SUHAILA ENDUT

ASSIGNMENT GROUP 8
ZULHILMI BIN ZAINUDDIN

MBE 141087
MBE 141075

GROUP 8
Skudai City Development purchases a piece of freehold land registered
under Registry Title in Kempas within the township of Johor Bahru.
Historically, the Johor State Authority alienates the land in 1901 to
one, Datuk Bendahara. Thereafter, the land passes from purchaser to
another until finally Skudai City Development now becomes the
registered owner. It appears that, the title does not indicate the usual
term as to the land use the land is subject to. The previous owners
had planted fruit trees and carried out other agriculture activities on
the land. The new owner now applies for planning permission to
develop it into a housing and commercial centre. The Dewan
Bandaraya Johor Bahru (DBJB) grants the application on condition
that the developer converts the freehold land from agriculture to
building. Thereafter, in compliance with the condition, the developer
applies to the Land Office for the conversion and also subdivision of
the land under section 124A of the National Land Code 1965. When
the State Authority (SA) approves the application, it imposes Premium
RM1 million based rate for commercial buildings; and the lands
original freehold title is reduced to ninety-nine year lease. Skudai City
is extremely unhappy with this turn of event and seeks you opinion on
the legality of the conditions imposed by MBJB and Johor State
Authority. Advise the developer.

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SUHAILA ENDUT
ASSIGNMENT GROUP 8
ZULHILMI BIN ZAINUDDIN

MBE 141087
MBE 141075

Introduction

Section 52 of the National Land Code recognized three categories

of land use that are agriculture, building and industry. The category
of land use shall be endorsed on the document of title as determined
by the State Authority1.

If the land was alienated before the commencement of the

National Land Code, then, section 53 shall be effective. Section 53s
implied conditions apply to all land alienated before the act 2 until a
category of land use is imposed under section 54 by the State
Authority3. The implied conditions are as follow:
i.Country land, or town or village land held under Land Office Title
ii.

shall be used for agricultural purpose only.

All other land (town and village land held under Registry Title)
shall not be used for agricultural or industrial purposes.

Skudai City Development had applied for planning permission to

develop the land into a housing and commercial centre. Under section
116 of the act which stipulate the implied conditions of building
category, housing falls under sub-section (4)(a) 4 while commercial
centre falls under sub-section (4)(b)5.

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1

Section 52

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SUHAILA ENDUT
ASSIGNMENT GROUP 8
ZULHILMI BIN ZAINUDDIN
2

Section 53

Section 54

Section 116(4)(a)

Section 116(4)(b)

MBE 141087
MBE 141075

In land development, a proprietor or land owner are required to

surrender a certain portion of land to local authorities such as TNB,
road and etcetera if they intends to carry out land development project
which required them to subdivide the said land. Any approval for
subdivision is given by State Authority 6. The approval of subdivision is
given by the Director of Lands and Mines (Registry Title)7 or Land
Administrator for Land Office Title 8. Subdivision shall only be
approved if certain conditions are satisfied9.
Under the surrender and re-alienation there are 2 parts which
can be used. First is surrender which has section 195 for total
surrender of land and section 200 is for partial surrender of land.
Second part is under surrender and re-alienation which the provision
is in the NLC Section 203 to 204H, the portion of land wanted will be
given back except for the remaining areas will be surrendered to SA.
The form that will use is Form 12D which mention portion of land to
be given back10. Surrender and re-alienation is approved by State
Authority11 and the approval is exercise at its discretion 12. The
application for approval of surrender and re-alienation is as per
follow13:
a) Re-alienation according to approved layout plan
b) Land revenue (quit rent) must be paid
c) Land is not under any attachment order by the court
d) No registered interest in the land
e) Consent from interested parties have been obtained
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6

Section 135 to 139

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SUHAILA ENDUT
ASSIGNMENT GROUP 8
ZULHILMI BIN ZAINUDDIN
7

Section 135 (2)

Section 135 (2)(b)

Section 136

10

Section 204

11

Section 204B

12

Section 204E(1)

13

Section 204C

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Whereas the procedure of surrender and re-alienation application

in the following14:
a)
b)
c)
d)
e)

Submit application as prescribed in Form 12D -enclosing fee

Consent from interested parties
Location plan /pre-computation plan
Approved layout plan
Issue document of title

Issues:

The following issues are identified based on the facts of the case:

1. The category of land use is not stated in the title. However, the
local authority assumes the land title is agriculture and the State
Authority imposed a premium of RM 1 million based rate for
commercial building.
2. Whether SA can change the title condition upon submission of
surrender and re-alienation by Skudai City Development.

Discussions
General
The

National

Land

Code

used

two

concepts

that

are

classification of land and category of land. Classification of land refers

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SUHAILA ENDUT
ASSIGNMENT GROUP 8
ZULHILMI BIN ZAINUDDIN

MBE 141087
MBE 141075

to the location of land whereas category of land refers to the type of

usage the land is subject to (refer to Section 52 under Introduction).
According to Salleh Buang, these legal concepts are to ensure certain
objectives are attained that is order in development, maximum
utilisation of land and identification for future acquisition15.
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14
15

Section 204D
Buang, S., (2007) Malaysian Torrens System: Second Edition, Dewan

Bahasa dan Pustaka, Kuala Lumpur, page 71

Issues (1): The category of land use is not stated in the title. However,
the local authority assumes the land title is agriculture and the State
Authority imposed a premium of RM 1 million based rate for
commercial building.

