Penang council ordered to pay nearly RM1mil over revoked hotel permit

 

The Penang High Court had been ordered by the apex court to assess the damages to be paid to Maritime Waterfront Suites Sdn Bhd and its owner.

GEORGE TOWN: The High Court here has ordered the Penang Island City Council (MBPP) to pay nearly RM1 million in damages to a hotel operator for prematurely withdrawing the hotel’s operating permit in 2016.

In a landmark ruling in 2021, the Federal Court had deemed MBPP’s termination of the permit six months before its expiry in 2016 as illegal, and directed the High Court to determine damages.

Today, the High Court ordered the council to pay Maritime Waterfront Suites Sdn Bhd (MWS) and its owner, Noorzaina Mat Zain, RM865,211 in general damages and RM100,000 in costs.

Judicial commissioner Kenneth St James said the court had decided on the damages based on an assumption of 70% occupancy of the hotel over an 83-day period from April 22, 2016, to July 13, 2016.

July 13 marks the date when the hotel operator secured a stay order from the High Court against MBPP’s permit revocation.

St James also cited the hotel operators’ three unanswered letters to MBPP after the permit revocation, describing it as “improper conduct” for the council not to respond.

He said the MBPP’s enforcement chief was reluctant to acknowledge wrongdoing despite the Federal Court’s findings and order to grant general damages.

Lawyers Ong Yu Shin and Lim Wooi Ying represented the hotel operator, while Karin Lim, MD Murgan and V Thanganachiar appeared for MBPP.

Karin later said the council will appeal the High Court decision.

On Feb 18, 2021, the Federal Court upheld the High Court and Court of Appeal’s finding that MBPP had illegally revoked a temporary permit given to the hotel operator.

The High Court and appellate court previously ruled that MBPP’s decision to terminate the temporary permit as “illegal, irrational, unreasonable, and disproportionate”.

MWS, which formerly operated a hotel at Karpal Singh Drive in Jelutong, obtained a temporary operating permit from Nov 1, 2015 to Oct 31, 2016.

The permit was secured under the Penang government’s moratorium programme for unlicensed hotels, allowing time for legalisation.

Jelutong Development Sdn Bhd (JDSB), the property owner, sought MBPP’s approval to rezone the building from “commercial-offices” to “commercial-hotel” to comply with regulations. MBPP rejected the request and simultaneously revoked MWS’s permit on April 22, 2016.

In response, MWS sued MBPP, seeking compensation and the reinstatement of the revoked permit. - FMT