NOVEMBER 22 — Twenty years ago, in 2001, the Tawau Municipal Council (“the Municipal Council”) terminated the operation of the Fuji Market (“the market”) in Tawau. The market then stood on two pieces of land (“the lands”) consisting of 104 hawker stalls and had been in operation since 1992.
The previous owner of the lands had obtained approval from the Municipal Council to build the market and when the lands were transferred to the new owner, ATS Land Sdn Bhd (“ATS”), the latter was granted a trading licence to continue the operation of the market with retrospective effect from November 1, 1998.
One Law Pang Ching and 67 others were stallholders (“the stallholders”) at the market but they had no contractual relationship with the Municipal Council. They merely paid the licence fees to ATS, who then paid over the fees to the Municipal Council.
The stallholders claimed that at a lunch organised by ATS, the president of the Municipal Council had given a verbal representation that the stallholders could continue to do business at the market.
Later, however, by a letter addressed to ATS the Municipal Council terminated the operation of the market. ATS wrote to the Municipal Council asking for its reasons to close the market abruptly and to reconsider its decision but the Municipal Council in reliance on its letter of approval and by-laws wanted to proceed to close down the market.
The stallholders appealed in writing to the Municipal Council to reconsider its decision but the latter requested them to move out. When all attempts failed, ATS advised the stallholders that it had decided not to pursue any legal action against the Municipal Council’s decision to terminate the operation of the market.
The stallholders, who were never given an opportunity to be heard in person, pursued their application for judicial review, in which they sought certiorari and declaratory relief but the High Court dismissed their application.
The stallholders appealed to the Court of Appeal. A number of grounds of appeal were raised. The main issue, however, was whether the stallholders had a legitimate expectation that the approval to continue trading at the market would not be withdrawn without first giving them the opportunity to make representations.
The Court of Appeal, by a majority (2:1), dismissed the stallholders’ appeal with costs.
The majority (Raus Sharif and Abu Samah JJCA) ruled that the affairs of the market were between ATS and the Municipal Council and the letters of approval and subsequently the termination of the operation of the market were only addressed to ATS.
Therefore, any complaint that the Municipal Council did not adhere to the principle of natural justice in making its decision to terminate the operation of the market should come from ATS.
However, it would appear that ATS had accepted the decision of the Municipal Council to terminate the operation of the market. ATS, in fact, took the stand that it would not seek legal recourse but would abide by the decision of the Municipal Council.
According to Raus Sharif JCA, the facts of the case showed that the stallholders had no locus standi (standing in court) to complain that they had been deprived by the Municipal Council of the right to be heard and due process when they were strangers to the arrangement between ATS and the Municipal Council.
Gopal Sri Ram JCA dissented. According to the learned appellate judge, the stallholders were persons who were adversely affected by the Municipal Council’s decision and therefore had the locus standi to seek relief by way of judicial review.
The stallholders had a legitimate expectation to continue to remain at the Fuji Market. This conferred on the stallholders a substantial right which was actionable.
This in turn was sufficient to confer locus standi upon the stallholders to bring an application for judicial review.
Further, there was no overriding public interest that called for a negation of the legitimate expectation created in the stallholders by the representation to them by the Municipal Council.
Legitimate expectation is explained by Professor Christopher Forsyth as follows:
“Good government depends in large measure on officials being believed by the governed. Little could be more corrosive of the public’s fragile trust in government if it were clear that public authorities could freely renege on their past undertakings or long-established practices.
“The law expects high standards from public bodies in such circumstances. Public authorities in general are required to act in a high-principled way, on occasions being subject to a stricter duty of fairness than would apply as between private citizens.
“Thus, save where there is an overriding public interest, it is submitted that it will generally be unreasonable to leave substantive legitimate expectations unprotected.” (See Christopher Forsyth, ‘Wednesbury Protection of Substantive Legitimate Expectation’ [1997] Public Law 375)
Gopal Sri Ram JCA ruled that the Municipal Council’s decision to close down the market was null and void and of no effect.
Despite the majority decision ruling against the stallholders, it did not rule against the doctrine of legitimate expectation. In fact, it acknowledged that the doctrine had been invoked by the Supreme Court (as it then was) in 1987 in the case of JP Berthelson v Director General of Immigration, Malaysia & Ors.
In that case the Supreme Court held that an American working in Kuala Lumpur as a staff correspondent with the Asian Wall Street Journal had a legitimate expectation that his employment pass would not be cancelled prior to giving him a right to make representations.
Abdool Cader SCJ said that “all that need be given was an opportunity to make representations.”
In the majority judgment, legitimate expectation would have applied had the lands where the market stood belonged to the stallholders. But that was not the case. The land did not belong to the stallholders. The market stood on privately-owned lands. The registered owner was ATS.
Abu Samah JCA referred approvingly to the judgment of Lord Diplock in the English case of Council of Civil Service Unions & Ors v Minister for Civil Service [1985] AC 374 that for a legitimate expectation to arise the decision must affect the other person by depriving him of some benefit or advantage which either:
(i) he had in the past been permitted by the decision-maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment; or
(ii) he has received assurance from the decision-maker that will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn.
The learned appellate judge was also mindful that “non-renewal of an existing licence is usually a more serious matter than refusal to grant a license in the first place. Unless a licensee has already been given to understand when he was granted the licence that renewal is not to be expected, non-renewal may seriously upset his plans, cause him economic loss and perhaps cast a slur on his reputation.”
It may therefore be right to imply a duty to hear before a decision not to renew when there is a legitimate expectation of renewal, even though no such duty is implied in the making of the original decision to grant or refuse the licence. (See S A de Smith, Judicial Review of Administrative Action, 1973)
But the fact that the landowner, ATS, was not a party to the judicial review application was an “insurmountable problem.” ATS was not before the court. The stallholders could not claim to have a better interest or right than the landowner.
Legitimate expectation arises where a person responsible for taking a decision has induced in someone who may be affected by the decision a reasonable expectation that he will receive or retain a benefit or that he will be granted a hearing before the decision is taken.
The key is this: legitimate expectation arises if the aggrieved parties stand in direct relationship with — without any go-between — the decision makers.
Then, all that needs to be given is an opportunity to make representations.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
