Pengerang Petrochemical Company Sdn. Bhd. v Majlis Perbandaran Pengerang (J-01(A)-701-11/2024)

These four appeals arise from the decision of the learned Judicial Commissioner of the High Court at Johor Bahru on 31 January 2025 that dismissed the four judicial review applications filed by the Appellants to challenge the retrospective imposition of annual assessment rates by the Respondent, Majlis Perbandaran Pengerang ("MPP"), under the Local Government Act 1976 ("Act 171").

The core dispute revolves around whether the Respondent had the legal authority under Act 171 to amend the Valuation List and impose assessment rates retrospectively on additional buildings and structures ("new erections") developed by the Appellants on their leased holdings.

The Appellants are companies within the Petronas group operating the Pengerang Integrated Complex ("PIC") in Mukim Pengerang, Daerah Kota Tinggi, Johor. Pengerang Refining Company Sdn. Bhd. ("PRC") is the refining company incorporated under Company No. 201301028727 (1058557-T), and is the Appellant in Appeals No. J-01(A)-700-11/2024, J-01(A)-702-11/2024, and J-01(A)-703- 11/2024. Pengerang Petrochemical Company Sdn. Bhd. ("PPC") is the petrochemical company incorporated under Company No. 201501003532 (1128864-H), and is the Appellant in Appeal No. J-01(A)-701-11/2024.

The Respondent, MPP, is the local authority with administrative jurisdiction over the Pengerang area effective from 1 January 2020 pursuant to Gazette Notification No. 4796 dated 19 December 2019. The Respondent is a public authority established under the Local Government Act 1976 and derives its powers from that statute.

The land in question is Lot No. 11369, PN 77802 (formerly known as PTD No. 5319), Mukim Pengerang, Daerah Kota Tinggi, Johor. The land is held under a lease from PETRONAS Hartabina Sdn. Bhd. to the Appellants for a period of 30 years expiring on 13 June 2046. The lease to PRC commenced on 14 June 2016.

The Appellants developed additional buildings and structures ("new erections") on their respective leased holdings. The Certificate of Completion and Compliance ("CCC") for each development was obtained on the following dates:

Appeal J-01(A)-703-11/2024 (Pakej 30A) - CCC obtained on 2 December 2019 for Plot No.176.

Appeal J-01(A)-701-11/2024 (Pakej 6A) - CCC obtained on 4 February 2020 for Plot Nos. 53B and 64B.

Appeal J-01(A)-700-11/2024 (Pakej 4) - CCC obtained on 3 June 2020 for Plot No. 24.

Appeal J-01(A)-702-11/2024 (Pakej 1) - CCC obtained on 29 December 2019 for Plot No. 25. [7] The additional structures included various buildings, vessels, tanks, compressor shelters, substations, control buildings, pipe racks, piping, and flare structures. The parties do not dispute that these developments were completed and that CCCs were issued on the dates set out above. THE VALUATION LIST AND NOTICE OF AMENDMENT [8] The Respondent, through its Valuation Officer, had assessed the additional developments and determined that the additional development constituted rateable holdings under paragraph 144(1)(b) of Act 171, as buildings erected or other improvements made upon a rateable holding. The Respondent issued Notices of Amendment to the Valuation List on various dates and made decisions at committee and full council meetings as detailed below. i. Appeal J-01(A)-703-11/2024 (Pakej 30A) [9] For Pakej 30A, the Respondent issued a Notice of Amendment to the Valuation List and an assessment bill via Bill No. T20220000465988 dated 1 January 2023. The Respondent's decision to amend the Valuation List was made at the Jawatankuasa Taksiran Bil. 3/2023 meeting on 20 March 2023 and confirmed at the Mesyuarat Penuh Majlis Perbandaran Pengerang Bil. 3/2023 on 29 March 2023. The initial valuation was RM118,306,000.00 with an annual rate of RM473,224.00 (at 0.40%). After the Appellant's objection, this was reduced to RM100,715,000.00 with an annual rate of RM402,860.00. [10] The Respondent communicated its decision to the Appellant via letter dated 13 April 2023 [reference no. (19) dlm. MPP/PPH/PH/7 Jld. 2], which enclosed Bill of Assessment No. T20220000465988 dated 1 January 2023. This letter and bill were received by the Appellant via email on 16 April 2023. [11] The retrospective period for the rates was fixed from 1 July 2019. The Respondent granted a remission for the period from 1 July 2019 to 1 December 2022. The amount payable after remission was RM1,442,851.85, which was paid by the Appellant on 26 April 2023. ii. Appeal J-01(A)-701-11/2024 (Pakej 6A) [12] For Pakej 6A, the Respondent issued a Notice of Amendment to the Valuation List on 22 December 2022. The Respondent's decision was made at the Jawatankuasa Taksiran Bil. 7/2023 meeting on 12 July 2023 and confirmed at the Mesyuarat Penuh Majlis Pengerang Bil. 7/2023 on 27 July 2023. [13] The Respondent communicated its decision to the Appellant via letter dated 30 July 2023 [reference no. (26) dlm. MPP/PPH/PH/7 Jld. 2], which enclosed Bill of Assessment No. T20230000498569 dated 1 July 2023. This letter and bill were received by the Appellant via email on 30 July 2023. [14] The retrospective period for the rates was fixed from 1 January 2020. The Respondent granted a remission for the period from 1 January 2020 to 3 February 2020 (being the day before the CCC date). The amount payable was RM658,636.67, which was paid by the Appellant on 8 August 2023. iii. Appeal J-01(A)-700-11/2024 (Pakej 4) [15] For Pakej 4, the Respondent issued a Notice of Amendment to the Valuation List on 30 January 2023, with an improved value of RM162,447,000.00 and an annual assessment rate of RM649,788.00. The Respondent's initial decision was made at the Jawatankuasa Taksiran Bil. 1/2023 meeting on 12 January 2023 and confirmed at the Mesyuarat Penuh Majlis Pengerang Bil. 7/2023 on 27 July 2023. [16] The Appellant submitted a written objection to the Notice of Amendment on 21 February 2023. An objection hearing was held on 22 May 2023 at the Respondent's premises. [17] The Respondent communicated its final decision to the Appellant via letter dated 30 July 2023 [reference no. (25) dlm. MPP/PPH/PH/7 Jld. 2], which enclosed Bill of Assessment No. T20230000498571 dated 1 July 2023. This letter and bill were received by the Appellant via email on 30 July 2023. [18] The retrospective period for the rates was fixed from 1 January 2020. The Respondent granted a remission for the period from 1 January 2020 to 2 June 2020 (being the day before the CCC date). The amount payable was RM1,868,052.92, which was paid by the Appellant on 8 August 2023. iv. Appeal J-01(A)-702-11/2024 (Pakej 1) [19] For Pakej 1, the Respondent issued a Notice of Amendment to the Valuation List on 21 March 2023. The Respondent's decision was made at the Jawatankuasa Taksiran Bil. 3/2023 meeting on 20 March 2023. [20] The Respondent communicated its decision to the Appellant via letter dated 30 July 2023 [reference no. (21) dlm. MPP/PPH/PH/7 Jld. 2], which enclosed Bill of Assessment No. T20230000498583 dated 1 July 2023. This letter and bill were received by the Appellant via email on 30 July 2023. [21] The retrospective period for the rates was fixed from 1 January 2020. The Respondent granted a remission for the period from 1 July 2019 to 28 December 2019 (being the day before the CCC date). The amount payable was RM5,526,055.96, which was paid by the Appellant on 8 August 2023. [22] All payments were made "without prejudice" in compliance with the proviso to subsection 145(1) of Act 171, which requires payment of the disputed rates before filing an appeal. C. THE JUDICIAL REVIEW PROCEEDINGS IN THE HIGH COURT [23] Being dissatisfied with the Respondent's decisions, the Appellants filed four separate judicial review applications in the Johor Bahru High Court, seeking, inter alia:

