Diora-Ace Ltd v Management Corporation: Sinking Fund, Tenancy Agreements & MCST Breaches
Diora-Ace Ltd and others, subsidiary proprietors of Riveria Gardens, sued Management Corporation Strata Title Plan No 3661 and Dr. Sim Chiang Khi in the High Court of Singapore, alleging breaches of the Building Maintenance and Strata Management Act. The plaintiffs sought declarations regarding the MCST's insistence on company profiles, sinking fund utilization, tenancy agreement requests, and unauthorized purchases. The court dismissed most of the plaintiffs' claims, ordering the MCST to ratify certain purchases. The plaintiffs have appealed the decision.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Prayers 2, 3, and 4 against the Management Corporation Strata Title Plan No 3661 were dismissed. Prayer 5 was addressed by ordering the MCST to ratify the purchases. No order was made on Prayer 1.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Subsidiary proprietors sued MCST for BMSMA breaches regarding sinking fund use, tenancy agreements, and unauthorized purchases. The court dismissed most claims.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Diora-Ace Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Liteace Management Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Vuitton Assets Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Laser Ace Ventures Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Skytrax Ventures Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Key Navigation Consultants Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| I.Contemporary Living Pte Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Management Corporation Strata Title Plan No 3661 | Defendant | Corporation | Partial Win | Partial | |
| Sim Chiang Khi | Defendant | Individual | Claim Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Hoo Sheau Peng | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Richard Lim | Richard Lim & Co |
| Cheo Chai Beng Johnny | Cheo Yeoh & Associates LLC |
4. Facts
- The Plaintiffs are subsidiary proprietors of a condominium development known as “Riveria Gardens”.
- The first defendant, the Management Corporation Strata Title Plan No 3661, is the management corporation of the Development.
- The second defendant, Dr Sim Chiang Khi, was the former chairman of the second council of the MCST.
- The Plaintiffs sought relief from the court in relation to alleged breaches of the Building Maintenance and Strata Management Act committed by the Defendants.
- The MCST requested corporate subsidiary proprietors to produce a company profile or certificate of incorporation before the AGM.
- The Plaintiffs alleged the MCST wrongfully utilized the sinking fund.
- The MCST requested a copy of the subsidiary proprietors’ tenancy agreements.
5. Formal Citations
- Diora-Ace Ltd and others v Management Corporation Strata Title Plan No 3661 and another, Originating Summons No 392 of 2014, [2015] SGHC 88
6. Timeline
| Date | Event |
|---|---|
| Temporary Occupation Permit issued for the Development | |
| First council of the MCST was appointed | |
| Fire broke out at the basement consumer switch room of the Development | |
| Second council of the MCST was appointed | |
| MCST made purchases of Ikea furniture | |
| MCST sent a letter to subsidiary proprietors requiring a copy of the tenancy agreement | |
| Standing instruction issued by the MCST requiring corporate subsidiary proprietors to deposit a letter of authority and company profile | |
| Third annual general meeting of the MCST was held | |
| Plaintiffs filed the present action | |
| Plaintiffs issued a written notice to the secretary of the third council informing him that they opposed any decision of the third council that would result in the MCST incurring legal costs | |
| Originating Summons No 994 of 2014 was filed by the Plaintiffs | |
| First hearing | |
| Fourth AGM of the MCST was held | |
| Adjourned hearing | |
| Decision Date |
7. Legal Issues
- Breach of Building Maintenance and Strata Management Act
- Outcome: The court found a breach regarding unauthorized purchases but ordered ratification instead of a bare declaration. Other breaches were not substantiated.
- Category: Substantive
- Sub-Issues:
- Wrongful utilisation of sinking fund
- Improper request for tenancy agreements
- Unauthorised purchases
- Jurisdiction of the High Court
- Outcome: The court held that it had jurisdiction to hear the application, even though the Strata Titles Board also had jurisdiction.
- Category: Jurisdictional
- Validity of MCST Standing Instruction
- Outcome: The court found that the MCST was not wrong in issuing the standing instruction.
