Suing over building defects. Why did the owners’ claims largely fail?

When building defects remain unresolved, owners may decide to take legal action together. But having a long list of complaints does not, by itself, establish a successful claim. Who brings the claim, what each defendant is responsible for, and the evidence supporting the loss all matter.

In Ong Yan Ling & 71 Ors v Sime Darby Ara Damansara Development Sdn Bhd & Anor, the High Court dismissed most of the owners’ claims against the developer and all claims against the Joint Management Body (JMB). The plaintiffs were ordered to pay approximately RM2.18 million in costs to the two defendants, with interest.

What happened?

The dispute concerned Ara Hill, a development comprising condominium and villa units in Ara Damansara. The plaintiffs raised numerous complaints, including alleged defects, problems affecting common facilities, delays in strata titles and misleading sales representations.

The JMB, which had taken over management of the common property in February 2013, was also sued.

After a lengthy trial, only two specific claims by one plaintiff succeeded: compensation for a limited period of delayed vacant possession and an order requiring the developer to rectify gravel stone flooring.

Why did the common-property claims fail?

The court distinguished between claims concerning an owner’s own parcel and claims concerning the common property.

For the common-property claims before it, the court held that the JMB was the proper body to sue the developer. The individual owners did not have the legal standing to pursue those claims in their own names. Bringing more owners into the action did not overcome that problem.

Owners should therefore first identify whether the affected area forms part of their parcel or the common property, and who has the right to pursue the particular remedy sought.

What evidence was missing from the building defects claims?

Several other claims failed because the plaintiffs did not establish the alleged breach or loss.

For example, the court rejected the claim that the properties had fallen in value after finding serious problems with the evidence of the plaintiffs’ valuation expert. The misrepresentation claim also failed: the plaintiffs did not establish the necessary false statement and reliance on it when purchasing.

The court also found that the plaintiffs had stopped certain proposed works, including rectification work. This affected their complaints about unresolved problems and further delay in obtaining strata titles.

These findings show why a building defects claim needs more than photographs or a list of complaints. The evidence should explain what is wrong, who is responsible, what must be done and how the amount claimed is justified.

Why was the claim against the JMB dismissed?

The court found no legal basis for the claim against the JMB. The orders sought essentially required it to perform duties it already had under the legislation.

This does not mean that a JMB can never be liable. It means that, in this case, the plaintiffs did not establish a claim against it. A complaint about the developer and a claim that the JMB breached its own duties require separate consideration.

How did the costs become so substantial?

The court considered the length and complexity of the litigation, the numerous issues and the work required to defend the proceedings.

The JMB had also made a formal offer to settle by agreeing to carry out what the plaintiffs sought against it. The offer was rejected. After dismissing the claim against the JMB, the court awarded costs on an indemnity basis for the period after that offer, allowing a broader recovery of its legal costs.

The approximately RM2.18 million was a costs award against the plaintiffs, not compensation payable to them.

What should owners and management bodies take note of?

Before collecting money for a joint lawsuit, establish who should bring the claim.

If building defects affect a shared pool, access road or other common property, owners should raise it formally with the JMB or MC and request a decision on the proposed action. Having many owners willing to sue does not resolve whether they are the proper claimants. If the management body declines to act, obtain advice on the available options before commencing proceedings individually.

Turn the complaints into a repair plan.

Identify each defect, its location, the likely cause, the party responsible and the proposed remedy. Support this with photographs, inspection reports, correspondence and properly explained repair estimates. This helps owners and the management body decide which claims can be proved and what outcome to pursue.

Do not let the dispute prevent a workable repair.

Where the developer offers rectification, ask for the scope of works, method, timetable and inspection arrangements in writing. If the proposal is unsuitable, explain why and obtain technical advice. Refusing access without a sound reason may undermine a later complaint that the defect remains unresolved.

Keep the developer’s obligations separate from the management body’s duties.

A JMB or MC should record what it has inspected, reported and done in response to complaints. Owners considering a claim against their management body should identify its own alleged failure, rather than assume that it is responsible for every problem left by the developer.

The written grounds record that some plaintiffs appealed against the decisions on liability and costs. This article explains the High Court’s findings; the appeal outcome has not been verified.

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