This article first appeared in Forum, The Edge Malaysia Weekly on November 4, 2024 - November 10, 2024

Planning laws are a critical factor in a developing economy. They determine the extent of property rights; the extent of discretion that can be exercised by planning authorities in dealing with planning applications by developers; and the right of adjoining owners and members of the public to object to decisions. Judicial review plays a very important role in determining the meaning and application of the planning laws themselves.

Two recent cases (Sunrise Garden and Taman Rimba Kiara, both decided by the Federal Court in 2023) have underlined the importance of both planning law and judicial review of administrative decisions. The cases are striking for their forthrightness in asserting judicial review, and the comprehensiveness and practical impact of the principles they lay down.

Sunrise Garden concerns the anxious matter of hillslope development, a perennial problem in Malaysia due to the possibility of landslips, highlighted in the Highland Towers tragedy in 1993.

Penang City Council (PCC), the local planning authority, gave permission to the developer Sunway to build housing on an 80-acre tract including 43% hill land. Development on hill slopes was generally forbidden under the Penang Structure Plan (PSP), but there were three exceptions established by the PCC under “administrative guidelines”. Objectors successfully appealed to the planning appeal board to have the planning permission set aside. However, the appeal board decision was quashed by the High Court on a judicial review application by Sunway. The Court of Appeal rejected an appeal by the objectors, who appealed to the Federal Court.

The Federal Court’s judgment was delivered by Nallini Padmanathan FCJ (Federal Court Judge), and she held as follows:

i) The administrative guidelines were ultra vires in that they were contrary to the provisions of the Town and Country Planning Act 1976, because they purported to vary the PSP without going through the process of public awareness and participation, as required by the Act.

ii) A decision contrary to the PSP, which prohibited development on hill slopes, required very strong reasons for justification, and it followed that adjoining owners had a right to be told of the reasons for such deviation, consistently also with the public interest.

iii) An attempt to argue that the developer had a legitimate expectation that there would be no restriction on developing the land, was rejected.

In Taman Rimba Kiara, the Datuk Bandar of Kuala Lumpur, as the local planning authority, gave permission to the developers for development comprising 25 acres in a public park, designated, following public consultation and objection hearings, as green open space under the Kuala Lumpur Structure Plan (KLSP). However, under the KL Local Plan, as gazetted in 2018, the land, contrary to the KLSP and the draft of the Local Plan, was designated for “mixed-development”. Objectors to the planning permission failed in their judicial review action in the High Court. An appeal to the Court of Appeal succeeded, but the Datuk Bandar appealed to the Federal Court, whose judgment was again set out by judge Nallini. She held as follows:

•    The KLSP, having been gazetted following public participation, was binding in law under the Federal Territory (Planning) Act 1982 (FTPA), and required “slavish compliance”. The Datuk Bandar erred in law in failing to have regard to the KLSP.

•    In holding hearings of objections under rules made under the FTPA, the Datuk Bandar again erred in law, as these rules, restricting to registered owners of adjoining lands the right to object to planning applications, were ultra vires the provisions of the Act.

•    The Datuk Bandar sat on the developer’s board of trustees, as well as sitting on the land exco, which decided on the planning application. There was thus a conflict of interest afflicting the decision, and on this ground alone the decision had to be set aside.

•    Under the rules of court, a judicial review action may be brought by anyone who is “adversely affected” by a decision. The applicants, who were owners of land adjoining or close to the park, had standing to bring a judicial review action. But so did other applicants who had rights to use the park. There was no requirement that an applicant should have suffered any special detriment arising from the decision.

•    The lack of any express statutory provision requiring the giving of reasons for granting planning permission does not mean there is no duty to give reasons. Reasons are of considerable importance where the authority deviates from development plans in the exercise of discretion, especially where public space is involved.

•    Public authorities act in the public’s interest, and they owe a duty of candour in judicial review proceedings to make full and fair disclosure of all relevant materials.

In just two cases, the Federal Court has set out and applied almost all of the important general principles of judicial review of administrative actions. The rule of law requires all administrative action to be based on law, and actions not authorised by statute are ultra vires. In any exercise of discretion, the decision-maker must ignore irrelevant considerations and have regard to all relevant considerations. Where the public participates in an important decision, reasons must be given for departing from what has been previously decided. Decision-makers must not have an interest in the outcome of the decision. Persons adversely affected have standing to apply for judicial review, and being adversely affected does not require the violation of a private right or any special detriment. Public decision-makers have a duty of candour before the court, as part of natural justice, and must make full disclosure of all relevant circumstances, even those harming their case.

Anyone not legally trained might be forgiven for noticing that none of these principles is set out in the relevant statute. Judicial review is not so much a system of rules as a system of principles that are read into the statute in all cases where statutory discretion is being exercised.

In Malaysia, local planning authorities are not accountable to an electorate, and these decisions emphasise that the democratic process of drafting a plan must be taken seriously. There can be no deviations without going through the prescribed consultation process. Plans are not policy guidelines that can simply be changed or made subject to exceptions. They constitute a kind of contract with the public.

Nonetheless, these decisions leave much space for speculation. When, for example, is public opinion a relevant consideration that cannot be ignored in the decision-making process? And in what other contexts will there now be a duty to give reasons? The courts will have to define this carefully. It is simply impossible to give reasons for the thousands of decisions issued daily across the country.

The two cases examined here raise many questions as to the legitimate extent of judicial review. For now, those involved in planning matters and other matters involving state regulation will have to be sure to take legal advice when making or being subjected to important decisions affecting the public.

Andrew Harding is Professor of Law at University of Reading Malaysia; Visiting Professor at the Centre for Asian Legal Studies, National University of Singapore; Adjunct Professor at the Faculty of Law, Universiti Malaya; Visiting Professor at the University of Oxford; Visiting Professor at Thammasat University in Bangkok. His book The Constitution of Malaysia: A Contextual Analysis (Hart Publishing, 2022) is now in its second edition.

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