Tropicana Macalister Avenue (Penang) Sdn Bhd v Badan Pengurusan Bersama Tropicana 218 Macalister [2023] CLJU 1554 affirmed in the Court of Appeal in the reported case of [2023] 1 LNS(O) 17
Facts:
Plaintiff is the developer and a parcel owner in a development known as Tropicana 218 Macalister. It has 4 components, namely Hotel, retail, Neo Suites (Office) and service residence. One of the many prayers made in the Originating Summons was to seek a declaration that a motion deposited by the Plaintiff at the registered office of the JMB on 7.11.2022 be included in the agenda of the reconvened 3rd AGM.
The private motion was deposited to the Defendant 27 days before the schedule 3rd AGM on 4.12.2022. The JMC members had, during the 16th JMC meeting, acknowledged that the private motion had been issued by Plaintiff to be included in the AGM but decided not to.
On 1.12.2022, Plaintiff issued a letter dated 1.12.2022 and asked the Motion to be included.
Decision:
Procedurally, the learned High Court Judge find that Plaintiff has met with all the necessary requirements for the private motion to be included in the 3rd AGM.
The learned High Court Judge analysed Paragraphs 12 and 13 of the 2nd Schedule of the SMA and find that there is no basis procedurally for the Defendant to disregard the Motion being considered at the AGM.
Procedurally, I find that P has met all the necessary requirements for the Motion to be included in the 3rd AGM.
(a) Paragraph 13 of the Second Schedule of the SMA states that any proprietor may, by notice in writing deposited at the office of the management corporation (the JMB / D in the present matter) not less than 7 days before the time for holding the meeting, require inclusion of a motion as set out in such notice in the agenda of the next general meeting.
(b) Paragraph 12 of the Second Schedule of the SMA states that where a notice of motion has been given, it shall be submitted at a general meeting. Thus, D has no option but to put forward the Motion for consideration at the AGM.
(c) Section 2 of the SMA provides the definition that a “special resolution” means a resolution which is passed at a duly convened general meeting of which at least 21 days’ notice specifying the proposed resolution has been given, and carried by a majority consisting of not less than three quarters of the valid votes cast at the general meeting. Notice of P’s Motion was given to D way ahead of time, deliberately allowing D to issue its Notice of the 3rd AGM, with P’s Motion, early enough to meet the 21-day time frame. The fact that this was not done is on D.
(d) The Motion was presented to D pursuant to paragraph 13 of the Second Schedule of the SMA, 27 days before the scheduled 3rd AGM on 4.12.2022 and prior to D issuing the Notice of the 3rd AGM. Hence, P had sent out the Motion as soon as possible to allow D to comply with the 21-days’ notice pursuant to section 2 of the SMA before an Annual General Meeting is held. D cannot feign ignorance.
(e) In fact, the JMC members duly acknowledged that the Motion had been issued. But decided not to include it into the agenda of the 3rd AGM. This, to my mind, is a violation of the SMA.
[43] In the premises, there is no basis procedurally for D to disregard or remove the Motion from being considered at the AGM.
On a substantive basis, the Learned High Court Judge also finds it wrong for the JMB to reject the motion since S.32(3) of the SMA allows JMB to make additional by-laws by way of a special resolution. This is despite that JMB contends that the private motion has the effect of paving the way to impose “different rates of charges” which is unlawful for a JMB.
Key Takeaway:
The Learned High Court Judge has ruled that the private motion ought to be included in this particular 3rd AGM and not doing so is wrong in law, both procedurally and substantive basis. This should provide clarity to the JMB / MC / COB over the issue of whether to include into this AGM or wait out for the next one.
The next interesting question would be what is the mode of service, ie (a) whether to issue by virtue of Section 144 SMA 2013 or (b) just to display at the notice board (which was being practiced now) will suffice. We hope this question can similarly be settled soon so the JMB / MC can take immediate steps upon receiving private motions.
