5 DALAM MAHKAMAH RAYUAN DI MALAYSIA

(BIDANG KUASA RAYUAN)

RAYUAN SIVIL NO: T-01-77-08

ANTARA
10

NORTH EAST PLANTATIONS SDN BHD … PERAYU/PEMOHON

15 DAN

1. PENTADBIR TANAH DAERAH DUNGUN ... RESPONDEN-RESPONDEN

2. PENGARAH TANAH DAN GALIAN TERENGGANU
20

(Dalam perkara Mahkamah Tinggi di Kuala Terengganu)

Dalam Negeri Terengganu Darul Iman, Malaysia
Semakan Kehakiman No: 13-02-2004
25

Antara

30
North East Plantations Sdn Bhd … Pemohon

35 Dan

1. Pentadbir Tanah Daerah Dungun ... Responden-Responden

40 2. Pengarah Tanah Dan Galian Terengganu

45
 5 Coram:
A. Samah Nordin, J.C.A
Mohd. Hishamudin Yunus, J.C.A
Azhar @ Izhar b. Haji Ma‟ah, J.C.A

10
Judgment of A. Samah Nordin, J.C.A

[1] The issue in this appeal concerns the power of the

State Authority to revoke its earlier approval of alienation of
15 state land under the National Land Code (“the Code”). It is
the appellant‟s contention that the State Authority has no
power to revoke its earlier approval of alienation of state
land under the Code. So, when the State Authority revoked
its earlier approval of alienation of state land to the
20 appellant it had in law exceeded its powers under the Code,
acted in bad faith and disregarded of the rules of natural
justice and the appellant‟s legitimate expectation.

[2] But before examining the powers of the State Authority

25 in respect of revocation of alienation of state land under
the Code, it is necessary to put the facts in proper
perspective. The State Authority of Terengganu is not itself
a party to this proceeding. The second respondent is the
proper party to this proceeding by virtue of section 16(2) of
30 the Code. The first respondent, namely the Land
Administrator of the District of Dungun, is made a party as

2
 5 the land, which is the subject matter of the dispute, is
situated in the District of Dungun, Terengganu.

The facts

10 [3] On 26.4.2000 the appellant applied to the then Chief

Minister of Terengganu for alienation of 10,000 acres of
reserved forest land in the Mukim of Besul and Mukim of
Hulu Paka, in the District of Dungun for the purpose of
cultivation of oil palm and cattle rearing.
15

[4] By a letter dated 27.11.2000, the Deputy State

Secretary informed the appellant that the state government
had agreed to approve its application in principle subject
to terms and conditions of alienation which may be imposed
20 by the second respondent and to the revocation of forest
reserved land by the Director of State Forestry. The
appellant was accordingly advised to liaise with the
Department of Lands and Mines and the Department of
Forestry, of Terengganu.
25

[5] This was followed by a letter dated 11.12.2000 from

one Mohd Yasim bin Awang, acting on behalf of the second
respondent, informing the appellant that the State
Authority had approved its application in principle and
3
 5 advised the appellant to put in a formal application to
Pentadbir Tanah Daerah Dungun. The letter reads:

11 December 2000

10 Pengerusi Eksekutif
North East Plantations Sdn Bhd
No. 5, Jalan 65C, Off Jalan Pahang Barat
Pekeliling Business Centre
53000 Kuala Lumpur.
15

Tuan,

PERMOHONAN TANAH KERAJAAN UNTUK

20 PEMBANGUNAN LADANG KELAPA SAWIT DAN
TERNAKAN LEMBU DI NEGERI TERENGGANU
SELUAS 10,000 EKAR DI KAWASAN HUTAN
SIMPAN SUNGAI PAKA, MUKIM BESOL DAN
HULU PAKA, DUNGUN____________________
25
Dengan hormatnya saya diarah merujuk perkara di atas, sukacita
memaklumkan permohonan tuan pada dasarnya telah diluluskan oleh
Pihak Berkuasa Negeri.

30 2. Sehubungan dengan itu tuan hendaklah merujuk kelulusan dasar

ini dan mengangkat permohonan rasmi kepada Pentadbir Tanah
Dungun untuk tindakannya. Pejabat ini akan mengambil tindakan
lanjut selepas permohonan yang telah disempurnakan diperolehi
daripada Pentadbir Tanah berkenaan.
35
Sekian, terima kasih.

“BERKHIDMAT UNTUK NEGARA”

40 Saya yang menurut perintah,

t.t
(MOHD YASIM BIN AWANG)
b.p Pengarah Tanah Dan Galian
45 Terengganu.

