In Badan Pengurusan Bersama Subang Parkhomes v Zen Estates Sdn Bhd (Fadhlullah & Associates Consulting Engineers Sdn Bhd, third party) [2025] 7 MLJ 780, the High Court held that the developer was liable in negligence for defects in the condominium’s common property, and awarded compensatory damages, interest, and partial cost indemnity from the third-party engineers.
Background of the Case
The Joint Management Body (JMB) of Subang Parkhomes sued the developer, Zen Estates, for multiple defects in the condominium’s common property, including:
- Water leakages from penthouse rooftops and basement car park due to insufficient waterproofing.
- Displaced tiles in swimming and jacuzzi pools.
- Electrical non-compliance with the Electricity Regulations 1994, posing safety hazards.
Prior to litigation, the JMB repeatedly requested rectification and relevant documentation (e.g., as-built drawings, waterproofing warranty) under section 15(3) Strata ManagementAct 2013 (SMA). The developer failed to comply fully, even after a High Court discovery order.
The JMB carried out partial rectification works and claimed negligence against the developer. The developer sought indemnity from its mechanical and electrical consultant engineers.
Court’s ruling
The High Court found in favour of the JMB, holding the developer liable in negligence. The Court held:
- Duty of Care to the JMB: The developer owed a tortious duty of care to the JMB, despite no contractual relationship and the fact that the JMB had only been formally constituted after the material events. This duty arose from the legal proximity between the parties, the reasonable foreseeability of harm from defective works, and public policy considerations under the SMA.
- Statutory Duty to Hand Over Documents: The developer breached section 15(3) of the SMA by not delivering key management and maintenance documents. Non-compliance with the discovery order constituted contempt of court and justified an adverse inference against the developer under section 114(g) of the Evidence Act 1950 for suppressing material evidence.
- Proof of Defects: The JMB successfully proved the existence and causes of the defects on the balance of probabilities, supported by credible expert evidence from its appointed architect and electrical engineer. The Court rejected the developer’s expert evidence for lacking site inspections and reliance on incomplete information.
- Certificate of Making Good Defects (“CMGD”): The CMGD issued by the developer’s consultant architect was rebutted by the plaintiff’s evidence. The Court held that the defects remained unrectified despite the certificate.
- Defect Liability Period Not a Bar: The Court clarified that the expiry of the Defect LiabilityPeriod is not a valid defence to a negligence claim, as the Limitation Act 1953 provides a six-year limitation period for tort claims.
- Damages and Interest: The JMB was entitled to compensatory damages to restore it to the position it would have been in had the negligence not occurred.
- Third-Party Indemnity: The consultant engineers were held liable to indemnify the developer for losses attributable to non-compliance with the Electricity Regulations 1994. The Court found breaches of both contractual and tortious duties.
- No Exemplary Damages: The Court declined to award exemplary damages, as the developer’s breach of the discovery order did not meet the strict legal thresholds in Rookes v Barnard [1964] 1 All ER 367, and such relief had not been pleaded.
Key Takeaways
- Developers’ Continuing Liability: Duty of care to JMB exists even without direct contractual relationship.
- Document Delivery Obligations: Failure to comply with section 15(3) SMA and court orders lead to adverse inferences and contempt risks.
- Expert Evidence Use: It is not mandatory for defect claims but persuasive when defects are technical; courts will prefer experts with direct inspection experience.
- DLP Expiry is Not a Shield: Negligence claims can proceed within statutory limitation despite DLP expiration.
- Third-Party Liability: Consultants can be held jointly liable where professional duties are breached.
– By George Miranda, Joy Sam Jia Qian, Nurafiqah ‘Izzati –
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.