a declaration that the Respondent has no power to impose rates retrospectively;

an order of certiorari to quash the Respondent's decisions; and

an order for refund of amounts paid. The judicial review applications were heard together by the High Court. [24] The central issue in the High Court was whether the Respondent had the power under the Act 171, particularly section 144 (amendments to Valuation List) and section 133 (duration of rates), to impose retrospective rates on additional buildings that were only later added to the Valuation List. [25] The High Court held that retrospective amendments and retrospective imposition of assessment tax are valid. The learned Judicial Commissioner relied on the binding principle of stare decisis by following the Court of Appeal decision in Tropiland Sdn. Bhd. v Majlis Perbandaran Pulau Pinang [1998] 4 MLJ 70, which in turn cited Cathay Finance Co. Ltd. v Municipal Councillors of Georgetown, Penang [1957] 3 MC ACJ 105 for the proposition that amendments to the Valuation List can validly have retrospective effect, especially where there has been a mistake, oversight, or fraud, or where new buildings are erected. The High Court found as follows: [2] Asas Mahkamah ini membuat keputusan menolak relif untuk membuat deklarasi Responden tidak berhak dan tiada kuasa untuk mengenakan cukai taksiran terhadap Pemohon secara retrospektif dan seterusnya membatalkan keputusan Responden tersebut, turut bersandarkan kepada prinsip yang diputuskan dalam kes Tropiland Sdn. Bhd. v Majlis Perbandaran Pulau Pinang [1998] 4 CLJ 199 (COA) yang telah merujuk kepada kes Cathay Finance Co. Ltd. v Municipal Councillors of Georgetown, Penang [1957] 3 MC ACJ 105 memutuskan di muka surat 306 penghakiman seperti berikut: 'We also need to distinguish two of the authorities cited. In the case of Cathay Finance Co. Ltd. v Municipal Councillors of Georgetown, Penang [1957] 3 MC ACJ 105 the court held the amendment to the assessment rates can validly be of retrospective effect. The relevant excerpt of the speech of Rigby, J states: "Again, I am of the opinion that such amendment can validly be of retrospective effect. As Mr. Meek, for the respondents, pointed out, the whole tenor of the section is to enable the commissioners to counteract the 'mistake, oversight or fraud' in the list. It would seem illogical, therefore, if that amendment to vitiate, for example, the fraud could not be made to refer back to the date the fraud was perpetrated." In the first case, no reference is made to an expired valuation list which is the problem in this appeal. We would add that we agree that there can be retrospective rating provided it affects a current valuation list..." [26] The High Court further elaborated on the application of Tropiland (supra) at paragraph [21] to [24] of its Grounds of Judgment: "[21] Sebagaimana yang tertera dalam penghakiman Mahkamah ini di para 2 yang merujuk kepada keputusan Mahkamah Rayuan dalam kes Tropiland Sdn. Bhd. yang memutuskan dalam situasi berlakunya 'mistake, oversight or fraud' (dapatan Mahkamah, keadaan ini dinyatakan secara khususnya dalam penghakiman Mahkamah Rayuan dalam kes Tropiland dan semestinya juga meliputi keadaan-keadaan lain di bawah seksyen 144), prinsip dalam kes Tropiland ini masih merupakan 'good law' dan belum diketepikan oleh Mahkamah atasan. [22] Dengan berpandukan kepada dapatan ini, maka peruntukan Akta 171 ini perlulah dibaca untuk memberi ruang kepada Responden menuntut semula apa-apa ketinggalan dalam bayaran cukai taksir jika berlaku diakibatkan oleh keadaan-keadaan ini. Maka, hujahan Pemohon yang memberi tafsiran yang sempit tidak wajar diterima oleh Mahkamah ini. Ini adalah kerana, pertamanya Pemohon tidak memberi penekanan kepada perkataan-perkataan lain di dalam seksyen 144 itu sendiri 'of the holding in question' dan 'Valuation List so amended' yang terdapat dalam seksyen 144 iaitu '... and rates shall be payable in respect of the holding in question in accordance with the Valuation List so amended'. [23] 'Holding in question' dan 'Valuation list so amended' semestinya dalam kes semasa ini, merujuk kepada bangunan tambahan di Pakej 30A bagi Fasa 1&2 