MC Strata Title No 980 v Yat Yuen Hong Co Pte Ltd and Another

• Judge: Lai Kew Chai J
• Judgment Date: 20 October 1992
• Neutral Citation: [1992] SGCA 68
• Citation: [1992] SGCA 68
• Defendant Counsel: Tang Khin Wai (Lee & Lee)
• Published date: 19 September 2003
• Plaintiff Counsel: Loo Choon Chiaw with David Tan (Loo & Partners)
• Date: 20 October 1992
• Docket Number: Civil Appeal No 82 of 1987
• Court: Court of Appeal (Singapore)
• Subject Matter: cl 11 of First Schedule Land Titles (Strata) Act (Cap 158),s 10 Buildings and Common Property (Maintenance and Management) Act (Cap 30),Whether subsidiary proprietors of uncompleted blocks liable to contribute,Strata titles,ss 7(2), 28, 30, 36 & 37 Land Titles (Strata) Act (Cap 158),Meetings,Land,Whether meeting null and void,Contributions payable,Failure to give notice to all members

Cur Adv Vult

The two respondents, who were property developers, developed the residential condominium known as `Teresa Ville` near Lower Delta Road, Singapore. It comprised three blocks of residential flats, known as Blocks 1003, 1005 and 1007; a clubhouse known as Block 1001 and six shop units. By 3 October 1985 the lands and buildings were duly stratified under the Land Titles (Strata) Act (Cap 158) (`the Act`) (1985 edition, which edition will be referred to in this judgment to avoid any confusion). That was because on the same day, Strata Plan No 980 was registered. By virtue of s 30(1) of the Act, the subsidiary proprietors became a body corporate with perpetual succession. This body corporate is known as Management Corporation Strata Title No 980 and are the appellants. On 3 October 1985, the subsidiary strata certificates of titles were issued by the Registrar of Titles to both the respondents for their lots in the entire condominium.

Twenty three days after the statutory incorporation of the appellants, temporary occupation licences were issued for the clubhouse and the flats in Block 1003; the temporary occupation licences for the flats in the other two blocks 1005 and 1007 were not obtained by the respondents until the expiry of nearly 11 months after the formation of the appellants, that is on 15 September 1986.

On 30 October 1985, the first annual general meeting of the appellants was held. At that meeting, the two respondents which were the registered subsidiary proprietors of all the lots in the condominium constituted all the members of the appellants which attended the meeting. Miss Cheung Poh Choo, who will feature later in this judgment, represented the second respondents. Messrs Fred Gan and Lim Wee Tee represented the first respondents. Mr Fred Gan and Miss Cheung were elected the chairman and secretary respectively of the appellants` management council. The meeting resolved, among other things, that the contributions to the management fund be determined at the flat rate of $220 per flat and $110 per shop until the next extraordinary general meeting of the appellants; this resolution was subject to the proviso that appropriate adjustments would be made retrospective to the date of the issue of temporary occupation licences to ensure that the contributions would be in proportion to the share value of each subsidiary lot as approved by the Commissioner of Buildings under s 7(2) of the Act. The resolution went on to stipulate that the contributions to the management fund shall be due and payable six months in advance on the date of the issue of the temporary occupation licences in respect of the clubhouse and the flats in Block 1003.

In the High Court and before us, it was common ground that this resolution was not binding on the subsidiary proprietors as it was passed contrary to ss 28(2)(c) and 36(3) of the Act. These two provisions of the Act respectively provide that the share units of each subsidiary lot shall, inter alia, determine `the proportion` payable by each subsidiary proprietor of contributions levied by the management corporation and that the management corporation in general meeting may only raise the amounts determined in the manner prescribed by levying contributions on the subsidiary proprietors `in proportion to the share units` of their respective lots. It was a failure to understand this essential feature in the strata title scheme established by statute that invalidated this resolution, which purported to impose maintenance charges at a flat rate rather than in proportion to the share units.

It is instructive to reproduce the whole of s 28 of the Act which reads:

(28) (1) The share value of each lot including a provisional lot shown in every plan lodged for registration as a strata title plan shall be taken as share units, and in the case of any strata title plan where planning permission has been granted on or after 15th April 1976 each lot including a provisional lot shall have the share value shown in the schedule of strata units approved by the Commissioner pursuant to section 7(1)(b) prior to the registration of the strata title plan by the Registrar.

