Scp Assets Sdn. Bhd. v 1. ) Pengarah Tanah dan Galian Selangor (BA-25-39-05/2021)

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PENTADBIR TANAH HULU LANGAT …RESPONDEN-RESPONDEN JUDGMENT Introduction [1] In this application for judicial review pursuant to Order 53 of the Rules of Court 2012, SCP Assets Sdn Bhd the applicant, being the proprietor of various strata parcels held in 5 different strata developments is essentially seeking to quash the decision of the authorities in respect of the issuance of Parcel Rents (‘Cukai Petak’) concerning the applicant’s parcels. Reliefs Sought [2] The applicant sought the following reliefs in this judicial review:

Declaration that the formula used to compute and calculate the Parcel Rent under Rules of Strata Titles (Amendment) 2017 (“Amendment Rules 2017”) is unreasonable, irrational, illegal and/or ultra vires of the provisions under the Strata Titles Act 1985 (“STA 1985”) and/or Strata Management Act 2013 (“SMA 2013”);

(ii) Declaration that the formula used to compute and calculate the Parcel Rent payable by the applicant in respect of its parcels for the years 2018, 2019, 2020 and 2021 is unlawful, illegal and unenforceable;

(iii) Alternatively, a Declaration that the respondents have failed and/or neglected to compute and/or calculate the correct Parcel Rent amount payable by the applicant in respect of its parcels for the years 2018, 2019, 2020 and 2021 in accordance with the provisions of STA 1985 and Rules of Strata Titles (Amendment) 2017;

(iv) Order of Certiorari to quash all bills of Parcel Rent issued in respect of the applicant’s parcels for the year 2018, 2019, 2020 and 2021; and

Order of Mandamus to direct the respondents to re-calculate and re-compute the amount of Parcel Rent payable in respect of the applicant’s parcels for the year 2018, 2019, 2020 and 2021 reasonably and fairly and/or in accordance with the provisions of STA 1985 and SMA 2013. Grounds for Judicial Review [3] In this application for judicial review, the applicant put for the following grounds:

the method of computation and calculation of the parcel rent rates by the respondents is based on the Amendment Rules 2017 and Schedule VI thereto;

(ii) the computation and calculation is unfair, inequitable and/or inconsistent with the concept of share units under the STA 1985 and SMA 2013;

(iii) the calculations by the respondents are against the very scheme and spirit of introducing the parcel rents, which was meant to replace quit rent and not meant to implement new tax;

(iv) the respondents’ computation itself is also not in accordance with the Amendment Rules 2017;

the respondent’s decision to implement the computation, imposition and collection in the manner set out by them are unreasonable and irrational, which resulted in drastic and illogical increase in the rates; and

(vi) the respondents have failed to take into account relevant consideration and laws/regulations in imposing the new rates under parcel rent. Factual Background [4] The facts of this application as garnered from the documents filed by parties are as follows. The applicant is the registered proprietor of 15 parcels in 5 different strata developments/complexes. The particulars this 5 strata developments may be encapsulated as:

7 strata parcels in Pusat Dagangan Phileo Damansara 1 (“Parcels in PD 1”);

5 strata parcels in Pusat Dagangan Phileo Damansara 2 (“Parcels in PD 2”);

1 strata parcel in Damansara Intan Business Park (“Parcel in

1 strata parcel in Leisure Commerce Square (“Parcel in LCS”); and

1 strata parcel in Dataran Palma (“Parcel in Dataran Palma”). (These parcels will be referred to collectively as “the applicant’s Parcels”) [5] There are different Management Corporations established in each of the abovementioned schemes/developments as the applicant’s Parcels are within different stratified developments. [6] As the applicant’s Parcels are within different stratified developments, there are different Management Corporations established in each of the abovementioned schemes/developments. [7] The method of implementations and payments of Quit Rent by the applicant differed according to the practices in each complex and its Management Corporations. [8] For instance, in respect of the parcel in Damansara Intan, the Management Corporation would bill and collect directly from the applicant the apportioned Quit Rent payable by the applicant. [9] In respect of the other 4 complexes notably the parcels in PD 1, PD 2, LCS and Dataran Palma, there was no direct billing to the applicant. Instead, the Management Corporations therein would use ‘service charges’ collected from the applicant and other parcel owners to pay the Quit Rent. [10] In May 2019, the applicant received Parcel Rent bills in respect of Parcels in Damansara Intan, LCS and Dataran Palma. [11] In July 2019, the applicant received Parcel Rent bills in respect of parcel in PD 1. [12] The Parcel Rent bills received were for 2019 as well as for amounts outstanding for the year 2018. [13] While the applicant did not receive any Parcel Rent bills for the year 2018, it had in fact paid for the Quit Rent bills for the year 2018. [14] According to applicant the Parcel Rents charged from 2018 are high and unreasonable compared to Quit Rent. The changes in rates are summarized and reproduced as follows: “(a) Parcels in PD 1, the total rates for:

