Ann Joo Steel Bhd v Pengarah Tanah dan Galian Negeri Pulau Pinang & Anor and another appeal [2020] 1 MLJ 689

Federal Court (Putrajaya) 

Challenging order of the High Court

1. Tenaga Nasional Bhd (“the First Defendant”) occupied a reclaimed area next to Lot 78, a piece of land owned by the Appellant (“the Plaintiff”). The Collector of Land Revenue, Butterworth, had earlier fixed the boundary of Lot 78 using the traverse mark (“TM”) method.  The Plaintiff argued that this method caused it to lose land, and that using the high water mark method (“HWM”) would give it an additional 7.5 acres (“the disputed land”).
2. Unsatisfied with the TM measurement, the Plaintiff applied to the Director of Land Titles to have the boundary re-measured. However, the Deputy Director of Titles, Penang, affirmed the collector’s TM-based boundary (“the First Decision”). The Plaintiff then appealed to the Land Titles Appeal Board but the appeal was dismissed on the ground that the first decision was final under subsections 27(3) and 28(3) of the National Land Code (Penang and Malacca Titles) Act 1963 (“NLCPMT”) and therefore not appealable under section 15.
3. The Plaintiff subsequently appealed to the High Court. The High Court did not rule on the merits but instead remitted the matter back to the District Commissioner of Land Titles for a new determination (“the 1995 Order”). None of the parties appealed this order.
4. Following the 1995 Order, the Deputy Director conducted an inquiry and re-measured the boundary using the HWM method (“the Second Decision”), which resulted in the disputed land being included within Lot 78.
5. Meanwhile, the First Defendant continued to occupy the reclaimed land and applied for alienation of part of it. When the First Defendant enquired about the status of the disputed land, the officer from the Penang Land and Mines Office (“the Third Defendant”) confirmed that the original TM-based boundary (the First Decision), and not the HWM-based boundary (the Second Decision), was the correct and applicable boundary position.
6. The Plaintiff then filed a suit seeking declarations that the second decision was valid and must be followed, and that the first Defendant must vacate the disputed land. The High Court held in favour of the Plaintiff, ruling that:
   (a) the 1995 Order was a valid High Court order, making the Second Decision legally sound; and
   (b) the Second Decision superseded the First Decision and was final.
7. The First Defendant appealed, as did the Second and Third Defendants. The Court of Appeal allowed both appeals and set aside the High Court’s decision. The Plaintiff has now appealed to the Federal Court leading to the present proceedings.

Whether the High Court’s order was made in excess of its jurisdiction, rendering it unlawful and liable to be set aside.

1. The Federal Court held that the High Court did not act in excess of jurisdiction when issuing the 1995 Order. The appellate court had incorrectly treated the order as illegal and void. Under section 19 of NLCPMT, the High Court undeniably has statutory appellate jurisdiction to hear appeals involving legal questions. Therefore, even if the appeal before the High Court was mistakenly treated as involving points of law rather than facts, such an error amounts to a wrongful exercise of jurisdiction rather than an absence of jurisdiction. This distinction is material because an order made within jurisdiction, although wrong, is not automatically void.
2. The Federal Court further stressed that the Defendants bore the legal burden to prove that the appeal was improperly brought on factual issues only, and they failed to do so. Moreover, all Defendants actively participated in the 1995 proceedings and did not at any point challenge that decision. By failing to appeal, and instead accepting and acting upon it, the Defendants were precluded from later disputing its legality (Syed Omar bin Syed Mohamed v Perbadanan Nasional Bhd [2013] 1 MLJ 461).
3. The Federal Court affirmed that orders of a superior court remain binding until set aside in direct proceedings. Parties are not permitted to ignore or sidestep court orders by raising collateral objections in later suits. This principle is firmly rooted in authorities such as Khaw Poh Chhuan v Ng Gaik Peng & Ors [1996] 1 MLJ 761, Hock Hua Bank Bhd v Sahari bin Murid [1981] 1 MLJ 143, Scotch Leasing Sdn Bhd (in receivership) v Chee Pok Choy & Ors [1997] 2 MLJ 105, and Isaacs v Robertson [1984] 3 All ER 140.
4. The Federal Court distinguished its earlier ruling in Tenaga Nasional Bhd v Bandar Nusajaya Development Sdn Bhd [2017] 1 MLJ 689, noting that in that case, the decision-maker attempted to reopen its own decision despite statutory finality. Here, the Deputy Director merely complied with a High Court remittance order, not unilaterally reviewing his own decision. Thus, the principle in Bandar Nusajaya did not apply.
5. The Federal Court also emphasised that where a superior court issues an order, even if later alleged to be contrary to law, its validity cannot be attacked indirectly. Instead, a separate application seeking to set it aside must be made as reaffirmed in Badiaddin bin Mohd Mahidin v Arab Malaysian Finance Bhd [1998] 1 MLJ 393, Pembinaan KSY Sdn Bhd v Lian Seng Properties Sdn Bhd [1991] 1 MLJ 100, and TO Thomas v Asia Fishing Industry Pte Ltd [1977] 1 MLJ 151.
6. Accordingly, the Defendants could not disregard the Second Decision simply by asserting the 1995 Order was void. Their attempted collateral challenge, raised only when facing a trespass claim, was procedurally impermissible and inconsistent with long-standing legal principles safeguarding finality of judicial decisions.