yang telah membawa kepada pindaan atau perubahan kepada senarai nilaian. [24] Akta 171 juga mengandungi takrifan kepada perkataan 'bangunan' dan 'tanah'. Takrifan lanjut perkataan-perkataan ini telah diputuskan dalam kes The Shell Company of the Federation of Malaya v Town Council, Bandar Penggaram, Batu Pahat (1962) 1 MLJ 277 dan dipersetujui oleh Mahkamah Persekutuan melalui keputusan dalam kes Tenaga Nasional Bhd. v Majlis Daerah Dungun [2009] 6 MLJ 322 yang mentakrifkan 'Holdings includes land and buildings'." [27] The High Court was of the view that the additional buildings constituted "rateable holdings" and fell within paragraphs 144(1)(a) and (b) of Act 171, as confirmed by the Federal Court in Majlis Daerah Hulu Selangor v United Plantations Bhd. [2021] 6 MLJ 539. [28] Further, the High Court had distinguished the High Court of Shah Alam decision in Petronas Gas Berhad v Majlis Bandaraya Shah Alam (Judicial Review No. 25-12-03/2016), which had held that retrospective charges could not be imposed. The Court noted that the Shah Alam decision lacked clear factual analysis, the Court of Appeal gave no written grounds, and the Federal Court's subsequent order in that case did not decide on the retrospective issue but rather concerned the removal of land lots not owned by Petronas. Therefore, that case did not bind the present hearing at the High Court. [29] The High Court also rejected the Applicants' narrow interpretation of section 133 (that rates can only be prospective and payable in advance), holding that section 144 must be read to allow the Respondent to recover any shortfall arising from the situations listed in subsection 144(1), including the erection of new buildings. It was emphasized that the phrase "holding in question" and "Valuation List so amended" in section 144 refer to the amended list that includes the additional buildings, and that the definition of "holding" under section 2 of Act 171 includes land and building. [30] Applying the principles of judicial review as set out in Council of Civil Service Unions v Minister of Civil Service [1985] AC 374 and R Rama Chandran v The Industrial Court of Malaysia [1997] 1 MLJ 145, the High Court found no illegality, irrationality, or procedural impropriety in the Respondent's actions. It was also noted by the High Court that the Respondent had heard the Applicants' objections, granted remissions for periods before the CCC dates, and acted within the powers conferred by section 144 The High Court also observed that allowing the Applicants to benefit from the use of the additional buildings without paying any rates would amount to unjust enrichment. [31] Accordingly, the High Court dismissed all judicial review applications on 31 January 2025. D. PROCEEDINGS AT THE COURT OF APPEAL [32] Being aggrieved by the decision of the High Court, the Appellants filed the present appeals to the Court of Appeal. The four appeals were consolidated and heard together before this Court. [33] The parties acknowledge that there are two other judicial review applications concerning the same amendment involving the same parties, pending before the Johor Bahru High Court: Johor Bahru High Court Judicial Review Application No. JA-25-39-11/2023 ("JR 39") and Johor Bahru High Court Judicial Review Application No. JA-25-40-11/2023 ("JR 40"). The High Court in JR 39 allowed arguments on the issue of breach of section 137 of Act 171 and directed the Respondent to file an additional affidavit to address this issue. The High Court in JR 40 allowed the Applicant's application for judicial review and quashed the decision of the Respondent. E. FINDING AND ANALYSIS [34] The following issues are for this Court's determination:

Whether the Respondent had jurisdiction to amend the Valuation List in 2023, given that the 2017 Valuation List had expired in 2022 (the "expired Valuation List" issue);

(ii) If the Valuation List was valid, whether section 144(6) of Act 171 permits the retrospective imposition of assessment rates;

(iii) Whether the Appellants are procedurally barred from raising the expired Valuation List issue at this appellate stage, having not pleaded it in the High Court; and

