Court holds Selangor authorities liable over RM2.5mil sale of land for LDP

 The Court of Appeal says the authorities’ negligence enabled a retiree to sell to a company a parcel of land that had already been acquired by the state government for a highway expansion project.

The disputed land was acquired by the Selangor government in 1994 to extend the Damansara-Puchong Expressway.

PUTRAJAYA:

In a ruling that underscores the public’s right to rely on official land records, the Court of Appeal has held the Petaling district land registrar and the Selangor director of lands and mines liable for negligence after a company was duped into buying land that had already been acquired by the state government for a highway.

A three-member bench, led by Justice Alwi Abdul Wahab, ruled that the land authorities must jointly and severally with the seller, retired civil servant Mustafa Kamal Albakri Hassan, compensate Orient Development Sdn Bhd, estimated to be approximately RM2.8 million.

The court also awarded Orient Development interest on the judgment sum at 5% per annum calculated from 2013 until full settlement.

“The land authorities materially contributed to the loss suffered by Orient Development,” Alwi said in a unanimous judgment allowing the company’s appeal against part of the Shah Alam High Court’s decision.

The Court of Appeal found no reason to disturb the High Court’s finding that the land authorities had acted negligently and dismissed their appeal against liability.

It also dismissed Mustafa’s appeal against the High Court’s finding that he had made misrepresentations in the land transaction.

“The evidence is overwhelming, and the High Court was correct in its findings,” Alwi said.

The other judges on the panel were Justices Radzi Abdul Hamid and Meor Hashimi Abdul Hamid.

The Court of Appeal also ordered the land authorities to pay Orient Development RM60,000 in costs, with Mustafa ordered to pay RM30,000.

Two years ago, the High Court found the land authorities negligent but stopped short of ordering them to pay damages.

Instead, it ordered them to refund the quit rent collected from Orient Development between 2016 and 2020 and declared the sale and purchase agreement void.

The disputed land had been acquired by the Selangor government from Mustafa in 1994 for the extension of the Damansara-Puchong Expressway (LDP).

Despite the acquisition, the land office later issued a title to Mustafa, enabling him to sell the same parcel of land to Orient Development for RM2.5 million on Oct 3, 2013.

Orient Development said it had conducted an official land search before signing the sale and purchase agreement, which confirmed Mustafa as the registered proprietor.

The company also incurred about RM200,000 in legal fees and stamp duty in completing the transaction.

It later discovered that the land had already been acquired by the state government for the LDP, and that Mustafa had received nearly RM303,000 in compensation.

Orient Development sued Mustafa in 2018, alleging fraudulent misrepresentation for inducing it to purchase the land.

A year later, it filed a separate suit against the Petaling district land registrar and the Selangor director of lands and mines, alleging they had breached their statutory duties under the National Land Code by failing to maintain accurate land records.

The company also argued that the authorities had failed to comply with procedures under the Land Acquisition Act 1960, depriving members of the public of accurate information needed to conduct land transactions safely.

S Preakas and Miguel Sequerah appeared for Orient Development, while Syamsul Azhar Ab Aziz and Sasha Nameera Sabtu represented Mustafa.

Senior federal counsel Onn Abd Aziz appeared for the Petaling district land registrar and the Selangor director of lands and mines. - FMT