BMSMA AND AN SP’S REQUEST TO EFFECT IMPROVEMENTS

In Prem N Shamdasani v Management Corporation Strata Title Plan No 0920 (“Prem v MCST920”), Goh Yihan JC considered the interaction between s. 37(3), 37(4), 88(1) and 111 of the Building Maintenance and Strata Management Act 2004 (“BMSMA”), which (in gist) deals with a management corporation’s power to authorize a subsidiary proprietor’s request to effect improvements to his / her lot and remedial provisions.

 

S. 37(3) BMSMA. S. 37(3) BMSMA is set out below:

“(3)  Except pursuant to an authority granted under subsection (4) by the management corporation or permitted under section 37A, a subsidiary proprietor of a lot that is comprised in a strata title plan must not effect any other improvement in or upon the lot for the subsidiary proprietor’s benefit which affects the appearance of any building comprised in the strata title plan.”

Goh JC held at [40] that:

  1. This provision is concerned with whether the subsidiary proprietor is required to seek the management corporation’s approval to “effect any other improvement in or upon the lot”;

  2. It is not concerned with whether the management corporation can, or should, grant such approval; and

  3. The test is whether the improvement “affect the appearance of any building comprised in the strata title plan”

The real question is how the test is to be applied. In this regard, Goh JC, referring to earlier decisions, clarified this test is a “factual exercise, undertaken by comparing the façade presented by the flat in question with the façade presented by other similar facts and by all of the flats as a whole”. It involved comparison “with the unit’s own original facade” and the “the degree of permanence with which the addition or alteration is annexed to the original structure of the balcony” is also relevant (at [41]).

What is important to note is that Goh JC clarified that, at this stage, the burden rests on the subsidiary proprietor to “to show that his or her proposed improvement does not so affect the appearance of any building, thereby absolving the need for the management corporation’s approval” (at [42]; emphasis in original).

 

S. 37(4). If approval of the management corporation is required, s. 37(4) of the BMSMA is then engaged (at [43]). We set out s. 37(4) BMSMA below:

“(4)  A management corporation may, at the request of a subsidiary proprietor of any lot comprised in its strata title plan and upon such terms as it considers appropriate, authorise the subsidiary proprietor to effect any improvement in or upon the subsidiary proprietor’s lot mentioned in subsection (3) if the management corporation is satisfied that the improvement in or upon the lot —

(a) will not detract from the appearance of any of the buildings comprised in the strata title plan or will be in keeping with the rest of the buildings; and

(b) will not affect the structural integrity of any of the buildings comprised in the strata title plan.”

Goh JC observed that s. 37(4)(a) BMSMA contains two limbs: “detract from the appearance of any buildings comprised in the strata title plan” and “will be in keeping with the rest of the buildings” (at [44]). After reviewing various case law and authorities, including similar provisions in Australia and Canada, Goh JC noted as “it is a basic principle of statutory interpretation that “Parliament shuns tautology and does not legislate in vain”” (at [54]), the two limbs could be accorded different meaning.

Goh JC suggested that the second limb of s. 37(4)(a) BMSMA (the “will be in keeping with the rest of the buildings” limb) is meant to “avoid a situation (which may not be common) where the management corporation is not empowered to grant approval even though the façade of the building was not uniform to being with.” (at [55]). This is because if “the façade of the building was not uniform to being with”, it would “not make sense to ask if the proposed improvement to the unit would “detract from” the façade of the building since it is already irregular and there would be nothing to “detract from”” (at [55]).

Nonetheless, Goh JC made clear that these were merely observations made in passing (at [55]).

Goh JC then held that a management corporation’s decision under s. 37(4) BMSMA is not wholly subjective, stating at [60] that “… a better reading of s 37(4) is that, whereas whether the statutory criteria in ss 37(4)(a) and 37(4)(b) are met is to be objectively determined, whether the management corporation then authorises the proposed improvement is a subjective decision.” (emphasis in original).

Therefore, the burden rests on the management corporation to justify its decision whether to authorized the proposed improvement (at [62]), and the tribunals and courts can intervene based on the substantive merits of the case (as opposed to a purely subjective construction of s. 37(4) BMSMA (at [63]).

