THE UPDATE SCOOP (#2/2025)
Altering Land Tenure on Conversion, Subdivision and Re-alienation │ Land Law
By TAY & HELEN WONG – March 24, 2025
The principal issue which arose before the Court of Appeal (COA) in Pendaftar Hakmilik Negeri Perak v Wong Sew Ling & Ors [2025] was whether a State Authority, when approving a proposed conversion of category of land use and subdivision of land and in the process of re-alienating the land, may reduce its tenure from a term in perpetuity to a term of years not exceeding 99 years or in other words, from freehold to leasehold.
The original landowners in respect of the lands in question held them previously under four documents of title under Certificate of Title (CTs). At that time, the status of the lands was for terms in perpetuity or freehold. Subsequently, the original landowners surrendered the CTs to the State Authority for the purpose of developing the lands into a housing scheme. The Respondents were the purchasers of the properties developed/ built by the landowners on the lands. The status of the lands at the time of their purchase (in 1980s) was leasehold for a period of 99 years. In 2022, the Respondents filed this action to seek a declaration that each of the properties purchased by them and registered as leasehold for a term of 99 years be declared null and void. They sought an order that the Land Administrator replace their titles for a period of 99 years (leasehold) with titles in perpetuity (freehold).
The COA answered the question in the negative. Relying on a previous authoritative case of Pengarah Tanah Dan Galian Wilayah Persekutuan v. Sri Lempah Enterprise Sdn Bhd and a more recent case of Leo Leslie Armstrong v. Jawatankuasa Kerja Tanah Wilayah Persekutuan Kuala Lumpur (Leo Leslie Armstrong), it was held that conversion of the land status from a term of perpetuity (freehold) to that of 99 years’ lease (leasehold) after re-alienation would be ultra vires the provision of s.204E(3) of the National Land Code (‘NLC’).
On the contention by the Appellant that the original landowners had agreed to the condition imposed by the State Authority that the lands were given back in the form of leasehold for a term of 99 years and hence the Respondents were estopped from claiming to have the lands reconverted to freehold, the COA ruled that the doctrine of estoppel raised by the Appellant had no place where the act was ultra vires. As in the case of Leo Leslie Armstrong, the fact such a consent was given did not bar the plaintiff from challenging that the reduction in tenure from freehold to leasehold was a nullity.
Further, based on the authority of Leo Leslie Armstrong, it was settled law that the law of limitation was not applicable where the decision being challenged was illegal or ultra vires.. The principle of caveat emptor or “let the buyer beware” that was raised by the Appellant, being more suited to a case in contract and in private law, had no place in the matter of land law which was a matter of public law. It had, therefore, no application to the facts of the case.
There was also a constitutional dimension which was encapsulated in Art.13 of the Federal Constitution. Sub-article (1) prevented any arbitrary confiscation or deprivation of property unless it was expressly sanctioned by the law. This placed the actions of the State Authority in converting the land status from a term in perpetuity to that of a 99-year lease after re-alienation, squarely within the prohibition of Art.13 as being in direct contravention of s 204E(3) of the NLC.
Further, the Respondents’ neighbours had secured freehold titles under somewhat similar circumstances and the Respondents would have expected similar treatment in respect of their titles. On the strength of Arts 4(1) and 8(1) of the Constitution with regard to the supremacy of the Constitution and the equality of the law and the fact that all were entitled to equal protection of the law, the learned High Court Judge was correct in making such findings.
The appeal was dismissed and the High Court decision was affirmed.
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Tags: [land tenure] [freehold to leasehold] [ultra vires] [conversion] [realienation] [National Land Code s 204E(3)] [Federal Constitution arts 4(1), 8(1), 13]