1

Halsbury's Laws of Malaysia - Constitutional Law/100 - Constitutional Law/(12) Fundamental Liberties/(11)

Right to Property

(11) RIGHT TO PROPERTY

[100.192]
General principles
The right to property is guaranteed by the Federal Constitution. No person can be deprived of property
except in accordance with the law1. No law can provide for the compulsory acquisition or use of property
without adequate compensation2.
This constitutional guarantee incorporates the basic principle that no one can be deprived of his property
merely by an Executive fiat in the absence of a law authorising such deprivation. It appears however that it
incorporates no substantive or procedural safeguards. Whether the law may have to be reasonable and not
arbitrary is unclear3. The compensation provision does not state that acquisition of property can only be for a
public purpose. Thus, one of the essential elements of eminent domain is missing. However, it can possibly
be argued that it incorporates the doctrine of eminent domain and so the concept of public purpose can be
implied into it: it specifically makes provision for payment of compensation for property acquired 4. Thus, one
element of eminent domain is specifically incorporated 5.
1 Federal Constitution art 13(1). See Majlis Perbandaran Pulau Pinang v Syed Ahmed a/l MM Gouse Mohamed [2007] 1 MLJ
42, CA (house demolished; held that this breached the Federal Constitution art 13(1) as the respondent was deprived of his
property otherwise than in accordance with the law as he was not given an opportunity to be heard; compensation payable; also
held that compensation is payable to a person whose constitutionally guaranteed fundamental right such as the right to life,
personal liberty or property is violated); United Development Company Sdn Bhd v The State Government of Sabah [2011] 7
MLJ 209 (land acquisition by state government held to be unlawful and contrary to the Constitution); Ismail bin Bakar v Director
of Lands and Mines, Kedah Darul Aman [2011] 5 MLJ 197, CA, where it was held that a delay of nine years to pay
compensation under the Land Acquisition Act 1960 s 29(1) was grossly unreasonable and to interpret that provision to mean
payment need only be made as soon as the collector/land administrator was in a position or able to make payment, was
inconsistent with the spirit and purpose of that provision and watered down the protection to property rights guaranteed by the
Federal Constitution art 13(1); Ngo Ong Chung v Pengarah Tanah dan Galian Perak Darul Ridzuan [2013] 10 MLJ 879 (issue
that arose for the determination of the court was, inter alia, whether the act of the defendant in reducing the tenure of the lands
from freehold to leasehold was ultra vires and therefore null and void; the court held that the right to one's property is found in
the Constitution art 13(1) and a mere administrative act could not deprive a person of his or her property. Any act to deprive a
person of his or her property must be based on law and in accordance with the procedure prescribed by that law. In the instant
case, there was little doubt that the act of reducing the tenure of land from freehold to leasehold was not based on any law. It
was ultra vires the National Land Code (Act 56 of 1965) and contravened the Constitution art 13(1)). See also Ee Chong Pang
v The Land Administrator of the District of Alor Gajah [2013] 2 MLJ 216, CA.
2 Federal Constitution art 13(2). See Kerajaan Negeri Selangor v Sagong bin Tasi [2005] 6 MLJ 289, CA, where the right to
property and compensation by the aboriginal peoples of the Temuan tribe was an issue. The court held that the relevant
provisions of the Aboriginal Peoples Act 1954 (Act 134) should be interpreted in such a way that they are consistent with the
Federal Constitution art 13(2) in ensuring that state legislation provide for adequate compensation; and see TR Lampoh AK
Dana v Government of Sarawak [2005] 6 MLJ 371 (Sarawak native customary land rights); Jitender Singh a/l Pagar Singh v
Pentadbir Tanah Wilayah Persekutuan [2008] 7 MLJ 479, where it was held that by virtue of the Sarawak Land Code (Cap 81) s
40D(2), in determining compensation for land acquisition, the court is legally compelled to concur with the opinion of either one
of the two assessors, in the event the assessors differed in their opinions. The court is not at liberty to arrive at any other
decision, even if it disagrees with the opinion of the assessors. In this case, the assessors did differ in their opinion and the
court accepted one over the other. Such acceptance was held to be consonant with the spirit of the Federal Constitution art 13;
Bato Bagi v Kerajaan Negeri Sarawak [2011] 6 MLJ 297, FC (the Sarawak Land Code only provides for hearing in respect of
quantum of compensation payable and did not impose an obligation to inform the appellants of the extinguishment of their
native customary rights or to invite them to make representation to the government. Therefore, the government could not be
said to have acted in contravention of art 13(2) of the Constitution). See also Azizah bte Zainal Abidin v Dato' Bandar Kuala
Lumpur [1999] 5 MLJ 405, where the court held that works carried out by the defendant was for maintenance and upkeep of the
water-courses and not for making new ones and therefore no compulsory acquisition was ever sought for or enforced; thus no
part of the plaintiffs' land was ever acquired by the defendant and for these reasons the Street, Drainage and Building Act 1974
(Act 133) s 53(1) did not violate the Federal Constitution art 13. Where due compensation is offered, even if it is for a sum
lesser than the market value of the property, the land owners cannot complain of any violation of art 13: see Singapore Para
Rubber Estate Ltd v Pentadbir Tanah Daerah Rembau, Negeri Sembilan [2008] 6 MLJ 763. See also Jais bin Chee v
Superintendent of Lands and Surveys Kuching Division, Kuching [2014] 6 MLJ 439, CA. See generally [140] BUILDING AND

