We have heard it said quite a few times now: that if the Penang government or Municipal Council were to cancel of even review projects already approved by the previous administration, it could be sued by developers.
This has led to official inaction in a number of important cases ranging from the land rezoning of the Turf Club land, approved hill-slope projects and approved high-rise buildings in the heritage area.
What if urgent state action is required in the public interest? Can official inaction be justified by the fear of being sued or of being held liable to pay compensation?
Blog reader ashtanga, a lawyer, thinks not:
LGE keeps worrying about lawsuits, for this matter (hill-slope projects) as well as PGCC and the Turf Club land. Part of his problem might be the quality of the legal advice the bureaucrats in admin feed him. Remember he seeks legal counsel from a civil service inherited from Koh Tsu Koon’s time. I am from the legal profession, and I can safely say a good many of us bristle when he falls back on those anxieties at a time when we expect him to change things for Penang.
If he had the political will to restrict development on Class 3 slopes, even so far as to re-evaluate previous approvals, and if necessary, revoke them “in the public interest”, there are enough laws which will allow him to do just that. We aren’t talking frivolous reasons but serious considerations for public good.
What do you think?
In theory,State government does not approve housing project without proper evaluation during tender process and careful analysis of the engineering and architectural feasibility before permit is issued, so many of the concerned about hillside construction can not be used as a legal ground for issuing stop order under the law, there had to be evidence of impropriety on the part of the parties concerned that deem to violate governmental procurement that require temporary injunction and work stop in order to protect public safety, failure to provide any documentary evidence or qualified engineering report on the part of state government will cost Peningites billion of compensation in the case of lost litigation.
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Dear Jeff,
That’s why I disagree some people during the meet the people session in Bayan Baru with CM Penang. I disagree with the Rukun tetangga chairman asking the present government just stick to just taking care of the running of government. Forget about the real root cause with Koh and co getting away of it
Frankly, Koh Tsu Koon has been getting away with it for 18 years. People only has 9 months to run.
Anyway, think about public housing. Perhaps, LGE and co can look into it. Hmm…….Provide affordable housing to masses. Getting rid of rented flats. Make all poor Penangites the ability to buy public flats. I have been thinking a lot on this. Being in Singapore, I am amazed by PAP’s endeavour making public housing a big success. S$10 note used to have public housing behind. Of course, they have CPF to do the funding
Perhaps, make develpers to change their mind in building houses in the hillslope. Penang got limited land. Not sure can use the Land Acquisition Act (National interest) to acquire land at cheap price. Funding is an issue. Yada! Yada! 300 million with 60% spent on emolument is an issue. Guys, correct me if I am wrong. LGE and state government must tackle that………Keep thinking…….
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astanga,
first of all im no genius..secondly im no constitutional lawyer too.. im a corporate lawyer who happen to have a first class in contitutional law and im privileged enough to earn another first class in administrative law from a red brick..
I will not offer any solution as i dun have any.. im not privy to the contractual documents itself and i duno how deep a s*** is the dilemma LGE in at the moment..
I do commend your effort highligting the law.. my apologies that i did not look it up.. but will the revocation of approval later result in compensation payable to the developer for works already done by them and for termination of the contract.. i mean.. the gerbang perdana dejavu?
i noted that they are ppl who say that a developer who sues the govt may hv a death wish to survice in penang..but do u think the developer gives a hoot after obtaining their multi million / billion dollar compensation?
yes i agree nyawa-s are important..more important than money.. but where will the money come from for the compensation.. LGE is in a dilemma.. a stop work order is timely pending on solutions.
right now..i myself cant think of a win-win solution.. but paying compensation certainly doesnt appeal.. its not fair to the rest of the penangnites that the State goes kaput for the sake of residents who chose to live by the hillside in the very first place and expect to have a fine nice view and scenery for eternity..
Scrutinise the contractual agreements for loopholes or..last option.. attempt to frustrate the contract some how..
god help LGE..its definitely gona be an unpopular outcome for one or another..
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Kelvin,
What contractual documents do you refer to? What contractual agreements do you want me to scrutinise? There isn’t any contract between State Govt and developer. For a lawyer with such excellent educational credentials, you don’t seem to have understood this.
The Act stipulates compensation for the developer, but only in respect of demolition of any works that might have been constructed pursuant to the approval; or in respect of expenditure in carrying out works to implement the permission or approval.
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Please note, compensation would only be for DEMOLITION of any works that might have been done after the approval, not for construction of the works themselves. Or, it would be for the cost of carrying out any works in order to qualify for planning permission or building approval.
Put simply, the developer would NOT be entitled to compensation for anything he proposed. He would be entitled to compensation only for expenditures incurred in complying with requirements imposed by the authorities.
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Ashtanga,
Noted your reply with respect. However, I stand by my view that none of us know for sure the nature of the documents involved.. we might assume that it merely involves the normal approval by the local authority.. yet we dont know for sure whether it’s just that or it’s part of a bigger picture.. I shall tone down my arguments as none of us really know the whole story.. further noted your comments on compensation.. but i shall stick to my earlier view.
No hard feelings..its a healthy debate and its great speaking to you! I shall assume that LGE a smart fellow and is not that ignorant on what have to be done.. thus I shall also give him the benefit of doubt for the time being..
