1. Case Information
- Court: Court of Appeal, Putrajaya.
- Coram: Lee Swee Seng, Supang Lian, M. Gunalan JJCA.
- Decision Date: 10 January 2023.
- Parties: Nikodemus Ak Singai & Ors (Appellants/Natives) vs. Indranika Jaya Sdn Bhd (Respondent/Registered Lessee).
2. Background and Facts This dispute arose after the Sarawak State and its agencies issued a lease to a private company (Indranika Jaya) over land where Iban natives claimed Native Customary Rights (NCR). The leases were issued and subsequently converted into final State Leases while a separate suit (the 2007 Suit) for a declaration of NCR was still pending. In 2014, the High Court declared that the natives indeed held NCR over 8,001 hectares, including the subject land. The respondent subsequently sued the natives for trespass and sought an injunction after the natives blockaded the plantation.
3. Issue: Co-existence of NCR and Registered Leasehold Interests The Court addressed whether NCR could exist alongside a registered lease:
“There was no reason why the appellant’s NCR over the same subject land could not co-exist or exist side by side with the registered lessee’s leasehold interest … until compensation was paid to the appellants.”
The Court further clarified the relationship between these two legal concepts:
“An NCR over the subject land might not defeat indefeasibility of the State Lease but that did not mean that the holder of the State Leases had been conferred an automatic right to claim for trespass over natives who had NCR over the subject land.”
4. The Legality of the Trespass Claim The Court of Appeal found that because the natives were legally on the land before the lease was issued and their rights had not been terminated, a trespass action was unsustainable:
“…as both NCR and benefits of indefeasibility may exist side by side over the disputed land … neither could sue the other for trespass. It was a most uncomfortable co-existence because it was something that, if done properly by the State and agencies, should not have happened.”
5. Extinguishment of Rights and Compensation The Court emphasized that NCR is not extinguished simply by the issuance of a title to a third party without following proper legal procedures and paying compensation:
“Unless and until compensation was paid out and in the absence of a declaration as to when their NCR rights had been extinguished, any finding of trespass and an award of damages, even nominal, would aggravate the anomaly and aberration in the granting of a State Lease before the NCR over the subject land had been lawfully surrendered, terminated or extinguished.”
6. Fiduciary Duty of the State The Court criticized the State’s decision to issue final leases while legal proceedings were pending:
“The State’s decision to go ahead and issue a final State Lease when the case was pending before the Court might well attract a claim for exemplary damages and more so in the context of breach of fiduciary dutiesowed by the State to its natives.”
7. Outcome The Court of Appeal allowed the appeal, setting aside the High Court’s award of nominal damages for trespass. It held:
“…the trial Judge in the High Court had been plainly wrong in failing to consider that the appellants’ NCR over the subject land might exist side by side with the registered leasehold interest of Indranika Jaya, more so when the NCR had not been properly and lawfully extinguished under the law.”
Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified Advocate & Solicitor for your specific legal needs.