4
 5 [6] The application for alienation of the said lands was
subsequently approved by the first respondent. By State
Gazette No. 67 dated 14.2.2002, the State Authority also
revoked the said forest reserved land with retrospective
effect from 15.11.2000.
10

[7] On 21.5.2003, part of the land approved for alienation,

consisting of three lots were issued with qualified titles,
namely, HSD 840 (PT3733), HSD 841C (PT3736) and HSD
842C (PT3737) and registered in the appellant‟s name.
15 They are therefore not the subject matter of dispute
between the parties herein.

[8] The dispute is in respect of eight other lots (“the said

lots”), consisting of 5 lots in the Mukim of Besul and 3 lots in
20 the Mukim of Hulu Paka, with a total area of 1,627.659
hectares where documents of titles had not been issued to
the appellant. These 8 lots are identified as PT1548,
PT1549, PT1551, PT1558, PT1559, PT3764, PT3765 and
PT3767. The first respondent had however on 12.1.2004
25 issued to the appellant 8 notices in Form 5A to pay land
revenue totalling RM2,052,465.30. These notices were
issued under section 81(2) of the Code. The said Form 5A
notices were not exhibited in the Appeal Record but they

5
 5 were not in dispute. The covering letter to the appellant
dated 11.1.2004 enclosing the said Form 5A notices reads:

DENGAN TANGAN

10 Pengurus
North East Plantations Sdn. Bhd
No. 66/23, Tingkat Dua Taman Seri Intan
Jalan Sultan Omar
20300 KUALA TERENGGANU
15
Tuan,
PERMOHONAN PINDAAN PELAN KELULUSAN MAJLIS
MESYUARAT KERAJAAN NEGERI TERENGGANU BIL 203B/2002
BERTARIKH 30 JANUARI 2002 BAGI PT. 1541 MUKIM BESOL DAN
20 PT. 3732 MUKIM HULU PAKA DI KAWASAN BANDAR AL MUKTAFI
BILLAH SHAH, DAERAH DUNGUN___________________________

Dengan hormatnya saya diarah merujuk kepada perkara di atas.

25 2. Sukacita dimaklumkan bahawa Majlis Mesyuarat Kerajaan Negeri

telah menimbangkan Kertas Mesyuarat Bil. 1586E/2003 bertarikh 10
Disember, 2003 dan bersetuju meluluskan permohonan pindaan pelan
kelulusan MMKN.TR. Bil. 203B/2002 bertarikh 30 Januari 2002 dan
tuan adalah dikehendaki mengisi semula borang Jadual 1 yang
30 dikembarkan bersama-sama ini dan kembalikan borang tersebut ke
Pejabat ini bersekali dengan wang bayaran daftar sebanyak RM10.00
satu lot (13 lot).

3. Bersama-sama ini dikembarkan Borang 5A bagi lot-lot yang

35 telah diberi pembebasan hutan oleh Pejabat Hutan iaitu:

MUKIM BESUL:-

(i) PT. 1548 - 134.90 ha ]

40 (ii) PT. 1549 - 169.50 ha ]
(iii) PT. 1551 - 421.73 ha ]
(iv) PT. 1558 - 179.45 ha ]
(v) PT. 1559 - 181.10 ha ]
1,086.78 ha ]
45 =======
6
 5 ] 1.627.659 ha
MUKIM HULU PAKA:-

(i) PT. 3764 - 134.17 ha ]

(ii) PT. 3765 - 70.969 ha ]
10 (iii) PT. 3767 - 335.74 ha ]
-----------------
540.879 ha ]
=========

15 Dengan dikenakan bayaran serta syarat-syarat seperti di dalam Jadual

5A berkembar dan syarat tambahan sebagaimana berikut:

(i) Kawasan yang diluluskan itu hendaklah dipagar supaya

tidak berkeliaran ternakan ke tanah-tanah luar kawasan
20 dan dijagai kawasan tersebut dengan baik.

(ii) Pemohon hendaklah mematuhi arahan-arahan nasihat-

nasihat dan syarat-syarat yang dikenakan oleh Pentadbir
Tanah, Penguasa-Penguasa Tempatan, Jabatan Alam
25 Sekitar dan Jabatan-Jabatan/Agensi-Agensi lain pada
setiap masa.

(iii) Sekiranya terdapat rintahan haram di kawasan tanah yang

diluluskan kepada NEP, Pentadbir Tanah Dungun
30 hendaklah berunding dan mencari penyelesaian sebaik-
baiknya bagi faedah kedua-dua pihak terlibat iaitu NEP dan
peneroka tanah haram. Pihak NEP dikehendaki
memaklumkan kepada Pentadbir Tanah Dungun jika
sekiranya ada.
35
4. Perlu diingatkan, pembayaran ini hendaklah dijelaskan dalam
masa tiga (3) bulan daripada tarikh penerimaan surat ini. Sekiranya
gagal menjelaskan di dalam tempoh tersebut, maka permohonan tuan
akan disifatkan sebagai telah ditarik balik dan kelulusan yang telah
40 diberikan itu akan luput dengan sendirinya. Bayaran tersebut
hendaklah dibuat dalam dua (2) keping cek:-

(i) Hasil Negeri - RM2,052,385.30

45 (ii) Hasil Persekutuan- RM 80.00

RM2,052,465.30
===========
7
 5 5. Tuan juga hendaklah mengemukakan Sijil Akuan Lembaga
Jurukur Tanah semasa membuat pembayaran tersebut.

Sekian, terima kasih.

10 “Membangun Menurut Islam”

Saya yang menurut perintah,

15 t.t
(IBRAHIM BIN MOHAMAD)
Ketua Penolong Pentadbir Tanah
b.p Pentadbir Tanah
Dungun
20

[9] The said sum of RM2,052,465.30 was for payment of

quit rent, land premiums, survey fees and preparation and
registration of land titles (“the land revenue”). The
25 appellant was required to pay the said sum within three
months from the receipt of the abovesaid letter.

[10] On 4.3.2004 the State Assembly of the State of

Terengganu was dissolved to pave the way for the general
30 election, which was held on 21.3.2004. It was during this
transitional period that the second respondent issued a
letter dated 23.3.2004 to all the District Land
Administrators in the State of Terengganu, to freeze
temporarily all matters relating to land administration in the
35 state until further notice, including, among others, the
registration of qualified titles and notices/offers to land
8
 5 applicants whose applications had been approved by the
State Authority. The material part of the letter reads:

Pelaksanaan Dasar Tanah Negeri

10 Dengan hormatnya saya merujuk perkara di atas.

2. Sebagaimana dimaklumkan bahawa Pentadbiran Negeri

telah bertukar mulai 22 Mac 2004. Selaras dengan itu urusan
Pentadbiran Tanah Negeri yang berkaitan dengan yang
15 dinyatakan di bawah hendaklah ditawakof buat sementara
sehingga diberitahu kemudian:-

2.1 ............

20 2.2 Pendaftaran Hakmilik Sementara (Hakmilik

pertama).

2.3 ...........

25 2.4 ...........

2.5 Pengeluaran Lesen Menduduki Sementara.

3. Arahan ini berkuatkuasa serta merta pada tarikh surat ini

30 dikeluarkan.

Sekian, terima kasih.

“BERKHIDMAT UNTUK NEGARA”

35
Saya yang menurut perintah,

t.t
40 (HAJI HASHIM BIN MAMAT)
Pengarah Tanah dan Galian
Terengganu

9
 5 [11] The previous State Government under the rule of PAS
lost to Barisan National in the general election. The new
State Executive Council under the succeeding government
was only sworn in and appointed by His Highness the Sultan
of Terengganu on 25.3.2004. It held its first meeting on
10 7.4.2004.

[12] It was also during the transitional period, that the

appellant by a letter dated 22.3.2004 paid the said sum by
way of two bankers cheques, namely –
15
(1) MBB263354 in the sum of RM2,052,885.30, and

(2) MBB263353 in the sum of RM80.50

20 [13] The first respondent however refused to accept the

said payment and returned the cheques. The appellant then
reforwarded the same cheques to the first respondent
through its solicitors by a letter dated 24.3.2004. The first
respondent, by a letter dated 15.4.2004 rejected the
25 payment and returned the said cheques to the appellant on
the ground that the State Executive Council had at its
meeting on 7.4.2004 revoked the previous approval of
alienation of the said lots. This letter reads:

30

10
 5 Surat Kita : PTD/03/15/2001/0001-(28)
Bertarikh : 15 April 2004
Bersamaan : 25 Safar 1425
DENGAN TANGAN

10 Pengurus
North East Plantations Sdn. Bhd,
d/a: Tetuan Fariz Halim & Co,
No. 20 Mezzanine Floor,
Taman Sri Intan,
15 Jalan Sultan Omar,
20300 KUALA TERENGGANU.

Tuan,
20
Dengan hormatnya saya diarah merujuk kepada surat tuan
FHC/mka/001/04 bertarikh 24 Mac, 2004 mengenai perkara di atas.

2. Dimaklumkan Majlis Mesyuarat Kerajaan Negeri yang bersidang

25 pada 07 April, 2004 telah bersetuju MENOLAK bayaran yang telah
dikemukakan dan membatalkan pemberian tanah yang telah
diluluskan di kawasan Mukim Besul dan Hulu Paka kepada pihak tuan.
3. Bersama-sama ini dikembalikan Cek MBB No. 263353 bertarikh
22 Mac, 2004 berjumlah RM80.50 dan Cek MBB No. 263354 bertarikh
30 22 Mac, 2004 berjumlah RM2,052,885.20.

Sekian, terima kasih.

“Islam Hadhari Terengganu Bestari”

35 “Berkhidmat Untuk Negara”

Saya yang menurut perintah,

40 t.t
(IBRAHIM BIN MOHAMAD)
Ketua Penolong Pentadbir Tanah
b.p Pentadbir Tanah
Dungun.
45

11
 5 [14] Being apparently dissatisfied by the abrupt change of
policy of the State Authority under the new State
Government, the appellant, after having obtained leave of
the Court, filed an application for a judicial review under
Order 53 of the Rules of the High Court 1980 seeking the
10 following declarations:

(a) That the decision of the State Executive Council on

7.4.2004 in rejecting the appellant‟s payment of
RM80.50 and RM2,052,885.30 for land revenue
15 and revoking the alienation of the land which had
been previously approved was null and void, ultra
vires and of no legal effect;

(b) That the appellant is entitled to and be registered

20 as the lawful proprietor of the said 8 lots;

(c) Further or alternatively, an order of certiorari be

issued by the court revoking the said decision;

25 (d) Further or alternatively an order of mandamus be

issued to compel the respondents to accept the
said payment and to take all the necessary steps
to register the said 8 lots in the name of the
appellant;
30

12
 5 (e) Damages;

(f) Exemplary damages;

(g) Punitive damages; and

10
(h) Costs

[15] The learned trial judge dismissed the appellant‟s

application for judicial review with costs. He was of the view
15 that by virtue of section 78(3) of the Code, the said lots
remained as state land until the registration of document of
title in the appellant‟s name notwithstanding the said
alienation. Until then, the State Authority had absolute right
to take whatever action in relation to the said land as it
20 deems appropriate. He disagreed with the appellant‟s
contention that the document of titles should be issued
as a matter of course pursuant to section 80(3) and 81(1)
of the Code once notices to pay land revenue in Form 5A
had been issued and payment made by the appellant. He
25 held that although payment was made, it was rejected by
the State Authority. He found that there was no evidence of
male fide as alleged. It was a mere perception on the part
of the appellant.

13
 5 [16] With regard to legitimate expectation, the learned
judge held that the appellant had no legitimate expectation
that titles would be issued in due course like the other three
qualified titles issued earlier, in view of section 78(3) of the
Code that the said lots remained as state land until
10 registration.

[17] The appellant‟s appeal before us is against the

dismissal of its application for judicial review by the learned
judge.
15

Alienation of state land

[18] The appellant‟s main contention is that the State

Authority has no power under the Code to revoke or
20 withdraw the approval of the alienation of state land which
had been approved earlier. Such power is not provided for
under the Code. This contention is further fortified by the
fact that the first respondent had, pursuant to section 81(2)
of the Code issued notices in Form 5A to the appellant to
25 pay the land revenue due, which payment had in fact been
made. As such by reason of section 80(3) of the Code, the
respondents, to be precise the first respondent, is
statutorily bound to issue the qualified titles. It was
submitted that the word “shall” in section 80(3) of the Code
14
 5 is mandatory in nature. The respondent had no choice but
to issue the qualified titles.

[19] For convenience, sections 78(3), 80(3) and 81(2) of

the Code are reproduced below.
10

78(3) “The alienation of State land shall take effect upon the
registration of a register document of title thereto
pursuant to the provisions referred to in subsection (1)
or (2), as the case may be; and, notwithstanding that
15 its alienation has been approved by the State Authority,
the land shall remain State land until that time”.

80(3) “Subject to subsection (2) of section 81, upon the

approval of the alienation of any land by the State
20 Authority under this Act and upon payment of all fees
the Registrar shall prepare, register and issue a
qualified title in respect of the land”.

81(2) “As soon as may be after any sums have become due in
25 respect of any land by virtue of subsection (1), the Land
Administrator shall, by notice in Form 5A, require the
intended proprietor to pay them to him within the time
specified in that behalf in the notice, and if any such
sum is not so paid within the specified time, the
30 approval of the State Authority to the alienation shall
thereupon lapse”.

[20] The word „alienate‟ is defined in section 5 of the Code:

35 “alienate” means to dispose of State land in perpetuity or for

term of years, in consideration of the payment of rent, and
otherwise in accordance with the provisions of section 76 or,
when used in relation to the period before the commencement of
this Act, to dispose of State land in perpetuity or for a term of

15
 5 years under a previous land law (not being a law relating to
mining)”

When does alienation take effect under section 76 of the

10 Code? Hashim Yeop A. Sani J (as he then was) in Dr. Ti
Teow Siew & Ors v Pendaftar Geran-Geran Tanah,
Selangor [1982] 1 MLJ 38 at page 39 said:

“Section 78(3) of the Code determines when an alienation of

15 State land take effect and it is clear from that subsection that
alienation takes effect upon registration”

[21] Abdoolcader F.J in Government of Negeri Sembilan

20 & Anor v Yap Chong Lan & 12 Ors, Lesco Development
Corporation Sdn Bhd v Yap Chong Lan & 12 Ors
(“Lesco case”) [1984) 2 MLJ 123 at page 128 held the
same view:

25 “..... section 78(3) provides that the alienation of State land

shall take effect upon the registration of a register document of
title thereto pursuant to the provisions referred to in subsection
(1) or (2), and notwithstanding that its alienation has been
approved by the State Authority, the land shall remain state land
30 until that time”.

[22] In Rahmah bt Ali & Ismail bin Awang v

Government of Pahang (High Court (Kuantan) Civil Suits
35 No 436 and 456 of 1977) Razak J, dismissed the plaintiff‟s
contention that the defendant could not revoke the approval
of alienation after payment of premium and other fees had
16
 5 been made. The defendant nevertheless withdrew its earlier
approval and refunded the payment. Razak J said:

“It is a fact that although the land had been approved for
alienation, it had never been registered. The land, in other
10 words, is still State land and the plaintiff‟s have no title to it.
The defendant could therefore repossess it at any time they so
choose”.

The appellant however sought to distinguish the abovesaid

15 case on the ground that section 80 of the Code at that time
was different from the current section 80(3) of the Code and
that the issue of legitimate expectation was not canvassed
in that case.

20 [23] In our judgment, all the abovesaid cases reaffirmed

what the legislature had, in clear words, enacted that the
lands remain as State land unless and until registration, or
as in this case, until they are registered in the appellant‟s
name. There is no doubt that the process of alienation had
25 not been completed. The document of titles had not been
issued to the appellant. Being state land, it is, by virtue of
section 40(a) of the Code still vested solely in the State
Authority. Section 48 of the Code makes it clear that no
title to State land shall be acquired by possession, unlawful
30 occupation or occupation under any licence for any period
whatsoever. It is immaterial whether the appellant had
17
 5 prematurely entered into possession of the land and claimed
to have planted some 693.408 hectares of the land originally
approved in principle for alienation with oil palm. The
respondents had no authority to bind the State Authority
even if permission to enter into possession, as alleged in the
10 appellant‟s submission, had been granted by the
respondents: see Lesco case, supra, Sidek bin Haji
Muhamad & 461 Ors v The Government of the State of
Perak & Ors [1982] 1 MLJ 313, 314. The affidavit evidence
shows that there was no written approval to support that
15 contention.

Notices in Form 5A

[24] It is further contended that the State Authority is duty

20 bound under the Code to issue the qualified titles after
payment of land revenue was made to the first respondent.
The contention is based on section 80(3) of the Code which
states that, “upon payment of all fees the Registrar shall
prepare, register and issue a qualified title in respect of the
25 land”. The word “shall” in that subsection, it was
submitted, makes it mandatory for the Registrar to issue the
qualified title upon payment being made by the appellant
pursuant to Form 5A notices, within the specified time. As

18
 5 such the State Authority had no power to revoke the
approval for alienation.

[25] Upon a close scrutiny of the Code, it appears that there

is no express provision therein which prohibits the State
10 Authority to revoke or withdraw prior approval of alienation
of State land before the registration of a register document
of title. The wording of section 78(3) of the Code tends to
suggest that such provision is not necessary. The need to
revoke has not arisen as the land is still state land by virtue
15 of the said section. The contention that the State
Authority cannot revoke the approval for alienation of state
land once approved goes against the grain of section 78(3)
itself. The power to revoke is implicit in that subsection
itself. It is absurd to say that the State Authority has lost
20 control over the land after alienation when section 78(3)
plainly states that it is still its land until registration.

[26] Section 80(3) of the Code cannot be read in isolation.

It must be viewed against the whole scheme of the Code.
25 The purpose of section 80(3), which was introduced in 1984
by the National Land Code (Amendment) Act 1984 (Act
A587) was to cut down unnecessary delay in the issuance of
qualified titles once payment of the land revenue as
specified in Form 5A had been made. Section 80(3)
19
 5 however does not impose a deadline for registration. Prior
to that there was no such requirement. The amendment
was not intended to take away or curtail the power of the
State Authority in dealing with its land as it is, in law, still
state land until registration of title in the name of the
10 appellant. It may, prior to registration decide to change or
reverse its decision so long as it is done in the interest
of the state or the public and made in good faith. Section
80(3) which only came into force in 1984 was never
intended to supercede section 78(3) of the Code.
15

[27] It is apparent that even on the facts of the case

alone, the appellant could not succeed. The sole authority
on State land is the State Authority: see section 40 of the
Code. The first respondent had to return the payment to
20 the appellant as the State Authority refused to accept it and
had decided to revoke the approval of alienation of the said
land. Under the circumstances the first respondent could
not therefore proceed with the issue of qualified title under
section 80(3) of the Code. The first respondent‟s refusal to
25 accept payment after keeping the cheques for about two
weeks prior to the decision of the State Authority on
7.4.2004 was understandable. The payment was made
during the transitional period before the new State
government was sworn in. This was not a case where the
20
 5 previous state government before the dissolution of the
State Assembly had been returned to power with a fresh
mandate after the election. It was a complete change of
government from the previous government under the rule of
PAS to a new government under the Barisan National. The
10 respondents being mere government servants, may want
to wait for further instructions. It was due to the change in
the government that prompted Haji Hashim bin Mamat, to
issue the instructions dated 23.3.2004 to all District Land
Administrators to freeze temporarily certain matters
15 pertaining to administration of land in the state.

[28] One cannot impute bad faith purely on mere refusal to

accept payment. The directive issued by the State Director
of Lands and Mines was purely administrative in nature. It
20 was done out of prudence to preserve the status quo
during the transitional period or „vacuum‟ pending the
formation of the new state government. Section 12(3)(a) of
the Code states that the State Director of Lands and Mines is
responsible to the State Authority for the due administration
25 within the state of the provisions of the Code. Under section
12(3)(d), the State Director of Lands and Mines is
empowered to exercise general control and supervision of
his officers. It cannot be said that it was done in bad faith
when what he did was within his power. The definition of
21
 5 „State Director‟ in section 5 of the Code includes a Deputy
Director of Lands and Mines.

[29] Pengarah Tanah dan Galian, Wilayah Persekutuan

v Sri Lempah Enterprise Sdn Bhd [1979] 1 MLJ 135 is
10 clearly distinguishable. The subject matter was not state
land. It was in respect of alienated land where title in
perpetuity had already been issued and registered in the
respondent‟s name. The issue in that case was whether the
Land Executive Committee of the Federal Territory had the
15 right to impose a condition pursuant to the respondent‟s
application for conversion and subdivision, that the
respondent would get back his titles, not in perpetuity but a
lease of 99 years. The respondent, being dissatisfied,
appealed to the High Court under section 418 of the Code.
20 Harun J allowed the appeal. The appellant appealed to the
Federal Court. The Federal Court dismissed the appeal
holding that the appellant had no power to make the
respondent give up its freehold title and receive in exchange
a 99 year lease.
25

[30] The burden of proof to establish bad faith is on the

appellant: see section 101 Evidence Act 1950, Yeap Seok
Pen v Government of the State of Kelantan [1986] 1
MLJ 449. Upon perusal of the appellant‟s affidavits, we find
22
 5 that there is no evidence to support such allegation. It is
based on suspicion or conjecture. The Code does not
require the State Authority to give reasons for the said
revocation. There is no express provision to that effect.
Nevertheless, the second respondent in his affidavit-in-reply
10 explained, among others, that the revocation was due to the
need to maintain forest sustainability and this view was
formed after having considered the various technical reports
from the relevant departments. It must be noted that the
land approved in principle for alienation was in fact a
15 permanent forest reserve. The revocation such forest
reserved land would in fact reduced the size of forest
reserved land in the state, which could have adverse effect
on the ecosystem and natural habitat in the state.

