Court hears whether land titles can defeat NCR claims

KUCHING: The Federal Court on Tuesday heard submission of two legal issues related to land in the case of Tuai Rumah Nyutan.

The first issue was whether titles to land in Sarawak are indefeasible. In other words, whether a land title can be defeated by native customary rights ( NCR) claims.

The second issue was if the government had issued a title over land where NCR had been created, what is the proper remedy for the natives after NCR had been extinguished by the issuance of the land title.

This was the case for almost all the NCR cases where leases provisional or otherwise had been alienated to third parties but such leases overlap with NCR lands claimed by some natives.

TH Pelita Sadong Sdn Bhd and TH Pelita Gedong Sdn Bhd ( TH companies), RHB Islamic Bank Bhd, Land Custody and Development Authority ( LCDA) as well as the state government are appealing against the decision made in a High Court which was in favour of the respondents namely Nyutan Jami, Gangak Guma and Langa Kama.

On September 2013, the High Court ruled that the respondents had proved NCR on their land. The appellants later appealed to the Court of Appeal against the decision, but the decision was affirmed and the appeal was therefore dismissed.

The state government was represented by state legal counsel Datuk JC Fong, the TH companies were represented by Arthur Lee and RHB Islamic Bank Bhd was represented by Albert Tang. The respondents were represented by Baru Bian, Desmond Kho and See Chee How.

The state government’s position was that the natives were only entitled for compensation because Section 15 of the State Land Code stated that prior to the alienation of land where NCR subsist, such NCR must first be extinguished and compensation paid to the affected native land owners.

The government felt that the land title issued to the plantation company which had created a charge or mortgage in favour of RHB Islamic Bank to secure a loan of RM66 million should not be set aside.

TH companies and RHB Islamic Bank also argued that they were protected by the doctrine of indefeasibility of title, that is, they had acquired interest in the land without knowledge of the plaintiffs’ NCR and they had not committed any fraud in acquiring the land.

The respondents’ position was that in Malaysia as in Sarawak, the state had deferred indefeasibility such as the title was not absolute until certain requirements were fulfilled as opposed to immediate indefeasibility.

“In addition, there is a long line of authorities from outside our jurisdiction and adopted by our court which state that radical title issued by the state is subject to native titles or in Sarawak’s context, NCR claims over land,” the respondents submitted.

However, the respondents said the matter was made complicated because the original owner had transferred their rights and title to another party and the bank had provided financing.

“Therefore the question before the court was the rights of the natives versus the right of a bona fide purchaser for value ( TH companies) versus the right of a mortgagee RHB Islamic Bank,” the respondents submitted.

After hearing the arguments by the counsel for all the parties, the Federal Court panel comprising Court of Appeal president Tan Sri Md Raus Sharif and Federal Court judges Tan Sri Suriyadi Halim Omar, Tan Sri Zainun Ali, Datuk Balia Yusof Wahi and Tan Sri Jeffrey Tan Kok Wha advised the parties to settle the matter with compensation to be paid to the landowners whose NCR rights over part of the land issued with land title to the plantation companies were not disputed by the government or plantation companies.

The state argued that to nullify the land title would be unjustified. However, Baru said his clients were claiming both the NCR land and damages as their land had been wrongfully alienated.

The court then said it would deliver a written judgment at a date to be fixed. Once out it would be another landmark decision pertaining to NCR land issues in Sarawak.