(iv) Whether the Respondent breached its duty of candour by failing to disclose that the Valuation List being amended was the 2017 Valuation List (which had expired), and whether such breach affects the Court's approach to Issue 3. Preliminary Objection by the Respondent [35] The Respondent raises a preliminary objection that the expired Valuation List issue was never pleaded in the High Court, never raised in the Memorandum of Appeal, and never raised during the statutory objection stage under section 142 of Act 171. The Appellants are therefore bound by their pleadings and cannot raise new issues at the appellate stage. [36] In this regard, the Respondent relies on RHB Bank Bhd. v Kwan Chew Holdings Sdn. Bhd. [2010] 1 CLJ 665, where the Federal Court held: "[33] It is a cardinal rule in civil litigation that the parties must abide by their pleadings... it is not the duty of the court to invent or create a cause of action or a defence under the guise of doing justice for the parties." [37] To further illustrate this argument, the Respondent highlights that in the Statement pursuant to Order 53 of the Rules of Court 2012, the Appellants expressly stated: "Pemohon sesungguhnya percaya bahawa Responden tidak berhak mengenakan cukai taksiran tahunan secara retrospektif iaitu bermula dari 1.1.2020; TETAPI HANYA BERHAK UNTUK MENGENAKAN CUKAI TAKSIRAN TAHUNAN TERSEBUT BERMULA DARI TARIKH RESPONDEN MEMINDA SENARAI NILAIAN YANG TERPAKAI." [38] This, the Respondent argues, constitutes an express concession that the amendment process was valid, with the only dispute being the retrospective date. [39] In response to this, the Appellants submit that even if the expired Valuation List issue was not pleaded in the High Court, this Court has an inherent power to consider issues not previously raised if they concern illegality, breach of statute, or lack of jurisdiction. In support of this contention, the Appellants rely on Datuk Bandar Kuala Lumpur v Perbadanan Pengurusan Trellises & Ors [2023] 3 MLJ 829. [40] Prior to determining the contention of the Appellants, this Court ought to consider and decide on the preliminary objection raised by the Respondent. [41] It is trite and a well-founded principle that parties are bound by their pleadings, and appellate courts are generally reluctant to entertain issues not raised in the court below. In RHB Bank Bhd. v Kwan Chew Holdings Sdn. Bhd. [2010] 1 CLJ 665, the Federal Court firmly established the principle that courts must decide cases in strict compliance with the pleadings. It is not the duty of the court to invent or create a cause of action or a defence under the guise of doing justice. [42] In other words, Courts are required to determine disputes in strict compliance with the parties' pleadings. The pleadings define the issues in controversy, identify the material facts relied upon by each party, and establish the scope of the matters to be decided. Accordingly, the court's determination must be confined to the issues arising from the pleadings as framed by the parties. [43] Nonetheless, there is a well-recognised exception to this rule. The Federal Court in Datuk Bandar Kuala Lumpur v Perbadanan Pengurusan Trellises & Ors [2023] 3 MLJ 829 and Perbadanan Pengurusan Sunrise Garden Kondominium v Sunway City (Penang) Sdn. Bhd. & Ors [2023] 2 MLJ 621 has held that courts have an inherent power to consider issues not previously raised if they concern illegality, breach of statute, or lack of jurisdiction. Such issues go to the very foundation of the court's supervisory jurisdiction in judicial review proceedings. [44] In Trellises (supra), the Federal Court held at [546] that "the courts do not condone contraventions of the law" and that the court may raise and rule on issues relating to "a possible contravention of the law" at any stage of the proceedings. [45] We are of the considered view that the issue concerning the expiry of the 2017 Valuation List is fundamentally one of jurisdiction rather than the exercise of discretion. This is not merely a dispute about the quantum of rates or the appropriate commencement date it is a challenge to the Respondent's very authority to act. [46] Upon the expiry of the 2017 Valuation List in 2022, the Respondent's statutory authority in relation to that Valuation List likewise came to an end. In the absence of a valid and subsisting Valuation List, the Respondent no longer possessed the jurisdiction to invoke section 144 of Act 171 to amend the Valuation List in 2023. Accordingly, any purported amendment made thereafter was beyond the powers conferred by Act 171, ultra vires, and void ab initio. [47] We are of the view that the fact that the Appellants may have conceded the validity of the amendment process in their pleadings does not prevent this Court from examining the legality of the Respondent's actions. As held in Sunrise Garden (supra), "the fact that this issue was not raised by the parties... does not preclude this Court... to raise or rule on the same at any stage of proceedings." [48] This principle reflects the settled position that a court is entitled to consider questions of jurisdiction and legality whenever they arise, irrespective of whether they were expressly pleaded or argued by the parties. Accordingly, even if the Appellants' pleadings are said to have proceeded on the assumption that the amendment process was valid, such assumption cannot validate an exercise of statutory power that was, in law, beyond the Respondent's jurisdiction. This Court is therefore empowered to determine whether the Respondent's purported amendment of the expired 2017 Valuation List was ultra vires Act 171 and consequently null and void. Accordingly, the Court of Appeal has the jurisdiction and discretion to consider the expired Valuation List issue, notwithstanding that it was not pleaded in the High Court. Duty of Candour [49] The Appellants submit that the Respondent was under a continuing duty of candour to place before the Court all material facts relevant to the exercise of its statutory powers. That duty required the Respondent to make full, frank and accurate disclosure of the factual and legal basis upon which it purported to amend the Valuation List. In particular, the Respondent was obliged to disclose that the Valuation List which it sought to amend was the 2017 Valuation List, and not any earlier Valuation List. [50] The Appellants contend that the Respondent failed to discharge this duty by omitting to disclose that the impugned amendments related to the 2017 Valuation List, which had already expired by operation of law. Instead, the Respondent permitted the proceedings to proceed on the premise that the relevant Valuation List was the 2013 Valuation List. As a consequence, both the parties and the learned High