Lawyers say Taman Rimba Kiara development can be terminated without compensation, if…

PETALING JAYA (March 26): The Taman Rimba Kiara developer is not entitled to any compensation for its termination, if “the contract is found to be tainted by illegality”, said former Malaysian Bar President Ambiga Sreenevasan and Derek Fernandez, lawyer and Petaling Jaya City Councillor.

“Where a contract is found to be tainted by illegality, the so called ‘binding contracts’ may be set aside, the Development Order revoked and the project terminated.  It would then be arguable that any developer involved in such illegality is not entitled to any compensation for its termination on the grounds of public policy,” the lawyers said in a statement issued today.

Referring to the file opened into the controversial deal, they said “the Malaysian Anti-Corruption Commission must urgently proceed with investigations into Yayasan Wilayah Persekutuan and its establishment and the irregular dealings in relation to this land, which the Center to Combat Corruption and Cronyism (C4) has found to be in conflict of interest”.

A such, Ambiga and Fernandez have urged Federal Territories Minister Khalid Abdul Samad and the Cabinet to seek “proper, independent legal advice” on the disputed high-rise project at the green lung area in Kuala Lumpur and to “review the whole process involved in this development”, referring to Khalid’s statement earlier that the Cabinet will decide the fate of the development.

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“The Cabinet must make its decision based on all the facts and advice on the correct position in law,” they counselled.

The lawyers noted with concern that the minister had also indicated that the compensation payable to the developer is in the region of RM150 million if the development is cancelled; and in view of that, he felt it is more reasonable to proceed with the construction.

In response, they said: “The only compensation payable in the event of termination (subject to any allegations of illegality being proven) and where the land is undeveloped, is the actual expenditure incurred as stated in section 25(6) of the Federal Territory (Planning) Act 1982. This would involve the purchase price paid for the land, the land premium and other expenses, all of which must be supported by receipts or proof of payment for the alleged expenditure. This is unlikely to be anywhere near RM150 million.”

In addition, Ambiga and Fernandez noted that the relevant Development Order issued by the Minister for the project does not accord with the 2013 Draft KL City Plan where Bukit Kiara was zoned as a park with no changes.

“The gazetting of the 2018 KL City Plan is not legal as it violates the law and has included unilateral changes to the Bukit Kiara Park without displaying the same for public hearing, in accordance with the law.

“The Minister must revisit the 2018 KL City Plan and carry out the required legal process of consultation before proceeding to implement it.” 

At the same time, they point out that Khalid “must resolve the conflict of interest that arises due to his position as Minister, having oversight over planning and development control in DBKL and being the chairperson of Yayasan Wilayah Persekutuan, which is involved with development projects”.