Hatimuda Sdn Bhd v 1. ) Y.B Menteri Tenaga Teknologi Hijau dan Air (WA-25-55-02/2018)

1.

SURUHANJAYA PERKHIDMATAN AIR NEGARA … RESPONDEN-RESPONDEN Grounds of Decision Azizah Nawawi, J: Application [1] Leave was granted by this Court for the Applicant to proceed with judicial review proceedings with regards to the following prayers: “(i) satu perintah certiorari untuk membatalkan keputusan Responden Kedau bertarikh 17.11.2017 yang diterima oleh Pemohon pada 17.11.2017 yang menyatakan bahawa permohonan Pemohon tidak dapat dipertimbangkan kerana terdapat satu pendakwaan terhadap Pemohon;

(ii) satu perintah deklarasi keputusan Responden Kedua bertarikh 17.11.2017 yang diterima oleh Pemohon pada 17.11.2017 yang menyatakan bahawa permohonan Pemohon tidak dapat dipertimbangkan kerana terdapat satu pendakwaan 3 terhadap Pemohon untuk pelanggaran peruntukan akta Industri Perkhidmatan Air Negara, 2006 adalah batal dan tidak sah; dan

(iii) bahawa kerugian Pemohon ditaksirkan oleh Mahkamah atas keengganan Responden Kedua mengeluarkan permit jenis C1 kepada Pemohon tidak dapat memasuki tender-tender kerja.” [2] Having considered the application and the submission of the parties, this Court had dismissed the application with costs. The Salient Facts [3] The Applicant is a private limited company. It provides construction services and is a contractor to water companies, among others, Syarikat Air Negeri Sembilan Sdn Bhd (“SAINS”). [4] The 2nd Respondent is the Suruhanjaya Perkhidmatan Air Negara (“SPAN”). SPAN is a body corporate established under the Suruhanjaya Perkhidmatan Negara Act 2006 (“Act 654”). Under section 15 of Act 654, the functions of SPAN, among others, is to supervise and regulate water supply services and sewerage services and to enforce the water supply and sewerage services laws and for related matters. Water supply and sewerage services laws include 4 Act 654 and the Water Services Industry Act 2006 (“Act 655”), and includes any subsidiary legislation made under those laws. [5] On 19.6.2017, the Applicant made an application for the renewal of its IPA Type C1 (Water Supply & Sewerage) permit online through SPAN‟s website pursuant to Rule 8 of the Water Service Industry (Permit) Rules 2007 (the “Renewal Application”). [6] The Applicant‟s Renewal Application was rejected by SPAN vide a letter dated 17.11.2017 on the grounds that were pending charges against the Applicant for contravening Act 655. The said letter, inter alia, reads: “2. Dukacita dimaklumkan bahawa permohonan ini tidak dapat dipertimbangkan kerana terdapat satu pendakwaan terhadap pihak tuan di mahkamah untk pelanggaran peruntukan Akta Industri Perkhidmatan Air Negara 2006 dan kes ini masih berterusan.

Sehubungan itu, Suruhanjaya memutuskan untuk enggan mengeluarkan permit IPA Jenis C1 (Bekalan Air & Pembentungan) kepada Hatimuda Sdn Bhd selaras dengan peruntukan di bawah Kaedah 8(1)(b) Kaedah-Kaedah Industri Perkhidmatan Air (Permit) 2007 atas sebab sepertimana dinyatakan di perenggan 2.” 5 [7] It is also not in dispute that prior to the Renewal Application, and on 19.5.2017, the Applicant was charged at the Criminal Sessions Court in Seremban, Negeri Sembilan with two separate charges for an offence under section 4(1)(b) of Act 655, which reads: “Requirements for individual licence 4.

Subject to section 5, no person shall –

own a public water supply system or public sewerage system or any part of the systems; or