Court Judge addressed the case on an erroneous factual foundation, without considering the legal consequences arising from the expiry of the 2017 Valuation List. [51] The Appellants further submit that this omission was material, as it prevented the Court from considering the threshold jurisdictional issue, namely whether the Respondent retained any statutory authority to amend an expired Valuation List. Had the true factual position been disclosed, the Court would have been required to determine whether the Respondent's exercise of power under section 144 of Act 171 was legally sustainable. The Respondent's failure to make full and accurate disclosure therefore undermined the proper determination of the issues before the Court. [52] According to the Respondent the duty of candour does not extend to matters which were never pleaded or raised as issues in the proceedings. It is contended that the scope of the duty is confined to the disclosure of material facts relevant to the issues identified by the parties. [53] In this regard, the Respondent contends that the Appellants did not, at any stage during the statutory objection proceedings or the proceedings before the High Court, challenge the validity or continued subsistence of the relevant Valuation List. The Appellants' case was instead confined to other grounds of challenge, and no issue was taken as to whether the Valuation List had expired or whether the Respondent lacked jurisdiction to amend it. [54] The Respondent further maintains that it discharged its duty of candour by placing before the Court all material facts relevant to the impugned decision and the issues as pleaded. It argues that the Appellants cannot now seek to broaden the scope of the appeal by relying on documents or evidence emanating from separate judicial review proceedings (JR 39) in order to introduce an entirely new jurisdictional challenge that was neither pleaded nor ventilated before the High Court. [55] Pertaining to this issue, this court found guidance in the Federal Court case of Datuk Bandar Kuala Lumpur v Perbadanan Pengurusan Trellises & Ors [2023] 3 MLJ 829 where the Federal Court held: "[542]... a public authority owes a duty of candour in judicial review proceedings to make full and fair disclosure of all relevant materials. [543] This duty of candour is a duty that public authorities should exercise, not least because they are expected to assist the court with 'full and accurate explanations of all the facts relevant to the issue which the court must decide'. [546] This transitions to an important point, namely that the courts do not condone contraventions of the law... The fact that a material issue was not disclosed by the parties does not preclude this court, upon becoming appraised of the issue... to raise and rule on the same, at any stage of the proceedings, particularly where it relates to a possible contravention of the law." [56] In this appeal, we are of the view that the Respondent knew, or ought to have known, that the Valuation List being amended was the 2017 Valuation List, not the 2013 Valuation List. As the Local Authority, the Respondent should have known that the 2017 Valuation List had expired in 2022 and that there was no new Valuation List prepared. The Respondent ought to have known the fact that no extension had been granted by the Local Authority. [57] Nonetheless, the Respondent failed to disclose that the amendments were in fact made to the 2017 Valuation List. Instead, the Respondent permitted the proceedings to continue on the erroneous premise that the relevant Valuation List was the 2013 Valuation List. At no stage did the Respondent seek to correct this misconception or draw the Court's attention to the true factual position, despite being fully aware of the statutory history of the Valuation List and the legal significance of its expiry. [58] The consequence of this omission was that both the parties and the learned High Court Judge addressed and determined the matter on an incorrect factual footing. Indeed, the learned High Court Judge herself proceeded on the basis that the applicable Valuation List was the 2013 Valuation List, as reflected in the judgment. [59] We are of the view that the Respondent's failure to make full and accurate disclosure therefore deprived the High Court of the opportunity to determine the dispute on the correct factual and legal basis and, with the result that the jurisdictional issue was not addressed. [60] The Respondent's failure to correct this fundamental misunderstanding amounted to a breach of its duty of candour owed to the Court. As a public authority, the Respondent was under a continuing obligation to ensure that the Court was apprised of all material facts bearing upon the legality of its decision, particularly where those facts were capable of affecting the Court's determination of its jurisdiction. By allowing the proceedings to continue on the mistaken premise that the relevant Valuation List was the 2013 Valuation List, the Respondent failed to discharge that obligation. [61] This breach has far-reaching consequences. It undermined the integrity of the judicial review proceedings by preventing the High Court from addressing the true jurisdictional issue, namely whether the Respondent possessed the statutory authority to amend the 2017 Valuation List after its expiry. It also caused the Appellants to incur considerable time, expense and resources in litigating the matter on an erroneous factual premise. In these circumstances, the Respondent ought not to be permitted to rely upon the Appellants' earlier pleadings or the course taken in the proceedings as a basis for objecting to the Appellants raising the true jurisdictional issue on appeal. To permit such an objection would allow the Respondent to benefit from its own failure to make full and accurate disclosure, contrary to the interests of justice and the proper administration of public law. [62] Hence, the Respondent's breach of its duty of candour, coupled with the jurisdictional nature of the expired Valuation List issue, strongly militates in favour of allowing the Appellants to raise this issue at the appellate stage. [63] As we have decided that this court has jurisdiction to consider the ground of the expired Valuation List, we will now proceed to consider this issue. The Expired Valuation List (Jurisdictional Issue) [64] The Appellants submit that the 2017 Valuation List ceased to have legal effect in 2022 upon the expiry of its five-year statutory lifespan prescribed under subsection 137(3) of Act 171. No new Valuation List was prepared, and no extension was granted by the Local Authority. The Appellants contended that, following the expiry of the 2017 Valuation List, the Respondent was required to prepare and bring into