Malaysia Federal Court holds landowner may participate in land reference proceedings despite prior acceptance of compensation award

30 May 2022

Spicon Products Sdn Bhd v Tenaga Nasional Bhd & Anor [2022] 4 CLJ 195

In Spicon Products Sdn Bhd v Tenaga Nasional Bhd & Anor, the appellant was the registered proprietor of the land acquired for the first respondent (“TNB”) for the purpose of constructing its main substation. After an enquiry was conducted by the land administrator (“LA”) pursuant to section 12 of the Land Acquisition Act 1960 (“Act”), the appellant was awarded an amount of RM467,154.22. The appellant did not file Form N under the Act (a form filed to apply for an objection to be referred to court) as the amount was accepted without any objection. As TNB objected to the award and lodged its objection vide Form N, the LA then referred TNB’s objection to the High Court vide Form O. In the land reference, TNB and the LA were respectively cited as applicant and respondent. The appellant was, however, not cited as a party although Form O identified the appellant as “a person interested in the land”.

The appellant invoked Order 15 rule 6(2)(b) of the Rules of Court 2012 (“ROC”) and/or inherent jurisdiction of the court to intervene in the land reference contending that as the landowner of the subject land acquired for TNB’s purposes, and as the recipient of the compensation paid for such acquisition, it would be prejudiced by any reduction of compensation. TNB opposed the application citing, among other things, (i) abuse of the process prescribed under the Act, and (ii) that the filing of Form N was a “compulsory statutory Form N” and the only mode available under the Act for any interested person to be a party in the land reference.

The application was allowed by the High Court. On appeal, the order was set aside by the Court of Appeal on the basis that such procedure amounted to an abuse of the court’s process. In allowing the appeal, the Federal Court held, among other things:

• Section 44(1) of the Act provides that the scope of the reference proceedings “shall be restricted to a consideration of the interests of the persons affected by the objection”. In line with the Act, it is for the High Court to ensure who attends court during the reference proceedings. 
• The reference was on an objection which related ultimately to the matter of determining the question of adequacy of compensation under article 13 of the Federal Constitution, and therefore, the landowner obviously and rightly had an interest to be added as a party and to appear at the reference proceedings.
• The Third Schedule neither provides for interventions nor for the exclusion of application of the ROC. Thus, by virtue of section 45(2) of the Act, the ROC “apply to all proceedings before the court” so long as the Rules are not “inconsistent with anything contained in this Act”. None of the provisions within the Act, whether expressed or by necessary inference, provide for the exclusion of a landowner who has accepted the award without objection to participate at any land reference proceedings.