Malaysia: Duties Of Council Members And Categorisation Of Common Property

Last Updated: 6 November 2018
Article by Hooi Lin and Melody Ngai Shi Yun

 In the case of 3 Two Square Sdn Bhd v Perbadanan Pengurusan 3 Two Square & Ors; Yong Shang Ming (Third Party) [2018] 4 CLJ 458, the High Court had the opportunity to consider the categorisation of common property in a stratified development and the duties of council members of a management corporation of such a development.


The plaintiff, 3 Two Square Sdn Bhd, was the developer of a commercial development called 3TwoSquare ("the Development"). The first defendant was the management corporation of the Development ("Management Corporation"), established pursuant to the Strata Titles Act 1985 ("STA") and the second to ninth defendants were council members of the Management Corporation.

The Development comprised six blocks of shop and office lots. The plaintiff remained the proprietor of all the parcels in one of the six blocks ("Crest Tower"), while the remaining parcels in the Development had been sold.

all the areas that are not identified as parcels will automatically be ... common property

Disputes arose as to the party who was responsible for the maintenance of certain areas and facilities within the Development, including the cooling tower located on the roof of Crest Tower and the toilets and lifts located in Crest Tower ("Disputed Facilities").

The plaintiff contended that the aforesaid responsibility lay with the Management Corporation as the Disputed Facilities formed part of the common property of the Development. The plaintiff sought a mandatory injunction to compel the Management Corporation to maintain the Disputed Facilities. It further sought to make the second to ninth defendants personally liable for what it alleged was a breach of duty by the Management Corporation. The first to eighth defendants contended that the Disputed Facilities did not form part of the common property of the Development whilst the ninth defendant denied liability on grounds that he had not been involved in the decisions by the Management Corporation.


The first to eighth defendants submitted that the Disputed Facilities did not form part of the common property of the Development as those facilities had not been specifically identified as common property in the strata plan. They relied on sections 10(3) and 10(4) of the STA which specifically required common property to be clearly identified in a proposed strata plan.

The learned judge, referring to section 4 of the STA which defines "common property" as "so much of the lot as is not comprised in any parcel (including any accessory parcel), or any provisional block as shown in an approved strata plan", opined that the STA defines "common property" by exclusion: common property is simply that which is not a parcel. Hence, there is no requirement for labels to be affixed to the Disputed Facilities in order for them to be designated as common property; all the areas that are not identified as parcels will automatically be regarded as common property.

His Lordship further held that sections 10(3) and 10(4) of the STA did not impose a requirement for common property to be specifically labelled in a strata plan in order to be considered as common property. Instead, the labelling requirements in those sections only applied to proposed strata plans to be submitted to the relevant authority in connection with an application for approval for subdivision of a building.

the duty of a council member is not co-extensive as the duty (of) a director

The Court also rejected the defendants' contention that the Disputed Facilities were not part of the common property due to the special or exclusive use of those facilities by the plaintiff. According to the Judge, this contention is not supported by the provisions of the STA nor that of other relevant statutes applicable at the material time and is not a concept which is provided for in the relevant legislation.

The Judge also referred to JMB Silverpark Sdn Bhd v Silverpark Sdn Bhd [2013] 9 MLJ 714 where it was held that two requirements had to be fulfilled in order for an area to be considered as "common property" under the Building and Common Property (Maintenance and Management) Act 2007 ("BCPA"): the area must be outside a parcel, and must be used or capable of being used or enjoyed in common by all occupiers of the building.

The High Court in the present case noted that the definition in the BCPA refers to "occupiers" rather than "proprietor". Thus, the Disputed Facilities would comprise "common property" so long as they are capable of being enjoyed by the employees and tenants of the plaintiff in Crest Tower, notwithstanding that the plaintiff was the sole proprietor of all the parcels in the tower. The Court further added that the proper categorisation of a facility as common property cannot depend on the identity of the proprietor as it could give rise to an absurd result if a facility is not considered as common property on one day (and thus need not be maintained by the management corporation) but would be considered common property once the proprietor sells one of his parcels to a third party.

The Judge emphasised that the BCPA does not apply to the case before him as the management corporation had already been formed (thereby bringing the matter outside the scope of the BCPA and into that of the STA) and added that the reference to the BCPA was to show that the definition of "common property" therein supports his conclusion that the Disputed Facilities ought to be considered as common property.

