Rimdaya Sdn. Bhd. v 1. ) The Government Of The State Of Sabah 2. ) The Director Of Lands And Surveys Department, Sabah

Case Significance

Confirms the constitutionality of section 10A of the Land Acquisition Ordinance 1950 and holds that the revocation of an acquisition restores ownership to the landowner rather than giving rise to compensation, leaving only a damages remedy under section 10A(3).

This Court of Appeal decision concerns the compensation consequences when a compulsory land acquisition is revoked, and the constitutionality of the revocation power under the Land Acquisition Ordinance 1950 in Sabah. The appellant company owned land in Kota Kinabalu, part of which the State had gazetted for compulsory acquisition for a public road-upgrading purpose. The acquisition was subsequently revoked under section 10A of the Land Acquisition Ordinance 1950, and the appellant's originating summons seeking compensation was dismissed by the High Court. On appeal, the appellant argued that the acquisition had been completed after the second gazette so as to entitle it to compensation under section 6(1), and that section 10A is unconstitutional because it contravenes the guarantee of adequate compensation for the deprivation of property in Article 13(2) of the Federal Constitution. The Court held that the statutory procedures for a completed acquisition, including registration and endorsement under section 3(3), had not been carried out, so the acquisition was incomplete in law. Because the acquisition had been validly revoked under section 10A, no basis for compensation arose, since compensation only arises where the acquisition has not been revoked. On the constitutional question, the Court declined to follow earlier authority that had held section 10A unconstitutional, reasoning that section 10A deals with revocation rather than acquisition and therefore does not engage Article 13(2): upon revocation, ownership simply reverts to the landowner. The Court noted that the appellant's remedy lay in a claim for damages under section 10A(3) for any actual loss or injury suffered before revocation, and dismissed the appeal with costs. The judgment is significant for confirming the constitutionality of section 10A and clarifying that revocation restores ownership rather than triggering compensation. The decision draws a clear line between an acquisition, which attracts the constitutional guarantee of compensation, and a revocation, which restores the landowner's title, and it maps the landowner's alternative remedy in damages for losses actually suffered before the revocation took effect.