Court: Only unit owners can be in high-rise management corporations

Court: Only unit owners can be in high-rise management corporations


PUTRAJAYA: The Court of Appeal here has affirmed a High Court ruling that the Commissioner of Buildings (COB) was right in deciding that only unit owners and not their proxies can be elected as council members of high-rise management corporations.

The Court of Appeal panel, comprising Justices Clement Allan Skinner, Linton Albert and Lim Yee Lan, upheld the decision by Penang High Court Justice John Louis O'Hara in what was the first judgment of its kind in the country.

The effect is that property owners can only have one representative in a management corporation regardless of how many parcels they own.

Justice O'Hara had on June 29, 2010, ruled in favour of the COB who is the Penang Municipal Council president, and a unit owner, Yeap Dah Long who was the addressee in the COB decision involving the 36-storey Gurney Tower.

The tower houses The Gurney Resort Hotel & Residences owned by the Employees Provident Fund (EPF), a fitness centre, eateries and an office block. EPF owned 15 parcels with 259 rooms in the building and had more than one representative in the management corporation.

Following complaints from various parcel owners of the office block, the COB had on March 3, 2010, ruled that the management corporation's council was not properly constituted; only unit owners could be elected as council members; proxies could not be elected nor made chairman; and EPF was only entitled to appoint one representative in respect of the election although it owned 15 parcels.

The COB also ruled the creation of two sub-management corporations - one for the hotel and one for the office block - was invalid.

Monday's appeal was brought by Gurney Tower Management Corporation, Bondell Corporation Sdn Bhd which operates the fitness centre, and two proxy holders - M. Elangovan and Vincent Tan Boon Sun.

They had appealed on grounds that the COB had no jurisdiction to make the decision and had breached the rules of natural justice, and the High Court judge had committed errors of law in his decision.

The Court of Appeal found that there was no want of jurisdiction in legality, rationality or judicial impropriety in the COB's decision, and there was no misdirection or error of law on the part of the COB nor the High Court judge.

They also found that the appellants lacked locus standi, and were required by Section 41 of the Building and Common Property (Maintenance and Management) Act 2007 to appeal to the state authority if aggrieved by the COB.

The appellants were represented by G. Arumugam, the COB by Karin Lim and M. Murgan, and Yeap by K.N. Lee.



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