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 The Star
by Yip Yoke Teng
THE Land Acquisition Act 1960 and National Land Code 1965, specifically the
amendment made in 1990, are two laws brought into view in the Jalan Sultan
debate.
Lawyer and former member of the Bar Council Roger Tan, who is also a columnist
with The Star, explained the relevance of these laws in this context.
He first highlighted an individual’s constitutional right to property as
enshrined in Article 13 of the Federal Constitution. The Article reads: “No
person shall be deprived of property save in accordance with law” and “No law
shall provide for the compulsory acquisition or use of property without adequate
compensation”.
He noted that even Singapore does not have a similar provision in its
constitution.
The word ‘law’ in Article 13(1) can only mean an enacted law. This law is the
Land Acquisition Act 1960 (LAA) which is in force since Oct 13, 1960.
Circumstances that allow land to be compulsorily acquired are:
Section 3(1) of LAA states that the state authority may acquire any land which
is needed-
(a) For any public purpose; or
(b) By any person or corporation for any purpose which in the opinion of the
state authority is beneficial to the economic development of Malaysia or any
part thereof or to the public generally or any class of the public; or
(c) For the purpose of mining or for residential, agricultural, commercial or
industrial purposes.
“‘Public purpose’ in 3(1)(a) is not defined in the LAA. Broadly speaking, it
would include the purpose in which it relates to the general interest of the
society as opposed to the particular interest of an individual or corporation,”
he said,
“We should note that if the acquisition is meant to build a commercial centre to
help finance the construction cost of the MRT, then it becomes an issue whether
the purpose of the acquisition falls within 3(1)(a).
“It is near impossible to challenge the validity of a land acquisition,” he
said, adding that any challenge is only limited to the determination of the
measurement of the land; the amount of compensation; the persons to whom it is
payable and the apportionment of the compensation only.
He also noted that since 1960, there have been few cases
challenging the land acquisition’s legality and validity on the ground that the
acquiring authority had acted mala fide, that is, in bad faith but almost
all had failed.
If the acquisition is made under 3(1)(b), the acquiring authority will need to
follow the procedures detailed by 3A, 3B, 3C, 3D, 3E and 3F which were
incorporated into the LAA in 1992.
He explained that the main issue of acquiring under 3(1)(b) would be whether a
development approval was granted and whether the acquisition was for public
utility.
He highlighted two other important sections in LAA, they are:
Section 8(3) says that a land acquisition declaration shall be conclusive
evidence. In other words, it is difficult to challenge the purpose for the
intended acquisition, and;
Section 68A states even if the subsequent use of or dealing with the land might
be different from the purpose which was originally stated when the land was
acquired, the acquisition is still legal. Such a provision acts as an ouster
clause, which means the acquisition cannot be invalidated.
The National Land Code (NLC) was brought into light by some parties to highlight
the possibility of acquiring only the stratum (underground land) while not
affecting the surface properties.
Tan said Section 44 (1)(a) of the NLC endowed upon landowners the exclusive use
of (air) space above and below the land.
However, ever since Part Five (A) of NLC was inserted by the NLC (Amendment) Act
1990 on 23 February 1990, separate ownership of surface land and stratum land
has been made possible.
“I don’t think it is correct to state that Part Five (A) NLC was inserted to
allow for the acquisition of underground land without affecting surface
property, which is by acquiring only the stratum. That is only possible if there
are already two separate and independent surface and stratum titles issued over
an alienated land,” he said.
He added that Part Five (A) only applied to the following situations:
(a) the state authority can alienate any underground land which is state land to
anyone (see Section 92C); and
(b) because of Section 44(1)(a), the State can only alienate the acquisition of
pre-war buildings underground land below the alienated land to the registered
proprietor of the alienated land on the latter’s application and no one else
(see Section 92D).
“Hence, if no individual or separate stratum titles have been issued to the
registered proprietor of the alienated land, no separate acquisition of the
underground land will be possible and any acquisition will then involve the
entire alienated land,” he concluded.
Only the state authority, in this case the Federal Government, has the power to
‘alienate’, and only state land is capable of being ‘alienated’. Therefore, if
SPAD wants to give any interest over the acquired land later alienated to them,
it will only be by way of a lease of between 30 and 99 years. Naturally, this
will not appeal to the landowners if they now hold the freehold titles, he said.
There are three other alternatives, nevertheless. One way is for the land
acquisition to proceed and the other, the current landowners to surrender their
properties to the state authority. By doing either of these, the state authority
can then simultaneously alienate the surface and stratum land to the current
landowners and SPAD respectively.
The third method is for the current landowners to apply for separate stratum
titles and lease them to SPAD but this may be subject to any express terms such
as any prohibition against leasing.
Tan opined that the third method would not be attractive to SPAD as it might not
be bankable to the MRT’s financiers, and while the second method was less time
consuming than the first, the state authority was technically not required to
pay compensation to the landowners when the land was surrendered to them.
“But this can be done by way of a separate agreement between SPAD and the
landowners for the former to pay compensation to the latter upon surrender.
“The subsequent payment can also be secured by way of a bankers’ guarantee,” he
said, highlighting also the higher premium facing landowners when the land is
alienated back to them as MRT would boost the value.
Tan also noted that the second and third methods could not be exercised if the
land was under any encumbrances unless with the prior consent of such
encumbrancers.
The state authority’s assurance that the surface land will be alienated to them
is pivotal to the landowners, he noted.
He said under Section 78(3) of NLC, alienation took effect only upon
registration of the titles into the landowners’ names, therefore, even a letter
of approval to alienate is not binding upon the state authority and will not
stand in a court of law.
“However, administratively, the problem can only be ameliorated but not
guaranteed by arranging the time for surrender and alienation not to lapse for
too long from one to the other or if it is possible, simultaneously,” he added.
In terms of legislative protection for historical building, Tan agreed that the
National Heritage Act (Act 645) that came into effect on March 1, 2006, has the
power to do so.
It is “an Act to provide for the conservation and preservation of national
heritage, natural heritage, tangible and intangible cultural heritage,
underwater cultural heritage, treasure trove and for related matters”.
Section 70 states that if a site has been declared national heritage, there
shall be no change of ownership except by inheritance or sale with the prior
approval of the commissioner.
No person shall without the approval of the commissioner demolish, alter or to
deal with the national heritage except in case of urgent necessity for the
safety of persons or property.
“As a conclusion, the National Heritage Act provides extensive preservation and
conservation for heritage sites, however, the area in question, that is the
Chinatown, is not designated as ‘Heritage Site’ under the Act as to date and
therefore the protection cannot be extended there,” he said.
But despite the above, he highlighted, neither Act 645 nor the LAA states that
the state authority is not permitted to acquire such properties.
“Perhaps employing political and social means will be more effective in stopping
any such intended acquisition,” he added.
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