Management Corporation Must Maintain Common Property within Stratified Unit

25 June 2020

In the recent case of ACN Infra Sdn Bhd v Perbadanan Pengurusan Kondominium Subang Indera [2020] 3 AMR 741, the High Court affirmed the statutory duties of the management corporation (“MC”) to maintain common property under the Strata Management Act 2013 (“SMA”) and the Strata Management (Maintenance and Management) Regulations 2015 (“SMR”). The High Court also considered the doctrine of res ipsa loquitor in such situation.

Brief Facts

The plaintiff was the tenant and occupier of a condominium unit (“Unit”), and the defendant is the MC of the condominium and the landlord of the Unit. The sewerage pipe running across the ceiling of the Unit burst and damaged the plaintiff’s goods, equipment and furniture stored in the Unit.

The plaintiff claimed that the defendant was liable for such damage on the basis of the defendant’s breach of statutory duties under section 59(1) of the SMA and by-law 3(2) of the Third Schedule to the SMR, and negligence by omission in the performance of their duties.

The defendant, on the other hand, contended that: (i) the plaintiff had never previously complained about any leak or damage to the sewerage pipe; (ii) the sewerage pipe was concealed and under the care and control of the plaintiff; (iii) the defendant had no access to the Unit; and (iv) the bursting or leakage of the sewerage pipe was an unforeseeable event and was beyond the defendant's control.

The Court's Findings

Whether the sewerage pipe is ‘common property’

Section 2 of the SMA provides that “common property” includes “so much of a subdivided lot used or enjoyed by the occupiers of two or more parcels.” As the sewerage pipe that ran above the ceiling of the Unit serviced all floors of the condominium, it was abundantly clear that the common sewerage pipe fell under the definition of common property.

Duty to maintain common property

Section 59(1)(a) of the SMA provides, inter alia, that the duties of a management corporation includes to properly maintain and manage the common property and keep it in a state of good and serviceable repair whilst by-law 3(2) of the SMR, inter alia, requires the management corporation to maintain, repair and where necessary, renew or upgrade sewers, pipes, wires, cables and ducts existing in the development area and used or capable of being used in connection with the enjoyment of more than one parcel or the common property.

The Court held that, on the evidence, there was a clear case of failure by the defendant to discharge its statutory duty to maintain and service the sewerage pipe to prevent it from facing such an outcome that should have been anticipated had periodic inspections been carried.

Defendant’s right of access

As to the question of access to the Unit, by-law 8(3)(b) of the Third Schedule to the SMR imposes an obligation on the proprietor of premises (which includes tenant) to permit the MC at all reasonable times and on reasonable notice being given to enter the premises for the purposes of maintaining, repairing, renewing or upgrading pipes used or capable of being used in connection with the enjoyment of any other parcel or the common property. Therefore, the Court concluded that the question of access to the Unit was not a valid excuse for the defendant to avoid liability.

Application of res ipsa loquitor

The learned Judge acknowledged that while it is settled law that a breach of statutory duty alone cannot found a private law action, the plaintiff can succeed under the tort of negligence if the breach also amounts to a breach of duty of care owed to the plaintiff, and damage is caused to the plaintiff as a result of the breach.

It was held that the defendant, as a statutory body, owed a duty of care to the plaintiff as the parcel owner in respect of the sewerage pipes that ran through the entire condominium and the management of which the plaintiff had no control of.

The plaintiff contended that the doctrine of res ipsa loquitor applied to impute negligence on the defendant. The learned Judge referred to Mahari bin Endut v Dato' Haji Mat Razali bin Kassim & 2 Ors [2009] 5 AMR 793 where the Federal Court held that this doctrine applied when the following conditions are satisfied:

when the thing that inflicted the damage was under the sole management and control of the defendant, or of someone for whom he is responsible or whom he had a right to control;

the occurrence is such that it would not have happened without negligence; and

there must be no evidence as to why or how the occurrence took place.

The Federal Court in Mahari bin Endut explained that if conditions in sub-paragraphs (a) and (b) above are satisfied, it follows, on a balance of probability, that the defendant, or a person for whom he is responsible, must have been negligent. The apex court added that the negative condition in sub-paragraph (c) must also be satisfied. If there is evidence as to why or how the occurrence took place, it would be inappropriate to apply the doctrine of res ipsa loquitor and the question of the defendant’s negligence must be determined on that evidence.

The Court was satisfied that it had been established that the sewerage pipe was unquestionably under the sole management and control of the defendant. It was common ground that the cause of the discharge from the sewerage pipe was due to the elbow cap having dislodged. What caused it to dislodge was unknown. However, the Court held that such an outcome should have been anticipated by the defendant even without periodic inspections being done.¹ Therefore, there was a clear case of failure by the defendant to discharge its statutory duty to maintain and service the sewerage pipe running through the entire condominium. In view of the facts clearly disclosing failure or neglect by the defendant to check the pipe resulting in the dislodgement of the elbow cap from unknown causes, the doctrine of res ipsa loquitor was invoked to impute liability on the defendant.

The learned Judge was satisfied that the evidence clearly supported the finding that the defendant had been negligent through its omission to properly perform it statutory functions and duties which resulted in damage to the plaintiff’s properties in the Unit.

The Court accepted the evidence of professional loss adjusters appointed by agreement and consent of the parties and awarded damages of RM348,930.00 in favour of the plaintiff.

Comments

While this is not the first case on the statutory duties of a management corporation or joint management body towards proprietors or occupiers of stratified properties, it highlights an important point that these bodies are not absolved from their duties merely by reason that the common property is located within a strata unit or by raising the lack of access to the strata unit as the basis to avoid liability.

It is also interesting to observe that the Court had applied the doctrine of res ipsa loquitor to shift the burden of proof to the management corporation to prove that they were not negligent in performing their duties.

Commentary by Jesy Ooi (Partner) and Tai Kean Lynn (Associate) of Skrine.

¹ This finding is set out in page 747 para 10 of the judgment. It is to be noted that headnote 1 of the judgment states that the incident could have been anticipated had periodic inspections been carried out.

Search

Management Corporation Must Maintain Common Property within Stratified Unit