CONSTRUCTION

(2006 Reissue).

3 The word 'law' in this context was initially held to refer to 'enacted law' only: see Comptroller-General of Inland Revenue v NP
[1973] 1 MLJ 165 (no recourse to natural justice); Arumugam Pillai v Government of Malaysia [1975] 2 MLJ 29, FC (whenever
a competent Legislature enacts a law in the exercise of any of its legislative powers, destroying or otherwise depriving a man of
his property, the latter is precluded from questioning its reasonableness by invoking the Federal Constitution art 13(1), however
arbitrary the law might be: per Gill FCJ). But as to the modern interpretation see [100.193].
4 See Singapore Para Rubber Estate Ltd v Pentadbir Tanah Daerah Rembau, Negeri Sembilan [2008] 6 MLJ 763, FC, where
the court firmly held that if all the provisions of the Land Acquisition Act 1960 (Act 486) have been duly complied with and the
compensation due is also offered, the land owners cannot complain of any violation of the Federal Constitution art 13.
5 Ie in the Federal Constitution art 13(2).

[100.193]
Extent of protection of property
If a person is deprived of his property by state action under a law, but without the acquisition of the property,
no compensation is payable under the constitutional right to property. 'Deprivation of property' in this context
does not include a mere negative prohibition of the enjoyment of property but refers to the actual taking of
the owner's property. Thus, compensation is not payable when there is no actual taking of property (when
there is only deprivation without acquisition) but only payable where there is compulsory acquisition or use of
property contrary to the constitutional provision. Although a person may be deprived of property by a mere
negative or restrictive provision, it does not follow that every provision which leads to deprivation also
amounts to compulsory acquisition or use1.
'Property' does not include a contractual right. Accordingly, the benefit of a lease of premises possessed by
the landlord on expiry of the lease cannot be regarded as 'property' within the meaning of the constitutional
provision2. It may be noted that the question of 'adequate compensation' is a justiciable matter as it is a
matter of constitutional guarantee under this provision. Whether a law providing for land acquisition provides
for adequate compensation or not is a matter on which the courts can always make a pronouncement. Also,
what 'adequate' means is for the courts to decide3. The Legislature is bound by whatever principles the courts
lay down for determining adequate compensation.
Land may be acquired under the Land Acquisition Act 1960 by the government for a public purpose on
payment of compensation4. The Act only provides a right of hearing on matters of compensation but does not
impose any obligation for any inquiry and hearing in respect of the acquisition itself. This was held not to be
unconstitutional: the Legislature can by clear words exclude the principles of natural justice in the absence of
specific constitutional guarantees and the article in the Federal Constitution providing that no person can be
deprived of property except in accordance with the law in no way vitiates the provisions of the Land
Acquisition Act 1960 in this regard5.
In the guarantee that no person may be deprived of property save in accordance with law 6, the word 'law' is
interpreted in the broad sense to denote a system of law which incorporates those fundamental rules of
natural justice that formed part and parcel of the common law of England in operation at the commencement
of the Federal Constitution7. Thus, for deprivation of property, the law has to have some procedural
safeguards. However, this meaning of the word 'law' does not apply to acquisition cases 8, which require only
adequate compensation but no pre-acquisition hearing9.
A long time gap between an acquisition order and assessment of compensation is not 'adequate
compensation' as the lapse of time could render the initial price of the property an inaccurate refection of the
real market value of the property. However, before any judge could infer that unreasonable delay had
seriously prejudiced or even resulted in serious injustice to the landowner whose land had been compulsorily
acquired, there must be admissible evidence to support it and there must also be satisfactory evidence that
land value and/or prices had risen rapidly between the date of the publication of the declaration in the
Gazette and the date of the inquiry10.
1 Government of Malaysia v Selangor Pilot Association [1977] 1 MLJ 133, PC, reversing the Federal Court decision in
Selangor Pilot Association (1946) v Government of Malaysia [1975] 2 MLJ 66 (the appellant association had been providing

