The dispute centred on whether the owner of a minimart located inside a condominium development in Choa Chu Kang can automatically became a member of the property's management council without the need to be nominated at the AGM every year.
Palm Gardens is a 99-year leasehold condominium development located along Hong San Walk, off Choa Chu Kang Avenue 1 in District 23. Palm Gardens is situated within a short distance to Keat Hong Shopping Centre and Lot One Shoppers' Mall. Palm Gardens is a 19 storey condo consisting of 694 residential units comprising of 2, 3 or 4 bedrooms and a separate commercial shop unit.
After a dispute that arose from the management council elections in November last year in 2021, six aggrieved home owners challenged the condo's managing agent's position that the property was a mixed development and thus, one council seat was reserved for the minimart owner and brought the case to Strata Titles Board arguing that the decision to reserve a council seat for the shop owner was wrong in law.
The case centred on the interpretation of the term “mixed-use development” in a provision of the Building Maintenance and Strata Management Act. Under the Act, at least one council seat must be reserved for each class of use in mixed-use developments.
Thus, the argument is centred on whether a residential condo with only a single shop unit instead of a number of shops within a designated mall area within the development is still considered as a mixed-use development.
The three-member Strata Titles Board (STB) agreed with the six aggrieved home owners and decided that the Palm Gardens is not considered as a mixed-use development and ordered the condo's management corporation to pay the six "justifiably aggrieved" home owners a total sum of $1,600 in costs in Sept 2022.
The Strata Titles Board (STB) disagreed that the presence of both residential units and a commercial unit in the property made it a mixed-use development and added that such "ancillary shops" in condominiums are allowed to operate only under limited circumstances. As the shop is not open to the public, the Strata Titles Board declared the contention that the property is a mixed-use development is not supported.
Palm Gardens' management corporation subsequently lodged an appeal to the High Court over the proper interpretation of the relevant provision under the Act.
On 28 November 2022, the High Court reversed the decision by the Strata Titles Board and ruled that it was not wrong for the owner of a minimart in Palm Gardens condominium to get a seat on the property’s management council without having to be elected.
Justice Kwek examined the replies given by URA and the Building and Construction Authority (BCA) to queries from the parties. He noted that a BCA deputy director had told the managing agent to refer to the written permission issued by URA to check what class of use the shop came under. Instead, the Strata Titles Board relied on a reply from a more junior BCA officer, who said the condo was registered as a residential development, without specifying what the registration related to.
The High Court therefore rejected arguments by the six home owners that a shop operating on land that has been zoned as “residential” does not fall under the “commercial” class of use saying this went against the plain words of the relevant provision in the Act.
In written grounds of decision issued on Monday, 28 November 2022 - Justice Kwek Mean Luck found that Palm Gardens, which has 695 separate strata units – 694 residential units and a shop unit – met the criteria of being a “mixed-use development”.
Justice Kwek referred to the planning permission issued by the Urban Redevelopment Authority (URA) on Dec 14, 2000. “In my view, the fact that Palm Gardens was authorised to have both residential units and a shop unit meant that Palm Gardens was authorised under the Planning Act for two classes of use – residence and commercial,” said the judge.
Some may wonder if the High Court's judgement will benefit the owners of Palm Gardens if this condo development is classified under 'mixed-use development site'. Developers usually may place a higher value on a plot of land if they are able to develop the land as a mixed-use project with a shopping mall below the residential homes especially if its located very near to an LRT or MRT station. Palm Gardens is located within less than 1 minute walk to Keat Hong LRT station surrounded by thousands of households that will likely welcome a new mall in the vicinity.