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AND SURVEYS

VIEWS: 9 PAGES: 13

									                            J   UUIUIAl(Y



        IN TTIE MALAWI SUPREME COURT OF APPEAL
                      AT BLANTYRE

         MSCA CIVIL APPEAL NUMBER 37 OF 2OO9

         (Being High Court Ciuil Cquse No. 1006 of 2006)

BETWEEN:
MALAWI PROPERTY INVESTMENT COMPANY
LTMTTED   (MPTCO)                              ....APPELLANT

_AND-

THE MINISTER OF LANDS, PHYSICAL PLANNING
AND SURVEYS.....                   .....RESPONDENT


BEFORE:         HON. JUSTICE TAMBALA, SC, JA
                HON. JUSTICE MSOSA, SC, JA
                HON. JUSTICE TEMBO, SC, JA
                Mr. Chilenga, Counsel for the Appellant
                Mr. Likoogwe , Counsel for the Appellant
                Mr. Manda, Counsel for the Appellant
                Miss Mninde, Counsel for the Respondent
                Miss Ka-lebe, Counsel for the Respondent
                Mr Balakasi, Court Interpreter


                          JUDGMENT

Tambala, SC, JA

     On 13th September,   2006 the appellant commenced arl
action by way of an application for judicia-l review, in the High
Court at   Lilongrn'e.    The appellant sought from the court,
among other reliefs,     ^-    ^-l^-
                         a1l.r ut Llcl   -


     a) quashing the decision of the Minister of Lalds,
          Physical Planning and Surveys which declared a piece
          of land known as Bwaila 40 I I situated in the City
          Centre of Lilongwe as vacant;

     b) restraining the Minister from dealing or issuing       of
          leases over the land known as Bwaila 40/ 1: and

     c)   staying the decision of the Minister declaring the said
          land as vacant.

The appellant's action was unsuccessful. The present appeal
arises out of the decision of the learned judge dismissing the
action in the court below.

      The issue between the parties relates to a piece of land
situated on the prime iand in the City Centre of Liiongwe. The
plot of land in issue is known as titie no. Bwaila 40 I I. It is
strategically located; it is near Bisnowarty Properties and also
not far from the National Audit Office and the Reserve Bank of
Malawi. The appellant holds a freehold title over the 1and. It is
unencumbered title. The appellant considered that piece of
land "a core asset of MPICO's lald bank destined for future
development to satisfy the company's objective as developer
and long term holder of property." Bwaila 40 I I used to
accommodate an impressive building called the Youth House;
but that building was demolished in a military operation ca-lied
Operation Bwezani undertaken by the Malawi Army in 1993;
that lald has remained vacant since that time.

      The Youth House was rented by the Malawi Government
from the appellant for use by the Malawi Young Pioneers,
before the property was destroyed in the Operation Bwezani.
The Malawi Government sti1l owes a staggering sum of K855.3
million in arrea-rs of rent. But the Malawi Government is a
major shareholder of the appellant.
    The matter begar with a letter from the Principal
Secretary of Lands, Housing and Surveys addressed to the
Genera-l Manager of the  appeiiant. The letter was dated 12t]"
January , 2006. It informed the appellant of the Malawi
government's desire and intention to acquire the property
comprising title No. Bwaila 40 I I. The letter advised;-

          "This, therefore should be treqted as an expression of
          interest to enter into negotiation uitLt gourselues as to
          the process of acquisition of this land.

          You are further adused that gouernment is tuilling to
          paA any fair qnd res-sonable compensation based on
          the open market ualue for the land, taking into
          consideration   that it ls a maior shareholder of
          MPICO.'

     On 27th January 2006, the General Manager of the
appellant wrote the Secretary for Lands, Housing and Surveys
advising that the appellant was prepared to transfer their title
to the land to the Malawi Government. The appellant
expressed the view that considering that the Malawi
government was a major shareholder of the appellant and the
huge debt by way of rent that it owes the appellant, it would
be important that the process of the transfer of the property
should conform with the principles of transparency and
accountability and that it must be on the basis of open market
value. On 3'd February 2006, the general manager of the
appellalt wrote to the Secretary for Lands, Housing and
Surveys confirming the willingness of the appellant to meet the
Minister and discuss the process of transferring title over the
land in issue to the Malawi Government. There was attached
to the letter a report of valuation of the land made by Knight
Frank Chartered valuation surveyors. The report stated that
the market value of the property as at 31't December 2006 was
K39 Million. Surprisingiy the report is dated 24th January
2006. The Genera-l Manager of the appellant made it clear, in
the letter, that the appeiiant was willing to transfer the
                                4


freehold interest   in the property to the Malawi Government   at
that price.