 

s. 88(1)(b) and s. 111(b) BMSMA. Goh JC also helpfully set out what happens after the management corporation reaches a decision under s. 37(4) BMSMA at [62].

  1. If management corporation grants the approval, then it is unlikely to cause any issues, though another dissatisfied subsidiary proprietor may challenge the decision on the decisions that the criteria in ss. 37(4)(a) and 37(4)(b) are met, which would likely be a challenge under s. 88(1)(a) BMSMA.

  2. If the management corporation decides that it is not empowered to grant the approval under s. 37(4), then the subsidiary proprietor may challenge the management corporation’s decision. If so, the challenge would likely be under s. 88(1)(a) BMSMA and the management corporation would “bear the burden of showing why it thought it was not so empowered under s 37(4), specifically why it thought that the criteria in ss 37(4)(a) and 37(4)(b) have not been met (ie, whether it had mistakenly decided not to grant the approval sought despite the criteria being met)”.

  3. Lastly, if the management corporation decided that it was empowered to grant the approval under s. 37(4), but declined to grant the approval anyway, then “[i]f the management corporation is later challenged, it will bear the burden of explaining why, despite it being satisfied that the criteria in ss 37(4)(a) and 37(4)(b) have been met, it still decided not to grant the approval sought”, and this would likely be a challenge under s. 111(b) BMSMA.

While Goh JC did not deal with all the grounds for challenging a management corporation’s decision under s. 37(4) BMSMA, Goh JC also dealt with challenging the decision under s. 88(1)(a) and 111(b) BMSMA.

  1. At [66], Goh JC held that a challenge under s. 88(1)(a) BMSMA can be established if, e.g., a management corporation willfully refuses to give due consideration to a subsidiary proprietor’s request under s. 37(4), or if the management corporation based its decision on “an objectively indefensible conclusion in so far as the criteria in ss 37(4)(a) and 37(4)(b) are concerned”.

  2. At [68], Goh JC held that a challenge under s. 111(b) BMSMA can be established if, e.g., “the management corporation acted capriciously or irrationally in coming to its decision (for example, that the decision was tainted with prejudice, malice or indifference”, such as if the “management corporation … decided that while the criteria under ss 37(4)(a) and 37(4)(b) have been met, it would nonetheless not grant the approval sought” and could not point to any other good reason(s) for the decision.

In this regard, Goh JC held at [69] that the reasonableness of the management corporation’s decision is not engaged unless and until it has been challenged, as the management corporation’s decision under s. 37(4) BMSMA is binding. Even then:

  1. The reasonableness of a management corporation’s decision under s. 37(4) BMSMA is not directly relevant for a s. 88(1)(a) BMSMA challenge, though it “can be indirectly relevant in so far as a subsidiary proprietor argues that the management corporation had breached its duty under s 88(1)(a) to properly consider the objective facts and is therefore unreasonable” (at [71]).

  2. The reasonableness of a management corporation’s decision is relevant if s. 111(b) BMSMA is engaged, as the provision “refers explicitly to whether the management corporation has “unreasonably refused to authorise under section 37(4) any improvement””, unlike s. 88(1)(a) BMSMA.

 

Conclusion. Prem v MCST920 therefore clarifies on how challenges to a management corporation’s decision to grant (or not to grant) approval to a subsidiary proprietor’s request to effect improvements to his / her lot are to be dealt with. The analytical framework set out by Prem v MCST920 is not only helpful when it comes to litigation, but is also helpful for management corporations faced with such decisions in framing how they should approach such requests.

As can be gleaned from the framework itself, the decision is highly fact-specific. Nonetheless, an underlying thread is that, while reasonableness may not always be directly relevant, it is usually a factor (eve not directly relevant), and reasonableness is demonstrated with reference to objectively ascertainable and justifiable criteria.

 

This publication is not intended to be, nor should it be taken as, legal advice; it is not a substitute for specific legal advice for specific circumstances. You should not take, nor refrain from taking, actions based on this publication. Chancery Law Corporation is not responsible for, and does not accept any responsibility for, any loss or damage that may arise from any reliance based on this publication.

Xian Ying Tan