The Johor State Authority alienated the land in 1901, way

before the commencement of National Land Code 1965 from 1
January 1966. Further, there is no mention of the land use in the title
but Dewan Bandaraya Johor Bahru (DBJB) instructed Skudai City
Development to convert the land use category from agriculture to
building.
Section 110 paragraph (a) of the act provides that land alienated
before the commencement of the Act shall be subject to such express
conditions and restrictions in interest endorsed on the document of
title16. Since the condition was not expressed, under paragraph (b) of
the same section, the implied conditions under section 53(2) or 53(3)
shall apply17.

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SUHAILA ENDUT
ASSIGNMENT GROUP 8
ZULHILMI BIN ZAINUDDIN

MBE 141087
MBE 141075

As the land is registered under Registry Title, section 53(2) is

not applicable. The land is affected by section 53(3) which stated that
it should not be used for agricultural or industrial purpose. Thus, the
land category based on the implied condition is building.

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16

Section 110(a)

17

Section 110(b)

This case is similar to Garden City Development Berhad v.

Collector of Land Revenue, Federal Territory 18. The proprietor had
challenged the validity of notice requiring them to convert their land
from agricultural land to commercial land and payment of premiums
issued by the authorities. The Privy Council had allowed the appeal by
the proprietor that under section 53(3), the provision allows the
proprietor's land being lawfully used for building purposes.

Although a bit different, the case was also being referred to in

Le Hazen Resources Sdn Bhd v. Land Administrator of Federal
Territory Kuala Lumpur19. The category of land use for the proprietors
land was not stated in the land title. Pursuant to section 53(2), since
the land is a country land, the implied condition is that the land shall
be used for agricultural purposes only. The proprietor argued that the
land is town land as its location is in Kuala Lumpur and referred to
the facts in Garden City. The argument was rejected by the High Court
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SUHAILA ENDUT
ASSIGNMENT GROUP 8
ZULHILMI BIN ZAINUDDIN

MBE 141087
MBE 141075

because in Garden City, the land is town land held under Registry
Title whereas this case relates to country land.

Conclusion Issues (1)

Based on the facts above, Skudai City Development does not need to
convert the land use category as instructed by DBJB and does not
need to pay the RM 1 million premium to the State Authority.

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18

Garden City Development Berhad v. Collector Of Land Revenue, Federal

Territory [1982] 2 MLJ 98

19

Le Hazen Resources Sdn Bhd v. Land Administrator of Federal Territory

Kuala Lumpur [2011] MLJU 1255

Issues (2): Whether SA can change the title condition upon

submission

of

surrender

and

re-alienation

by

Skudai

City

Development.

The State Authority exercises the approval for surrender and realienation at its discretion12. However there is no provision for realienation approved by State Authority changed the title of the land.
When a freehold land is surrendered to the SA, the re-alienation by SA
shall also be as freehold, according to Section 204E(3) 20:
Provided that where the original title is a title in perpetuity, the
period for which the land is to be re-alienated shall also be in
perpetuity, and where the original title is for a period of years,
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SUHAILA ENDUT
ASSIGNMENT GROUP 8
ZULHILMI BIN ZAINUDDIN

MBE 141087
MBE 141075

the period for which the land is to be re-alienated shall not be

less than the remainder of the period of the lease for which the
land was held under the original title.

The same case could be referred is in the Pengarah Tanah &

Galian, Wilayah Persekutuan v. Sri Lempah Enterprise Sdn. Bhd 21.
Suffian

LP

said

that:

conditions to be valid must fairly and reasonably relate to the

permitted development.
In Ipoh Garden Berhad v. Pengarah Tanah & Galian 22, Perak Raja
Azlan Shah Ag. C.J. put his judgement briefly as follow:

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20

Section 204E(3)

21

Pengarah Tanah & Galian, Wilayah Persekutuan v. Sri Lempah Enterprise

Sdn. Bhd [1979] 1 MLJ 135

22

Ipoh Garden Berhad v. Pengarah Tanah & Galian [1979] 1 MLJ 271

In my opinion, the present case falls to be decided on well established

principles and they are to be found in the cases decided under the
(U.K.) Town and Country Planning Acts. It is unfortunate that neither
in the court below nor in this court has reference been made to any of
them. The Acts empower planning authorities to refuse permission or
to grant permission unconditionally or to impose such conditions as
they think fit. On principle and authority, the discretionary power to
impose such conditions as they think fit is not an uncontrolled
discretion to impose whatever conditions they like.
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SUHAILA ENDUT
ASSIGNMENT GROUP 8
ZULHILMI BIN ZAINUDDIN

MBE 141087
MBE 141075

Conclusion Issues (3)

Although the power of approval is under SA jurisdiction, however it
doesnt have any power to impose change of title from freehold to
leasehold.

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