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2023 MarsdenLR 972
COURT OF APPEAL PUTRAJAYA
TENAGA NASIONAL BERHAD – Appellant
Versus
MAJLIS DAERAH SEGAMAT – Respondent
[Civil Appeal No: J-01(A)-714-12/2021]
A licensee under the Electricity Supply Act is not liable for local government rates imposed on pylons situated on lands it does not own, as liability rests with the registered landowners.
Headnote:(A) Electricity Supply Act 1990 - Section 11 - Local Government Act 1976 - Sections 127, 133, and 146 - Judicial review - Imposition of assessment rates on electricity pylons - TNB contends it is not the landowner, thus not liable for rates - The learned JC held TNB's entry constituted de facto acquisition, imposing liability - Court found TNB is a licensee with no ownership, thus not liable for rates. (Paras 3, 5, 57, 66)
(B) Judicial review grounds - Illegality and ultra vires - The Majlis acted beyond its powers by imposing rates on TNB, as it is not the registered owner of the land. (Paras 28, 66)
Facts of the case:
TNB appealed against the High Court's dismissal of its judicial review application regarding the imposition of assessment rates by the Majlis on pylons situated on third-party lands. TNB argued it is not the owner of the land and thus should not be liable for rates. (Paras 1-4)
Findings of Court:
The court found that TNB, as a licensee under the Electricity Supply Act, does not own the land where its pylons are located and is therefore not liable for the rates imposed by the Majlis. (Paras 57, 66)
Issues: The main issues were whether TNB is liable for assessment rates on pylons situated on lands it does not own and the legality of the Majlis's decision to impose such rates. (Paras 3, 24)
Ratio Decidendi: The court ruled that the Majlis's decision to impose rates on TNB is ultra vires as the responsibility to pay rates lies with the registered landowners, and TNB only holds a right of way over the lands. (Paras 57, 66)
Result: Appeal allowed; the decision of the learned JC is set aside and the Majlis's decision is quashed.
| Table of Content |
|---|
| 1. tnb's appeal against assessment rates. (Para 1 , 2 , 3) |
| 2. tnb's argument on land ownership. (Para 4 , 5) |
| 3. high court's framing of the issue. (Para 6 , 22 , 23 , 24 , 25) |
| 4. court's view on de facto acquisition. (Para 26 , 27) |
| 5. grounds of judicial review. (Para 28 , 29 , 30 , 31 , 32) |
| 6. local authorities' duty under lga. (Para 35 , 36) |
| 7. definition of holdings and buildings. (Para 39 , 40 , 41) |
| 8. liability for payment of rates. (Para 43 , 44 , 45) |
| 9. judicial interpretation of lga. (Para 46 , 47 , 48) |
| 10. tnb's right of way under esa. (Para 50 , 51 , 52 , 53) |
| 11. tnb's status as a licensee. (Para 54 , 55 , 56) |
| 12. responsibility for rates under malaysian law. (Para 57 , 58 , 59) |
| 13. ultra vires principle in local authority decisions. (Para 61 , 62 , 63) |
| 14. majlis acted beyond its jurisdiction. (Para 64 , 65 , 66) |
| 15. error in the learned jc's decision. (Para 67 , 68 , 69) |
| 16. compensation for landowners. (Para 70 , 71) |
Introduction
[1] This is an appeal by Tenaga National Berhad ("TNB") against the decision of the learned Judicial Commissioner ("JC") dated 10 November 2021 where the learned JC had dismissed TNB's application for Judicial Review with costs. At the High Court, TNB had filed an application to review the decision of the Respondent, the Majlis Daerah Segamat ("Majlis") to impose rates on TNB for the transmission towers ("pylons") that support TNB's high voltage transmissions lines and which are within the jurisdiction of the Majlis. The pylons were erected over lands of third-party landowners in accordance with s 11 of the Electricity Supply Act 1990 (" ESA 1990").
[2] Under s 11 of the ESA 1990, TNB is obliged to pay "full compensation in accordance with s 16 to all persons interested for any disturbance, damage or disability that may be caused thereby and such compensation may include an annual payment for land used for the purpose of the posts or other equipment'. In this regard, it is important to highlight that the process under 1990 is not a land acquisition exercise and TNB does not become the owner of the land occupied by the pylons and the high voltage transmissions lines.
[3] The problem here emanates from the decision by the Majlis to impose assessment rates on TNB which are payable under the Local Government Act 1976 (" LGA 1976"). TNB contends that they are not the landowner of the lands where the pylons and high voltage transmission lines are situated, and that only the owners of these lands are liable to pay annual assessment rates.
[4] In its judicial review application, TNB's main argument is that it is not the owner of the lands where its pylons and high voltage transmission lines are situated. TNB took the position that under the LGA , only the owners of the lands are liable to pay rates, and that since it is not the owner of the said land where the pylons and high voltage transmission lines are situated, it should not be subjected to this liability.
[5] The Learned JC however held the view that TNB's entry onto the lands for the construction of its high voltage transmission lines and pylons, in accordance with s 11 of the ESA can be regarded as a de facto acquisition of those lands and therefore TNB is liable to pay for the rates imposed by the Majlis.
[6] Having considered the submissions of the parties, both written and oral, this Court had allowed the appeal, set aside the decision of the learned JC and quashed the decision of the Majlis dated 26 April 2017. Our reasons for allowing the appeal now follow.
The Salient Facts
[7] TNB is a public listed company and is licensed under s 9 of the ESA 1990 to supply electricity. Under the said Act, TNB has a statutory right to enter private land to erect pylons for their electricity transmission lines.
[8] The Majlis is a local authority established under the LGA 1976. The Majlis, being a corporation statutorily created, derives its powers from the 1976 and within that statutory framework, operate and administer the relevant