Accordingly, the Court held that the responsibility for the maintenance and upkeep of the Disputed Facilities fell on the Management Corporation and issued the mandatory injunction requiring the Management Corporation and the council members for the time being to maintain and manage the Disputed Facilities.


The plaintiff also sought to make the second to ninth defendants personally liable in their capacity as council members of the Management Corporation for the latter's breach of duty on the basis that individual council members owed a statutory and fiduciary duty to the plaintiff.

The duty is owed to the management corporation and to the proprietors as a whole

In the absence of legal precedent in Malaysia on the aforesaid issue, counsel for the plaintiff cited the legal position in other jurisdictions, such as Australia, Sri Lanka and Ontario, Canada, where the fiduciary duty of the office bearers in a corporation that manages stratified property has been considered. After examining the authorities submitted by the plaintiff's counsel, the Judge cautioned that authorities from other jurisdictions are at best only of persuasive value, and that the legal position in Malaysia must take into account local circumstances and be consonant with the context of local legislation.

The Court noted that section 43(1) of the STA, inter alia, requires the management corporation to maintain the common property in good and serviceable repair whilst section 34(1)(b) confers the right of user on every proprietor in relation to the common property "which he would have if he and the other proprietors were co-proprietors" of such property. According to the Judge, when these provisions are read together, the duty of the management corporation under section 43(1) is owed to all proprietors collectively as they have the right of use of the common property as though they were co-proprietors of such property.

The Judge opined that the duty of a council member is not coextensive as the duty that is owed by a director to the company of which he is a director. A council member should not be held to the same high standard of care as would be owed by a professional director in a company for the following reasons:

(a) a management corporation established pursuant to the STA differs from a company incorporated under the Companies Act 2016: the former exists simply as a repository of rights that are common to all the proprietors in a development whereas the latter is formed for the purposes of pursuing a particular venture or economic activity;

(b) council members are elected from a much smaller pool of candidates, i.e. proprietors of the parcels in a particular development whereas a for-profit company may select and appoint its directors based on their skill and experience; and (c) the requirement under the STA that a council member must be a proprietor of a parcel in the development means that a council member would always have a personal interest to advance as he must necessarily be a proprietor.

His Lordship then set out the applicable principles, which may be summarised as follows:

(1) A council member of a management corporation owes a fiduciary duty to act bona fide in the interests of the management corporation;

(2) The duty is owed to the management corporation and to the proprietors as a whole but not to individual proprietors;

(3) The nature of the fiduciary duty includes:

(a) a duty to exercise due care and skill, having regard to the skill and experience of the council member in question; and

(b) a duty of fidelity or loyalty that requires the council member (i) not to exercise a delegated power to advance a personal interest to the detriment of the management corporation or the proprietors as a whole; and (ii) to disclose any personal interest that he may have in any transaction or undertaking proposed to be carried out by the management corporation;

(4) Once the interest is disclosed, a council member is at liberty to exercise his right to vote in any way he deems fit at any council meeting or general meeting of the management corporation, including advancing a personal interest that he may have in his capacity as a proprietor, and to suborn the interest of the collective to his personal interests.

In light of the Judge's view that council members owe a fiduciary duty to the management corporation and to the proprietors as a whole but not to individual proprietors, His Lordship held that the plaintiff's claim against the second to ninth defendants for breach of fiduciary duty failed on a point of law. The Court was also satisfied that there was insufficient evidence to show that the council members had acted otherwise than in good faith and in what they considered to be in the best interests of the proprietors as a whole.


This decision is noteworthy as it sheds light on the basis for determining whether certain areas or facilities in a stratified development are to be categorised as common property. It is also significant as it is the first reported decision in Malaysia which considers and sets out the nature and extent of the duties of the council members of a management corporation of a stratified development.

As the plaintiff's action was commenced prior to the coming into force of the Strata Management Act 2013 ("SMA"), the provisions of the SMA did not apply to this case and were not considered by the Court (except in relation to the issue of costs). It is submitted that the duties of council members of a management corporation expounded by the learned Judge in this case would be applicable under the regime of the SMA.

Although the definition of "common property" under the SMA differs from that in the STA, it is submitted that the principles laid down in 3 Two Square on the categorisation of common property would apply under the SMA provided that the area or facility in question is used, or capable of being used or enjoyed, by the occupiers of two or more parcels.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions