1. Cheong Wai Kwan v 1. Pentadbir Tanah Petaling (22NCVC-669-12/2016)

CHEONG WAI KWAN (NO. K/P.: 610919-10-5683) (Sebagai wasi dan pemegang amanah kepada harta Cheong Weng Sun (Si Mati)

CHEONG WAI MEI (NO. K/P: A0552995) (Sebagai wasi dan pemegang amanah kepada harta Cheong Weng Sun (Si Mati) ... PLAINTIFFS

MAGNA SHAH ALAM SDN. BHD. (NO. SYARIKAT: 381065 – U) … DEFENDANTS Page 2 of 21

PENDAFTAR HAKMILIK TANAH

PEGAWAI-PEGAWAI DI PENDAFTAR HAKMILIK TANAH NEGERI SELANGOR YANG MENGISUKAN DUA SERAHAN HAKMILIK YANG BERTINDIH … THIRD PARTIES BEFORE Y.A. TUAN GUNALAN A/L MUNIANDY JUDGE, HIGH COURT GROUNDS OF JUDGMENT [1] This is an action commenced by the executors of the estate of one Cheong Weng Sun, who was the registered owner of a piece of land held under EMR 2501, Mukim Damansara, originally issued on 2.3.1917 before its eventual conversion to the current Geran Mukim 210, Lot 953, Batu Page 3 of 21 Tiga, Mukim Damansara, Daerah Petaling, Selangor (‘Land 1’) of which the deceased became the registered owner on 23.7.1964. Brief Facts [2] According to the version of the 1st Plaintiff (PW5), some time in 2016, when the executor wanted to develop the land, he was informed that a condominium had been erected thereon by the 2nd Defendant (Magna). [3] Subsequent investigations revealed that the 2nd Defendant (‘D2’) had been issued with a title for lands which overlapped onto the Plaintiff’s land. D2’s title was issued on 2.11.1993 under H.S.D 80103 (‘Land 2’). The title was thereafter converted to the current Geran PN48052, Lot 453, Seksyen 13, Bandar Shah Alam, Daerah Petaling, Selangor Darul Ehsan on 3.3.2008. [4] D2 became the registered owner of Land 2 on 3.3.2008. [5] As both the Plaintiff and D2 held final titles to the same lot, D2 then proceeded to take out Third Party (‘TP’) proceedings against the Third Parties (‘TPs’) as on the basis of prima facie negligence on the part of the TPs in issuing the title in respect of Land 2 and the trite principle that once Page 4 of 21 land has already been alienated, it cannot be alienated again by the State as that land can longer be considered as State Land. It was contended that the State has no power to alienate land for a second time unless that land had reverted back to the State. [6] Before the matter proceeded to trial on the first scheduled date, the Federal Counsel appearing for the State Legal Adviser who was representing the 1st Defendant (‘D1’) introduced documents claiming that Land 1 had been acquired pursuant to the Land Acquisition Act, 1960 (‘LAA’) sometime in 1986. As a consequence, the Plaintiff sought to amend the pleadings and cite the 1st Defendant in this proceeding. There was no record of any acquisition exercise having been carried out via land title searches done by the Plaintiff on Land 1.

The Deceased is the registered owner of a piece of land held under title GM210, Lot 953, Mukim Damansara, Batu Tiga, Daerah Petaling, Selangor Darul Ehsan (formerly known as EMR 2501, Mukim Damansara) (‘Land 1’). Page 5 of 21

The 2nd Defendant is the registered owner of a piece of land held under title PN100092, Lot 91071, Seksyen 13, Bandar Shah Alam, Daerah Petaling, Selangor (‘Land 2’).

Originating title of EMR2501 Land 1 has been surrendered by the 1st Plaintiff to the 1st Defendant on 9.6.2016 and a continuous title of GM210 was issued to the Plaintiffs on 16.6.2016.

2nd Defendant’s development known as “Prima U1 Condominium” has been erected on Land 2. Issues For Determination At Trial

Whether the title for Land 1 encroached onto Land 2?

Whether the acquisition of Land 1 under Land Acquisition Act 1960 is a valid and proper acquisition?

Whether the Plaintiffs are entitled to the exclusive ownership of Land 1 despite the issuance of title for Land 2.

Whether the 2nd Defendant’s development (‘Land 2’) has encroached onto the Plaintiffs’ Land (‘Land 1’). Page 6 of 21

Whether the 2nd Defendant’s development amounts to an encroachment onto the Plaintiffs’ Land 1?

Whether the Plaintiffs suffered losses as a result of the alleged encroachment? Analysis of Facts and Issues [7] Of paramount importance to the determination of this case is whether there was a proper and valid acquisition exercise concluded by the State as claimed and whether Land 1 had reverted to the State in 1986 or thereabouts to enable the State to realienate the land to the 2nd Defendant in 1993. The answer to this provital issue would determine whether the parties’ position would have to revert to status quo as before the acquisition exercise with the Plaintiff having priority to the title and the 2nd Defendant’s remedy being to seek indemnity from the 3rd Party (‘TP’). [8] As the party having carried out the purported acquisition exercise, the declaratory relief in this case was sought wholly against the 1st Defendant for non-compliance with the provisions of the Land Acquisition Act, 1960 (‘LAA’). Page 7 of 21 [9] Apart from Article 13(1) of the Federal Constitution on the right to property, the Plaintiff also relied on the Federal Court case of Pemungut Hasil Tanah, Daerah Barat Daya, Pulau Pinang v Ong Gaik Kee [1983] 2 MLJ 35 where Salleh Abas CJ (Malaya) (as his Lordship then was) held: “Every exercise of statutory power must not only be in conformity with the express words of the Statute but above all must also comply with certain implied legal requirements.” [10] It was the Plaintiff’s basic contention that several provisions of the LAA had been disregarded in the purported acquisition, thus, rendering it or any award thereunder null and void. Further, that it had several prejudiced the sights of the registered proprietor. Also, that the acquisition was never complete, such that Land 1 could not have reverted to the State. [11] To determine this primary issue of whether the mandatory requirements of the LAA had not been adhered to, it would be necessary to look at the procedural requirement under the LAA for compulsory acquisition of land. [12] To start with in the issuance of the Form A which is expressly required under Section 4(1), LAA but in this case, there was without dispute no Form A issued to carry out the purported acquisition. In view of the Page 8 of 21 developments in this area of the law culminating in the Federal Court judgment in Semenyih Jaya Sdn. Bhd. v Pentadbir Tanah Daerah Hulu Langat [2017] 5 CLJ 526 it is important to take note of the dissenting judgment of Gopal Sri Ram, JCA (as he then was) in Ng Kim Moi & Ors. v Pentadbir Tanah Daerah, Seremban, Negeri Sembilan Darul Khusus [2004] 3 CLJ 131. “… Since it is statute that is aimed at deprivation of property, courts require the acquiring authority to act strictly in accordance with terms of the Act… the word “shall” in s4(1) of the Act when read as a whole is mandatory and not merely directive in effect. The omission to issue Form A amounted to a clear violation of the mandatory provision of s4(1) of the Act.” [13] The mandatory nature of the statutory requirement under S.4(1), LAA was clearly spelt out by Desai J in The Collector (Dist. Magistrate) Allahabad and Anor v Raja Ram Jaiswal [1985] AIR SC 1622 where the learned Judge said: “A bare perusal of s.4 (1) clearly shows that in order to comply with the statutory requirements therein set out, a notification stating therein ‘the land which is needed or is likely to be needed for a Page 9 of 21 public purpose’ has to be published in the official Gazette. The second part of the sub-section provides that 'the Collector has to cause public notice of the substance of such notification to be given at convenient places in the locality in which the land proposed to be acquired is situated. Both the conditions are held by a catena of decisions to be mandatory. Whether the second condition is mandatory or directory is no more res integra. In Khub Chan v State of Rajasthan [1967] 1 SCR 120 at p. 125: (AIR [1967] SC 1074 at p/ 1077, Subba Rao CJ speaking for the court observed that: “The statutory intention is, therefore, clear, namely, that the giving of public notice is mandatory. If so, the notification issued under s. 4 without complying with the said mandatory direction would be void and the land acquisition proceedings taken pursuant thereto would be equally void.” [14] After several pronouncements by the Court of Appeal and the Federal Court taking the position that it was not mandatory for the Form A to be issued before the issuance of the Form D to execute the acquisition exercise the law has now been laid to rest by the Federal Court in Page 10 of 21 Semenyih Jaya Sdn. Bhd. (supra) by the decision that the non-issuance of the Form A would infringe Article 13(1) of the FC. It, thus, rendered the Form A compulsory, the effect being that any purported acquisition exercise without the Form A would be regarded as null and void. [15] Proceeding to S.9(2) of the LAA, there can be no doubt that this is a mandatory provision. Under S. 9(2), registration of the Form D on the title is made compulsory. However, in this case, the land searches done by the Plaintiff revealed that no such registration had ever taken place. Neither was there any endorsement of the purported acquisition on the title. This omission can be remedied by rectification on the title but this too was never done in this case. Hence, another mandatory legal requirement had not been complied with in this purported acquisition. [16] Lastly and most importantly is the issue of compliance with the mandatory requirements under S.11(1)(d) of the LAA as to service of the Form E on the registered proprietor for completion of the acquisition exercise. S.11(1)(d) makes it compulsory for service of the Form E to be effected on the registered proprietor, the Plaintiff in this case. It was the contention of the Plaintiff that based on the uncontradicted evidence service of the Form E had not been effected on the Plaintiff before the Page 11 of 21 scheduled date of the enquiry. In this instance, the Notice of Enquiry (Form E) is dated 20.04.1985 for the enquiry to be held on 30.5.1985. There was on record no subsequent notice of enquiry or the enquiry being adjourned to another date. [17] S.11 of the LAA contains a proviso which excuses non-service if the omission to serve is by reason of damage or deterioration of the register document to such land, such person cannot be ascertained. [18] It was correctly contended by the Plaintiff that in all other instances such non-service would renders the enquiry invalid. It was also clear that he proviso to S.11 did not apply to the present facts. [19] Another significant discrepancy raised by the Plaintiff was that D1 had failed to produce any record of what transpired on 30.5.1985 which was the scheduled date for the enquiry to be held. There was, further, no evidence that the enquiry was postponed nor of issuance of any fresh Form E. [20] The Plaintiff also contended correctly that several unanswered questions arose as to how the enquiry to complete the acquisition process could be held on 30.05.1985 contrary to the date stated in the Form E Notice, 30.05.1985, which was a full year earlier. If in fact it was so held, it Page 12 of 21 would be without the benefit of any Form E nor any official minute on record that the enquiry scheduled on 30.5.1985 had been postponed to a year later. [21] It is stated in the notes of enquiry that the registered proprietor could not be traced (tak dapat dikesan) whereas the owner’s identify is clearly stated on the register. From D1’s own evidence through DW1, the Form 14A would indicate the transferor’s and transferee’s addresses. According to the 1st Plaintiff, that was the registered proprietor’s address since the 1950s. DW1 also confirmed that the address in the physical records was uploaded onto the computerised system together with all the other information. Hence, D2’s evidence that service of the Notice could not be effected due to D1 not having knowledge of the registered proprietor’s address was incredible and unacceptable. D1 had, therefore, not acted in accordance with law in not effecting proper service of any of the essential documents on the registered proprietor as required under the LAA, 1960. [22] Following from a manifest failure to serve a valid Form E on the registered proprietor before proceeding with the enquiry and handing down an award, both the enquiry and award are, in principle, wrong in law and have to be declared null and void. Page 13 of 21 [23] Going on to the culmination of the acquisition exercise which is the award, the Plaintiff drew the Court’s attention to the reliance by D1 upon the enquiry purportedly held on 30.05.1986 whereas the award relied upon was made 2 days earlier on 28.05.1986. This called into question the validity of the Form G in this case which is merely dated June 1986. The glaring anomaly here is that the award stated in the Form G corresponds with the enquiry held on 30.05.1986 but the decision appears to have been made 2 days earlier. No explanation was forthcoming for this discrepancy which went to the veracity of the whole acquisition process. [24] In relation to the issue of the validity of the award, the Plaintiff also referred to Section 14(2) of the Land Acquisition Act 1960 which provides that every award prepared shall be filed with the office of the land administrator. But, all searches on the Land 1 do not reveal any such document as having been filed which, therefore, meant that there was no award properly on record in this matter. [25] There was, thus, a blatant failure by D1 in the performance of its officers’ public duty to the extent that the registered proprietor’s rights over his own property had been denied in regard to the compulsory acquisition Page 14 of 21 of the same. Such a failure could be regarded as mala fide on their part in the discharge of their public duties. [See United Allied Empire Sdn. Bhd. v PTG Selangor and Ors. [2017] 8 CLJ 173] [26] Lastly on the validity of the acquisition process, the issue raised was as to the registration of the Form K which was vital for the land to revert to the State. If it had not vested in the State Authority by reason of the non-registration it meant that the State did not have the authority to realienate the land to D2. In United Allied Empire Sdn. Bhd. (supra) the Court of Appeal made it clear that: “We noted, with respect, that the panel of this court in the Ishmael Lim case (supra ) did not refer to s. 66 of the LAA 1960. Section 66 provides for the vesting of the title in the said land to the State Authority thereby effectively reverting the acquired land as State land. It was noted too by us that this court in the Ishmael Lim case (supra ) did not consider the Pekeliling Ketua Pengarah Tanah dan Galian Persekutuan Bilangan 27/2009 which reaffirms effectively the position that before an endorsement or memorial of Form K is Page 15 of 21 made on the issue document of title of the land, no title shall be vested in the State Authority in respect to the said acquired land.” [27] The evidence showed that no Form K had been endorsed on the title of Land 1. As a consequence, the State Registrar of Titles (‘1st TP’) had no authority to issue any title for Land 2. In fact, DW1, the officer in charge of registration from the Petaling District and Land Office, confirmed without hesitation that Land 1) still existed and had not been cancelled. It, therefore, followed that the alienation of Land 1 to the registered proprietor (deceased/father of Plaintiffs) subsisted and had never been revoked on the register. [28] As to the allegation of encroachment into Land 1 or Lot 953 by the building constructed by D2, the evidence of encroachment as alleged was indisputable in that it pointed irresistibly to the fact that almost the entire land held under the Plaintiff’s title is now occupied by D2’s building with just a small area that is unoccupied. As regards the latter area, the Plaintiffs’ rightly invoked the principle of de minimis non curat lex which ought to apply in this instance as the unaffected area was minimal. [29] The Plaintiffs’ evidence was uncontradicted that what was physically occurring at the site showed substantial encroachment by D2’s Page 16 of 21 building on Land 1. DW5, D2’s Legal Affairs Manager himself admitted that D2’s buildings is on Lot 953. DW5 further agreed with the Plaintiff’s suggestion that D2 was not diligent in doing its searches because a normal surveyor, if he had done the same, would have discovered the existence of Lot 953 and a follow-up search on the title would reveal that it was still subsisting with no evidence or record of any acquisition ever having occurred. If the surveyor had acted diligently, he would have discovered that Lot 953 was still subsisting in the Registry at the Land Office. [30] Finally, on damages to be awarded for trespass and encroachment against D2, I upheld the Plaintiffs’ contention that D2 can only avoid the same if it can prove it holds not only good title but a superior earlier title to the land which is encompassed in Land 1. If the acquisition or award is set aside or if it is shown the land has never reverted to the State, then the State would have no power to re-alienate the land, considering D1’s own evidence that Land 1 was at all times subsisting. [31] From the above, the acquisition process of Land 1 must be set aside primarily because the land never reverted to the State which is a condition precedent for a valid acquisition. It follows from this that the Page 17 of 21 Plaintiffs will clearly be entitled to the ancillary relief of damages against D1 and D3 is also clearly entitled to be indemnified by the TPs. [32] As for quantum, the Plaintiffs principally relied on the unchallenged evidence of the Architect (DW3) that, based on land cost and sale price and estimates of gross and net profits, the Plaintiffs’ estimated loss would be about RM 35.7 million. However, the professional valuer called by the Plaintiffs (PW4) valued the losses at RM 19,378,590.00. The Plaintiffs relied upon his unrebutted evidence in the alternative should PW3’s estimate of the losses suffered was not acceptable to the Court. Having considered the analyses of losses by these witnesses, as the valuer was a more competent and qualified professional to assess losses in respect of properties, I gave preference to the assessment by PW4 and awarded quantum accordingly based on the latter’s unchallenged valuation. Conclusion [33] To sum up, I conclude as follows bearing in mind that the burden of proof is on the Plaintiff in the claim and the Defendants (‘D1 and D2’) in the 3rd Party Action (‘TPA’) to prove their claim and the TP claim (‘TPC’) respectively on a balance of probabilities. Upon duly evaluating the Page 18 of 21 evidence adduced at the trial in its totality, the averments in the pleadings and the contentions of all the parties concerned through counsel and the State Legal Advisor, the Court finds as follows on the Principal Claim and the TPC. Plaintiff’s Claim [34] Based on the undisputed facts, it is manifestly clear that the purported land acquisition exercise carried out by D1 over land owned by the deceased (‘the subject land’) was both incomplete and invalid for non-compliance with the provisions and procedural requirements laid down in the Land Acquisition Act (‘LAA’) and thus, contrary to the constitutional safeguard under Article 13 (1) of the Federal Constitution. [35] Hence, the declaratory reliefs ought to be granted against D1 as prayed for principlally to declare the acquisition exercise a nullity. [36] Having found as above, the evidence establishes beyond doubt that there was encroachment by D2’s building on almost the entire land held under the Plaintiff’s title. D2 has failed to rebut the clear evidence of encroachment as alleged. Page 19 of 21 [37] On the issue of damages, the Plaintiff has claimed General Damages for trespass which need not be pleaded specifically and is subject to assessment. Based on the evidence of the professional valuer called by the Plaintiff which has not been contradicted by D2, the Plaintiff ought to be awarded damages in the sum of RM19, 378,590.00 against D2. [38] The Court therefore allows the Plaintiff’s claim against D1 and D2 with costs and enters judgment accordingly. [39] OIT of prayers a), c), d), j) and k). TP Claim [40] Based on the proven and undisputed facts, D2 has, on a balance of probabilities proved its claim for indemnity against the TPs in issuing 2 titles for the same plot of land (‘Lands 1 & 2’) that led to the encroachment by D2 on the Plaintiff’s land. There was clear negligence and breach of statutory duties by the TPs as pleaded basically due to the principle that once land has been alienated it is no longer State land and cannot be realienated as was done in this case unless the land has reverted back to the State which did not occur in accordance with law in this case for the reasons adverted to. Page 20 of 21 [41] The TPC for indemnity in respect of damages and costs against D2 has, therefore to be allowed. [42] OIT of prayer a), b) and c). [43] Costs to the Plaintiff in sum of RM100,000.00. [44] Costs of RM20,000.00 to D2. Dated : 7 February 2019 (GUNALAN A/L MUNIANDY) Judge High Court of Malaya Shah Alam Page 21 of 21 COUNSEL: For the Plaintiffs : Dato’ Vijay Kumar Natarajan together with Miss Chee Chun Yen Messrs Natarajan Kuala Lumpur For the 1st Defendant And Third Parties : Puan Wan Norazimin binti Kassim Penolong Penasihat Undang-Undang Kamar Penasihat Undang-Undang Negeri Selangor For the 2nd Defendant : Mr. Gobonath Karuppan Messrs Mohanadass Partnership Kuala Lumpur