pilotage service at the Port of Swettenham since 1946. Under a law, the Port Authority took over the pilotage service and also
the physical assets of the Selangor Pilot Association, such as launches etc and paid compensation for the same but the Port
Authority refused to pay any compensation to the Pilot Association for the loss of goodwill and for loss of future profits on
grounds it had not acquired those rights from the Association which had lost them due to amending legislation. The Privy
Council held as a majority of 4:1 that as the goodwill of the Pilot Association was not acquired by the Port Authority, no
compensation was payable for this. The minority view in the Privy Council represents a view intermediary between the two
views-that of the majority and the Federal Court. Lord Salmon's dissenting judgment excluded regulatory law affecting property
rights for purposes of compensation, but the Federal Court made no such exception. However, the Privy Council decision has
now laid down the proposition that if a person is deprived of his property by state action but without acquiring the same, then no
compensation is payable). See the dissenting judgment of Gopal Sri Ram JCA (as he then was) in Ng Kim Moi (P) v Pentadbir
Tanah Daerah, Seremban, Negeri Sembilan Darul Khusus (Negeri Sembilan Township Sdn Bhd) [2004] 3 MLJ 301 at 325 (an
appeal involving the validity of acquisition of land by the state government under the Land Acquisition Act 1960), where his
Lordship commented on the applicability of Cullen v Chief Constable of the Royal Ulster Constabulary (Northern Ireland) [2003]
1 WLR 1763, HL, and extracted three principles from the majority speeches of the Law Lords: 'First, a fundamental right
guaranteed by the Constitution is a value added right. Second, because it is a value added right, its breach is to be redressed
by an award of compensation without proof of actual damage, ie on the footing of strict liability. Third, the State is liable to
compensate a citizen for a violation of his or her constitutional right by any arm of the State'.
2 Ie the Federal Constitution art 13: see Station Hotels Bhd v Malayan Railway Administration [1977] 1 MLJ 112, FC (see also
[1980] 1 MLJ 197, PC).
3 In Jais bin Chee v Superintendent of Lands and Surveys Kuching Division, Kuching [2014] 6 MLJ 439, CA, the court held that
the word 'adequate' meant what was fair and reasonable compensation.
4 Ie the Land Acquisition Act 1960 (Act 486); see Singapore Para Rubber Estate Ltd v Pentadbir Tanah Daerah Rembau,
Negeri Sembilan [2008] 6 MLJ 763 (acquisition of property by government, appeal by the land owner on the grounds of noncompliance with the Land Acquisition Act 1960 (Act 486). The so called non-compliance was in relation to the valuation report
prepared by the government valuer as relied on by the respondent in which the date in determining the market value of the land
to be acquired was not the date of the Gazette under s 8 of the Act. The court was of the view that the written opinion or report
provided under the proviso to s 12(1) only acted as a guidance to the land administrator. Thus, the land administrator was not
bound to accept the valuation report made by the government valuer but just as a guide in determining the award of
compensation. If at all there had been a non-compliance by the respondent of the statutory requirements under the Act in
making the award under s 14 of the Act, this issue should have been taken up and argued at the hearing of the objection of the
appellant in the reference to the High Court under s 36 of the Act; held that all provisions of the Land Acquisition Act 1960
complied with). See generally [250] LAND (2009 Reissue).
5 S Kulasingam v Comr of Lands, Federal Territory [1982] 1 MLJ 204, FC (the Federal Court negatived any right to a preacquisition hearing under the Land Acquisition Act 1960 on several grounds:

1)

there is nothing in the legislation imposing any obligation on the acquiring authority to give a hearing to the
person whose land is being acquired;

1)
1)

the Legislature can by clear words exclude the principles of natural justice;

1)

the Land Acquisition Act 1960 lays down a procedural code and so natural justice is impliedly excluded on the
authority of Furnell v Whangarei High Schools Board [1973] AC 660, [1973] 1 All ER 400, PC;

1)

there was an implied exclusion of natural justice because a preacquisition hearing would stultify acquisition
proceedings.

the provisions in the Land Acquisition Act 1960 specifically provide for an inquiry and hearing in respect of
assessment of compensation but no such hearing is provided for at the state of acquisition, and so the maxim
expressio unius est exclusio alterius applies to exclude natural justice;