(2) The share units determine -

(a) the voting rights of the subsidiary proprietors;

(b) the quantum of the undivided share of each subsidiary proprietor in the common property; and

(c) the proportion payable by each subsidiary proprietor of contributions levied by the management corporation pursuant to section 36.

As this appeal has to do with the validity and ambit of a subsequent resolution of the appellants in general meeting, which directly bears on the levy for the management fund, we should also reproduce s 36 which provides:

(36) (1) The management corporation shall establish a fund for administrative expenses (referred to in this Part as the management fund) sufficient in the opinion of the management corporation for the purposes of controlling, managing and administering the common property, paying rent, rates and premiums of insurance and discharging any other obligation of the management corporation.

(2) The management corporation may invest as it thinks fit any moneys in the management fund.

(3) For the purpose of establishing and maintaining the management fund the management corporation may at a general meeting -

(a) determine from time to time the amounts to be raised for the purposes mentioned in sub-section (1);

(b) raise the amounts so determined by levying contributions on the subsidiary proprietors in proportion to the share units of their respective lots; and

(c) determine the amount of interest payable by a subsidiary proprietor in respect of late contributions which shall not exceed the rate of 10% per annum.

(4) On application by or on behalf of a person who is a subsidiary proprietor of a lot or by or on behalf of a prospective purchaser of a lot that is offered for sale or by or on behalf of the mortgagee or prospective mortgagee of a lot, the management

corporation shall issue to that person a certificate certifying -

(a) the amount determined pursuant to subsection (3) as the contributions of that subsidiary proprietor;

(b) the time and manner of payment of the amount determined by it pursuant to that subsection;

(c) the extent (if any) to which the contribution has been paid;

(d) the amount (if any) then recoverable by the management corporation in respect of the lot pursuant to section 31(5);

(e) the sum or the respective sums standing to the credit of the fund or funds kept and maintained by the management corporation pursuant to subsection (1), and the amount or respective amounts out of that fund or those funds committed or earmarked for any expenses already incurred by the management corporation; and

(f) whether or not the management corporation has incurred any expenditure or performed or is about to perform any repairs, work or act in respect of which a liability is likely to be incurred by the subsidiary proprietor under any provision of this Part and, if so, the estimated amount of the expenditure or the general nature of the repairs, work or act,

and as against the management corporation and in favour of any person (including the member) relying in good faith on such certificate, that certificate shall be conclusive evidence of the matters certified therein.

(5) Any contribution levied under subsection (3) in respect of a lot is due and payable on the passing of a resolution to that effect by the management corporation, and in accordance with the terms of that resolution, and may be recovered as a civil debt from a subsidiary proprietor of, or his successor in title to, the lot.

(6) Where any contribution levied under subsection (3) remains unpaid after the expiry of a period of 14 days from the date the management corporation has sent a written demand by registered post to a subsidiary proprietor of the lot in respect of which the contribution is levied, the subsidiary proprietor shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $1,000 and in the case of a continuing offence to a further fine not exceeding $50 for every day during which the contribution remains unpaid after conviction.

(7) For the purposes of subsections (5) and (6), `subsidiary proprietor` includes the person for the time being receiving the rent of the lot, whether as agent or trustee or as receiver, and who would receive the same if the lot were let to a tenant.

The statutory scheme for the ownership and management of property in respect of both the lots of subsidiary proprietors and common property comprised in a strata title plan under the Act is by now well-known. Under the Act, the subsidiary lots are separately owned by subsidiary proprietors who are members of the management corporation. The common property in a strata title plan is held by the subsidiary proprietors as tenants-in-common in shares proportional to their respective share units and for the same terms and tenure as their respective lots are held by them: see s 12(1). The subsidiary proprietor`s share in the common property is certified on his subsidiary strata certificate of title and such share is not capable of independent disposal but goes with the subsidiary lot: ss 12(2) and (3). The Act imposes on the management corporation such as the appellants a duty to control, manage and administer the common property for the benefit of the subsidiary proprietors and to properly maintain the common property and keep it in a state of good repair. They are given the management fund which, as noted earlier, is raised by levies on the subsidiary proprietors in proportion to the share units of their respective lots. The share units, of course, are fixed subject to the approval of the Commissioner of Buildings who would consult the Registrar of Titles, the competent authority appointed under s 3 of the...