Spicon Products Sdn Bhd v Tenaga Nasional Bhd & Anor [2022] MLJU 299

Spicon Products Sdn Bhd v Tenaga Nasional Bhd & Anor [2022] MLJU 299

Federal Court (Putrajaya)

Right of a landowner to intervene in land proceedings brought by other party

1. The Appellant was the registered owner of a parcel of land located in the Mukim of Kelemak, District of Alor Gajah, Melaka (“the scheduled land”). The land was acquired by the Government for the use of the First Respondent, Tenaga Nasional Berhad (“TNB”), to construct its main substation. Following the procedures under section 12 of the Land Acquisition Act 1960 [Act 486], the Land Administrator conducted an inquiry, and on 30 March 2018, issued Form E to the Appellant to inform it of the date of the hearing.
2. After the inquiry, the Land Administrator awarded a total compensation of RM467,154.22 to the Appellant, as reflected in Form H dated 13 June 2018. The award comprised RM272,000 for the value of the land, RM192,654.22 for incidental costs (interest on a loan), and RM2,500 for the valuer’s fees. The Appellant accepted this compensation on 2 July 2018 without objection and therefore did not file a Form N.
3. However, TNB disagreed with the portion of the award concerning the incidental costs and filed its objection through Form N on 7 August 2018. The Land Administrator subsequently referred TNB’s objection to the High Court by Form O, listing TNB as the applicant and the Land Administrator as the Respondent. Although the Appellant was identified in Form O as a “person interested in the land,” it was not included as a party to the proceedings.
4. The Appellant then applied to intervene in the land reference proceedings under Order 15 rule 6(2)(b) of the Rules of Court 2012 and/or the Court’s inherent jurisdiction. It argued that as the landowner and recipient of the compensation, it would be directly affected by any reduction in the award, particularly the incidental costs. The Appellant also contended that its participation was necessary to protect its rights and to ensure fair and just adjudication of the matter.
5. TNB opposed the application, arguing that the Appellant’s intervention was an abuse of process. According to TNB, filing Form N was a mandatory statutory requirement under Act 486 for any party seeking to participate in a land reference. Since the Appellant had not filed Form N, TNB contended that it was precluded from taking part in the proceedings. TNB also asserted that the Appellant’s interests were adequately represented by the Land Administrator, who was responsible for defending the compensation award.
6. The High Court, however, disagreed with TNB. After considering subsections 37(1) and 38(1) of the Land Acquisition Act 1960, the judge held that there was no requirement for a party who accepted the award without objection to file Form N. The Court found that the Appellant’s non-filing of Form N was not fatal since it was not contesting the award but merely seeking to protect its interests in light of TNB’s objection. Accordingly, the High Court allowed the Appellant’s application to intervene in the proceedings.
7. TNB then appealed to the Court of Appeal due to the High Court’s decision that allowed the landowner to intervene in the land reference proceedings. TNB argued that the landowner had no right to take part because they did not file Form N and had already accepted the compensation without objection. TNB claimed that allowing intervention under Order 15 would bypass the strict procedure under the Land Acquisition Act.
8. The Court of Appeal decided in favor of TNB. It held that filing Form N is the only proper method for a person to become a party to a land reference. Since the landowner accepted the award and did not file Form N, it could not later intervene. The Court of Appeal ruled that using Order 15 was an abuse of process and that the Land Administrator would adequately safeguard the landowner’s interests. Therefore, the Court of Appeal set aside the High Court’s order allowing intervention.
9. Aggrieved by this, the Appellant then appealed to the Federal Court, arguing that even though they accepted the compensation, they still have a direct interest in the outcome whereby any reduction in compensation would affect it personally. 

1. The Federal Court decided that a landowner who has accepted an award of compensation made by the Land Administrator without protest is nevertheless entitled to intervene and participate in land reference proceedings initiated by another interested party, such as the paymaster who has objected to that award.
2. The Court held that this position is consistent with Clause (1) of Article 13 of the Federal Constitution, which guarantees that no person shall be deprived of property save in accordance with law. The process of compulsory acquisition involves the deprivation of property, and the adequacy of compensation is a constitutional safeguard that must be upheld. Therefore, any interpretation of the Land Acquisition Act 1960 [Act 486] must lean towards allowing, rather than restricting, a landowner’s right to participate in proceedings that affect their property interests.
3. The Court conducted a detailed analysis of the statutory scheme under Act 486, particularly the procedure for objections and references under sections 37 and 38. It observed that while only a “person interested” who has objected to an award may file a formal objection, the Act does not expressly exclude other interested persons, such as a landowner who has accepted the award, from attending or participating in reference proceedings. Importantly, subsection 45(2) of Act 486 provides that the Rules of Court 2012 apply to all proceedings under the Act insofar as they are not inconsistent with its provisions. This allows procedural flexibility, including intervention under Order 15 rule 6, which permits any person whose presence is necessary to ensure that all issues are properly adjudicated to be joined as a party.
4. The Federal Court emphasized that land reference proceedings are original hearings rather than appeals, and are adversarial in nature. The High Court’s role in such references is to determine the adequacy of compensation, considering the interests of all parties affected by the objection. Hence, the participation of the landowner, even if they had accepted the award, is vital to protect their constitutional rights and ensure a fair determination of compensation.
5. In rejecting the earlier decision in Tenaga Nasional Berhad v Unggul Tangkas Sdn Bhd [2018] 4 CLJ 285, the Federal Court clarified that applying Order 15 rule 6 of the Rules of Court 2012 does not contradict Act 486 but rather complements it. The Court noted that Act 486 is not exhaustive, and procedural rules can be used to fill any gaps, provided they do not undermine the Act’s purpose. Excluding the landowner from participation would amount to a denial of natural justice and could result in an unfair diminution of compensation.
6. Accordingly, the Federal Court held that a landowner’s right to intervene and participate in land reference proceedings is constitutionally and procedurally justified, even if the landowner did not object to the award. The Court allowed the appeal, reinstating the High Court’s decision, and reaffirmed that the interpretation of Act 486 must always be guided by the principles of fairness, natural justice, and protection of property rights under Article 13 of the Federal Constitution.