MALAYSIA IN THE HIGH COURT IN SABAH AND SARAWAK AT FEDERAL TERRITORY, LABUAN. CIVIL CASE NO: LBN-24NCvC-6/ BETWEEN SEJATI SDN. BHD..

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1 MALAYSIA IN THE HIGH COURT IN SABAH AND SARAWAK AT FEDERAL TERRITORY, LABUAN CIVIL CASE NO: LBN-24NCvC-6/ BETWEEN SEJATI SDN. BHD.. PLAINTIFF AND DIRECTOR OF LANDS AND SURVEYS.. 1 ST DEFENDANT SABAH DIRECTOR OF LANDS AND MINES OF.. 2 ND DEFENDANT THE FEDERAL TERRITORY OF LABUAN THE GOVERNMENT OF MALAYSIA.. 3 RD DEFENDANT 1

2 JUDGMENT Introduction [1] In this originating summons, the plaintiff is applying to nullify a land acquisition that was carried out over 30 years ago in Labuan by the Sabah Government. In the alternative, the plaintiff is claiming for further compensation. The 1 st defendant is the Director of Lands and Surveys of Sabah. The 2 nd defendant is the successor to the 1 st defendant in respect of land administration after Labuan became a Federal Territory. The 3 rd defendant is the Government of Malaysia. In Enclosure 4, the 2 nd and 3 rd defendants are applying to strike out the originating summons. In Enclosure 7, the 1 st defendant has a similar application. The principal ground canvassed to strike out both applications is that the originating summons is barred by the Public Authorities Protection Act 1948 Act 198 (the PAPA). Background facts [2] For the purpose of this application and the limited questions that it raises, the basic underlying facts of the acquisition and the striking out applications are largely undisputed. The affidavit in support was deposed by Halijah binti Harris who is a director of the plaintiff. The plaintiff had been issued with a title deed (CL ) to a large parcel of land on 14 th December 1977, i.e. land which measured acres. Part of this land was acquired by the Sabah Government in 1980 and In 1980, acres were acquired by the Sabah Government. On 18 th March 1981, 351 acres were acquired. On 12 th August 1982 and 26 th August 1982, an additional acres and acres were acquired by the Sabah Government. On 5 th December 1983, the plaintiff transferred acres to Koperasi Tenaga Sabah. 2

3 [3] Following the acquisition and transfer of the various portions of the land, the Lands and Surveys Department of Labuan replaced the original title (CL ) with two separate title deeds for the balance of land, i.e. CL and CL There is no issue that the plaintiff was not compensated or paid for the said land acquisitions and land transfer. Complaint of plaintiff [4] The complaint of the plaintiff has its origins in the following discovery by the auditors of the plaintiff in The auditors, T.H. Liew Tong dan Gabungan reported to the plaintiff in 1991 that there was a discrepancy of acres after taking into account all the land acquisitions and the new title deeds. In other words, the plaintiff was not compensated for acres of land. [5] The plaintiff is now claiming compensation in respect of the said acres which is termed as the missing acreage. The plaintiff averred that it had written numerous reminder letters to the Labuan Lands and Surveys Department commencing from 1994 but to no avail. The plaintiff s case is that as no notification in respect of acquisition of the acres was given and no compensation was paid, they are entitled to a declaration to nullify the land acquisitions in question or in the alternative are entitled to compensation. The defence [6] The 1 st defendant and the 2 nd and 3 rd defendants took out Enclosures 4 and 7 to strike out the originating summons. In the affidavit in support, the 1 st defendant averred that there is no reasonable cause of action and that the claim is barred by the PAPA. In respect of the argument that there is no reasonable cause of action, the 1 st 3

4 defendant referred to a letter issued by the Labuan Land Office on 19 th February In the said letter that was issued by the Labuan Land Office which by then had been federalized, it was explained that the missing acreage of about 20 acres is accounted by the acquisition of road reserves and cemetery which totaled acres. [7] Upon receipt of the above mentioned letter, the solicitors of the plaintiff (Messrs. Foo, Teo & Associates) wrote a letter to the Labuan Land Office demanding compensation for the road reserves and cemetery. This demand was followed by numerous demands until the instant action was filed in August of Limitation [8] During argument, only one issue was pursued by the Senior Federal Counsel on behalf of the 2 nd and 3 rd defendants. His argument was adopted by the State Counsel for the Sabah Government. It is that the claim of the plaintiff is inordinately out of time. I am mindful that in considering a striking out application, courts have been careful not to strike out an action if there is a factual dispute as to commencement of the limitation period or the applicable limitation period. However, in my opinion, on the affidavit evidence of the plaintiff itself, it is indisputable that the cause of action has been extinguished by section 2(a) of the PAPA. My reasons are as follows. [9] There is no dispute that the plaintiff was generally compensated for the various land acquisitions in the early 1980 s in respect of the original title (CL ). However, as I stated earlier, in 1991, the auditors of the plaintiff notified the plaintiff that there was a discrepancy or missing acreage of about acres after taking into account the acquisitions and re-issued titles. This is the gravamen of 4