force a fresh and new Valuation List. However, no new Valuation List was prepared, nor was any extension of the 2017 Valuation List granted by the Local Authority as contemplated under Act 171. In the absence of a valid and subsisting Valuation List, the Respondent no longer possessed the statutory authority to invoke section 144 of Act 171 to amend the 2017 Valuation List in 2023. Accordingly, the Appellants contend that the purported amendment was made without jurisdiction, was ultra vires the provisions of Act 171, and is therefore invalid and of no legal effect. [65] In support of this contention, the Appellants rely on the Federal Court decision in Majlis Daerah Hulu Selangor (supra). The Federal Court in Majlis Daerah Hulu Selangor (supra) provided definitive guidance on the proper operation of Part XV of Act 171. The Court held at paragraphs 50 and 52: "[50] Consequently, a new valuation list must be prepared and completed once every five years. Put another way, a valuation list has a statutory life span of five years. A new valuation list has to be prepared and completed to replace or supersede the subsisting valuation list before that life span expires. Where that cannot be done and arguably it must be for cogent and proper reasons, the State Authority may extend that period of five years for the preparation and completion of the new valuation list. It is the period during which the new valuation list is to be prepared and completed which the state authority is empowered to extend. Section 137(2) is not power to extend the life-span of the existing valuation list. It is power conferred on the state authority to extend the time for the preparation and completion of a new valuation list. [52] In substance therefore, a new valuation list must always be prepared and completed within the time prescribed. No local authority may use a valuation list for an indeterminable period and under any guise or misguided reading of its powers and obligations. It is their single responsibility to see to the preparation of a valuation list and to complete such List in accordance with the mandatory process as laid down in Part XV of Act 171 before the local authority is authorised to collect any rates. This extends to the power of amendment of the valuation list." [Emphasis added] [66] The Federal Court further emphasised the mandatory nature of subsection 137(3) and its proper interpretation on the power of extension as follows: [50] Consequently, a new valuation list must be prepared and completed once every five years. Put another way, a valuation list has a statutory life span of five years. A new valuation list has to be prepared and completed to replace or supersede the subsisting valuation list before that life span expires. Where that cannot be done and arguably it must be for cogent and proper reasons, the State Authority may extend that period of five years for the preparation and completion of the new valuation list. It is the period during which the new valuation list is to be prepared and completed which the state authority is empowered to extend. Section 137(2) is not power to extend the life-span of the existing valuation list. It is power conferred on the state authority to extend the time for the preparation and completion of a new valuation list. [51] Until the new valuation list is prepared and completed, s 137(2) categorically states that '[T]he Valuation List together with the amendments madeunders144 shall remain in force until it is superseded by a new Valuation List'. The continued application of the existing valuation list is thus envisaged by statute and there is no requirement for the local authority or even the State Government to make a specific decision to like effect. And, it is in these critical respects that MDHS has misinterpreted the meaning and intent of s 137 and from there misapplied the provisions of Act 171." [67] The Federal Court in Majlis Daerah Hulu Selangor (supra) also clarified the meaning of "rateable holdings" that an amendment under section 144 can only be made in respect of a subsisting "rateable holding" appearing in a valid Valuation List: [76] Further, we are of the view that the amendment conducted in 2016 to include the UPB holdings is also invalid because the UPB holdings is a new holding and does not fall within the definition of rateable holding as defined in s 2 and explained in Majlis Perbandaran Seremban v Tenaga Nasional Bhd. In any case, MDHS did not specify under which particular limb of ss 144(a)-(f) that the amendment was sought. From the facts, we are nevertheless satisfied that the amendment does not fall under any of these limbs. [77] For the same reasons set out above, we disagree with the view taken in Shalimar Malay Plc that a new holding may be added to an existing valuation list through an amendment exercise following a re-boundary authorised under s 4(3). Although state authorities may redraw the boundaries of any local authority within its jurisdiction, local authorities cannot begin to impose rates on holdings which hitherto were outside their jurisdiction. The approach taken in Syarikat Cahaya Muda Perak, that the local authority is obliged to come out with a new valuation list whenever there is a re-boundary exercise or at least to wait till the next new valuation list before it may impose its rates on holdings which newly fall within its jurisdiction, is thus consistent with the views expressed herein” [68] Referring to Majlis Perbandaran Seremban v Tenaga Nasional Bhd. [2020] 12 MLJ 1, the Federal Court in Majlis Daerah Hulu Selangor (supra) held that an amendment can only be made in respect of properties that have been subjected to the payment of rates when the Valuation List was prepared under section 137(1) or (3), "but not otherwise.": "[57] Similar views to this effect were expressed in the recent decision of Majlis Perbandaran Seremban v Tenaga Nasional Bhd. [2020] 12 MLJ 1; [2020] 10 CLJ 715 where this court opined: [27] From the definition section of the words 'rateable holding', we are of the opinion that for a holding to be considered as a 'rateable holding', it must be subject to payment of a rate 'made and levied under the Act'. The local authority must first evaluate whether or not the holding in question is subjected to the imposition of rate. Any holding which is not listed in the Valuation List is deemed to be considered as being exempted from the imposition of rate. The definition of the phrase 'rateable holding' as shown above, in our view, makes it clear that the amendment to the Valuation Course can only be made in respect of the properties that have been subjected to the payment of the rate made and levied when the Valuation List or revised Valuation List was prepared under sub-s 137(1) or (3) of the Act but