Are the Penang govt’s fears of being sued justified?


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?

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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….


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… Read more »


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 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… Read more »


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… Read more »


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… Read more »


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… Read more »


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… Read more »


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… Read more »


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.


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.


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… Read more »


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… Read more »


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… Read more »

Lim Sang Seong

I would strongly advised ashtang and his/her group of legal experts to come out and be counted as responsible and concerned Penangites to make your case to the Penang CM and provide advice on the legalities of the issues. You can make a difference to the state of Penang and I sincerely do not think that LGE will not accept your expert leagl view(s) if there are grounds for the Penang govt to take appropraite action. Please take the courageous first step as a member of civil society for the good and betterment of Penang and Malaysia and show the… Read more »


I’m not a lawyer, but I’m well aware that various government agencies which issue approvals or licences always have reserve powers to revoke previous approvals, if substantial public interest or safety issues are involved. And Good Luck to any developer who tries to sue the government – courts have long protected the right of governments to act in the public interest, as long as they are not seen acting in a careless manner or abusing their power. As a person who has spoken up often about responsible government and Rule of Law, I’m mindful that such powers are not to… Read more »


Of course state government can invoke state law to stop every construction work that put the public at immediate danger, but they can only legally issue the order after careful study of the project and have details scientific analysis and data to substantial the claim of “in the interest of public safety” in the course of future law suit. There must be sufficient doubts or documentary discrepancy in the former tender contract leading to probable fraud of the contractor or former official, then only state government can act in the eye of the law.

J Yeoh

LGE has, as can be expected very limited experience in running the State Givt and even less knowledge of legal issues especailly when there can be a possibility of his govt being sued. Knowledgable and qualified/experienced lawyers who believe in the PR Govt being the best alternative to the thuggish and greedy BN govt should not just stand on the side lines and comment or criticise LGE and his govt. Be a true Penangite/Malaysian and step up to the plate yourselves. Offer your skills, knowledge and support to LGE to kick the BN and their cronies where it hurts most… Read more »


It is easy to know if LGE is doing NOTHING out of a genuine concern of getting sued. If he is really concerned then he would have BANNED all hillslope developements, full stop. He would not embark on a misguided mission to justify the developments of hillslope by setting up regulations and agency ala Hong Kong.

LGE’s insincerity is evident when one compares his action and statements against the Selangor MB’s. Khalid despite strong lobbying by (certain quarters) refused point blank on further hillslope development. This is a mark of a leader truly committed to rakyat’s welfare.


Read more of the materials here. Someone is still very evasive talking about certain architect’s role in one of the 4 buildings. I am still waiting…………..


Poke LGE in the A. If he has not guts, then get LKS to take over.


The Penang State Government is certainly scared to go through any case that need adjudication by the present Judiciary, knowing well any possible biasness akin to Lingamnism.

But the interest of the General Public is paramount even if there is any possible onslaught by third party forces who are keen to see the fall of the Pakatan Government.

Holding the leadership of the State is totally different from being an individual. The Public expect the leadership to act against any activities that are adverse to public interest.


If there is a lawsuit, can I count on everyone of you talkers here to contribute Rm1-1000 for legal cost and funds? I bet that you hypocrites will just disappear and probably shout – I told you not to do it.


Hill slope failure, you people always blame the Government. But when building collapse in the flat land, you turn around and blame the architect, engineer and contractor. Where is the logic?


To reply to Mut that I cite no law: Section 25(1) of the Town and Country Planning Act, 1976, Amended 1 January 2006, states, “If it appears to the local planning authority to be in the public interest that a planning permission granted under subsection 22(3)or an approval of a building plan given under any of local government laws should be revoked or modified, the local planning authority may order the permission or approval to be revoked or modified to such extent as appears to it to be necessary.” Note it does not say State Government but local planning authority.… Read more »


Dear Kelvin, No point suing Astanga if the damaged has been done. That’s if Ashtanga given LGE a wrong adive. Please people, THAT’s HYPOTHETICAL. No offence, Ashtanga! Remind me the biblical story of David stop praying after his son died. A punishment from God for his adultereous affair (with Baseehba) and heinous crime (ordering Uziah, Basheeba husband to be sent to the area where the battle is the fiercest and be killed). Oops, not a good analogy! Well, I do suggest that LGE can release those documents if there is no non disclosure clause in the agreement. So that independent… Read more »