20 Legitimate expectation

[31] The basis of the appellant‟s contention that it had a

legitimate expectation that qualified titles to the said lots
would be issued is based on the facts that the State
25 Authority had approved the alienation of the said land to it
and that it had duly paid the sum due pursuant to Form 5A
notices within time. Section 80(3) of the Code provides
that upon payment of all fees the Registrar shall prepare,
register and issue a qualified title in respect of the land. It
23
 5 was submitted that „legitimate expectation‟ includes
expectation which goes beyond legal right provided it has
some reasonable basis: See Attorney General of Hong
Kong v Ng Yuen Shiu [1983] 2 AC 629.

10 [32] In Council of Civil Service Unions & Ors v Minister

for Civil Service [1985] 1 AC 374 Lord Fraser of Tullybelton
said:
“But even where a person claiming some benefit or privilege has
no legal right to it as a matter of private law, he may have a
15 legitimate expectation of receiving the benefit or privilege, and,
if so, the Courts will protect his expectation by judicial review as
a matter of public law”.

[33] Lord Diplock, in the same case at page 408 said that
20 for a legitimate expectation to arise the decision must affect
the other person either:

(a) by altering rights or obligations of that person which are

enforceable by or against him in private law; or
25
(b) by depriving him of some benefit or advantage which
either (i) he had in the past been permitted by the decision
maker to enjoy and which he can legitimately expect to be
permitted to continue to do until there has been
30 communicated to him some rational grounds for
withdrawing it on which he has been given an opportunity
to comment; or (ii) he has received assurance from the
decision – maker will not be withdrawn without giving him
an opportunity of advancing reasons for contending that
35 they should not be withdrawn”.

24
 5 [34] What the appellant is claiming here is not just a right to
a fair hearing before the State Authority revoked its
approval of alienation of the said land. Its complaint is not
confined to procedural impropriety on the part of the State
Authority. It goes beyond that. It expects to get the
10 „substance‟ of the expectation itself, namely, the qualified
titles to the said lots once it had shown that it was deprived
of its legitimate expectation.

[35] Decided cases however had shown that the doctrine of

15 legitimate expectation cannot be applied indiscriminately in
all cases. It does not apply to every single case of denial of
a fair hearing or opportunity to make representation before
a decision is made. Thus in Council of Civil Service
Unions & Ors v Minister for Civil Service, supra the
20 House of Lords held that the appellants had no legitimate
expectation to prior consultation before the minister varied
the terms and conditions of service of the staff to the effect
that they would no longer be permitted to belong to national
trade unions on the grounds of national security. Lord
25 Diplock at page 412 said:

“National security is the responsibility of the executive

government ..... It is par excellence a non-justiciable question.
The judicial process is totally inept to deal with the sort of
30 problems which it involves”.

25
 5 [36] It had not been shown to us that the denial of a right of
fair hearing or the opportunity to make representation,
which Lord Diplock referred to as “procedural impropriety”
would entitle the appellant to the actual substance of the
expectation, which in this case, is the qualified titles to the
10 said lots. No case was cited to us in support thereof. The
basis of the appellant‟s contention here is that it had a
legitimate expectation to the titles of the said lots by reason
of section 80(3) of the Code after having made the payment
as specified in Form 5A notices, within time. In short, the
15 appellant insisted that the respondents must perform their
duty by issuing titles to the said lots.

[37] In our judgment, this proposition cannot be sustained

in the face of expressed provision in section 78(3) of the
20 Code. Section 80(3) of the Code should not be considered
in isolation. It must be viewed in the context of the whole
scheme of the Code. The land law, which is codified in the
Code is based on a system of registration. Section 40 of the
Code vests the entire property of all state land in the State
25 Authority. Section 78(3) states that alienation of state land
shall only take effect upon the registration of a register
document of title. The appellant does not acquire
indefeasible title to the land under section 340 of the Code
until it is registered in its name.
26
 5 [38] There is ample authority that a public body cannot
exercise its powers or discretion contrary to the statute. In
Cudgen Rutile (No.2) Pty Ltd & Anor v Gordon William
Wesley Chalk [1975] AC 520 P.C, an Australian case,
referred to by the Federal Court in Lesco case, the Privy
10 Council held that the Crown in Australia could not contract
for the disposal of any interest in Crown lands except in
accordance with powers conferred by a statute and
accordingly, where a statute prescribed a mode of exercise
of the statutory power that had to be observed.
15