not otherwise." [69] The Appellants further submit that, upon the expiry of the 2017 Valuation List, their properties ceased to constitute "rateable holdings" within the meaning of section 2 of Act 171. It is argued that the existence of a valid and operative Valuation List is a statutory precondition for a holding to be regarded as a "rateable holding" capable of being assessed for rates. Consequently, once the Valuation List had lapsed, the Respondent no longer had any statutory basis to exercise its powers under section 144 of Act 171. The Appellants contend that an amendment under section 144 can only be made in respect of a subsisting "rateable holding" appearing in a valid Valuation List. In support of this proposition, the Appellants rely on the decision in Majlis Daerah Hulu Selangor (supra), where the Court held that a holding "must first and foremost be a rateable holding before an amendment may be made." [70] The Appellants further rely on the decision in Tropiland (supra). The Court of Appeal in Tropiland (supra) was confronted with the precise question of whether an amendment to a valuation list can take place after the expiry of the five-year term of the valuation list in question. The respondent in Tropiland (supra) advanced two arguments. First, the respondent argued that the appellant was estopped from raising the validity of the retrospective rating because it had not appealed the decision of the assessment appeal committee. Second, and more significantly, the respondent argued that the valuation list does not expire but continues to remain in force. The Court of Appeal recorded the respondent's argument at page 76 of the judgment: "Learned counsel for the respondent argued that the valuation list does not expire but it is only superseded by the subsequent valuation list but continues to 'remain in force'. We find this argument totally devoid of merit as taken in its ordinary sense, 'to supersede' would mean 'to take the place of'." [71] The respondent in Tropiland (supra) also advanced a second argument, recorded at page 77: "Learned counsel for the respondent had also submitted that in line with s 144 of the Act, the valuation list may be amended at any time." [72] The Court of Appeal implicitly rejected this argument by holding that an amendment under section 144 must be made to the current valuation list, not an outdated one. The Court held at page 78: "This is reinforced by sub-s (4) of s 144 of the Act which says that any amendment made under this section may, at the discretion of the local authority, have regard to the level of annual values or improved value prevailing as at or about the time the current valuation list was prepared. The amendment, therefore, must be to the current valuation list." [73] The Court then concluded as follows at page 79: "Having considered the arguments, authorities and affidavits, we were in total agreement with learned counsel for the appellant that an amendment cannot be made by the respondent to an outdated valuation list." [74] The Appellants also rely on the Court of Appeal's reasoning in Tropiland (supra) regarding subsection 144(4) of the Act, which states that any amendment "may, at the discretion of the local authority, have regard to the level of annual values or improved value prevailing as at or about the time the current valuation list was prepared." The Court held: "The amendment, therefore, must be to the current valuation list." [75] Critically, the Court of Appeal in Tropiland (supra) distinguished Cathay Finance Co Ltd v Municipal Councillors of Georgetown, Penang [1957] 3 MC 105, which had held that amendments to assessment rates can validly be of retrospective effect. The Court stated at page 78: "In the first case, no reference is made to an expired valuation list which is the problem in this appeal. We would add that we agree that there can be retrospective rating provided it affects a current valuation list." [76] This qualification — "current valuation list" — is critical. The Court of Appeal in Tropiland (supra) was careful to limit its holding to situations where the amendment affects a Valuation List that is still in force and current. In the present case, the 2017 Valuation List had expired in 2022 and was no longer current when the Respondent purported to amend it in 2023. Therefore, Tropiland (supra) does not assist the Respondent; indeed, it supports the Appellants' position that an amendment cannot be made to an expired or outdated Valuation List. The High Court's error was in reading Tropiland (supra) as authority for the proposition that retrospective amendments are always permissible, without giving effect to the crucial qualification that the Valuation List must be current. [77] We pause to address the Respondent's argument that subsection 137(2) of Act 171 which provides that "the Valuation List together with the amendments made under section 144 shall remain in force until it is superseded by a new Valuation List" somehow preserves the validity of the 2017 Valuation List beyond its five-year lifespan. This argument must be rejected. As the Federal Court in Majlis Daerah Hulu Selangor (supra) made clear at paragraph 70, subsection 137(2) is a saving provision that merely allows the existing list to continue temporarily while a new list is being prepared. It is not a power to extend the lifespan of the existing list indefinitely. The power to extend time is conferred on the State Authority under subsection 137(3), and that power is strictly confined to extending the time for preparation and completion of a new Valuation List, not the validity of the old one. In this case, no extension was granted. The Respondent cannot rely on subsection 137(2) to breathe life into a Valuation List that had already lapsed by operation of law. [78] We also reject the Respondent's argument that the Appellants are precluded from challenging the validity of the Valuation List because they conceded the validity of the amendment process in their pleadings. As the Federal Court held in Majlis Daerah Hulu Selangor at paragraph 52, "no local authority may use a valuation list for an indeterminable period and under any guise or misguided reading of its powers and obligations." The legality of the Respondent's actions cannot be saved by the Appellants' concession. Jurisdictional defects go to the very foundation of the Respondent's power to act and cannot be waived or cured by the parties' agreement or failure to plead the issue. Interpretation of Section 137 of Act 171 [79] To consider this ground, it is perhaps apt to reproduce the relevant provisions of Act 171. Section 137 of Act 171 reads: "137. (1) The local authority shall cause a Valuation List of all holdings not exempted from the payment of rates to be prepared containing

