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2010 MarsdenLR 2287
HIGH COURT SABAH & SARAWAK KOTA KINABALU
UNITED DEVELOPMENT COMPANY SDN BHD – Appellant
Versus
THE STATE GOVERNMENT OF SABAH & ANOR – Respondent
[Suit No: K21-16-2008]
The court established that non-compliance with statutory requirements renders land acquisition unlawful under the Land Acquisition Ordinance and the Federal Constitution, allowing the original owner to repossess the land.
Headnote:(A) Land Acquisition Ordinance - Sections 3, 6(2), and 7 - Federal Constitution - Article 13(1) - Land acquisition for public purpose - Acquisition declared unlawful due to lack of approval and undue delay - Plaintiff entitled to repossession of land and compensation of RM1 million. The court concluded that the purported acquisition was ultra vires due to failure to comply with statutory requirements and evidenced mala fide of the defendants. (Paras 11-21, 33-37)
(B) Bad Faith in Acquisition - Acquisition purportedly for public purpose yet not developed over 31 years indicates mala fide intent by the State Government, which must exercise its powers properly and in good faith. (Paras 22-32)
Facts of the case:
The plaintiff, a company, was the registered owner of land acquired by the State Government for a public housing project in 1979. Compensation was fixed at RM1 million, but the land was never developed, raising questions about the legality of the acquisition and the plaintiff's ownership. (Paras 1-7)
Findings of Court:
The court found that the acquisition was unlawful, confirming that the plaintiff remained the legal owner of the land, and ordered the defendants to pay the compensation. (Paras 33-38)
Issues: Main issues included whether the acquisition was lawful under LAO and the Federal Constitution, if it was executed mala fide by the State Government, and the ownership status of the land. (Paras 9-10)
Ratio Decidendi: The court concluded that the acquisition was incomplete due to non-compliance with statutory requirements and the use of the land had not served the gazetted public purpose. The State Government's failure to act diligently constituted mala fide. (Paras 14, 28)
Result: Plaintiff's claim allowed.
| Table of Content |
|---|
| 1. factual background of land acquisition (Para 1 , 2 , 3 , 4 , 5 , 6 , 7) |
| 2. reliefs sought by the plaintiff (Para 8 , 9 , 10) |
| 3. validity of land acquisition process (Para 11 , 12 , 13 , 14 , 15) |
| 4. delay and its implications for acquisition legality (Para 16 , 17 , 18 , 19 , 20) |
| 5. allegations of mala fides in land acquisition (Para 21 , 22 , 23 , 24 , 25) |
| 6. determination of discretion and proper purpose in acquisition (Para 26 , 27 , 28 , 29 , 30) |
| 7. legal ownership post unlawful acquisition (Para 31 , 32 , 33) |
| 8. compensation concerning unlawful acquisition (Para 34 , 35 , 36) |
| 9. conclusion and orders issued in favor of plaintiff (Para 37) |
The Agreed Facts
[1] The plaintiff is a company incorporated under the Companies Act 1965 and was at the material time the registered owner of a piece of land consisting of an area of 1400 acres more or less held under Provisional Lease No. 1312 (the said land) situated at Kawang in the District of Papar, Sabah.
[2] Sometime in 1979 the 1st defendant (the State Government) acquired the said land purportedly for the purpose of developing a project known as "Skim Penempatan Semula" thereon. Pursuant to negotiations under sub-s. 62(2) of the Land Acquisition Ordinance (the LAO) between the plaintiff and the State Government the compensation price for the said land was fixed at RM1 million. The plaintiff had asked for RM1.5 million.
[3] The plaintiff could not surrender the original title deed of the said land as it was misplaced. To effect payment of the RM1 million compensation the plaintiff executed a Memorandum of Surrender of Title dated 17 October 1979. The sum was paid to the plaintiff on 10 October 1979 and there was no further negotiation between the parties thereafter.
[4] The acquisition was notified in the Gazette seventeen years later by way of Gazette Notification No. 708 dated 19 December 1996 and repeated on 26 December 1996. The second notification was necessary in order to cancel the title deed of the said land. The purpose of the acquisition, as declared in the Gazette Notification, was as follows:
Pada menjalankan kuasa-kuasa yang diberikan kepadanya oleh subseksyen (1) Seksyen 3 Ordinan Pengambilan Tanah, Yang di-Pertua Negeri dengan ini mengisytiharkan bahawa pada pendapatnya tanah yang dinyatakan dalam Jadual bersamaan dengan ini hendaklah diambil bagi maksud awam, iaitu untuk tapak Skim Penempatan Semula di Kawang, Daerah Papar . (emphasis added)
[5] On 28 February 1997 the 2nd defendant registered the acquisition on the Land Registry copy of the title deed to enable the 2nd defendant to cancel the title deed of the said land.
[6] By letter dated 21 March 2001, the plaintiff requested for the return of the said land for a consideration sum of RM1 million on the ground that it was still not developed despite a lapse of 31 years since the acquisition in 1979.
[7] On 21 June 2004 the 2nd defendant sent a report to the Setiausaha Hasil Bumi on the proposed development of the said land. Apparently the State Government has now identified the said land as the site for "Taman Kekal Pengeluaran Makanan". The plaintiff was then duly informed of the State Government's refusal to return the land to the plaintiff.
Reliefs Sought
[8] The reliefs sought by the plaintiff are the following:
1. A declaration that the purported purchase of the said land by private treaty was ultra vires s. 6(2) of the LAO and thus null and void and that therefore the plaintiff is entitled to take repossession of the said land by paying or refunding to the 1st defendant the sum of RM1 million without interest.
2. A declaration that the defendants' purported acquisition of the said land was mala fide and/or ultra vires ss. 3 and/or 7 of the LAO or art. 13 of the Federal Constitution and thus at all material times the said land was and still is the plaintiff's lawful property.
3. A declaration that the said land was not required for a public purpose and/or since the defendants had alienat
