Challenging Condominium Resolutions under Thai Law

Do owners of condominium units in Thailand have the right to challenge unlawful resolutions passed by a general meeting of the condominium’s co-owners? The Condominium Act of B.E. 2522 (1979), amended as recently as 1999, has detailed rules regarding general meetings of the co-owners, but in fact does not have any provision addressing the cancellation of unlawful resolutions passed by a general meeting. The Thai Supreme Court took up the issue in Decision No. 2177/2555. The facts were that Plaintiff was the manager of a condominium in Bangkok consisting of four separate buildings situated in the same project. A resolution of the co-owners passed on September 18, 2005 removed Plaintiff from the position of manager, followed by a second resolution passed on September 25, 2005 that appointed Defendant as the new condominium manager. In both cases, Defendant was responsible for convening the general meeting of the co-owners. Plaintiff filed a lawsuit against Defendant to cancel the resolutions, but did not sue the condominium juristic person itself. The judgment of the Court was as follows:

• Since the Condominium Act does not have any provision addressing illegal resolutions passed by a general meeting of the co-owners, Section 4 of the Civil and Commercial Code requires the Court to decide the case by analogy to the closest applicable law, which is Section 1195 of the Civil and Commercial Code, a provision of law addressing unlawful resolutions passed by limited companies.
• Section 1195 provides that: “If a general meeting has been summoned or held or a resolution passed contrary to the [law] or contrary to the regulations of the company, the Court shall on application of any director or shareholder, cancel any such resolution or any resolutions passed at such irregular general meeting…”
• Therefore, the Court ruled that Plaintiff did have the right to challenge the resolutions passed by the condominium, but added that he could only do so if his rights were in dispute. However, the Court noted that Defendant, by himself, did not have any authority to withdraw the resolutions.
• The Court held that the person with authority to withdraw the unlawful resolutions would be the condominium juristic person itself. However, Plaintiff did not sue the condominium juristic person. Furthermore, the Court could not interpret Plaintiff’s complaint to include a claim against the condominium juristic person, since it would result in a judgment exceeding the terms of a complaint according to Section 142 of the Civil Procedure Code.

Finally, the Court noted that Plaintiff also did not claim any damages from Defendant personally so there was no dispute to be adjudicated as between Plaintiff and Defendant. Therefore, Plaintiff’s suit was dismissed. Based on the above decision, we can arrive at the principle of law that a co-owner or manager of a condominium (analogous to a shareholder or director of a company, respectively) can sue to cancel an unlawful resolution of the condominium if (1) their rights are in dispute and (2) the condominium juristic person itself is sued. In any case, condominium law in Thailand is very complex. It is recommended that co-owners consult competent legal counsel before and after investing in a condominium unit.

 

Category: Administrative Law, Condominium, Property