Quit Rent for 2018: RM5,053.44;

(ii) Parcel Rent commencing 2018: RM301,480.00; The Parcel Rent is 60 times more than Quit Rent.

Parcels in PD 2, the total rates for:

Quit Rent for 2018: RM1,925.91;

(ii) Parcel Rent commencing 2018: RM134,968.00; The Parcel Rent is 70 times more than Quit Rent.

Parcel in Damansara Intan, the total rates for:

Quit Rent for 2018: RM2,613.16;

(ii) Parcel Rent commencing 2018: RM40,202.00; The Parcel Rent is 15 times more than Quit Rent.

Parcel in LCS, the total rates for:

Quit Rent for 2018: RM11,063.80;

(ii) Parcel Rent commencing 2018: RM54,450.00; The Parcel Rent is 5 times more than Quit Rent.

Parcel in Dataran Palma, the total rates for:

Quit Rent for 2018: RM413.81;

(ii) Parcel Rent commencing 2018: RM9,685.00; The Parcel Rent is 23 times more than Quit Rent.” [15] By way of a letter dated 30.05.2019, the applicant, inter alia, sought confirmation on the formula for the computation from the first respondent and also requested that the rates be recalculated and reduced in respect of parcels in Damansara Intan, LCS and Dataran Palma. As there was no response, the applicant issued 2 reminder letters dated 24.06.2019 and 23.07.2019 to the first respondent. [16] Also, by way of letter dated 24.07.2019, the applicant issued a similar letter as the above to the first respondent followed by a reminder letter dated 23.09.2019 in respect of the parcels in PD 1. [17] As there was no response from the first respondent, acting in an abundance of caution, the applicant appointed a firm of professional Surveyor Consultant (“the Consultant”) to verify the method of calculation and computation by the respondents. The applicant informed the first respondent of the appointment and sought for a quick resolution by way of its letter dated 12.06.2020. [18] The consultant completed the verification. The consultant concluded that there is a difference in the method of calculation used by the respondents and the consultant. The consultant, under the instruction of the applicant, issued letters dated 15.06.2020 to the first respondent regarding the same. [19] By way of letters dated 15.07.2020, the first respondent alleged that the Parcel Rent in the State of Selangor was carried out pursuant to the new amendments to Strata Titles Act 1985 and furnished examples of the calculations. [20] As the applicant’s parcels are within different stratified developments, each governed by its own Management Corporation, the applicant's method of implementing and paying Quit Rent varied based on the practices observed in each complex and its Management Corporations. As an example, for the Parcel in Damansara Intan, the Management Corporation would invoice and directly collect the apportioned Quit Rent from the applicant. [21] In respect of the other 4 complexes notably the parcels in PD 1, PD 2, LCS and Dataran Palma, there was no direct billing to the applicant. Instead, the Management Corporations therein would use ‘service charges’ collected from the applicant and other parcel owners to pay the Quit Rent. [22] Regarding the other four complexes, specifically the parcels in PD 1, PD 2, LCS, and Dataran Palma, the applicant was not directly billed. Instead, the Management Corporations in those complexes utilized 'service charges' collected from the applicant and other parcel owners to cover the Quit Rent. [23] In May 2019, bills for Parcel Rent were issued to the applicant for the parcels in Damansara Intan, LCS, and Dataran Palma. In July 2019, the applicant received Parcel Rent bills for the Parcel in PD

[24] The bills for Parcel Rent that were received covered the year 2019 and claimed outstanding amounts for the year 2018. Although the applicant did not receive any Parcel Rent bills for the year 2018, the applicant had made payments for the Quit Rent bills for that year. [25] The applicant contends the charges for Parcel Rents from 2018 are excessively high and unreasonable when compared to Quit Rent. The rate variations are outlined as follows:

Parcels in PD 1, the total rates for:

Quit Rent for 2018: RM5,053.44;

(ii) Parcel Rent commencing 2018: RM301,480.00; The Parcel Rent is 60 times more than Quit Rent.