undertake, provide or make available any water supply services or sewerage services or part of the services by means of operating a public water supply system or public sewerage system, unless he holds an individual licence granted under this Act” [8] One charge relates to the Sungai Terip Water Treatment Plant, and the other to the Ngoi Ngoi Water Treatment Plant, both in Seremban, Negeri Sembilan. The charges were a result of a full investigation by SPAN‟s officers which included a raid of the Water Treatment Plants conducted on 27.10.2015. From the raid, it was found that the 6 Applicant was managing the Water Treatment Plants, which were public water supply systems, without holding a valid individual license from 1.7.2015 to the date of the raid on 27-10-2015. [9] The case against the Applicant had commenced on 25.9.2017 and the Session Court has found a prima facie case on both charges and directed the Applicant to enter its defence. [10] In response to the Applicant‟s appeal, vide a letter dated 26.1.2018, SPAN has maintained its stand in the letter, [11] Being aggrieved by the said decision, the Applicant then filed this judicial review application. The Findings of the Court [12] In Booi Kim Lee v YB Menteri Sumber Manusia & Golden Plus Geaniait SB [1999] 3 MLJ 515, Justice KC Vohrah adopted Lord Diplock‟s classification of grounds of judicial review in the House of Lords case of Council of Civil Service Unions V. Minister for the Civil Service [1985] AC 374. The three (3) grounds described by Lord Diplock are:

illegality;

(ii) irrationality; and

(iii) procedural impropriety. 7 [13] By illegality as a ground for judicial review, it means “that the decision-maker must correctly understand the law that regulates his decision-making power and must give effect to it‟ and that “… the authority concerned has been guilty of an error of law in its action as for example, purporting to exercise a power which in law it does not possess.” [14] By irrationality it means „Wednesbury unreasonableness‟ and “applies to a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided upon could have arrived at it” [15] By procedural impropriety, it includes „failure by an administrative tribunal to observe procedural rules that are expressly laid out.” and “duty to act fairly”. [16] In the present case, the first issue raised by the Applicant is that since there are no conditions pertaining to an application for a renewal of permit under rule 8 of the Water Industry (Permit) Rules 2007 (“Permit Rules 2007”), then this Court should refer to the conditions specified in rule 10, and in particular rule 10 (1)(d) which provides that SPAN may give written notice to revoke a permit issued or suspend the permit for such period as it thinks fit, if “the permit holder has been convicted of an offence under the Act or its subsidiary legislation.” 8 [17] In the present case, since the criminal charges against the Applicant are ongoing, therefore there was no criminal conviction against the Applicant when it made the Renewal Application. [18] However, I am of the considered opinion that rule 10 of the Permit Rules 2007 is not applicable, as the same is specific to the issue of revocation or suspensions of a permit. It is not applicable to the situation where the Applicant is applying for a renewal of the permit. [19] An application for a renewal of permit is governed by rule 8 and rule 8 does not specify the reasons or circumstances where SPAN may reject an application for a renewal of the permit. Rule 8(1)(b) simply provides that SPAN may “refuse to grant the renewal, where reasons for refusal shall be given to the applicant in writing.” [20] It is not in dispute that SPAN has complied with rule 8(1)(b), by issuing the letter dated 17.11.2017 containing the reasons for the refusal to renew the permit. Therefore, the main issue here is whether the given reasons are irrational or unreasonable. [21] In R v Secretary of State For Transport, ex parte Richmond-Upon-Thames London Borough Council & Ors [1994] 1 WLR 74 at 95, QBD (Eng) the court held as follows: “[I] In a case where the statute itself does not specify the considerations to be taken into account in arriving at a discretionary decision, it will be for the 9 decision-making body to decide what is and what is not a relevant consideration, and this decision will itself only be subject to review on Wednesbury grounds.” (emphasis added) [22] In the present case, the reasons why SPAN has rejected the Renewal Application is because the Applicant is facing two (2) criminal charges of managing the water treatment plants, which were public water supply systems, without holding a valid individual license. [23] Having considered SPAN‟s reasons, I find that the said reasons cannot be said to be unreasonable or irrational. I agree with SPAN that it is entitled to consider and scrutinise the track records of applicants for new permits and/or licences or for renewals. It is not illogical to take into account whether the particular applicant had in the past breached or violated the relevant water laws, or had been investigated for or charged for breaching the same. Put another way, given the public and national importance of operating water resources in a country, how the Applicant had conducted itself in the past is a relevant consideration. It would also be irresponsible for SPAN to renew the Applicant‟s permit when at the same time SPAN is pursuing criminal charges against it for its failure to operate without licences on two previous occasions. [24] Added to that, SPAN‟s policy was made pursuant to the functions, duties, and responsibilities of SPAN under Act 654 and 655, and the 10 subsidiary legislations made under those laws. Under section 15 of Act 654, the functions of SPAN, inter alia, are as follows:

to supervise and regulate water supply services and sewerage services and to enforce the water supply and sewerage services laws;

(ii) to implement and enforce the water supply and sewerage services laws and to consider and recommend reforms to the water supply and sewerage service laws;

