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PUTRAJAYA (July 24): The Court of Appeal has ruled that state governments have the authority to determine quit rent rates without obtaining approval from the National Land Council (NLC).
In a unanimous decision, a three-member Court of Appeal bench led by newly elevated Federal Court judge Datuk P Ravinthran, along with judges Datuk Choo Kah Sing and Datuk Ahmad Fairuz Zainol Abidin, upheld the High Court’s decision and dismissed the five appeals involving Berjaya Hills Resort Bhd and related companies over increased quit rents for 330 land parcels in Bentong, Pahang.
The dispute arose after the Pahang government introduced revised quit rent rates under the Pahang Land (Amendment) (No 3) Rules 2019, which came into force on Jan 1, 2020. In 2023, the Pahang Land and Mines Department imposed the higher rates and applied them retrospectively to 2020, 2021 and 2022.
The companies filed a judicial review on Aug 19, 2024, to challenge the Pahang Land and Mines director’s decision to increase quit rents. After the High Court rejected their challenge, they filed an appeal.
The companies argued that the revised rates were invalid because the Pahang government had not obtained prior approval from the NLC under Section 101(5) of the National Land Code.
However, the Court of Appeal upheld the High Court's earlier decision, ruling that the NLC's role is to formulate national land policy and advise the federal and state governments, not to approve or scrutinise individual states' quit rent rates.
The bench further ruled that Section 14(1)(e) of the National Land Code grants state authorities the power to determine rent rates, while Section 101(3) allows them to increase or reduce payable rents, introduce different rates for different classes of land, or impose new rent rates.
Choo, who wrote the unanimous decision delivered on July 16, with the grounds of judgment released on Thursday (July 23), said any approval required from the NLC under Section 101(5) relates only to the timing of a state's rent revision exercise, not the amount of the revised rates.
He said the NLC’s role is to formulate national land policies and advise governments on the administration of the National Land Code, rather than approve individual states’ quit rent rates.
In this case, Choo said that during the 70th National Land Council Meeting held on Aug 18, 2014, the NLC advised state governments to consider revising their respective rent rates. The council also approved the revision exercise, noting that the last review was conducted in 2004, and recommended that reviews be carried out every 10 years.
“This court is of the considered view that it is not the duty or function of the NLC to approve the revised rent rates of each state as suggested by the appellants’ counsel. The revised rent rates are to be determined by the respective state governments in accordance with the power conferred under Section 14(1)(e) of the National Land Code,” he added.
“There is no provision in the National Land Code that suggests any revised rent rates to be reserved and determined by the state authority must be approved by the NLC,” he said.
On the rates being applied retrospectively from 2020, Choo said although the amendment has retrospective effect, it could not have prejudiced the interest of the companies.
“This court finds that the amendment, ie, Pahang Land (Amendment)(No 8) Rules 2022, could not be construed as ultra vires in the substantive challenge of the administrative decision of the respondent to issue the quit rents for year 2023, 2022, 2021 and 2020,” Choo added.
He added there were no procedural impropriety or acts of ultra vires by the respondent (Pahang Land and Mines director) to revise the rent rates.
The five companies were ordered to pay RM20,000 in costs to the director of the Pahang Land and Mines Department.
The five companies were represented by Tan Sri Tommy Thomas, Chuar Kia Lin, Valerie Seaw Ja Hui, Wong Ying Ying and Sharrin Kaur of Messrs Chuar Kia Lin while senior counsel Datuk Muhammad Saifuddin Hashim Musaimi and federal counsels Munirah Shamsudin @ Baharum and Ahmad Fazrul Zahari appeared for the Pahang Land and Mines director.
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