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Kelvin, thanks for your reply. No hard feelings, no offence taken.
My comments have been in respect of a State Govt or approving authority revoking an earlier approval, either of planning application or building plans, submitted by a prospective developer. There are no “documents” involved that require any special study. So there is no separate “whole story” which we are not privy to.
I am not talking about a State Govt or local authority that has entered into a building or development contract with whichever party, for the specific performance of any nature. Say, the State engages a builder to construct a building, in which case, the State Govt assumes the role of Employer in a contract. This is surely not the subject we are on.
What I stated on the matter of compensation is clearly spelled out in Section 25(3),(5),(6),(7),(8) and (9) of the Town and Country Planning Act. This is plainly not a matter of my opinion.
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looes74;
That is why all these calls of stop hillside project are a simple way to govern a state’s affairs without thinking much of consequences;
it is not only state government is liable to developer, and buyer lawsuits which can amount to hundred of million to billion compensatory damages and loss revenue in the case of loss litigation, the federal government can also get in the way for them to use whatever tools state law provide, since those are former projects approved under BN governance, so it is more complicated like most Penangites will like to believe. But at end of the day, i am confident LGE and his EXCO will try to sort out problem area
for correction.
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Ashtanga,
I was thinking along the lines that they may be other documents involved.. for example..say acquisition of the land for development of the hillside residence. Whether the land is acquired from the then govt or govt-related entities at unfavourable terms..and whether any conditions are attached thereto that may be binding..
I dont know for a fact.. but Im thinking along those lines.. or another example.. maybe that development or the approval for that development is a pre-condition or a condition attached to some other related contractual documents. again, i dont know.. none of us know..considering the extent of malpractices in the previous admin. But I do believe that the legal hurdles the govt is facing is not just a clear cut revocation of approval.. k.. back to work.
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So Jeff & Kelvin
What you guys are saying is since this MIGHT involve contracts and clauses and issues that at this point of time that MIGHT lead to litigation, LGE should do NOTHING ? Please spare us Penangites with such spin-doctoring. We are not some uneducated and uncivilised lost tribe from Timbuktu.
LGE is not a member of some small time and pesky NGO but the Chief Minister of Penang. We expect him to ACT and NOT sit on his posterior by referring to non existance clauses and issues. LGE has in his disposal considerable executive power in the matter of land (which is entirely state controlled) and has the full right to go through all the previous agreements and contracts and approvals with a micron-sized comb.
Don’t talk about litigations and being sued for billions. Don’t give us the ****(self censorship) about the need to get the Federal govt involved as this has nothing to with them. Even if they can or have the rights, I don’t think any private company would sue the state govt. If you care to re-visit Malaysian corporate history, there were many contracts cancelled or revoked by the state and Federal govts, sometimes with very dubious reasons.
Dear LGE, instead of giving us the PROBLEM, please give us the SOLUTION. And that’s the job of the government and not people like ashtanga or other concerned citizens.
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K,
I shall not stir up anymore emotions of yours for the tone of your language used.
Of course LGE can deal with it the proper way according to the books or the hostile way..you seemed to prefer hostility..with a mighty fist of executive power and which would be doing sorts like forced nasionalisation.. terminate contracts arbitrarily and not pay up.. withheld any compensation payable to anyone payable to such.. or to the extreme, withheld all tax payments to the federal govt at State level. Well, of course all those can be done by way of force (notwithstanding the legal provisions),to show those who are against the State govt who is the boss of the day.. I for one hope that it will never extend to such hostility. I respect your views though..
Contracts can be breached / terminated for dubious reasons.. provided BOTH parties agree or waive their rights to sue..
simple as that.. the issue then is whether its good corporate governance.. which it is not..it remains the hobby for some though. perhaps LGE can nego nego with the developer or the new home buyers(if they manage to pull the state govt in to be liable for their losses – unlikely.. unless the state govt / local authority / state agencies gave them some misleading representation or undertakings)
Anyone wana volunteer list down the hundreds of cases of the State govts / fed govt/ emanation of the States being sued by private / public companies or individuals.. Im reluctant to do so.. erm.. if no volunteers.. one can hop from court to court to check out..there are plenty of cases there..enough to keep all the federal counsels creacking their heads.. no need to set any precedents for this..
*the word spin-doctoring has been used arbitrary man.. getting out of hand here. I dont think ahstanga would be thinking that I`m spin doctoring here? anyway.. cheers mate!!
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Kelvin
I did not and would not advocate using extra legal means to the business community. Whatever we do should be guided by the law and the contractual terms and conditions. If there are clauses that prevent us from protecting the lives of Penangites, let us engage developers and find an amicable solution. I am sure you know that in Malaysia almost in every field the government has the absolute legal power to do whatever it wishes to do. Even a non-lawyer like me is aware of this.
I am merely saying that claiming legal roadblocks and obstacles without doing his homework or showing the necessary documentary evidence is not acceptable to any right thinking person. For someone who promotes CAT principles at every possible opportunity, LGE has the moral responsibility to be transparent about these contracts.Let’s not assume things and allow status quo to prevail. We are talking about potential loss of human lives and major environmental disaster.
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No body is denouncing any Malaysian as uneducated or uncivilized and suggesting LGE do nothing. Why getting so hot headed???Cheer….
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