(iii) to ensure the productivity of the water supply services and sewerage services industry and the monitoring of operator compliance with stipulated standards, contractual obligations and relevant laws and guidelines;

(iv) to maintain of law and order, the prevention and detection of crime and the apprehension and prosecution of offenders; and

to protect the rights and interests of license and permit holders under the WSI Act. [25] Further, pursuant to section 16(1) of Act 654, SPAN shall have the power to do all things necessary or expedient for or in connection with the performance of its functions under the water supply and sewerage services laws, and section 16(2)(g) provides that the SPAN‟s powers shall include to do anything incidental to any of its functions and powers. [26] Bearing in mind that the water and sewerage industry involves public interest and that the statutory functions of SPAN are to supervise and 11 manage the water and sewerage matters in this country, I find that it is within the powers of SPAN to consider whether an applicant, who wants to be involved in a public interest industry, must not be tainted with any activity against the law. As such, I find that the reasons for the rejection of the Renewal Application are not irrational or unreasonable. [27] Another issue raised by the Applicant is that there was a breach of the value of natural justice as the Applicant was not given the right to be heard, a breach of the audi alteram partem principle. [28] In the present case, section 180 of Act 655 has empowered SPAN „to make rules on all matters relating to the issuance of permits granted under the Act, including the procedures for application, fees, forms, conditions and duration of the permits‟. The Permit Rules 2007 were made by SPAN and gazetted in 2007. The principles of audi alteram partem can be seen in Rule 10(2) of the Permit Rules 2007 which deals with revocation or suspension of permits and the provision reads: “Revocation or suspension of permits

10.

The Commission may by written notice revoke a permit issued under these Rules or suspend the permit for such period as it thinks fit …..

Before the Commission makes a decision under subrule (1), the Commission shall give the permit holder – 12

a written notice of the Commission‟s intention to revoke or suspend the permit; and

an opportunity to make written submissions within a period specified in the written notice which shall not be less than thirty days from the date on which the notice is served on the permit holder.” [29] However, the above provision has been excluded in rule 8 of the Permit Rules 2007, which deals with renewal of permits. [30] The principle of audi alteram partem may be excluded by the legislature. This was expressed in S Kulasingam & Anor v Commissioner of Lands, Federal Territory & Ors [1982] 1 MLJ 204, where the Federal Court held as follows: “(1) Whether there is a right to a pre-acquisition hearing Considering the provisions and scheme of the Act, the short answer to this point is that there is nothing in the legislation imposing any such obligation in marked contrast to the specific provisions for an inquiry and hearing in respect of the quantum of compensation payable. This very point was taken before the Privy Council in Mukta Ben & Anor. v. Suva City Council [1980] 1 13 WLR 767, 769 where it was contended inter alia that the requirements of natural justice were not observed but the Judicial Committee held (at p. 779) that acquisition could not be impugned on any ground of natural justice, since the legislation imposed no obligation inform the appellants in that case that an application for compulsory acquisition was contemplated or to invite them to make representations to the Governor and that he had in no way acted unfairly to them. The rules of natural justice vary and ambit according to the circumstances and context (Pahang South Union Omnibus Co. Bhd. v. Minister of Labour and Manpower & Anor [1981] CLJ(Rep) 74; [1981] 2 MLJ 199; Merdeka University Bhd. v. Government of Malaysia [1981] CLJ 191 (Rep); [1981] 2 MLJ 356), and the English Court of Appeal in Regina v. Raymond [1981] 3 WLR 660, 670; [1981] 2 All ER 246 (at p. 670) approved the proposition that the Courts should not fly in the face of a clearly evinced Parliamentary intention to exclude the operation of the audi alteram partem rule. ……. The legislature can by clear words exclude the principles of natural justice in the absence of specific constitutional guarantees. In an appeal from New Zealand the Privy Council approved of the idea that natural justice could be effectively excluded by a legislative code in Furnell v Whangarei High Schools Board [1973] AC 660, 679 which concerned the disciplinary code for New Zealand government teachers. Charges against a school teacher were investigated by a sub-committee which reported to the high school's board. Neither the sub-committee nor the board gave the 14 school teacher an opportunity of making representations but he was suspended from teaching pending consideration and decision by the teachers' disciplinary board. The majority opinion held that the legislative code was not unfair and refused a writ of prohibition, stating (at page 679) that it is not 'the function of the court to re-draft the code' and referring with approval to the decision of the High Court of Australia in Brettingham-Moore v Municipality of St Leonards

