PUTRAJAYA: The Court of Appeal has allowed an application by Izen Kiara 2 Subsidiary Management Corporation (K2 Sub MC) to intervene in a legal action initiated against a Management Corporation (MC), marking the first decision where the Court of Appeal has recognised the separate legal status of a subsidiary management corporation (Sub MC) distinct from the MC.

The case began with a suit filed by proprietors against the MC in the High Court, seeking, among other things, a declaration that the imposition of different rates for maintenance charges and sinking fund contributions was null and void. On May 7, 2021, the High Court ruled that all maintenance charges imposed and collected by the MC must comply with Section 60(3) of the Strata Management Act 2013.

Subsequently, on March 31, 2024, the proprietors filed an application in the High Court seeking orders for the MC to provide accounts and refund charges allegedly collected unlawfully, and purportedly by the High Court's 2021 decision. In response, K2 Sub MC applied to intervene in the proceedings.

However, the High Court dismissed K2 Sub MC's application, reasoning that the orders concerned only the proprietors and the MC and that any legal interests of K2 Sub MC were sufficiently represented by the MC itself. Dissatisfied with the decision, K2 Sub MC appealed to the Court of Appeal.

After hearing submissions from all parties, the Court of Appeal recognised the distinct legal interest of K2 Sub MC, which exists independently of the MC, and unanimously allowed the appeal.

The Court of Appeal held that K2 Sub MC, as a separate legal entity from the MC, had a direct legal interest in the matter, in line with the principles established in the Pegang Mining case. This legal interest arose because the relief sought by the proprietors would require K2 Sub MC to make payments from funds currently under its management. The Court further noted that the orders sought by the proprietors were not merely consequential to the High Court's decision on May 7, 2021; rather, they necessitated a fresh deliberation of issues.

Izen Kiara 2 Subsidiary Management Corporation was represented by lawyers Lai Chee Hoe and Angeline Ang from Chee Hoe and Associates (CHA) while lawyer Muayyad Khairulmaini represented the proprietors.

Stay ahead of the crowd and enjoy fresh insights on real estate, property development and lifestyle trends when you subscribe to our newsletter and follow us on social media.