Parcels in PD 2, the total rates for:

Quit Rent for 2018: RM1,925.91;

(ii) Parcel Rent commencing 2018: RM134,968.00; The Parcel Rent is 70 times more than Quit Rent.

Parcel in Damansara Intan, the total rates for:

Quit Rent for 2018: RM2,613.16;

(ii) Parcel Rent commencing 2018: RM40,202.00; The Parcel Rent is 15 times more than Quit Rent.

Parcel in LCS, the total rates for:

Quit Rent for 2018: RM11,063.80;

(ii) Parcel Rent commencing 2018: RM54,450.00; The Parcel Rent is 5 times more than Quit Rent.

Parcel in Dataran Palma, the total rates for:

Quit Rent for 2018: RM413.81;

(ii) Parcel Rent commencing 2018: RM9,685.00; The Parcel Rent is 23 times more than Quit Rent. [26] Through three distinct letters dated 30.05.2019, the applicant, among other things, sought clarification on the computation formula from the first respondent. Additionally, they requested a recalculation and reduction of rates for parcels in Damansara Intan, LCS, and Dataran Palma. The applicant sent two reminder letters on 24.06.2019 and 23.07.2019 to the first respondent. [27] On 24.07.2019, the applicant sent a letter to the first respondent concerning Parcels in PD 1. A reminder letter dated 23.09.2019, followed. Due to the absence of a response from the first respondent, the applicant, exercising caution, engaged a professional Surveyor Consultant to verify the calculation method used by the respondents. The applicant notified the first respondent of this appointment and urged a prompt resolution in a letter dated 12.06.2020. [28] The verification process by the Consultant was successfully completed, revealing a disparity in the calculation method employed by the respondents compared to that of the Consultant. Under the applicant's direction, the Consultant issued letters on 15.06.2020, notifying the first respondent of these findings. [29] In letters dated 15.07.2020, the first respondent asserted that the Parcel Rent in the State of Selangor was conducted in accordance with the new amendments to the Strata Titles Act 1985, providing examples of the calculations. Principles relating to Judicial Review [30] The grounds for an application for judicial review are illegality, irrationality, procedural impropriety and proportionality. [31] In the Federal Court case, Akira Sales & Services (M) Sdn Bhd v. Nadiah Zee Abdullah & Another Appeal [2018] 2 CLJ 513; [2018] 2 MLJ 537, the liberal approach on judicial review in R Rama Chandran v. The Industrial Court of Malaysia & Anor [1997] 1 CLJ 147; [1997] 1 MLJ 145 has been re-emphasised at pp. 547 to 548 (CLJ); pp. 571 to 572 (MLJ) as follows: [45] In the same appeal, Edgar Joseph Jr FCJ (Eusoff Chin in agreement) said that an award could be reviewed for substance as well as for process: It is often said that judicial review is concerned not with the decision but the decision making process. (See eg Chief Constable of North Wales Police v. Evans [1982] 1 WLR 1155). This proposition, at full face value, may well convey the impression that the jurisdiction of the courts in Judicial Review proceedings is confined to cases where the aggrieved party has not received fair treatment by the authority to which he has been subjected. Put differently, in the words of Lord Diplock in Council of Civil Service Unions & Ors v. Minister for the Civil Service [1985] AC 374, where the impugned decision is flawed on the ground of procedural impropriety. But Lord Diplock’s other grounds for impugning a decision susceptible to Judicial Review make it abundantly clear that such a decision is also open a challenge on grounds of ‘illegality’ and ‘irrationality’ and, in practice, this permits the courts to scrutinise such decisions not only for process, but also for substance. In this context, it is useful to note how Lord Diplock (at pp. 410- 411) defined the three grounds of review, to wit, (i) illegality, (ii) irrationality, and (iii) procedural impropriety. This is how he put it: By ‘illegality’ as a ground for Judicial Review, I mean that the decision maker must understand correctly the law that regulates his decision making power and must give effect to it. Whether he has or not is par excellence a justiciable question to be decided, in the event of dispute, by those persons, the judges, by whom the judicial power of the state is exercisable. By ‘irrationality’, I mean what can by now be succinctly referred to as ‘Wednesbury unreasonableness’ (see Associated Provincial Picture Houses Ltd v. Wednesbury Corp. [1948] 1 KB 223). It 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 could have arrived at it. Whether a decision falls within this category is a question that judges by their training and experience should be well equipped to