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Saturday February 18, 2006

Federal Court: MPAJ has full immunity from claims

By RAPHAEL WONG

PUTRAJAYA: Local councils cannot be held liable for losses suffered by anyone should a building collapse, the Federal Court has ruled.

The court said this when it held that the Ampang Jaya Municipal Council (MPAJ) was not liable for losses suffered by 73 residents of two blocks of the Highland Towers condominium who had to evacuate after the collapse of Block One 13 years ago, killing 48 people.

Justice Abdul Hamid: Projects will stall. The local council may go bust’
The three-member panel presided by Chief Judge of Sabah and Sarawak Justice Steve Shim Lip Kiong and Federal Court judges Datuk Abdul Hamid Mohamed and Datuk Arifin Zakaria ruled that the MPAJ was not liable in the pre-collapse period as well as post-collapse period of Block One.

They said local authorities such as the MPAJ were given full immunity under Section 95 (2) of the Street, Drainage & Building Act 1974 (Act 133) from claims for the pre-collapse period.

The court was unanimous in allowing the MPAJ’s appeal to set aside the Court of Appeal’s decision holding the MPAJ 15% responsible for the pre-collapse period.

As for the post-collapse liability, it dismissed with a 2-1 majority the cross-appeal by the 73 residents of Block Two and Three against the Court of Appeal’s ruling that the MPAJ was not liable for losses suffered during the post-collapse period. Justice Shim gave a dissenting judgment.

Justice Abdul Hamid Mohamad said that if the local councils were made liable, it would open the floodgates to further claims for economic loss, and this would deplete the council’s resources meant for the provision of basic services and infrastructure.

“Projects will stall. The local council may go bust. Even if it does not, is it fair, just and reasonable that taxpayers’ money be utilised to pay the ‘debts’ of such people?

“In my view, the answer is no,” he said.

In overturning the trial judge’s decision to allow the post-collapse claims, Justice Abdul Hamid said vandalism followed every disaster, natural or otherwise, in undeveloped, developing or developed countries.

TERRIBLE DISASTER: The two collapsed blocks of the Highland Towers condominium is shown in this file photograph taken on Dec 11, 1993.
“Recent events showed that even the most-powerful military and the best-equipped police force in the richest and most-developed country in the world were unable to prevent it,” he said.

“In my view, the provision of basic necessities for the general public has priority over compensation for pure economic loss of some individuals, who are clearly better off than the majority of the residents in the local council area,” he said.

He said a local council has an endless list of duties to perform for its residents and relied mainly on assessment rates and fees for licences.

Justice Arifin concurred with Justice Abdul Hamid’s findings.

In his dissenting judgment on the post-collapse liability, Justice Shim said the MPAJ could not seek shelter in Section 95(2) of the Street, Drainage and Building Act because this was a case of negligence in failing to formulate and implement the master drainage plan so as to ensure the stability and safety of the adjacent Blocks Two and Three.

He said there was an assumption of responsibility by the MPAJ to do what it had promised.

“I do not think it would be in the public interest that a local authority such as the MPAJ should be allowed to disclaim liability for negligence committed beyond the expansive shelter of Section 95(2) or other relevant provisions of the Act nor would it be fair, just and reasonable to deprive the respondents of their rightful claims under the law,” he said.

In 2000, High Court Judge James Foong ruled for the 73, and apportioned liability as follows: Arab-Malaysian 30%, Metrolux and MBf Property Services together 20%, Highland Properties 15%, MPAJ 15%, draughtsman Wong Ting San 10% and engineer Wong Yuen Kean 10%.

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