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Property Law

STRATA MANAGEMENT – MANAGEMENT FEE SHOWDOWN – RESIDENTIAL VS. COMMERCIAL – WHO’S PAYING FOR THE EXTRAS?

In a landmark decision in Aikbee Timbers Sdn Bhd & Anor v Yii Sing Chiu & Anor and another appeal [2024] 1 MLJ 94 , the Court of Appeal clarified the rules on maintenance charges and sinking fund contributions in mixed strata developments. Developers and management corporations can impose different rates based on the distinct purposes of residential and commercial parcels. The judgment emphasizes fairness, ensuring residential owners bear the costs of exclusive facilities like pools and gyms, while commercial owners aren’t subsidizing amenities they don’t use. This ruling highlights the importance of transparency in budgeting and equitable cost-sharing in mixed-use properties.

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16 December ,2024
Updates

ILLEGALITY OF UNREGISTERED ESTATE AGENTS’ CLAIM – FINDER’S FEES AND ILLEGALITY: COURT DRAWS THE LINE ON UNREGISTERED ESTATE AGENTS

In a pivotal ruling, the Court of Appeal clarified that finder’s fee agreements are not automatically void under the Valuers, Appraisers, Estate Agents and Property Managers Act 1981. The Court emphasized that illegality must be specifically pleaded and supported by evidence, and isolated transactions do not trigger the Act’s prohibition. This decision highlights the importance of precise pleadings and a clear understanding of the law’s scope.

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16 December ,2024
Company Law

COMPANIES ACT – OPPRESSION – DRAWING THE LINE: FEDERAL COURT DEFINES OPPRESSION VS. CORPORATE HARMS

In a decisive ruling, the Federal Court clarified the boundaries between personal shareholder oppression and corporate harm, overturning the Court of Appeal’s findings. The Court held that claims tied to the wrongful transfer of trademarks belonged to the company, not the individual shareholder, reaffirming that corporate harm must be addressed through a derivative action rather than an oppression claim.

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16 December ,2024
Company Law

COMPANIES LAW – WHEN DIRECTORS BETRAY: COURT CONDEMNS BREACH OF TRUST AND CORPORATE MISCONDUCT

In a stark reminder of the consequences of corporate betrayal, the court found that the directors had systematically dismantled their own company to benefit a competing entity they controlled. By breaching their fiduciary duties, conspiring to harm the business, and unjustly enriching themselves, the defendants were held accountable through significant compensatory and exemplary damages, reaffirming the critical importance of trust and integrity in corporate governance.

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16 December ,2024

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Recent Legal Updates

STRATA TITLES ACT – DEVELOPER MUST ACCOUNT FOR COMMON PROPERTY COMPENSATION: HIGH COURT IMPOSES CONSTRUCTIVE TRUST

1 February ,2026

In JMB Kelana Square v Perantara Properties Sdn Bhd & Ors [2025] 12 MLJ 51, the High Court held that a developer who received compensation for land compulsorily acquired for the LRT 3 project could not retain sums attributable to common property. Although the compensation was paid entirely to the developer as registered proprietor, the Court found that part of the acquired land constituted common property, and the developer therefore held RM6.05 million on constructive trust for the Joint Management Body. The decision affirms that JMBs have proprietary standing to recover compensation for common property and that courts will intervene to prevent unjust enrichment in strata developments.

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UNFAIR DISMISSAL – MEDICAL LEAVE IS NOT MISCONDUCT: HIGH COURT UPHOLDS INDUSTRIAL COURT’S PROTECTION OF SICK EMPLOYEE

1 February ,2026

In Aerodarat Services Sdn Bhd v Lawerance Raj a/l Arrulsamy & Anor [2025] 11 MLJ 26, the High Court dismissed an employer’s judicial review and affirmed that prolonged medical leave does not, by itself, amount to misconduct justifying dismissal. The Court held that the employer failed to prove the critical element of intention not to return to work or unwillingness to perform contractual duties, despite high absenteeism caused by serious illness and surgery. The ruling reinforces that employers must distinguish between genuine illness and misconduct, and cannot rely on medical absence alone to terminate employment.

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WILL AND PROBATE – COURT OF APPEAL INVALIDATES WILL OF 97-YEAR-OLD TESTATOR: CAPACITY, SUSPICION AND UNDUE INFLUENCE PROVED

1 February ,2026

In Kong Kin Lay & Ors v Kong Kin Siong & Ors [2025] 5 MLJ 891, the Court of Appeal set aside a will executed by a 97-year-old testator, holding that there was real doubt as to testamentary capacity, compounded by serious suspicious circumstances and undue influence by certain beneficiaries. The Court emphasised that while the “golden rule” is not a rule of law, failure to obtain medical confirmation of capacity where doubt exists is a grave omission. Credibility issues with the drafting solicitor, beneficiary involvement in the will’s preparation, and suppression of evidence led the Court to declare the will invalid and order intestacy.

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NOT AN ‘AGREEMENT TO AGREE’: ENGLISH COURT OF APPEAL SAVES LONG-TERM SUPPLY CONTRACT DESPITE OPEN PRICE CLAUSE

1 February ,2026

In KSY Juice Blends UK Ltd v Citrosuco GmbH [2025] 2 Lloyd’s Rep 581, the UK Court of Appeal held that a long-term supply contract was not unenforceable merely because part of the price was stated as “open price to be fixed”. The Court implied a term that, in the absence of agreement, the price would be a reasonable or market price, noting that the product’s value could be objectively benchmarked against the market price of frozen concentrated orange juice. Emphasising that courts should preserve commercial bargains rather than destroy them, the decision confirms that section 8(2) of the Sale of Goods Act 1979 operates as a saving provision, not a bar to enforceability.

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DISCOVERY APPLICATION – HIGH COURT ORDERS JPN TO DISCLOSE FAMILY TREE — STATUTORY RIGHT OVERRIDES ADMINISTRATIVE SECRECY

1 February ,2026

In V Kalanathan a/l Veeran v Ketua Pengarah Jabatan Pendaftaran Negara (JPN) & Ors [2025] 12 MLJ 529, the High Court directed JPN to disclose the family tree details of a deceased co-proprietor to assist in probate proceedings. The Court held that such information, recorded in JPN’s digital registers, constitutes a “document” under Order 24 rule 7A ROC 2012 and is not an official secret in the absence of a valid OSA certification. JPN’s reliance on internal circulars was rejected, as statutory rights under the Births and Deaths Registration Act 1957 cannot be curtailed by administrative policy. The ruling reinforces that discovery against government agencies is permissible where necessary to ensure the fair disposal of proceedings.

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PROFESSIONAL NEGLIGENCE – SOLICITOR – PANEL SOLICITORS LIABLE: LITIGATION BRIEF DOES NOT EXCUSE FAILURE TO PROTECT BANK’S SECURITY

1 February ,2026

In Malayan Banking Bhd v Russell Lua Kok Hiyong & Ors [2025] 12 MLJ 599, the High Court held the bank’s former panel solicitors professionally negligent for failing to safeguard the bank’s proprietary interest in a charged property during litigation. The Court ruled that a solicitor’s duty to protect a client’s interests extends beyond the confines of a ‘litigation-only’ brief, particularly where the risk of loss is obvious and foreseeable. Limitation was held to run only when actual loss crystallised, and all partners were found jointly and severally liable under the Partnership Act 1961. The decision is a clear warning that solicitors must act proactively to protect client interests, even outside their immediate scope of instruction.

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