LEE WAI KIN V. YULEK SDN. BHD.
HIGH COURT MALAYA, KUALA LUMPUR
SITI NORMA YAAKOB J
[ORIGINATING SUMMONS NO. F 1013 OF 1985]
12 FEBRUARY 1986
JUDGMENT
Siti Norma Yaakob J:
The defendant in this originating summons is a developer who in the early
1970's had embarked in a large development scheme on several pieces of land
which it owned. The scheme involved construction of 6 blocks of 4 storey
buildings consisting of 560 units of flats which it sold to the public. The
plaintiff bought one of them pursuant to a sale and purchase agreement dated
4 October 1973 and has since paid the purchase price of RM13,000 and is in
occupation of the flat.
As the property has not been issued with a strata title, the defendant
had, over the years, been demanding various sums of money from the plaintiff
for expenses to be incurred for applying for such title. In addition, the
defendant had demanded for an increased sum by way of consent and vetting
fee from the other purchasers for the purpose of assigning their properties.
Dissatisfied with the indiscriminate manner in which the various sums of
money had been demanded, the plaintiff referred several questions which are
clearly set out as (a) - (g) in this originating summons for my
determination.
Questions (a) and (b)
The defendant concedes to the issues raised in view of the repealed s.
151A(1) of the National Land Code 1965 and the law now in force namely s.
8(1) of the Strata Titles Act 1985 which makes it compulsory for the
proprietor of any alienated land on which there is a building of 2 or more
storeys to apply for a sub-division of the building into parcels each to be
held under a separate strata title. Thus it is incumbent upon the defendant
to apply for the strata title on behalf of the plaintiff.
Question (c)
This relates as to who should bear the burden of meeting the costs of
applying for the strata title. The defendant maintains that the plaintiff
should do so by virtue of Clause 28 of the sale and purchase agreement
entered between them. The plaintiff considers it to be otherwise as the
meaning of Clause 28 is ambiguous and that the agreement should be construed
against the maker, i.e. the defendant.
The first sentence of Clause 28 states that "the cost of and incidental
to this Agreement, any subsequent assignment and the final transfer to him
shall be borne by the Purchaser." Reading the agreement in its entirety, I
do not consider that the words "final transfer" in Clause 28 are ambiguous
in meaning. They can only refer to the issuance of the strata title as that
is the final act that establishes the plaintiff as the registered proprietor
of his flat. As its issue is solely for the benefit of the plaintiff, it is
only right and just that he should meet the costs of applying for such
title. So for question (c), I hold that the defendant is entitled to collect
payment from the plaintiff for the expenses to be incurred in the
application for the strata title.
Question (d)
The amount to be collected from the plaintiff must be the prescribed fee
that is to be paid under s. 10 of the Strata Titles Act 1985 and in making
the ruling that the plaintiff is to meet such payment, the defendant should
not take that as an opportunity to hike up the prescribed fee under the
guise of administrative costs so as to make a profit in making such
application. This is so as the defendant had delayed considerably in making
the application and had insisted as a condition precedent for the
application that the plaintiff deposit a specified sum which had been
increased over the years as estimated expenses involved in the application.
On 3 June 1980, the defendant had demanded that the plaintiff deposit RM500
as being the estimated costs of the application. This amount was raised to
RM578.55 in June 1983 and 2 months later, in August 1983, the amount was
again raised to RM700.
No reason is given why the expenses cannot be determined or why the
defendant had delayed in applying for strata title. Before the coming into
effect of the Strata Titles Act 1985,the relevant provision of the law
applicable was s. 153(1) of the National Land Code 1965 which prescribed the
procedure for such application on payment of the prescribed fee. The delay
must, to some extent, affect the amount of expenses to be incurred and as
the defendant has been guilty of it, it is only right and proper that it
should be prepared to advance its own funds for the costs of the application
and then seek a reimbursement from the plaintiff of such costs which amount
must be the prescribed fee under s. 10 of the Strata Titles Act 1985.
Question (e)
Based on what I have stated earlier, I consider that the defendant is not
entitled to collect payment of the prescribed fee from the plaintiff in
advance.
Question (f)
I now come to consider whether the defendant is entitled to charge RM500
as consent fee for any intended assignment. Clause 11 of the agreement
allows the defendant to charge RM50 as the administrative fee for every
assignment it had consent to. The RM50 administrative fee is the costs of
maintaining a complete record of such assignment or sub-sale by each
purchaser of the flats. As the parties had agreed that RM50 shall be charged
for each assignment, the defendant cannot, be reason of inflation, raise the
consent fee to RM500.
Question (g)
Lastly, I come to consider whether the defendant is entitled to;
(1) increase the maintenance fee generally from RM2.50 to RM15 per
month,
(2) collect a sum equivalent to 3 months' maintenance fee in advance
and,
(3) charge interest on overdue payment
The common services which the defendant agreed to maintain are;
(1) the roads and drains.
(2) the lights on the main road.
(3) the removal and disposal of refuse
(4) weeding along the edges of the roads and drains.
For providing the above services, the plaintiff had agreed in Clause 11
of the agreement to pay the defendant RM4 a month as maintenance fee so long
as such services have not been taken over by any local authorities. As such
services have since been taken over by Dewan Bandaraya, clearly Clause 11 is
inapplicable.
Apart from Clause 11, Clause 20(c) of the agreement allows the defendant
to charge each purchaser not less than RM2.50 per month for keeping all
passageways, stairs and drains clean, for lighting the corridors and
staircases, for white washing the external walls, maintenance of the roof
and painting the railings from time to time, provided that at least one
month's notice shall be given to the purchaser if at any particular month
the maintenance fee exceeds RM2.50. By generally raising the maintenance fee
from RM2.50 to RM15 per month, the defendant has clearly acted well beyond
what had been agreed upon in Clause 20(c). The only way a maintenance of a
particular month has been increased due to some extra work, like, painting,
had to be done to the premises in which case; the defendant should give 1
month's notice of his intention to raise the maintenance fee and the
increase is only applicable to the particular month when the extra
maintenance had to be done. Thus, to arbitrarily raise the maintenance fee
to RM15 per month is contrary to what had been agreed and clearly the
defendant has no power to do so. For that matter too, neither can it demand
a deposit equivalent to 3 months' maintenance fee. As interest is not
chargeable under Clause 20(c), here again the defendant has no power to
charge such interest. So for question (g), I answer all the issues raised in
the negative.
As the plaintiff is not asking for costs, I make no order as to costs in
this originating summons.
As the same questions and issues have been raised in Originating Summons
F. 1319/85, I accordingly answer them in the same manner I have done in this
originating summons, and likewise, I also make no order as to costs in
Originating Summons F 1319/85
