Apex court rules sensitive hill top or hill slope development projects need National Physical Planning Council approval

• Judge Datuk Nallini Pathmanathan, who wrote the unanimous decision, ruled Section 22(2A) said the development affecting hill tops or hill slopes are no longer merely an issue of local state governance.
• “It is also a federal and national issue. The inclusion of the role of the federal government in town and country planning would promote coordination between the local authority, state level authorities, and the federal government, thus ensuring development takes place in a well-balanced manner and accords with the sharing of responsibilities and the principle that the public interest precedes private interest in the use and development of land.

PUTRAJAYA (Jan 20): In a landmark decision, the Federal Court on Friday (Jan 20) ruled that any hill top or hill slope development project which is designated as environmentally sensitive in a development plan, must obtain approval from the National Physical Planning Council (NPPC) as stipulated under Section 22(2A)(c) of the Town and Country Planning Act 2001 (TCPA).

The court further ruled that local councils cannot arbitrarily bypass the NPPC and redesignate such proposed projects as "special projects" in a bid to get away from this requirement of consulting the council.

This follows a three-member apex court bench decision on Friday which allowed the appeal of Sungai Ara residents who are challenging a hillside development project approved by the Penang City Council for the Sunway (City) Penang Sdn Bhd project and hence quashing the approval.

Judge Datuk Nallini Pathmanathan, who wrote the unanimous decision, ruled that Section 22(2A) said the development affecting hill tops or hill slopes is no longer merely an issue of local state governance.

“It is also a federal and national issue. The inclusion of the role of the federal government in town and country planning would promote coordination between the local authority, state level authorities, and the federal government, thus ensuring development takes place in a well-balanced manner and accords with the sharing of responsibilities and the principle that public interest precedes private interest in the use and development of land.

“This much was made evident by the minister [of housing and local government] in the Hansard debates that took place on July 30, 2001 and July 31, 2001,” she said when the amendment [to Section 22] was made.

Development approved in 2012
Sunway is the registered owner of the land and developer for the construction of a housing development project of 600 housing units involving 13 blocks of condominium, three-storey bungalows as well as other structures covering an area of 80.89 acres, 43% of which is hilly.

The planning permission was granted on Feb 21, 2012 by the local authority.

Subsequently, the Sungai Ara residents brought the matter to the Penang Appeal Board (PAB), and on Nov 20, 2015, the PAB set aside the planning permission granted by the local authority.

Sunway then filed a judicial review proceeding at the Penang High Court, seeking to quash the PAB decision and succeeded in doing so. The Court of Appeal affirmed the High Court decision in March 2021, resulting in this appeal by the residents.

Nallini said it was clear that the amendment to the TCPA is the inclusion of the element of public participation in the land planning process which requires public participation in the drawing up of both the structure plans and local plans.

“The TCPA amendment introduced new provisions which substantially directed the TCPA towards the aims of ensuring integration of federal and state government policies, and ensuring uniformity of law and policy in Peninsular Malaysia,” she added.

Developer could not use land title indiscriminately
Nallini, who sat with Chief Judge of Malaya Datuk Mohamad Zabidin Mohd Diah and Federal Court judge Datuk Rhodzhariah Bujang, further reminded that a development on hilly land and steep slopes is of great significance as it is intrinsically related to sustainable development in the context of environmental law.

“It brings to the fore the need for a holistic approach in decision making in relation to property development, particularly on hill land and steep slopes as notwithstanding legislation in this regard, sustainability of development has not necessarily been ensured.

“The governance of property development requires constant vigilance and a holistic approach in decision making by the relevant authorities,” she added.

In this case, Nallini noted that developer Sunway cannot shield itself from the application of the TCPA and Land Conservation Act (LCA) for the reason that the subject land was a first grade freehold title without any restriction of land use.

“Possession of land title does not give the owner of the land a blank cheque to do whatever he or she pleases with the land. This would have the potential of allowing for unsustainable development outside the purview of the TPCA and the LCA.

“This in turn would defeat the very object and purpose of both the TCPA and LCA, and hence negate the intent of Parliament in enacting those statutes,” she warned.

Nallini further said the structure plan stipulates a general prohibition against development on hilly land or slopes which applies to this land.

However, part of the subject land was zoned for housing or low-density housing under the policy plan.

“This is in direct conflict with the provisions of the structure plan. If a local plan had been drafted and approved, it would have to conform to the structure plan pursuant to Section 15(5) of the TCPA, and if there was any inconsistency between a local plan and structure plan, there is a specific statutory procedure in the TCPA to deal with such an inconsistency.”

She added the structure plan has statutory force and requires compliance and this in effect limits the scope of the State Planning Committee’s power.

Nallini said directives cannot be issued when it contravenes the structure plan.

Local authorities need to comply with TCPA provisions
“The structure plan provides that, even where a proposed development constitutes a ‘special project’, there are still conditions that need to be met. After the local authority decided that the application falls under ‘special projects’, the application is to be referred to the State Planning Committee for their approval.

“It is then that the State Planning Committee is under a duty pursuant to Section 22(2A) of the TCPA to request from the NPPC its advice on the application submitted,” she said.

Nallini said the local authority, as the entity responsible for the issuance of planning approval, has a duty to comply with the provisions of the TCPA.

She added when Section 22(2A) is read contextually, it follows that it refers to the direction given by the State Planning Committee, if any, within the context of the material factors to be taken into account in deciding on planning approval.

“It envisages a directive that is in complete compliance with, and within the scope of the TCPA, taken as a whole,” she said.

“For the foregoing reasons, we conclude that the local authority’s approval of Sunway’s application for planning permission is ultra vires (beyond the power) and void. The High Court and Court of Appeal erred in law in upholding the decision of the local authority to grant planning approval. For the reasons set out in the judgment, these appeals are allowed.”

The court ordered Sunway and the Penang City Council to pay RM150,000 costs each to the Sungai Ara residents.

The residents were represented by Datuk Dr Gurdial Singh Nijar, while Christina Siew appeared for Sunway and Karin Lim for the city council.