121 CLR 509, 524 which held in effect (at page 524) that it is not for the court to amend the statute by engrafting upon it some other provision which it might think more consonant with a complete opportunity for an aggrieved person to present his views and to support them by evidentiary material.” (emphasis added) [31] Therefore, since the right to be heard is not provided in rule 8 of the Permit Rules 2007, then SPAN‟s decision to reject the Renewal Application without affording the Applicant the right to be heard, cannot be said to be illegal. It is also not the function of this Court to amend rule 8 in order to make it pari materia with rule 10. [32] Further, I agree with SPAN that the Applicant has no legal right to have its permit renewed. Under section 50 of Act 655, no person shall carry out works for water supply services and sewerage services without a written permit issued by the SPAN pursuant to subordinate legislation. 15 [33] Therefore, neither Act 655 nor any other legislation, impose a duty on SPAN to grant a renewal to the Applicant, nor does it gives the Applicant an entitlement for its permit to be renewed. The permit is only a privilege, and SPAN is entitled decide at its discretion, having considered the relevant considerations. This position is supported by Mkini Dotcom Sdn Bhd v Ketua Setiausaha Kementerian Dalam Negeri & 2 Ors [2013] 6 AMR 668, where the High Court held as follows: “[11] Strong support for this proposition, this court would gather, could be derived from the unanimous decision of the Court of Appeal in the case of Datuk Justine Jinggut v

Pendaftar Pertubuhan [2012] 3 AMR 393; [2012] 3 MLJ In that case, the appellate court had occasion, in the course of its decision pertaining to the duty on the decision maker to provide reasons for his or her decision, referred to the speech by learned justice Lord Denning LJ in the case of Breen v Amalgamated Engineering Union & Ors [1971] 2 QB 175 where the learned judge and eminent jurist had said: … if a man seeks a privilege to which he has no particular claim – such as an appointment to some post or other – then he can be turned away without a word. He need not be heard. No explanation need be given … but … if he is a man who has 16 some right or interest or some legitimate expectation, of whom it would not be fair to deprive him without a hearing, or reasons given, then these should be afforded him, according as the case may demand. (Emphasis added.) [12] So, from the above-quoted speech, it is clear that if what a person is seeking what is essentially a privilege, then he can be turned away without being afforded the reason(s) as to why his request was turned down. But if applicant had some right or interest over the matter of his application, then it would be contrary to procedural fairness on the part of the decision maker, to just dismiss the matter without hearing or without giving the aggrieved party any reason why he was not granted of his right or interest…”(emphasis added) Conclusion [34] In Minister of Labour v. Lie Seng Fatt [1990] 2 MLJ 9, it was held by the Supreme Court that in reviewing the discretionary power of an administrative body, the following should be borne in mind: “As stated earlier, so long as he exercises the discretionary without improper motive, the exercise of discretion must not be interfered with, unless it can be shown that the particular authority had misdirected 17 himself, had taken into account irrelevant matter or had not taken into consideration relevant matter or that the decision militates against the object of the law.” [35] Premised on the reasons enumerated above, I find no reason to interfere with the decision made by SPAN. The decision by SPAN was not tainted with any form of irrationality, illegality, or procedural impropriety. Therefore, the application is dismissed with costs. (AZIZAH BINTI HAJI NAWAWI) JUDGE HIGH COURT MALAYA (Appellate and Special Powers Division 2) KUALA LUMPUR Dated: 29th January 2019 For the Applicant : Ashok K.Raman/Mohd Jamil Yaacob/R.Rajasurian Messrs Srihana Mohamad & Partners Selangor D.E. For the 2nd Respondent : Edmund Bon/Michael Chia Messrs Amerbon Advocates Kuala Lumpur 18 Cases referred:

Booi Kim Lee v YB Menteri Sumber Manusia & Golden Plus Geaniait SB [1999] 3 MLJ 515.

R v Secretary of State For Transport, ex parte Richmond-Upon-Thames London Borough Council & Ors [1994] 1 WLR 74 at 95.

S Kulasingam & Anor v Commissioner of Lands, Federal Territory & Ors [1982] 1 MLJ 204.

Mkini Dotcom Sdn Bhd v Ketua Setiausaha Kementerian Dalam Negeri & 2 Ors [2013] 6 AMR 668.

Minister of Labour v. Lie Seng Fatt [1990] 2 MLJ 9.