Appeals court upholds ruling that developers owed duty of care to condo joint management body

• The JMB filed the suit against the developer in March 2020 after repeated requests for rectification of defects in the common property went unaddressed. The alleged defects included water leakages at penthouse rooftops and the basement car park, dislodged tiles in the swimming pool and jacuzzi as well as issues with water seepage and electrical installations which are non-compliant with the Electricity Regulations 1994.

PUTRAJAYA (Aug 5): The Court of Appeal has upheld a judge's ruling last year that a developer owed a duty of care to the joint management body (JMB) of a condominium in Subang over defects affecting common property.

In a unanimous decision, a three-member bench led by Judge Datuk Che Ruzima Ghazali dismissed Zen Estate Sdn Bhd’s appeal against the High Court’s findings on liability in the case.

The panel, which also comprised Judges Mohamed Zaini Mazlan and Shahnaz Sulaiman, affirmed that the High Court had correctly assessed the facts and did not err in ordering damages to be assessed.

Zen Estate was ordered to pay RM20,000 in costs to the JMB of Subang Parkhomes condominium.

The developer had appealed the High Court’s decision delivered last year in favour of the JMB, which represents more than 400 homeowners who entered into sale and purchase agreements with the developer and took vacant possession of their units between 2013 and 2014.

The JMB filed the suit against the developer in March 2020 after repeated requests for rectification of defects in the common property went unaddressed. The alleged defects included water leakages at penthouse rooftops and the basement car park, dislodged tiles in the swimming pool and jacuzzi as well as issues with water seepage and electrical installations which are non-compliant with the Electricity Regulations 1994.

In the High Court judgment, Judge Wong Kian Kheong (now a Court of Appeal judge), ruled that the absence of a contract between the JMB and the developer was immaterial. He held that the tort of negligence is available as a standalone cause of action independent of any contractual relationship.

Judge Wong further found that there was sufficient legal proximity between the JMB and the developer and that it was reasonably foreseeable the JMB would suffer loss if the developer breached its duty of care.

"When the defendant applied for the necessary approvals to build the condominium, the defendant knew as a fact that the JMB would be subsequently established [...] to take over the maintenance and management of the common property from the defendants," he said in his decision.

He also rejected the developer’s reliance on the expiration of the 24-month defect liability period (DLP) as a defence, stating that the statutory six-year limitation period for actions based on tort would be rendered redundant if the DLP were to override it.

Damages are being assessed by the High Court in Shah Alam.

During Tuesday's proceedings, counsel CK Lim appeared for the JMB together with solicitors Julian Chan, David Yii and S Hemashantini. Zen Estate was represented by lawyers Cheryl Tay and Carmen Liao.

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