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2021 MarsdenLR 4162
FEDERAL COURT (PUTRAJAYA)
NALLINI PATHMANATHAN, J, HASNAH MOHAMMED HASHIM, CJ, MARY LIM THIAM SUAN, J
Majlis Daerah Hulu Selangor – Plaintiff
Versus
United Plantations Bhd – Defendant
CIVIL APPEAL NO 01(f)-27-09 OF 2019(B)
Yusfarizal bin Yussof (Khairul Nizam bin Mohd Masnan with him) (Dzulkifli Jaafar Nizam & Co) for the appellant.
Anand Raj (Foong Pui Chi and Abhilaash Subramaniam with him) (Shearn Delamore & Co) for the respondent.
Local authorities must prepare a new Valuation List every five years; failure to do so invalidates any rates imposed, confirming the importance of procedural compliance under the Local Government Act.
Headnote:(A) Local Government Act 1976 - Section 145(5) - Appeal from High Court to Federal Court on questions of law - Validity of local authority's imposition of rates on previously exempt holdings without due process - Court ruled that the Notice of Amendment was void, as proper procedure was not followed under sections 137, 141, and 144 - Appellant's failure to prepare a new Valuation List every five years was a critical non-compliance with statutory obligations. (Paras 30, 67, 72)
(B) Procedural requirements for local authorities - Local authorities are required to prepare a new Valuation List not exceeding a five-year period and ensure compliance when imposing rates - Imposition of rates on properties without a current Valuation List is invalid. (Paras 50, 76)
Facts of the case:
The respondent was informed by the local authority about the imposition of annual rates on its holdings, which were previously exempt and not included in any Valuation List since 1996. Upon appeal, the High Court ruled in favor of the respondent, citing procedural failures by the local authority. (Paras 8, 14)
Findings of Court:
The Federal Court dismissed the local authority’s appeal, affirming the High Court's ruling that the rates imposed were invalid due to non-compliance with statutory prerequisites. (Paras 78)
Issues: The court addressed whether the holdings were subject to rates, the legality of the amendment to the Valuation List, and the implications of failing to prepare a new Valuation List. (Paras 4, 79)
Ratio Decidendi: The court determined that without a legally valid Valuation List prepared according to procedure, the local authority could not levy rates and invalidated the amendment attempting to include new holdings without proper justification. (Paras 51, 72)
Result: Appeal dismissed with costs of RM50,000.00.
| Table of Content |
|---|
| 1. direct appeal to federal court on legal questions. (Para 1 , 2 , 3 , 4) |
| 2. background facts on upb and mdhs actions. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 3. arguments presented by mdhs in the appeal. (Para 16 , 17 , 21 , 22 , 29) |
| 4. high court's ruling on law compliance and upb's objection. (Para 18 , 19 , 20 , 30) |
| 5. local authorities must comply with statutory mandates. (Para 31 , 32 , 40) |
| 6. mandatory preparation of new valuation list every five years. (Para 50 , 63) |
| 7. invalidity of existing valuation list extension and upb holdings amendment. (Para 71 , 75 , 76 , 78) |
[1]Three questions of law were posed in appeal directly from the High Court to the Federal Court by virtue of section 145(5) Local Government Act 1976
[2]The appellant had imposed rates on the respondent’s holding which hitherto had been excluded from the jurisdiction of the appellant. The respondent objected and appealed. On 4.7.2019, the High Court allowed the respondent’s appeal.
[3] Section 145 (5) of Act 171 allows any party to appeal directly to the Federal Court on questions of law. The full terms of Section 145 are as follows:
145.
(1)Any person who having made an objection in the manner prescribed by section 142 or 144 is dissatisfied with the decision of the local authority thereon may appeal to the High Court by way of originating motion:
Provided that with the filing of the originating motion there shall be paid into the local authority the amount of the rate appealed against.
(2)The originating motion shall be filed by the person dissatisfied with the decision of the local authority within fourteen days of the receipt thereof.
(3)The local authority shall be the respondent in any appeal under this section.
(4)Every such appeal shall be heard before the High Court whose decision on questions of fact shall be final and conclusive.
(5)From the decision of the High Court either party may appeal on questions of law to the Federal Court whose decision shall be final and conclusive.
[4]The three questions of law posed are:
i.Sama ada pegangan Responden dikategorikan sebagai suatu pegangan berkadar atau suatu pegangan yang dikecualikan daripada kadar.
ii.Sama ada pegangan yang dimasukkan ke dalam kawasan kerajaan tempatan melalui persempadanan semula dikategorikan sebagai pegangan yang dikecualikan dari kadar sebelum ia disenaraikan di dalam senarai nilaian atau pindaan kepada senarai nilaian.
iii.Sama ada Responden berhak untuk bergantung kepada Senarai Nilaian bagi tahun 1996 untuk tahun taksiran 2018 atau mana-mana taksiran selepas itu.
[5]After hearing parties by way of a virtual platform, necessary in view of the current pandemic which has spared no corner of world including this Nation, and at that material time upon the cooperation and consent of the parties (the law has since been amended to facilitate such means – see sections 3, 15A and 16(aa) of the Courts of Judicature (Amendment) Act 2020 [Act A1621]), we unanimously dismissed the appeal and answered all three questions in the following terms.
Brief facts
[6]First, some background facts for context so that the appeal may be better understood. These facts are summarized from the succinct grounds of the learned High Court Judge and the cause papers.
[7]The respondent, United Plantations Berhad [UPB] is the registered owner of 2,889 hectares of holdings located at Lot 1899, Ladang Lima Belas, Mukim Ulu Bernam, District of Ulu Selangor, upon which it carries on an oil palm plantation business [UPB holdings].
[8]By letter dated 3.7.2018, the appellant, Majlis Daerah Hulu Selangor [MDHS] informed UPB that it was going to impose an annual value and annual rates on the UPB holdings. It is however, not in dispute that prior to this letter, UPB was unaware that its holdings fell within the local authority area of MDHS.
[9]According to MDHS, it had decided to revise its Valuation List for 1996 [Valuation List]. A Notice of a New Valuation List 1996 was published in the Government of Selangor Gazet
