The Court of Appeal in Pendaftar Hakmilik Negeri Perak v Wong Sew Ling & Ors [2025] 3 MLRA 76 has addressed a significant land law issue in Malaysia, focusing on whether State Authorities can reduce land tenure from freehold to leasehold during re-alienation. Freehold offers perpetual ownership, while leasehold is limited, often to 99 years, impacting property rights and value.
Facts
The dispute arose when landowners surrendered their freehold titles to the State Authority for the purpose of developing a housing scheme. Upon re-alienation, the State Authority issued leasehold titles for 99 years to subsequent purchasers. The landowners challenged this conversion, arguing that the State Authority’s actions were unlawful under Section 204E(3) of the National Land Code (NLC), which mandates that re-alienated titles must retain their original tenure. They sought a declaration to nullify the leasehold titles and reinstate freehold tenure.
Decision & Legal Analysis
The Court of Appeal upheld the High Court’s ruling, affirming that the State Authority’s conversion of freehold land to leasehold was ultra vires and therefore invalid. The court dismissed the appeal with costs, restoring the landowners’ rights to freehold titles.
Key findings include:
- Estoppel is inapplicable for ultra vires acts
- Limitation laws do not apply to illegal or ultra vires decisions
- Caveat emptor is inapplicable in land law, as it is governed by public law
- The action violated Article 13(1) of the Federal Constitution, protecting against arbitrary property deprivation
- The decision supported equality under Articles 4(1) and 8(1), addressing inconsistencies in land administration
Key Points to Take Note
1. State Authority Constraints: State Authorities cannot impose conditions requiring landowners to surrender freehold titles for leasehold tenure. Any change to a freehold title requires a clear legal foundation within the NLC, which was absent in this case.
2. Ultra Vires Action: The State Authority’s act of converting freehold land to leasehold upon re-alienation contravened Section 204E(3) of the NLC. This provision clearly requires that re-alienated land must retain its original tenure.
3. Constitutional Protection: The court emphasized that the State Authority’s actions violated Article 13 of the Federal Constitution, which protects individuals from arbitrary deprivation of property except in accordance with the law.
4. Contrast with Conversion Norms: While leasehold-to-freehold conversions are routine (via application, premiums, and state approval), this case illustrates that the reverse—freehold to leasehold—is exceptional and legally fraught.
5. Precedential Value: The decision strengthens landowner protections, setting a benchmark for challenging unlawful tenure amendments.
6. Caveat Emptor Irrelevant: The principle of caveat emptor (“buyer beware”) does not apply in this context, as land tenure disputes are governed by public law rather than contractual principles.
7. Equality and Fairness: The court noted inconsistencies in land administration, where neighboring properties retained freehold status under similar circumstances. Such unequal treatment violated constitutional guarantees of fairness under Articles 4(1) and 8(1).
8. Estoppel Inapplicable: The doctrine of estoppel did not apply because an ultra vires act cannot be validated by consent or agreement. Purchasers retained their right to challenge the unlawful conversion despite any prior acceptance by developers.
– By George Miranda, Joy Sam Jia Qian, Nurafiqah ‘Izzati –
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.