- Category: Substantive
8. Remedies Sought
- Removal of the present council of the MCST and elections held to elect a new council
- Declarations that the MCST was wrong in insisting that the Plaintiffs produce and deposit a company profile or certificate of incorporation
- Declarations that the MCST’s sinking fund was wrongly utilised
- Declarations that the MCST was wrong in requiring the Plaintiffs to submit a copy of their respective tenancy agreement
- Declarations that the MCST’s purchase of items from Ikano Pte Ltd were unauthorised
9. Cause of Actions
- Breach of Statutory Duty
10. Practice Areas
- Strata Management Disputes
- Civil Litigation
11. Industries
- Real Estate
- Property Management
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Tan Ah Thee and another (administrators of the estate of Tan Kiam Poh (alias Tan Gna Chua), deceased) v Lim Soo Foong | High Court | Yes | [2009] 3 SLR(R) 957 | Singapore | Cited to argue that the Plaintiffs could not invoke the court’s inherent powers to override a statutory rule that dealt with the exact situation. |
| Muhd Munir v Noor Hidah and other applications | Unknown | Yes | [1990] 2 SLR(R) 348 | Singapore | Cited for the distinction between jurisdiction and power of a court. |
| Re Nalpon Zero Geraldo Mario | Court of Appeal | Yes | [2013] 3 SLR 258 | Singapore | Cited for support of the distinction between jurisdiction and power of a court. |
| Fu Loong Lithographer Pte Ltd and others v Mok Wai Hoe and another | High Court | Yes | [2014] 1 SLR 218 | Singapore | Cited to support the holding that the STB does not have exclusive jurisdiction over disputes falling within the scope of the BMSMA. |
| Salijah bte Ab Latef v Mohd Irwan bin Abdullah Teo | Court of Appeal | Yes | [1996] 2 SLR(R) 80 | Singapore | Cited as the basis of the court’s power to grant declaratory judgments. |
| Karaha Bodas Co LLC v Pertamina Energy Trading Ltd and another appeal | Court of Appeal | Yes | [2006] 1 SLR(R) 112 | Singapore | Cited for the factors governing the exercise of the court’s discretionary power to grant declaratory relief. |
| Salijah bte Ab Latef v Mohd Irwan bin Abdullah Teo | High Court | Yes | [1995] 3 SLR(R) 233 | Singapore | Cited for the statement that the remedy of a declaration should provide “relief” in a real sense. |
| Scott Latham v Credit Suisse First Boston | High Court | Yes | [1999] SGHC 302 | Singapore | Cited for the court requiring a useful or practical purpose to be served before it would exercise its discretion to grant a declaration. |
| Latham Scott v Credit Suisse First Boston | Court of Appeal | Yes | [2000] 2 SLR(R) 30 | Singapore | Cited for the court requiring a useful or practical purpose to be served before it would exercise its discretion to grant a declaration. |
13. Applicable Rules
| Rule Name |
|---|
| Order 15 Rule 16 of the Rules of Court |
| Order 28 Rule 8 of the Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Building Maintenance and Strata Management Act (Cap 30C, 2008 Rev Ed) | Singapore |
| Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) | Singapore |
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) | Singapore |
| Women’s Charter (Cap 353, 1997 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Management Corporation Strata Title
- Subsidiary Proprietors
- Sinking Fund
- Tenancy Agreement
- Letter of Authority
- Building Maintenance and Strata Management Act
- Council Resolution
- Annual General Meeting
- Originating Summons
- Declaratory Relief
15.2 Keywords
- MCST
- BMSMA
- Strata Title
- Sinking Fund
- Tenancy Agreement
- Declaratory Relief
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Strata Management | 80 |
| Property Law | 70 |
| Construction Law | 30 |
| Administrative Law | 20 |
| Company Law | 10 |
16. Subjects
- Strata Management
- Condominium Law
- Declaratory Judgments