5 complaint of the plaintiff. However, the plaintiff did not initiate any legal action to obtain relief by way of civil suit for compensation or judicial review to quash the acquisition of the extra acres. It is granted that numerous letters demanding compensation were written by the plaintiff, their lawyers or their agents to the governmental authorities. However, as no offer of compensation was forthcoming, the plaintiff should have instituted legal proceedings instead of sleeping on their rights for about 25 years. [10] Section 2 (a) of the PAPA reads as follows: Where, after the coming into force of this Act, any suit, action, prosecution or other proceeding is commenced in the Federation against any person for any act done in pursuance or execution or intended execution of any written law or of any public duty or authority or in respect of any alleged neglect or default in the execution of any such written law, duty or authority the following provisions shall have effect - (a) the suit, action, prosecution or proceeding shall not lie or be instituted unless it is commenced within thirty-six months next after the act neglect or default complained of or, in the case of a continuance of injury or damage, within thirty-six months next after the ceasing thereof; Thus, it must be observed that the applicable limitation period under the PAPA when one sues a public authority is only 36 months. [11] As submitted by the Senior Federal Counsel, the plaintiff had the opportunity to take legal action on various occasions when its demand for further compensation for the missing acreage was not entertained. In 1991, as I said earlier, the plaintiff s auditors had intimated for the first time that there was a discrepancy of 20 acres. In my opinion, the limitation period commenced from 1991 as the plaintiff 5

6 had knowledge of the facts that gives rise to the instant action, i.e. the compensation paid to them did not take into account the missing acreage or that no notice of acquisition for the missing acreage was issued. [12] On 19 th November 2002, the Labuan Land Office wrote a letter to the plaintiff s solicitors to explain the missing acreage. The said explanation did not commend itself to the plaintiff as their solicitors wrote another letter to demand compensation. Although, compensation was not forthcoming from the Federal Government or the Sabah Government, the plaintiff neglected to institute action in [13] Finally, on 11 th June 2012, the plaintiff s agents, Henry Butcher Malaysia wrote to the Labuan Land Office to request compensation for the acres. Again, the Labuan Land Office did not comply with the request. The plaintiff only instituted the instant action four years later in August of By doing so, in my view, the plaintiff had exceeded the three-year limitation period prescribed in the PAPA by 22 years. [14] The limitation period prescribed in PAPA in respect of actions against public authorities is a special law that does not merely bar remedy as in the case of a general statute of limitation. In Tasja Sdn Bhd v Golden Approach Sdn Bhd [2011] 3 CLJ 751, the Federal Court said by way of obiter that if a defence is based on section 2(a) of the PAPA, said that the limitation period is absolute and the defendant need not even plead the defence. Thus, it bars the right to commence action. In the premises, as submitted by the learned Senior Federal Counsel, it is an absolute defence and the court has no discretion to ignore it if it applies. In this case, it is indisputable that 6

7 the plaintiff could have sued the defendants for a higher compensation in 1991 but failed to do so. Other issues [15] Counsel for the plaintiff cited the Court of Appeal case of Tamit Anjat & Ors v Fung Tai Sdn Bhd and Ors [2015] 1 LNS 1510 and argued that since the property rights are protected by Article 13 of the Federal Constitution, it would defy logic to say that limitation law would defeat the right to sue. In my opinion, reliance on the above mentioned case is unhelpful. The defendants herein did not argue that the property rights of a citizen can be interfered with impunity without regard to Article 13 of the Federal Constitution or the Sabah Land Acquisition Ordinance (Cap. 69). They had merely argued that the plaintiff had slept on its rights for over 25 years and the protection afforded to public authorities under the PAPA applied. [16] The passage relied by counsel for the plaintiff in Tamit Anjat & Ors v Fung Tai Sdn Bhd and Ors (supra) is as follows: We, therefore, held that NCR right to land acquired prior to is a property right protected by Article 13 of the Federal Constitution, and that the quarry licence having the effect of taking away that right during the term of the licence, the issue of the quarry licence was unconstitutional, null and void against the Plaintiffs. The quarry licence issued after the acquisition of NCR rights was a nullity. In Badiaddin bin Mohd Mahidon & Anor v. Arab Malaysian Finance Bhd [1998] 2 CLJ 75; [1998] 1 MLJ 393 FC, it was held that an order that is a nullity can be disregarded and impeached in any proceeding. In Eu Finance Berhad v. Lim Yoke Foo [1982] 1 LNS 21; [1982] 2 MLJ 37 FC it was held, adopting the reasoning of Lord Denning in Director of Public Prosecutions v. Head [1959] AC 83, that where an order is a void order, it would be a nullity and there would be no need for an order to quash it as it would be automatically null and void without more ado. Similarly, the 7