the name of the street or locality in which such holding is situated;

the designation of the holding either by name or number sufficient to identify it;

the names of the owner and occupier, if known;

the annual value or improved value of the holding.

The Valuation List together with the amendments made under section 144 shall remain in force until it is superseded by a new Valuation List.

A new Valuation List which shall contain the same particulars as in subsection (1) shall be prepared and completed once every five years or within such extended period as the State Authority may determine." [Emphasis added] [80] The provision of subsection 137(3) of Act 171 clearly states that a new Valuation List must be prepared every five years or within such extended period as the State Authority may decide. In this appeal, the facts presented are that there was no new Valuation List prepared, and neither was an extension granted by the State Authority. Founded on the provision of subsection 137(3) of Act 171, and applying it to the facts of this case, we find it is evident there is no new Valuation List nor an extension granted. Consequentially, the Valuation List relied upon by the Respondent to amend the valuation rate had expired. As the 2017 Valuation List had expired, the question that begs to be asked is whether the Respondent is conferred with the authority pursuant to section 144 to amend the 2017 Valuation List which has expired? [81] In this regard, this Court alluded to the Federal Court decision of Majlis Daerah Hulu Selangor (supra). Majlis Daerah Hulu Selangor (supra) has provided definitive guidance pertaining to section 137 of Act 171. The Federal Court had stated that the provision of subsection 137(3) is mandatory. A Valuation List "shall be prepared and completed once every five years." The word "shall" denotes a mandatory obligation, not a directory one. [82] The Federal Court in Majlis Daerah Hulu Selangor (supra) further stated that subsection 137(2) of Act 171 does not extend the lifespan of the Valuation List. It merely provides that the existing list "shall remain in force until it is superseded by a new Valuation List." This is a saving provision that allows the existing list to continue temporarily while a new list is being prepared. It is not a power to extend the lifespan of the existing list indefinitely. [83] Moreover, the power of the Local Authority under subsection 137(3) of Act 171 is intended to extend the time for preparation of a new list, not to extend the validity of the old list. Paragraph 70 of Majlis Daerah Hulu Selangor (supra) is instructive in this regard: [70] Where the new Valuation List cannot be prepared and completed within the five-year period, that time period may be extended. Until a new Valuation List is prepared and completed, the existing Valuation List will remain in force until it is superseded by the new Valuation List. What is envisaged under section 137(3) is an extension of the time for the preparation and completion of a new Valuation List; not an extension of the validity of the existing Valuation List." [84] In other words, what this entails is that no Local Authority may use a Valuation List for an indeterminable period. The Federal Court's reasoning in Majlis Daerah Hulu Selangor (supra) is unequivocal. A Valuation List derives its validity solely from the statutory framework established under Act 171 and is subject to a prescribed lifespan of five years. Upon the expiry of that statutory period, the Valuation List lapses and ceases to have any legal force or effect unless a fresh Valuation List has been prepared in accordance with the Act or a valid extension has been granted by the State Authority for the preparation of a new Valuation List. Once the Valuation List has expired, it no longer constitutes a subsisting statutory instrument capable of being relied upon or amended by the Local Authority. Consequently, any statutory powers predicated upon the existence of a valid Valuation List likewise come to an end upon its expiry. [85] Applying the foregoing principles to the present case, the 2017 Valuation List came into force on 19 February 2017 and, pursuant to subsection 137(3) of Act 171, remained valid for a period of five years only. As the Federal Court held in Majlis Daerah Hulu Selangor (supra), a Valuation List has a statutory lifespan of five years and cannot be used for an indeterminable period. Accordingly, it expired in 2022. It is not in dispute that no fresh Valuation List was thereafter prepared, nor was any extension granted by the State Authority to extend the statutory period pending the preparation of a new Valuation List. Notwithstanding the expiry of the 2017 Valuation List, the Respondent purported to amend it in 2023 under section 144 of Act 171. We find the amendment of the 2017 Valuation List, after the said Valuation List had expired and no longer valid, to be invalid as the Respondent's exercise of power was therefore undertaken without statutory authority. Consequentially, we find the amendments ultra vires Act 171, void ab initio, and incapable of giving rise to any valid assessment or liability for rates. [86] The inevitable consequence is that the Respondent's purported amendment is void for want of jurisdiction. Once the 2017 Valuation List expired, it ceased to have any legal force or effect, and the Appellants' properties could no longer be regarded as "rateable holdings" within the meaning of Act 171. In the absence of a valid and subsisting Valuation List, the statutory foundation for the imposition and collection of assessment rates no longer existed. It follows that the Respondent was not empowered to amend the expired Valuation List or to levy rates pursuant to such amendment. We find that as a consequence, the amendment is void for lack of jurisdiction. [87] The Appellants' holdings ceased to be "rateable holdings" when the Valuation List expired. No rates can be imposed whether retrospective or prospective on the basis of an expired and invalid Valuation List. Whether the Respondent seeks to impose rates with retrospective effect or only from the date of the purported amendment is immaterial. In either scenario, the Respondent's power to impose assessment rates is contingent upon the existence of a valid Valuation List. As the 2017 Valuation List had already lapsed, there was no lawful statutory basis upon which the Respondent could amend the assessment rates. Accordingly, the amendments founded upon the expired 2017 Valuation List are ultra vires Act 171, null and void. [88] As we have found the amendments to the Valuation List to be null and void, we will not proceed to consider whether the amendments can be made retrospective or otherwise. The question of retrospectivity becomes academic because there is no valid assessment from which retrospectivity could arise. F. CONCLUSION [89] For the aforementioned reasons, we are satisfied that appellate intervention is warranted in these 4 appeals. The appeals are therefore allowed and the decision of the High Court is set aside. The Respondent in all 4 appeals is ordered to refund the Appellants all monies paid pursuant to the Bill Taksiran. We order interest at 5% per annum on all the amount payable with effect from today until full satisfaction. We further order costs of RM20,000.00 for each appeal to be paid by the Respondent to the Appellants subject to allocatur. Dated:14 July 2026 (SHAHNAZ BINTI SULAIMAN) Judge Court of Appeal Malaysia Putrajaya Counsel: For the Appellants : Saranjit Singh a/l Surjit Singh Shaheera binti Abdullah Shamrin Danial (Messrs. Saranjit Singh) For the Respondent Respondent 700 & 702 Khairul Nizam bin Abd Razak Mohd Faiz bin Abd Rahim (Messrs. Khairul Suhail Salwa & Co.) Respondent 701 & 703 Mohd Radzi bin Yatiman (Messrs. Rahim & Lawrnee)