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8PLANNING & THE LAWDELAY AND MALAFIDE As Grounds forChallengingLand Acquisitionby Salleh BuangDr. Salleh Buang is a former Deputy Dean, Faculty of Law,International Islamic University, author of many authoritativeproperty related books and articles including the MalaysianTorren System, Land Acquisition and Law on HousingDevelopers. He has a weekly column in Utusan Malaysia, NewStraits Times and MASSA. He can be contacted atsallehbuang@hotmail.com.If you are the registered owner of a piece of land in thiscountry, the National Land Code 1965 confers on you abundle of rights commonly referred to as “indefeasibility oftitle”. 1 In simple terms, what this means is that your rightsto the land are beyond question. 2 The extent or scope ofyour rights to the land, however, depends on the express 3and implied 4 conditions affecting the land, and anyrestrictions in interest (if any) affecting the land. 5With indefeasibility, you also enjoy the right of exclusiveuse and possession of the air space above your land andthe land below the surface, and the right of support of yourland in its natural state by an adjacent land. These rightsare spelt out in section 44 of the Code.With indefeasibility also, you enjoy rights to enter into“dealings” - unless these are prevented by restrictions ininterest or encumbrances (like charges or caveats) on yourland. Dealings which are recognized under the Code aretransfers, leases and tenancies, charges and liens andeasements. Apart from these Torrens dealings, you canalso enter into other dealings recognized under customarylaw (such as jual janji) and under Islamic law (such ashibah).But indefeasibility must not be mistaken as permanency.Your rights to the land will come to abrupt end of thehappening of any of the following circumstances - if you failto pay the annual quit rent, if you are in breach of any ofthe express or implied conditions, if you surrender back theland to the State Authority, or if the State Authoritycompulsorily acquires your land.In other jurisdictions, compulsory acquisition of privateland is known by different names. 6Article 13 Federal ConstitutionYour rights to the land are protected by the FederalConstitution. Under Article 13, it is provided that alienatedland cannot be compulsorily acquired or used unless thereis a specific law authorizing it, and that law must provideadequate compensation.In Peninsular Malaysia, that specific law is the LandAcquisition Act 1960, in force since October 13, 1960. Asfor adequate compensation, that is guaranteed under theFirst Schedule to the Act, which defines in great detail themeaning of “market value”.In essence, if any land acquisition proceeding is carried outin contravention of the 1960 Act or the letter and spirit ofArticle 13, it can (and will) be challenged. Over the years,as we read the growing body of case law, we came acrossvarious grounds raised by land owners.Success varied from case to case, depending on the factsof each case and the ability of the land owners to convincethe courts that relief should be given to them.Delay in the proceedingsInordinate delay was quite rampant amongst some StateAuthorities before the Land Acquisition Act 1960 wasrevamped in the 80s. Prior to that amendment in 1984,there was no specific time frame for a compulsory landacquisition proceeding to be completed. 7 As a result, therewere several cases of inordinate delay by the relevantauthorities - delay in holding the inquiry, resulting in delayin making the Award, and finally delay in making paymentof the compensation.In Pemungut Hasil Tanah Daerah Barat Daya PulauPinang v. Ong Gaik Khoo 8 , there was a delay of 7 yearsbetween the date of the declaration under section 8 of the1960 Act and the holding of the inquiry under section 10.The Federal Court declared the land acquisitionproceeding as null and void. The court remarked that thelonger the delay in making the award the greater theinjustice to the deprived landowner. The effect of the delayin that case was that the owner was awarded in 1981 themarket price of the land prevailing in 1974.Salleh Abas CJ (Malaya) (as he then was) explained -“Every exercise of statutory power must not only be inconformity with the express words of the statute butabove all must also comply with certain implied legalrequirements. The court has always viewed its exerciseas an abuse and therefore treats it as illegal where the1Section 340(1).2Unless there are vitiating circumstances which will render your title defeasible; see section 340(2).3Section 120.4Sections 115 (for agricultural land), 116 (for building land) and 117 (for industrial land).5See sections 104 and 105.6In US, it is referred to as “taking”. In Sarawak, it is referred to as “resumption”; see Part IV of the Sarawak Land Code.7After the amendment, land acquisition in Peninsular Malaysia under the Act must be completed within 3 years.8[1983] 2 MLJ 35.BERITA PERANCANG