Arguments may be raised against these grounds. As regards head (1), cases have laid down that it is not necessary for a
statute to provide expressly for a hearing; for when a statute is silent, natural justice is implied as and when an action of the
administration may injure the person, property, reputation or livelihood of an individual (see Cooper v Wandsworth Board of
Works (1863) 14 CBNS 180, 143 ER 414; Ketua Pengarah Kastam v Ho Kwan Seng [1977] 2 MLJ 152). As regards head (2), it
may be said that while the proposition is generally valid, it is not applicable to the Land Acquisition Act 1960 as there are no
clear words in the statute excluding preacquisition hearings. As regards head (3) above, in many common law jurisdictions, the
argument that if one provision of a statute specifically stipulates natural justice and another provision in the statute is silent, then
the argument that natural justice is impliedly excluded in the latter case is not now accepted (see Nicholson v Haldimand
Norfolk Regional Board of Comrs of Police (1979) 88 DLR (3d) 67). As regards head (4) above, the prevailing judicial view in
common law countries is that even when the statute lays down a procedure, natural justice may still be read into it to
supplement the statutory procedure (see generally [80] ADMINISTRATIVE LAW (2015 Reissue)). As regards head (5) above, the
view is held that even when there is an urgency, natural justice ought not to be completely excluded (see S L Kapoor v
Jagmohan AIR 1981 SC 136). A hearing ought not to be rejected merely because it may slow down the administrative process.
6 Ie in the Federal Constitution art 13(1). See also Ee Chong Pang v The Land Administrator of the District of Alor Gajah [2013]
2 MLJ 216, CA.

7 S Kulasingam v Comr of Lands, Federal Territory [1982] 1 MLJ 204 at 206, FC, referring to Ong Ah Chuan v PP [1981] 1
MLJ 64,[1980-1981] SLR 48, PC.
8 Ie which come under the Federal Constitution art 13(2).
9 S Kulasingam v Comr of Lands, Federal Territory [1982] 1 MLJ 204 at 206, FC: the word 'law' is used in the Federal
Constitution art 13(1) as well as in art 13(2). There is no reason given as to why 'law' in art 13(2) ought not be interpreted in the
same sense as in art 13(1) as including procedural safeguard by way of natural justice to the person whose land is being
acquired. If the word 'law' in art 13(1) is read broadly so as to include natural justice therein, then natural justice becomes a
constitutionally guaranteed procedural safeguard and will have to be implied in every statute falling within the scope of art 13.
The constitution being the supreme law of the land it will be beyond Parliament to dilute the effect of art 13 and exclude natural
justice when a person is being deprived of his property. After Tan Tek Seng v Suruhanjaya Perkhidmatan Pendidikan [1996] 1
MLJ 261, CA (see [100.166]) this argument is further strengthened. If art 5(1) can be read along with art 8(1) and thus, the
notion of procedural fairness can be introduced in art 5(1), then there is no reason why cll (1) and (2) of art 13 cannot be read
along with art 8(1), and the word 'law' in both these provisions be interpreted as including 'procedural fairness'. This means that
a law depriving a person of his property under art 13(1) must contain a fair procedure which will mean giving a hearing to the
person who is being deprived of his property. Similarly, under art 13(2) it can be argued that art 8(1) introduces the concept of
procedural fairness therein also and a person whose property is being acquired ought to be given a hearing. See MP Jain and
Grace Xavier 'Compulsory Acquisition of Land in Malaysia' [1996] 2 MLJ xxix. See also Lee Kwan Woh v PP [2009] 5 MLJ 301,
FC (case involving failure to allow submissions as to no case to answer; the word 'law' in has both procedural and substantive
dimensions).
10 Pemungut Hasil Tanah, Kuantan v Oriental Rubber and Palmoil Sdn Bhd [1986] 1 MLJ 39, SC (a delay of about 3 years
between the notification acquiring land and the making of the award) reversing Oriental Rubber and Palm Oil Sdn Bhd v
Pemungut Hasil Tanah, Kuantan [1985] 1 MLJ 257. See also Re Application of Tan Oon [1985] 2 MLJ 67 (delay of almost six
years between the s 8 notification and the holding of the s 10 inquiry under the Land Acquisition Act 1960; held, the delay was
inconsistent with the scheme of the Act and that any other interpretation of the scheme of the Act would make the Act to be in
contravention of the Federal Constitution art 3 and as such invalid). See generally [250] LAND (2009 Reissue).