> Kg Buah Pala: A way out of the impasse

by Hafiz Yatim, Malaysiakini.

The Penang government only has to read the fine print on a document issued by the state land office to bring the Kampung Buah Pala saga not just to a close, but to happy ending for affected residents.

Lawyer and Petaling Jaya city councillor Derek Fernandez said the state government can take back the land, based on a caveat in the 99-year lease document issued by the land registrar.

The document states that the plot is to be specifically used for housing and that the deed "cannot be transferred, mortgaged, pawned, sub-let or used as a business instrument".

"These means that the developer cannot operate via a joint venture," said Fernandez.

"If the Penang government re-acquires the land, they only need to pay back land premium as to what is actually paid by the cooperatives," he said.

The lease, registered on March 27, 2008 and effective up to March 26, 2107, was issued to Koperasi Pegawai Kerajaan Negeri Pulau Pinang Bhd.

The Penang government changed on March 8 after the general election, with the defeat of Barisan Nasional in the state. The Pakatan Rakyat coalition then assumed office under the stewardship of Lim Guan Eng of DAP.

Developer Nusmetro Venture (P) Sdn Bhd entered the picture on April 14, 2008, based on transaction details on the document.

"I have discovered a serious weakness in the landowner Koperasi Pegawai Kerajaan Negeri Pulau Pinang Bhd and Nusmetro's claim on the land.

"It is issued with restriction 'tanah yang diberi milik ini tidak boleh dipindah milik, cagar, pajak, pajakan kecil atau sebarang bentuk urusniaga (the land cannot be transferred, mortgaged, pawned, sub-let or used as a business instrument.)

"This restriction reduces the cooperatives to an end-user as it can build houses for members only. It cannot enter into a joint venture to develop the land or sell units to third party," he added.

He said that his assumption was based on the fact that the Penang government did not approve any transaction or development in relation to the land after the title was issued.

Fernandez said if the Penang government had not given any approval for the project, then Kampung Buah Pala is saved.

Developer has no claim over loss

The lawyer also said the developer cannot claim loss of market value or gross development loss as the land cannot be developed in the first place.

"It (the land) has no commercial value without the state consent to develop it. Hence, with this it can be easily acquired back by the Penang government," the Petaling Jaya councillor said.

He argued that in fact, the cooperatives should give back the land to the Penang government as it is duty bound to comply with state government policy as it is made up of officers of the state.

"The state could give them some other asset to replace this property. The developer in this case has no rights as there cannot be joint venture enforced without the state government's approval because of the restrictions," he said.

Fernandez also said the co-operatives should not have been involved in any business dealings in the first place due to restrictions imposed.

The restriction on the title, Fernandez said, makes the cooperatives the end-user only, as there should not be any purchaser or buyer.

He also debunked the caveat obtained by Nusmetro as according to him it only showed that the developer was laying claim over the land.

He added that the caveat itself was illegal based on a judgment delivered by Justice Mahadev Shankar in the case of Goo Hee Sing vs Will Raja and Anor.

Chief Minister Lim had previously stated that the state government has yet to give approval on the project.

"If that is the case, the land cannot be developed without the new government's approval so they (developer Nusmetro) cannot claim loss of market value or gross development value," added Fernandez.

Project is unlawful

He said that to acquire the land, the state government only needed to pay back the premium or what was actually paid by the cooperative society to the government.

"Therefore the state government can stop the demolition by issuing an acquisition notice under the Land Acquisition Act.

"It is my opinion that in the event the Pakatan government did not approve any development as they claimed, the project is unlawful in law because of these restrictions in the document.

Former Petaling Jaya councillor A Thiruvenggedam meanwhile has challenged Penang Chief Minister Lim to set the record straight on whether his government had approved any development projects with the land when it took over the reigns.

"Lim has been putting the blame on BN and also declassifying confidential documents to prove the point that it was BN's fault.

"He (Lim) should stop in this blame game and set the record straight," he added.

(With additional reporting by K Pragalath)