answer, or else there would be something badly wrong with our judicial system. To justify the courts’ exercise of this role, resort I think is today no longer needed to Viscount Radcliffe’s ingenious explanation in Edwards v. Bairstow [1956] AC 14, or irrationality as a ground for a court’s reversal of a decision by ascribing it to an inferred though undefinable mistake of law by the decision maker. ‘Irrationality’ by now can stand on its own feet as an accepted ground on which a decision may be attacked by Judicial Re view. I have described the third head as ‘procedural impropriety’ rather than failure to observe basic rules of natural justice or failure to act with procedural fairness towards the person who will be affected by the decision. This is because susceptibility to judicial review under this head covers also failure by an administrative tribunal to observe procedural rules that are expressly laid down in the legislative instrument by which its jurisdiction is conferred, even where such failure does not involve any denial of natural justice. Lord Diplock also mentioned ‘proportionality’ as a possible fourth ground of review which called for development” [32] Further, the meaning of error of law has also been explained in the case of Syarikat Kenderaan Melayu Kelantan Bhd v. Transport Workers Union [1995] 2 CLJ 748; [1995] 2 MLJ 317 in the following words: “Is neither feasible nor desirable to attempt an exhaustive definition of what amounts to an error of law, for the categories of such an error are not closed. But it may be said that an error of law would be disclosed if the decision-maker asks himself the wrong question or takes into account irrelevant considerations or omits to take into account relevant considerations (what may be conveniently termed Anisminic error) or if he misconstrues the terms of any relevant statute, or misapplies or misstates a principle of the general law.” [33] The test applicable is the objective test as was held by the Federal Court in the case of Titular Roman Catholic Archbishop Of Kuala Lumpur v. Menteri Dalam Negeri & Ors [2014] 6 CLJ 541; [2014] 4 MLJ 765, as follows: “(1) (per Arifin Zakaria Chief Justice) It is trite that the test applicable in judicial review now is the objective test. In considering whether the Court of Appeal had applied the correct test, it is pertinent to consider the whole body of the judgments of the judges of the Court of Appeal and not by merely looking at the terms used in the judgments. The courts will give great weight to the views of the Executive on matters of national security. The Court of Appeal had applied the objective test in arriving at its decision. Had it applied the subjective test, it would not be necessary for it to consider the substance of the first respondent’s decision.” Applicant’s submissions [34] According to the applicant, the method of computation and calculation of the Parcel Rent rates by the respondents is based on the Amendment Rules 2017 and Schedule VI thereto. The computation and calculation is unfair, inequitable and/or inconsistent with the concept of share units under the STA 1985 and SMA 2013. [35] It was further submitted by the applicant that the calculations by the respondents are against the very scheme and spirit of introducing the Parcel Rents, which was meant to replace Quit Rent and not meant to implement new tax. It was argued that the respondents’ computation itself is not in accordance with the Amendment Rules 2017. [36] The applicant argued that the respondents’ decision to implement the computation, imposition and collection in the manner set out by them are unreasonable and irrational, which resulted in drastic and illogical increase in the rates. And that the respondents have failed to take into account relevant consideration and laws/regulations in imposing the new rates under Parcel Rent. [37] The implementation of Parcel Rent ensures that the parcel owners receive bills directly from the Land Office (Pejabat Tanah) and are responsible to pay directly, unlike previously under Quit Rent, where parcel owners are to pay Management Corporations or the Joint Management Bodies, as the bills are issued to those bodies. [38] The new subsections 23C(1), 23C(8) and 23C(9) STA 1985 states as follows:

the Land Administrator is to determine the amount of rent;

it is to be computed on the basis of a rate per square metre for each parcel; and

where the rent in relation to any parcel is or includes a fraction of a ringgit, it is to be rounded up to one ringgit or to the nearest ringgit above the amount so computed. [39] By way of the subsidiary legislations and regulations namely the new Rules 13(1) and 13(2) Amendment Rules 2017 and the new