     It would seem that representatives of the appeliant who
included Mr. s. Malata chairman of the appeiant, Mr. A.
Barron and Jean Du Plessis members and Mr Nthinda the
General Manager held a meeting with the Minister on 6rh
February 2006 in connection with the proposed transfer of the
property to the Malawi Government. The details of what
transpired at that meeting have not been revea-led, but what is
clear is that the parties did not strike an agreement over the
transfer of the property. It would seem that the
representatives of the appellant insisted that they would
accept to transfer their interest in the property if they were
paid the market value of the properfy (K39 Miliion). The
Minister and his team were only prepared to pay for the
property some monetary compensation amounting to a sum
which was obviously iess than K39 Million. The exact amount
offered by the Government side remains undisclosed. The
meeting ended with the appellant's representatives thinking
that negotiations over the proposed transfer of the title over
the property had not reached the dead end.. They felt that
further discussions on the matter would be held. in future.
But the Government side had other ideas.

      From 6th February 2006, there was silence from the
Government side till 7th september 2006 when Mr Tukula
commissioner for Physical Pianning wrote the Genera_l
Malager of the appellant. The letter informed the appellant
that the Minister made a vacant Land Development order
affecting title No Bwaila 40 I r, or 3Oth Mar ch 2006 and that
the order was published in the Ma-lawi Government Gazette of
12tt' May 2006. The letter conciuded:-

         "The order was made for the purpose of effecting
         deuelopment on the piece of land, that has
         unreasonablg remained uacant (emphasls added.)
         The Minister responsible for Lands, therefore has the
         power to lease the land as public land. A plan for the
                                5



          piece of land wltich is attached has been prepared.
          and approued fo, purposes of leasing it out to
          interested parties."

The act of the Minister to make a vacant Land Development
order affecting the appellant's land title No. Bwaila 40/ 1 was
unexpected and moved the appellant to seek, from the High
Court, judicial review of the Minister's decision.

     The appellant's attack against the Minister's decision to
declare a vacant Land Development order, both in the lower
court as weli as this court, turned principally on the Minister's
alleged violation of section 43 of the Constitution. That
section is concerned with administrative justice. It sets out a
constitutional standard to which public officials in the course
of discharging their duties of making administrative d.ecisions
or acts must satisfy. The Minister, here, was obviousiy
engaged in making arr administrative decision when he made a
decision to invoke section 55-(1) of rown and country
Planning Act to make a vacant Land Development order
over the appellant's property on title No Bwaiia 40 I L The
Honourable Minister was required to comply with the standard
laid down in section 43 of the Constitution. The essential
elements of that staldard are:-

a)   the administrative decision or act must be lawful; it
     must comply with the law which governs it. It must not
     depart from that law. In the instant case the Minister's
     decision must be fully consisted with section 55-(1) of
     Town and Country Plalning Act.

hl   the official decision or act must be fair procedurally; the
     process which brings it about must comply with the rules
     of natura-l justice to ensure fairness; any person or body
     likely to be affected adversely by the decision must be
     given adequate opportunity to be heard. The procedure
     which is followed before the decision or act is made must
     be transparent.
                                  o



(-'\   where it is necessary to give reasons for the decision or
       act then the official decision or act must be consistent
       with the reasons given.

Section 43 (b) creates a duty to give written reasons to persons
iikely to be prejudiced by an administrative decision or act.

       In dealing with the question whether the            Minister
complied with the constitutional duty laid down by section 43
of the constitution, the learned judge in the court below took
the view that the events which preceded the making of a
vacant lald deveiopment order made it clear that there was
communication between the Malawi Government and the
appellant regarding the Malawi Government's intention to
acquire the affected land and the appellant's willingness to
transfer title over the land to the Malawi Government, upon
payment of the market value of the land. The learned judge
took a further view as follows:-

            "From all this, it should haue been reasonably clear
            to MPICO that in uiew of its statutory poLuers of
            q.dministration or acquisition of land ttte Gouernment
            could exercise its best options under those statutory
            powers. In mg judgment, the process that u)as
            engaged lmd put MPICO on sufficient notice as to the
            options open to the Gouernment in tLrc euent of failure
            of a negotiated transfer. Inuoking section 55 of tLte
            Town and Country Planning Act was on-e such
            option, and I consider the notice MPICO had, as utell
            as the opporhtnitg MPICO had in hauing made i/s
            presentations to the Mirtister on the Gouernment
            corLcerrLs and intentions regarding the land, to Ltaue
            beeru sufficient to satisfg the requirements of the right
            to fair administratiue practice under section 43 of the
            constitutiorl."

     The appellant argues in its skeleton arguments that the
notice envisaged under section 43 of the Constitution, or the
rules of natural justice, generally, is not a notice to put the
other party into a place where   it can oniy begin to guess what
the administrative authority might do in the event of failed
negotiations. The appellant submits that the requirement of
notice is for the aJfected party to know with particularity the
decision or intended decision for which it must make
representations in protection of its interests.

