HOTEL SENTRAL (JB) SDN BHD v PENGARAH TANAH DAN GALIAN NEGERI JOHOR, MALAYSIA & ORS [2017] 5 MLJ

COURT OF APPEAL (PUTRAJAYA)

ADMINISTRATIVE LAW – JUDICIAL REVIEW – LOCUS STANDI – LEGITIMATE EXPECTATION

2.    In this case, the reserved road (“the said road”) situated between Lot 2897 and Lot 3270 was revoked by the State Authority (“1^st and 2^nd Respondents”).  Subsequently, the said road was alienated to the 4^th Respondent and formed as a part of the new Lot 3270.

3.    As a result, the Appellant lost access to the Hotel Sentral’s basement car park.

4.    The Appellant filed a claim in the High Court (“HC”), arguing that the said road was essential for entry to and exit from Hotel Sentral’s car park, and also necessary to meet bomba (fire safety) requirements.

5.    The Appellant further asserted that, although no approved building plans were provided at the time of purchasing Lot 2897, he had managed to obtain approved bomba plans for Hotel Sentral, which confirmed that the hotel had been built in compliance with the relevant regulations.

6.    The HC ruled in favour of the Respondents, holding that the Appellant was not adversely affected by the revocation and alienation of the said road, as the road reserve was not intended solely for the Appellant’s benefit. The court also found that the Appellant lacked locus standi.

7.    Dissatisfied with the HC’s decision, the Appellant appealed to the Court of Appeal (“COA”) to review and set aside the revocation of and alienation of the said road to the 4^th Respondent.

2.    Whether the Appellant could assert a substantive right based on the principle of legitimate expectation.

3.    Whether the decision to revoke the road reserve frustrated the Appellant’s legitimate expectation and therefore rendered the revocation invalid.

(a) The COA reiterated the decision of the court in QSR Brands Bhd v Suruhanjaya Sekuriti & Anor [2006] 3 MLJ 164; [2006] 2 CLJ 532 to define locus standi as follows:

“It is for the applicant to show that he falls within the factual spectrum that is covered by the words ‘adversely affected’.”

(b)  The COA affirmed the validity of the Bomba plans provided by the Appellant and held that they carried the same evidentiary weight as approved building plans.

(c)  The COA held that the learned trial judge erred in law and fact in determining that the Appellant had no locus standi, since the loss of access clearly constituted an adverse effect.

(d) Therefore, the Appellant was entitled to initiate judicial review.

2.    Whether the Appellant could assert a substantive right based on the principle of legitimate expectation.

(a) The COA reiterated the Indian Supreme Court in the case of Motilal Padampat Sugar Mills v State Of Uttar Pradesh and Ors 1979 AIR 621, which recognised the principle of legitimate expectation in India, as follows:

“It was thus laid down that a party who has, acting in reliance on a promise made by the Government altered his position, is entitled to enforce the promise against the Government, even though the promise is not in the form of a formal contract as required by Article 299 and that Article does not militate against the applicability of the doctrine of promissory estoppel against the Government.”

(b) The COA also affirmed that this principle is also applicable in Malaysia by referring to the case Law Pang Ching & Ors v Tawau Municipal Council [2009] 3 MLJ 452; [2010] 2 CLJ 821, which followed the decision in Mc Innes v Onslow Fane as follows:

“There are at least three categories in which the court is entitled to intervene… Thirdly, there is an intermediate category, which may be called the expectation cases, which differ from the application cases only in that the applicant has some legitimate expectation from what has already happened that his application will be granted.”

(c)  The COA found that the Appellant had reasonably relied on the conduct of the 1^st and 2^nd Respondents, creating a legitimate expectation of continued access to the said road.

(d) The COA also noted that the 1^st and 2^nd Respondents should have exercised fairness to notify the Appellant prior to the revocation of the said road.

3.    Whether the decision to cancel the road reserve frustrated the expectations of the Appellant and thus rendered the decision to cancel the road invalid.

(a) The COA emphasised that the general rule of the doctrine of estoppel and legitimate expectation is not applicable against the Government, nor any representation, whether made expressly or implied by conduct, should bind the Government if acting upon it would result in a breach of statute.

(b) The COA referred to the case of North East Plantations Sdn Bhd

lwn Pentadbir Tanah Daerah Dungun & Satu Lagi [2011] MLJU 1529; [2011] 4 CLJ 729 at p 733 as follows:

“There was no express provision in the NLC which stated that the State Government must accept the payment made by way of Form 5A. Thus, the first Respondent’s act of rejecting and returning the payment made by the appellant was valid and proper following the provision of s 78(3) of the NLC.”

(c)  Although the COA acknowledged that the sudden revocation of the said road was detrimental to the Appellant’s right to access it, the COA had no position to determine the validity of the action to revoke the said road, considering the 1^st and 2^nd Respondents acted according to the power vested upon the State Authority.

However, the COA declined to grant the substantive orders sought regarding the revocation of the said road, on the basis that the 1^st and 2^nd Respondents had acted within the scope of their lawful statutory authority.

2.    Although legitimate expectation may provide grounds for judicial review, it cannot override statutory powers lawfully exercised by the Government.