[39] In that case the appellants carried on the business of

mineral sand mining in Queensland. The appellants were
holders of an authority to prospect, granted under section
23A of the Mining Act 1898 by the Minister of Mines in
20 respect of an area of approximately 18 square miles, which
was renewable for a further period of one year. On their
application for renewal, the Minister granted the renewal to
prospect on the Crown lands for all minerals other than coal,
mineral oil and petroleum. When the appellants discovered
25 large mineral deposits on the Crown lands, they applied for
special mineral leases in respect of the minerals so
discovered. The Mining Warden, who heard the applications
recommended that the leases should be granted but the
government refused to grant any.
27
 5 [40] The appellants then instituted proceedings , claiming,
inter alia, specific performance of the contract which they
alleged existed to grant them the leases. The issue of law
before the Privy Council turned on the power of the Crown to
dispose Crown land, by lease. It was submitted on behalf of
10 the Crown that it could not contract for the disposal of any
interest in Crown lands unless under and in accordance with
power to the effect conferred by statute. Lord Wilberforce
agreed with the Crown contention and at page 533 said;

15 “.... when a statute, regulating the disposal of Crown lands, or of

an interest in them, prescribes a mode of exercise of the
statutory power, that mode must be followed and observed, and
if it contemplates the making of decisions , or the use of
discretions, at particular stages of the statutory process, those
20 decisions must be made, and discretions used, at the stages laid
down. From this in turn it must follow that the freedom of the
Minister or officer of the Crown responsible for implementing the
statute to make his decisions, or use his discretions, cannot
validly be fettered by anticipatory action and if the Minister or
25 officer purports to do this, by contractually fettering himself in
advance, his action in doing so exceeds his statutory powers”.

[41] The Privy Council in that case approved what Rich J

30 said in State of New South Wales v Bardolph (1934) 52
CLR 455, 496. Rich J. said:

“When the administration of particular functions of government

is regulated by statute and the regulation expressly or impliedly
35 touches the power of contracting, all statutory conditions must
be observed and the power no doubt is no wider than the statute
contemplates”.
28
 5 [42] Similarly, in this appeal there is a statute namely, the
Code which expressly prescribes a specific mode for
alienation of state land, lays down the various steps to be
taken before the issue of documents of titles and declares
that the land shall remain state land until registration of a
10 register document of title. The rights, duties and liabilities
of the State Authority vis-a-vis that of the appellant has
been exhaustively spelt out in the Code. Abdoolcader J in
delivering the judgment of the Federal Court in Pemungut
Hasil Tanah, Kota Tinggi v UMBC Bhd [1981] 2 MLJ 264,
15 pointed out that, “The relevant provisions of the Code
provide a complete code regulating the respective rights,
duties and liabilities of the State Authority and its agents on
the one hand and the registered proprietor of alienated land
on the other hand in relation to the rent payable in respect
20 thereof and no recourse can legitimately be had to look
beyond their specific terms to seek any relief for the
hardship”. Although that observation was made in respect
of forfeiture of alienated land for non-payment of rent, the
Code also represents a complete code regulating the
25 respective rights, duties and liabilities of the State Authority
in respect of state land vis-a-vis that of the appellant.

[43] In our judgment, legitimate expectation cannot and

should not, override the express statutory provisions of the
29
 5 Code. The appellant here is in a worse situation. It has no
legitimate expectation that titles would be issued to it
when the State Authority had validly revoked the approval of
alienation of the said lots. At the time of revocation, the
said lots were still state land.
10

[44] The outcome is inevitable. For the abovesaid reasons

the appeal is dismissed with costs. My learned brother
Azhar @ Izhar bin Haji Ma‟ah, J.C.A. had seen this judgment
in draft and expressed his agreement with it.
15

Dated this 28th October, 2010

A.Samah Nordin
Judge
20 Court of Appeal,
Putrajaya, Malaysia.

Parties

25 1. Tun Salleh Abbas and En. Abdul Haris bin Abdul Malik
for the Appellant
(Messrs Abdul Haris & Co).

2. YB. Norbahari bin Baharuddin for the Respondents

30 (Pejabat Penasihat Undang-Undang, Negeri Terengganu).

30