PLANNING & THE LAW 9exercise is done for an inadmissible purpose or onirrelevant grounds or without regard to relevantconsideration or with gross unreasonableness . . . It istrue that section 10 of the Act does not prescribe the timewithin which the inquiry into the compensation must beheld but looking at the Act as a whole no one could denythat the proceedings under the Act are meant to be incontinuous motion so that no such interruption or suchundue delay or stoppage as to amount to anabandonment of the acquisition could be regarded aswithin this motion …”(Emphasis added)Salleh Abas then referred to section 38 of theInterpretation and General Clauses Ordinance 1948which provides that where no time is prescribed orallowed within which anything shall be done, such thingshall be done with all convenient speed and as often asthe prescribed occasion arises. He continued -“What then is the “convenient speed”? In our view, itmust be “as soon as possible” or “within a reasonabletime”, and not “as late as possible”. Obviously whatamounts to convenient speed must vary from case tocase and in our judgment seven years delay is certainlynot a convenient speed as it is so far outside the normalperiod of time that no reasonable authority could evenregard it as reasonable. That being the case the court isentitled to strike down the impugned acquisitionproceeding as illegal”. (Emphasis added).Delay in paying compensationArticle 13 of the Federal Constitution categorically statesthat the deprived landowner must be paid “adequatecompensation” if his land has been compulsorily acquired.The Federal Court decision in Ong Gaik Khoo aboveclearly shows that an award made by the authorities in1981, but on the basis of a valuation in 1974, can neveradequately compensate the deprived owner. It is commonknowledge that property prices escalate through the years,never remaining stagnant.The Federal Court emphasized in that case that theCollector 9 must always keep in view the interests of notonly the State Authority but also the interests of thedeprived landowners. Failure to do so, “resulting in thediminution of their interests” will amount to “an abuse ofpower, which entitles the land owners concerned to anorder for certiorari”. 10The Federal Court further held that the delay in holding theenquiry, 7 years after the declaration of acquisition, hadresulted “in an inadequate compensation” for the deprivedlandowner and this “brings the inquiry and the awardoutside the purview and scope of the Act.”Consequently, the court added -“Such delay tantamounts to an abuse of power andrenders the inquiry and subsequent proceedings null andvoid. We therefore agree with the learned JudicialCommissioner’s conclusion that an order of certiorarishould be issued to quash the acquisition proceedings.”Three years later, in the subsequent case of PemungutHasil Tanah Daerah Barat Daya Pulau Pinang v. Kam GinPaik & Ors 11 , where there was a similar delay of 7 yearsbefore the enquiry was held, the Privy Council held, citingwith approval the earlier decision of the Federal Court inOng Gaik Khoo, that the delay “had the effect” of makingthe proceeding “in contravention of the statutoryrequirements and did not constitute a valid exercise ofpower.” 12The Privy Council emphasized that a “valid award was aprerequisite” for the Land Administrator to take possessionof the acquired land. Since there was no valid award in theinstant case, the Privy Council held the Land Administratorwas “not entitled to do so and is therefore under a duty torestore possession” of the land to the land owner.The Privy Council, however, noted that the GovernmentProceedings Ordinance 1956 precludes such an order torestore possession being made against the Government.What the court could (and should) do was to declare thatthe deprived landowners (the respondents in the case)were entitled as against the Land Administrator (theappellants) to possession of the land.Mala fideMala fide means bad faith. It is the opposite of bona fide,good faith. Mala fide is more than just malice, spite or ill.The following selected cases illustrate the meaning of theterm as well as the difficulty in proving them. Difficult, butnot impossible.In Syed Omar bin Abdul Rahman Taha Alsagoff & Anor v.The Government of the State of Johore 13 , the appellants’land, measuring 5,700 acres, had been compulsorilyacquired by the Government of Johor. However,documents later showed that only 2,000 acres wererequired for the Pasir Gudang Port project. The remaining3,700 acres were marked somewhat vaguely as beingrequired for some “special purposes”. The appellantschallenged the validity of the acquisition, alleging malafide.They failed at the High Court, the Federal Court, as well asat the Privy Council.Delivering the decision of the Privy Council rejecting theappeal, Viscount Dilhorne said -9Collectors of Land Revenue are now called Land Administrators.10[1983] 2 MLJ 35, at p. 38.11[1986] 1 MLJ 362.12[1986] 1 MLJ 362, at p. 365.13[1979] 1 MLJ 49BERITA PERANCANG
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Page 4 and 5: 4BLOG PERANCANGAN (PLANNING BLOGS)
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Page 12 and 13: 12FEATUREViewpoint, New Straits Tim
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Page 16 and 17: 16CALENDAR OF EVENTSJUNE 20053 Majl
Page 18 and 19: 18ROUND-UPUNITED NATIONS HUMANDEVEL
Page 20 and 21: 20ROUND-UPTHE S-DEV GENEVA 05 - INT
Page 22 and 23: 22MIP COMMITTEESChairman :Md Nazri
Page 24 and 25: 24CAMPUS NEWS - UiTMDEPARTMENT OF T
Page 26 and 27: 26NEWS FROM NORTHERN BRANCH & SARAW
Page 28: 28 PROFILEDATO’ MOHD. FADZIL BINH

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