Change of Land Use vs Tenancy Agreement

TAN SRI DATO' LIM CHENG POW v. BELLAJADE SDN BHD & ANOTHER APPEAL

FEDERAL COURT, PUTRAJAYA

VERNON ONG LAM KIAT FCJ;

ABDUL RAHMAN SEBLI FCJ;

ZABARIAH MOHD YUSOF FCJ;

HASNAH MOHAMMED HASHIM FCJ;

RHODZARIAH BUJANG FCJ

[CIVIL APPEAL NOS: 02(f)-135-11-2017(W) & 02(f)-136-11-2017(W)]

30 SEPTEMBER 2021

(1) The letter from the Land Administrator and the certificate confirming the approval were relevant. What was noteworthy from both the documents was the fact that the application was expressly stated to have been made under s. 204D of the NLC and in the said certificate, the condition of the land titles was clearly stated to be mixed development for the purpose of apartments and office only. It was not one made solely for a change of condition under s. 124(4) of the NLC, given the express citation of the said s. 204D in both the application and the certificate of approval although in the certificate the said section was put in the alternative, that was, 'atau'. The reason to invoke s. 204D was because this development was not a single parcel of land but nine parcels of land. Hence the need for amalgamation of the same to suit the extensive development built on it and given the nature of that development there was an equal need to make that application under s. 124(4). The mere fact that s. 204D was only stated in the alternative in the said certificate did not mean that it was not invoked by the Land Administrator. When such an application is made under s. 204D, the governing provisions are those provided under that part of the NLC which is titled 'Surrender and Re-alienation - Special Provisions'. Therefore, the first leave question on the peculiar facts of this case should be answered in the positive, because of the clear evidence that Kris Angsana's application to the Land Administrator was made both under ss. 204D and 124(4).

(2) The NLC does not stipulate when is the effective date for the approval of the change in condition unlike that for alienation of land as provided in s. 78(3) and change in category of land use in s. 124(1)(a). In the absence of such specific provision, that effective date, would be when the same was similarly endorsed on the title. Section 124(7) is applicable to an approval for change in condition in these appeals because of the clear requirement in the said provision and when it is read with sub-s. (1)(c) and (4). The second leave question should be answered in the affirmative. (para 14)

(3) Not only was the approval granted, even Plaza Palas was given the certificate for occupation by the Council and was obligated by it to pay an assessment tax on a commercial rate. Even the stipulated premium at the time of approval was paid when the tenancy agreement was entered into. Therefore, there was no obvious intention to commit or even perpetuate the illegality. The dealing between the parties was above board at the start. The certificate for occupation for the Plaza Palas by the Council added another dimension to the sincerity of Bellajade when entering the agreement for it reinforced the official approval on the change in condition. The Council, being a public entity, must be presumed to have made a diligent search of the land title's condition before issuing the said certificate. It could not be, unless there was evidence to the contrary, that one arm of the public authority was oblivious to what the other was doing. Thus, at the time the agreement was entered, the change in condition was effectively in place though not formally endorsed on the land title yet.

(4) The imposition of further premium afterwards which were not settled yet at the material time of the dispute should not be completely held against Bellajade for the crucial time here was the execution date of the agreement. With the approval and full satisfaction of the condition imposed to effect the change of land use, what was left to be done at that material time was the administrative act of endorsing the change on the land title. Thus, the agreement was not void ab initio. The question of knowledge of the alleged illegality of the said condition on the part of CME was immaterial to the issue of its liability to pay the rentals as claimed.

(5) It was obvious from the letter dated 16 December 2015 from the office of the Director of Land and Mines, Federal Territory that all decisions made in the official meeting of the Department on 8 May 2012 were being maintained, which meant that the decision to increase the premium was also maintained. Therefore, with effect from the date of the letter dated 16 December 2015 and the undisputed evidence that the increase in premium was not paid at the material time of this dispute, the pre-requisite to effect the change in condition was not met. Thus, from the said date onwards, Bellajade could not presuppose that the said change in condition was still effective or in place and under the said circumstances, the agreement had by then, been rendered void. Bellajade was therefore only entitled to claim the outstanding rentals from May 2013 until December 2015 but not until the end of the three years tenancy period as prayed in the statement of claim.

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