CoB approval required for management committee allowances, rules court

The Court of Appeal also says a vacancy arising from the resignation of a committee member cannot be filled by appointment.

The Court of Appeal ruled that Section 60 of the Strata Management Act read with Section 50(3)(l) provides that the Commissioner of Buildings must approve meeting allowances paid to committee members.

PUTRAJAYA:

 The Court of Appeal has unanimously allowed an appeal by the Sentral Residences management corporation (SRMC) against four former committee members who collected meeting attendance allowances without prior approval.

A three-member bench led by Justice Lim Chong Fong held that the High Court erred in affirming the validity of the payments to the four individuals.

The bench ruled that the High Court was wrong to conclude that there was no provision in the Strata Management Act (SMA) that requires the Commissioner of Buildings (CoB) to approve the payment rates.

“The monies in the maintenance account are trust money, and the committee members act in the capacity of trustees,” Lim said.

He said Section 60 of the SMA — which governs the SRMC’s maintenance account — must be read together with Section 50(3)(l), which requires CoB approval for allowances and expenses paid to committee members for attendance at meetings.

Also on the panel hearing the appeal were Justice Ong Chee Kwan and co-opted High Court judge Latifah Tahar.

The parties were ordered to bear their own costs as the case was one of public interest.

Last year, the High Court quashed the Strata Management Tribunal’s award on a judicial review application by the four respondents.

The dispute began in December 2022 when the SRMC in Kuala Lumpur lodged a claim with the tribunal against eight former committee members, including the four respondents, seeking refunds of meeting attendance allowances previously paid.

The amounts ranged from RM1,500 to RM4,200 per person, totalling RM27,300.

The SRMC also asked the tribunal to rule that the appointment of the first respondent, Hong Swee Lan, as a committee member was not made in accordance with the SMA.

The tribunal directed that the allowances be refunded within 60 days of the order and found Hong’s appointment to be invalid.

Only one of the eight respondents failed to comply with the direction.

Dissatisfied with the tribunal’s decision, the four respondents sought judicial review in the High Court.

Before the Court of Appeal, the respondents argued the appeal was academic because they had already settled the outstanding amounts but the bench rejected their position on the matter.

On the validity of Hong’s appointment, Lim said the High Court had misconstrued the Second Schedule to the SMA — particularly paragraph 3(5) — by failing to consider paragraph 3(1) which specifies that a vacancy that arises as a result of the resignation of a committee member cannot be filled by appointment.

Counsel Lim Kien Huat and Bryan Ching represented the SRMC, while the respondents were represented by K Rajasegaran and Kalvinder Singh Bath. - FMT