Court of Appeal rules against local council's bid to raise rates

The Court of Appeal in Putrajaya has upheld the ruling of the High Court in Malacca that the Hang Tuah Jaya Municipal Council's assessment rate hike in July 2015 was illegal and thus null and void.

A three-member bench led by Justice David Wong Dak Wah unanimously dismissed the appeal by the municipal council.

"We are not with you and we dismiss the appeal," Justice Wong said.

The appellate court made no order on costs.

Previously, judicial commissioner Mohd Firuz Jaffril, declared the increase in assessment rate as null and void as it did not comply with the procedures of the Local Government Act 1976.

Justice Abang Iskandar Abang Hashim, the second member of the Court of Appeal bench, described the move by the council to increase the assessment rate without getting the necessary approval from the state authority as akin to putting the cart before the horse.

What the Malacca government approved was a proposal on the implementation of the new assessment rates and not the new assessment rates.

They got the approval of the state government to the proposal only before Dec 31, 2014, on which they took advertised in the newspapers on Jan 5 and Jan 7, 2015.

Following that, they held the objection period for the owners and the decision to raise the assessment rates was done in July 2015.

Firuz in his judgment said approval from the state had to be gained after this is verified by the local authority after the objection period.

“This approval for the new assessement rates has to be done or approved by the state government before Dec 31, 2014, before it is to be implemented,” the judicial commissioner said.

“In my finding, the gazette 731 dated Dec 18 is just an information only (on the proposal) and not gazetted as stated under Section 141(1) of the state approval,” Firuz added.

With the decision today, DAP Ayer Keroh assemblyperson Khoo Poay Tiong, who brought the action against the local council along with his wife Lee Wei Cheng, said it was incumbent on the local council to follow the law before raising the assessment rates.

“I would like to thank my lawyers Gobind Singh Deo (photo) and Ng Kok Peng, who did this pro-bono,” Khoo said, adding that he was one of those affected by the 30 percent increase proposal.

Justice Umi Kalthum Abdul Majid, the third member of the bench, said Sections 137, 141 and 143 of the Local Government Act 1976 must be read as a whole and not individually before deciding to increase the assessment rates.

Gobind: Prepare evaluation before approval

Gobind who appeared for Khoo, said this is a first of its kind of action on a local council in challenging the increase in assessment rates.

“What the court is saying is that if the local authority wants to increase the assessment rate, it needs to prepare the evaluation and gather objections from the ratepayers. After the study has been done, then only must get the approval from the state authority.

“You have to prepare the list and hear the objections first, before gaining state approval. The decision today has an effect on all local councils as to how future valuation (of property) is to be done. We welcome the judgment and the declaration that impacts the assessment rate of 2015,” he said.

Khoo added that there are some consumers who paid the new assessment rates.

With the decision today, the old assessement rates will apply.

The local council, which was represented by SM Shanmugam, said he will await further instructions on whether to file leave to appeal at the Federal Court.- Mkini