facts Sri Keladi Sdn. Bhd (the ‘Appellant’) is a housing developer while Bukit OUG Condominium Joint Management Body (the ‘Respondent’) is a joint management body. The Appellant developed 6 blocks of condominiums known as Bukit OUG Condominium, comprising 1,536 residential parcels and 74 commercial parcels. The Respondent is entrusted to manage the common property of the development. The Appellant was subsequently wound-up. Liquidators were then appointed for the Appellant. The liquidators conducted an audit exercise with the parcel owners of the development and found 149 surplus and unaccounted car parks. In order to realise the Appellant’s assets, the liquidators placed an advertisement in the newspaper to sell the 149 surplus car parks. The intended sale of the car parks was by way of tender submission. The Respondent filed the action in court to claim the surplus car parks as the development’s common property and asset, under their management. The Respondent applied for a declaration that the car parks are part of common property and that it has ownership of the same. As such, the Appellants cannot deal in any manner in respect of the car parks. However, to date, strata titles have yet to be issued. The Appellant submitted that as no strata titles had been issued, the car parks are not part of the development’s common property or asset. At the High Court, the learned Judge held that the surplus car parks do not belong to the Appellant. Therefore, the Appellant had no right to sell the car parks. Hence this appeal.

Issues 1. What is the instrument or document governing the ownership of the car parks; and
2. Would the car parks come under the definition of “common property” under the Sale and Purchase Agreements (“SPA”)

Held In allowing the appeal, the Court of Appeal held that the determination of whether the car parks should be considered as common property would depend on the terms of the SPA. The Court of Appeal held that the surplus car parks belong to the Appellant and the same has ownership of these car parks because the definition of common property found in the SPA must mean it could not include additional car parks in this case. It ought to be emphasised that the purchasers who bought the parcel units with car parks have been catered for with the same. The definition of common property as seen in the SPA cannot include additional or surplus 149 car parks. Since it is “additional”, it exists more than what is required. Therefore, it cannot and must not be enjoyed by all as “common property”. Hence, it should follow that the Respondent has no right and interest to manage the same. Therefore, the Court of Appeal held that the learned High Court Judge’s finding was in error and inconsistent with the plain and clear words of the relevant schedule found within the SPA.  The Court of Appeal were of the considered opinion that they ought to intervene in correcting the error made in this respect and as such the appeal was allowed.

ZUL RAFIQUE & partners
{29 July 2022}

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