8 quarry licence being issued contrary to the constitution on land on which NCR rights subsisted, it was automatically void and a nullity, and it would defeat any logic to say that limitation provision can allow the licence to be maintained. [17] The facts of the above case are clearly distinguishable. In the above mentioned case, the government had granted quarry licence in respect of land that was claimed as native customary rights (NCR) land. The Court of Appeal found that each renewal of the quarry licence refreshes the limitation period as the land was NCR land. In the instant case, the Sabah Government had acquired several portions of the plaintiff s land in the early 1980 s. The plaintiff realised that there was discrepancy between the acreage of land acquired and the new titles issued in respect of the balance of the land in The plaintiff had been writing to the authorities for further compensation since then but failed to institute legal proceedings. Thus, this is not a case of indefinite continuance of injury or damage as in cases of trespass when licences are issued in respect of NCR lands. It must be noted that the plaintiff was content to accept the compensation paid in the early 1980s until notified by their auditor of the missing acreage. [18] Counsel for the plaintiff submitted that the instant case is no different as the breach of Article 13 of the Federal Constitution would nullify the acquisition in any case. With respect, I am unable to see merit in this argument for the following reason. Article 13, while giving constitutional protection to property ownership, also approves of compulsory acquisition of property with adequate compensation. In this case, the acquisition of the land was carried out under compulsory acquisition law, i.e. the Sabah Land Acquisition Ordinance (Cap.69). The essential complaint of the plaintiff was that it was not compensated for the missing acreage. Thus, 8

9 legal action should have been commenced upon being made aware of the missing acreage. [19] I also cannot find any constitutional provision or statutory provision that automatically nullifies acquisition of land by the government in cases of breach of procedure or on the ground of inadequate compensation. If that were so, section 2(a) of the PAPA would be rendered otiose insofar as compulsory acquisitions by the government are concerned. It would also mean that legal challenges in respect of compulsory acquisition on the ground of procedure or adequacy of compensation could be mounted half a century or even a century later. As the the PAPA has not provided any such exception to the limitation period, I find it difficult to accept argument of counsel for the plaintiff. [20] Counsel for the plaintiff cited also the case of Ismail Bakar & Ors v Director of Lands and Mines, Kedah [2010] 9 CLJ 810. In that case, the Court of Appeal held that a nine-year delay in paying compensation for compulsory acquisition was grossly unreasonable, not in accordance with the law and in contravention of Article 13. However, in that case, no compensation at all was paid to the land owner as the Land Office was waiting for funds from a third party who wanted the land, i.e. Yayasan Negeri Kedah. Furthermore, in the entire judgment of that case, there is no discussion at all on the import of section 2(a) of the PAPA. It is apparent that the limitation period under the PAPA was not an issue in that case. [21] Finally it must be said that it is trite law that the proper way to nullify the decision of a public authority is to commence judicial review action to quash the impugned decision. The plaintiff omitted to do that but has taken out an originating 9

10 summons action to re-claim the missing acreage which in the first place has not been properly identified or claim compensation in the alternative. Thus, the action of the plaintiff is a non-starter. It would have been otherwise, if the plaintiff had sought additional compensation by instituting court proceedings within three years of being informed of the missing acreage. Conclusion [22] For all the above reasons, I shall granted order in terms Enclosure 4 and Enclosure 7 and strike out the action of the plaintiff. The plaintiff is ordered to pay costs of RM to the 1 st defendant subject to payment of allocatur and another RM to the 2 nd and 3 rd defendants which is subject to payment of allocatur. (RAVINTHRAN PARAMAGURU) Judge High Court Kota Kinabalu, Sabah Date of Grounds of Judgment : Date of Delivery of Decision : Date of Hearing :

11 For The Plaintiff : Alycia Wong Of Messrs Lind Willie Wong & Chin Advocates and Solicitors Kota Kinabalu For The 1 st Defendant : Dayangku Fazidah Hatun Pg. Bagul Jabatan Peguam Negeri Kota Kinabalu, Sabah For The 2 nd & 3 rd Defendants : Andi Razalijaya Bin A Dadi Jabatan Peguam Persekutuan Kota Kinabalu Sabah Notice: This copy of the Court's Reasons for Judgment is subject to editorial revision. 11