Recently, RDS successfully represented the largest electricity provider in Malaysia in striking out a claim for alleged trespass over land which had already been compulsorily acquired by the State. In making its decision, the Sessions Court in Kota Bharu held that the plaintiff did not have the necessary locus standi to commence the claim despite possessing power of attorney as the subject matter land had already been compulsorily acquired and therefore, has vested in the State. This victory was secured by our Firm’s Disputes Resolution Partner, Syafinaz Vani together with associates, Elani Mazlan and Rakkshanaa Samasundaram.
This alert will discuss the Court of Appeal case of Fun Fatt v Datuk Bandar Kuala Lumpur [2023] 8 CLJ 543 which similarly dealt with the issue of locus standi in a striking out application in relation to a claim of trespass over compulsorily acquired land.
Background Facts
The Appellant (Fun Fatt) is the administrator and sole beneficiary to an estate. The Respondent (Datuk Bandar Kuala Lumpur) is the administrator of municipal affairs of the city of Kuala Lumpur.
The Appellant’s claim for damages is premised on the alleged trespass and unauthorised use of land in Kuala Lumpur (the Land) by the Respondent from 13 February 2008 until 8 October 2017.
On 9 October 2017, the Land was compulsorily acquired by the State for the construction of a highway and in view of this, the Appellant accepted an award of compensation made by the land administrator amounting to over RM10 million.
On 3 September 2020, the Pejabat Tanah & Galian had registered Form K on the title of the Land pursuant to Section 23 of the Land Acquisition Act 1960 (LAA).
The Appellant did not proceed to initiate land reference proceedings under the statutory remedy available under the LAA. Instead, the Appellant filed an action before the High Court in Kuala Lumpur to seek damages against the Respondent for alleged trespass. Thereafter, the Respondent filed to strike out the Appellant’s claim on the basis that the claim disclosed no reasonable cause of action, was scandalous, frivolous or vexatious and otherwise, tantamount to an abuse of court process.
The High Court’s Decision
The High Court struck out the Appellant’s suit on the grounds that, inter alia, the Appellant lacked locus standi to commence the action in trespass over the Land.
In doing so, the High Court had found that not only had the Land been compulsorily acquired by the State, the Land had also become vested in the State upon the registration and endorsement of Form K on the land title under Section 23 of the LAA. Therefore, the Land had become wholly owned by the State.
Following the Federal Court case of Orchard Circle Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat [2021] 1 CLJ 1, the High Court found that when the Appellant had commenced the action on 6 October 2020, the Land was no longer under the ownership of the Appellant nor under the estate administered by the Appellant. This is also evident from the land search conducted on the Land which shows that the Form K was duly registered on 3 September 2020.
Upon finding that the Land no longer belongs to the estate administered by the Appellant, the High Court concluded that the Appellant therefore no longer has the locus standi to institute and maintain the suit.
The Court Of Appeal’s Decision
The Appellant’s appeal to the Court of Appeal was premised on the contention that the Appellant did possess the required locus standi because the Land was not yet vested in the State during the period in which the trespass allegedly occurred. The Appellant also argued that there is factual conflict which can only be resolved in a full trial and therefore, the suit ought not to be struck out and should proceed to trial as per the Federal Court case of Seruan Gemilang Makmur Sdn Bhd lwn. Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 3 CLJ 1.
At the outset, the Court of Appeal held that the law as pronounced by the Federal Court in Seruan Gemilang (supra) is trite. Nevertheless, the Appellant must first overcome the issue of locus standi as the lack of such would cause a claim to be struck out for failing to disclose a reasonable cause of action as per Order 18 Rule 19(1)(a) of the Rules of Court 2012 (ROC 2012).
On the analysis of the Appellant’s pleadings in the statement of claim itself, the Court of Appeal found that the Appellant had admitted that the Land had been validly acquired by the State through compulsory land acquisition on 9 October 2017. Thus, at the time of the filing of the suit on 6 October 2020, the Land is no longer under the estate administered by the Appellant. As such, the Court of Appeal established that by the Appellant’s own admission, the Land had already been compulsorily acquired by the State at the requisite time. Therefore, the Appellant does not have locus standi to commence and maintain its suit rendering the suit bereft of a reasonable cause of action.
Nevertheless, the Court of Appeal had also examined affidavit evidence in its consideration of whether the suit is scandalous, frivolous or vexatious under limb (b) and whether the suit is an abuse of court process under limb (d) of Order 18 Rule 19(1) of the ROC 2012. In doing so, the Court of Appeal found the Form K had in fact been registered and endorsed on the title of the Land on 3 September 2020 based on the land search dated 2 November 2020.
Citing the clear provisions of Sections 22 and 23 of the LAA, it was established that the Land had been acquired and vested in the State by virtue of the registration and endorsement of the Form K. In this regard, the Court of Appeal had also referred to the Federal Court case of Orchard Circle Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat & Ors [2021] 1 CLJ 1 which found that where a Form K was issued in accordance with Section 22 of the LAA, the land has been acquired and has vested in the state authority pursuant to Section 23 of the LAA.
Conclusion
For the above reasons, the Court of Appeal dismissed the appeal and found that the Appellant did not possess the necessary locus standi at the time of filing of its suit.
The Court of Appeal held that even on this ground of lack of locus standi alone, the High Court was correct in striking out the Appellant’s suit under Order 18 Rule 19(1)(a) of the ROC 2012 as the claim did not disclose a reasonable cause of action. Further, the Appellant’s lack of locus standi was also evinced by the evidence exhibited in the affidavits and thus, the Appellant’s suit is found to be scandalous, frivolous or vexatious and an abuse of court process warranting the suit to be struck out under Order 18 Rule 19(1)(b) and (d), respectively.
24 January 2024