WHEN our Federal Constitution came into force on Merdeka Day, Article 121 stated: “The judicial power of the Federation shall be vested in a Supreme Court and such inferior courts as may be provided by federal law.”
Legal balance and harmony was maintained in line with the doctrine of separation of powers because legislative power is vested in Parliament (Article 44), while executive power is vested in the Yang di-Pertuan Agong acting upon advice (Article 39).
The objective of this important constitutional doctrine (originally attributed to French political philosopher de Montesquieu) is that no single arm (organ) of the government shall completely dominate the other. However, absolute separation of powers does not exist here because some of our members of parliament are also, at the same time, members of the administration (in the executive branch of the government).
Subsequent events in our constitutional history saw an erosion of this judicial power. This is evident upon our reading of Article 121 as it stands today, where the important words “judicial power... shall be vested” are now painfully missing. In plain language, the three arms or organs of our government are no longer at par.
Members of the legal fraternity and the judiciary were recently reminded of this segment of our legal history when the Federal Court handed down its remarkable decision in a land acquisition case known as “Semenyih Jaya Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat” on April 20. The facts of the case are summarised below.
The appellant company owned a piece of land in Hulu Langat, Selangor. In January 1997, the company commenced construction for its industrial project known as “Kajang 181 Park”. Part of the land was then acquired under the Land Acquisition Act 1960 (Act 486) for the purpose of constructing the Kajang-Seremban Highway. The appellant was in due course awarded compensation totaling RM20,862,281.75 — representing the sum of RM17,627,400.00 (the value of the land acquired) and RM3,234,881.75 (compensation for the loss suffered from the termination of the project). Unhappy with the amount, the appellant referred the case to the High Court.
At the High Court, the appellant submitted that the compensation awarded was inadequate because the Land Administrator (respondent) failed to consider the appellant’s “other claims” — namely, loss of profits and the costs and expenses arising out of the termination of its commercial project. The appellant submitted that he should be compensated for loss of profits in respect of the sale of the 57 units in the project, which had been concluded when the acquisition took place.
After hearing the submission of both parties, the High Court held that the appellant was also entitled to receive an additional compensation of RM1.16 million “for severance and injurious affection”, but its other claims for compensation were dismissed. Aggrieved by this decision, the appellant appealed to the Court of Appeal but the appeal was dismissed. The appellant then sought leave to appeal to the Federal Court. Six questions of law were framed for the decision of the Federal Court.
For the purpose of this short commentary on the issue of judicial power, focus is made only on question No. 3, which concerns the constitutional validity of Section 40D of Act 486.
According to Tan Sri Zainun Ali (the Federal Court judge who delivered the 87-page judgment of the court), the issue was whether Section 40D “contravenes Article 121(1) of the Federal Constitution, which declares that judicial power to decide a dispute brought before the courts is vested in the courts” (paragraph 24).
Explaining the history of Act 486, Zainun said that originally (before 1984), the duty of assessors (under Section 42 of the act) is only to assist the judge in determining the amount of compensation, while the power to determine it remains vested in the judge. When Act A575 came into force (on Jan 20, 1984), Sections 40-42 of Act 486 were deleted, thus, completely removing the role of the assessors. The role of the assessors was, however, restored by Act A999, which came into force on March 1, 1998.
She added that when the revised Section 40D came into force in 1988, a “sea change” took place because the assessors are now empowered to decide on the amount of compensation, their decision becoming final and non-appealable. Their original role (merely to assist the judge) has been transformed, as they have become “fact finders and adjudicators”, effectively usurping the judicial power of the court.
She proceeded to explain that on June 10, 1988, the words “judicial power” were deleted from Article 121(1) of the Federal Constitution by Act A704. This historical constitutional amendment of 1988 “had the effect of undermining the judicial power of the Judiciary and impinges on the following features of the Federal Constitution — (i) The doctrine of separation of powers, and (ii) The independence of the Judiciary” (paragraph 74).
Zainun stated that under section 40D the assessors had in effect taken over the judicial power of the court. This whittling away of the power of the High Court Judge is in breach of Article 121 of the Federal Constitution. Reiterating that the power to award compensation in land reference proceedings is “a judicial power that should rightly be exercised by a judge and no other”, she consequently held that Section 40D is ultra vires the Federal Constitution and “should be struck down”.
This recent decision of the Federal Court was warmly welcomed by several parties, including G25 (a non-governmental organisation) who “wholeheartedly applauded its courageous judgment”, an eminent scholar (Prof Datuk Shad Saleem Faruqi) and a former Bar Council president.
On June 6, the new Chief Judge of Malaya Tan Sri Ahmad Maarop issued a new practice direction (Arahan Amalan Hakim Besar Malaya Bil 1 Tahun 2017) stating that this new Federal Court decision applies to all cases still pending and not finally disposed of. He also urged the members of the Malaysian judiciary to “read the judgment”.
SALLEH BUANG formerly served the Attorney-General’s Chambers before he left for practice, the corporate sector and, then, the academia.