Tenaga Nasional Berhad v Bukit Lenang Development Sdn Bhd - An electrifying decision

ABSTRACT

It is unlawful for electric utility companies (such as Tenaga Nasional Berhad “TNB”) to encroach on private lands to supply electricity to illegal occupiers of land. Doing so would render TNB liable for trespass.

That was, in a nutshell, the decision pronounced by the Federal Court on 31 October 2018 in dismissing a civil appeal brought by TNB against a developer company known as Bukit Lenang Development Sdn Bhd (“Bukit Lenang”).

Like many other disputes, there were competing interests that had to be balanced. On the one hand, occupiers of lands should be entitled to be provided electricity upon request given how important electricity is to everyday life. This is why, TNB said, it had a statutory duty to supply upon request. But on the other hand, if those occupiers are illegally occupying the land, surely the land owner’s rights to prevent trespass must also be protected.

How then can the law be set in a manner that will fairly protect the interests on both sides of the divide?

Before answering that, a brief explanation of the facts in this case will assist in appreciating the Federal Court’s decision below.

BACKGROUND

In 1996, Bukit Lenang purchased 407 lots of lands in Johor with the intention of developing the same. Those lands, however, were occupied by individuals who Bukit Lenang said had no right to be on its lands. In other words, Bukit Lenang considered those individuals to be illegal squatters. This prevented Bukit Lenang from developing its lands, which then prompted it to commence an action to evict the squatters.

In the meantime, Bukit Lenang wrote to TNB in 2002 demanding that it removed its pylons, conduits and other related structures built on the lands for the purpose of supplying electricity to the squatters. Bukit Lenang warned TNB that it would otherwise sue TNB for trespass.

TNB refused to comply with the demand on the basis that it was obligated under section 24, Electricity Supply Act 1990 to supply electricity to owners or occupiers of lands upon request. TNB said that if it was required in law to supply electricity to people who requested for it, how could it then be held liable for trespass for carrying out its statutory duties?

In 2003, Bukit Lenang obtained an order from the High Court declaring the squatters on its lands as being in illegal occupation of the lands in question. This is important for reasons explained below. Having obtained a judgment against the squatters, Bukit Lenang repeated its demand to TNB for it to remove its structures. TNB again refused, and so Bukit Lenang sued TNB for trespass.

Bukit Lenang successfully obtained a judgment against TNB for trespass in the High Court and Court of Appeal. TNB then appealed further to the Federal Court.

THE FEDERAL COURT’S DECISION

One of two important issues placed before the Federal Court was whether TNB could be liable for trespass for supplying electricity to occupants of premises upon a determination that those occupants are in unlawful occupation of the subject land.

The Federal Court unanimously held that TNB’s obligation in law to supply electricity does not mean that it can do so even where those occupiers have been declared to be in illegal occupation of the lands. The word “occupier” in Section 24, Electricity Act 1990 had to be read as occupiers who are in legal occupation of the lands. To allow otherwise, the Federal Court explained, would condone trespass on two levels: firstly, trespass by the illegal squatters on the lands; and secondly, trespass by TNB itself.

The Federal Court also took into consideration every individual’s “right to property” protected under Article 13 of the Federal Constitution. This was especially so in this case when TNB was put on notice that there was a valid High Court order issued in 2003 declaring those squatters in question to be illegal occupiers. In other words, those squatters were declared to be trespassers. How could TNB then, in these circumstances, be permitted to continue its encroachment on private property owned by Bukit Lenang without its consent? This, in the eyes of the Federal Court, amounted to trespass by TNB. Section 24 of the Electricity Act 1990 could not be used as a defence to TNB in such a situation.

COMMENTS

The Federal Court’s decision brings welcomed clarity to this issue that affects squatters, land owners, and electricity utility companies like TNB.

For the avoidance of doubt, TNB will not be liable for trespass in every situation in which it supplies electricity to squatters. It must first be determined that those occupants are in illegal occupation of the lands. This has to be done by way of obtaining a declaration from a court order. Only then will TNB be exposed for trespass if it did not have consent to enter the lands.

If the status of those squatters have not been declared illegal, then TNB would not be liable for trespass because TNB’s duty to supply electricity under Section 24, Electricity Act 1990 would still apply as a statutory defence. TNB does not have a duty to make a determination whether those occupants are in legal or illegal occupation. This was set out in the case of Sri Alam Sdn Bhd v Tenanga Nasional Berhad [1995] MLJU 457, and it does not appear that the Federal Court had disturbed the findings therein.

Note: The Federal Court’s decision above was summarised from the brief grounds read out by the Federal Court yesterday. Any inaccuracies are the fault of this author’s own small ears. A link to the Federal Court’s written Grounds of Judgment will be added once the author obtains a copy of the same.