      The court agrees fully with the appellant on this issue. It
is the view of the court that to give a party arl opportunity to
be heard before a decision or act is made is to make it clear to
the affected party what decision or act is intended to be made
or taken. The rules of natural justice embodied in section 43
of our constitution require real or genuine opportunity to be
heard to be given to the party likely to be affected by
administrative decision. Those rules are not about notice of
options that are available to a decision-maker leaving the
affected person scratching his head trying to make out which
of the several options would be taken by the administrative
authority. In the view of the court, to give a party          an
opportunity to be heard, the notice given by the public official
must direct the mind of the affected party to the decision or
act intended to be made or taken. The decision - maker must
not be allowed to give a notice which is ambiguous and clearly
misleading to the affected party.

     In the instant case an examination of the        possible
options which were open to the Ma-lawi Government included a
purchase by payment of open market va1ue, compulsory
acquisition under the Land Acquisition Act, making a
declaration of Vacant Land Development Order, or doing
nothing. The Malawi Government made clear its intention to
acquire the land by purchase. If the negotiations to purchase
the land lailed the Malawi Government could simply give up
the intention of acquiring the lald, or it could hope that after
some period of waiting the appellant could change its position
and accept the offer made by Government. Indeed, in his
affidavit, the General Manager of the appellalt makes it clear
that after the meeting of 6th February 2006, the appeilant was
waiting for a further meeting to continue the negotiations.
                                8



Therefore, even if the appellant was aware of all the options
available to the Maiawi Government relating to the acquisition
of the property, the appeliant did not think that the
negotiations with the Malawi Government had reached a dead
end. Clearly there was no meeting of the minds between the
parties, at least regarding the time that the            Ma-lawi
Government would exercise one of the other possible options
available to it.

     Clearly, the Malawi Government 1ed the appellant into
believing that the option which the Government had chosen
with a view to acquiring the appellant's property was by way of
purchase. Was the Malawi Government entitled to conceal
from the appellant its change of heart for well over six months
and only reverting to the appellant to inform it that a Vacant
Land Development Order had been made, some five months
previously? We do not think so. It, surely, was not fair for the
Malawi Government to change its mind and abandon the idea
of purchase opting for the making of a Vacant Land
Development Order, withoutfirst communicating the chalge
of mind and the new decision to the appellant. When the
Malawi Government made its intention clear to acquire the
land by purchase, the appellant quickly moved and entered
into negotiations with a view to protecting its freehold interest
in the property. The change of mind by the Ma-lawi
Government and failure to communicate to the appellant
about the new option which it had chosen, had the effect of
misleading the appellant leaving it stranded without being
availed a reaL opportunit5r to make its representations
regarding the making of a Vacant Land Development Order.
The conduct of the Minister under the circumstances had the
effect, intended or unintended, of misieading the appellant and
of failing to afford him an opportunity to be heard.

      W€, therefore, take the view that the Minister failed to
comply with the standard laid down in section 43 (a) of the
Constitution when he made the Vacant Land Development
Order without giving the appellant the opportunity to be heard
in the matter.
     In his skeleton arguments the appellant drew the court's
attention to the factors which the Minister must consider
before he is entitled to make a Vacant Land Development
Order under section 55-(1) of Town and Country Planning
Act. The court agrees that before declaring land vacant for the
purpose of section 55-(1) the Minister must be satisfied-

a)   that the land is in an urban area

b)   that the person entitled to that land has unreasonably
     failed to develop it.

     The appellant in his skeleton arguments states that the
affidavit sworn by Mr Tukula Commissioner for Physica-l
Planning revealed that the Minister made the Vacant Land
Deveiopment Order as a reaction to the fact that the appeliant
could not accept the price offered by the Minister. The
suggestion here is that the Minister used section 55
declaration as a punishment for the appellant's act of insisting
on being paid the market value of the land before titie could be
transferred to the Government. An examination of Mr
Tlrkula's affidavit shows that the conclusion drawn by the
appellant on what is stated in the affidavit is not unfair or
exaggerated. Mr Tukula said in paragraph t2 of his aJfidavit:-

          "That the interested partA could not compromise on
          anA other price for the propertg and consequently,
          the Gouernmertt resorted to inuokirug the prouisions of
          sectiort 55 of tt'te Town and Courttry Planning Act
          uthich prouision empowers the Minister, by means o/
          a Vacant Land Deuelopment Order, to declare anA
          uctcant lqrud in an urban a.recf,, which has other uise
          been urrreosoruablg not been deueloped s"s a special
          erea to be subject to special potuers of control and
          manogement in order to bring qbout deuelopment in
          the public interest."
                                10



     It is quite clear that if the appellant accepted the lower
price offered by the Malawi Government the Minister would
not have made the impugned order. To make a vacant Land
Development order because the owner of the properf insists
to be paid open market value after proper va_luation would in
our view constitute taking into account an irrelevant factor in
making such order; that would certainly taint the decision of
the Minister with unreasonableness ald attracts the courts
intervention on that ground: see Lord Green, M.R. in the
Associated Provincial picture Houses, LTD v.
WEDNESBURY coRPoRATIoN (L9471 2 ALL ER 680 at 682
where the Master of the Roils said:

           "In the present case u)e haue heard a great deal
          qbout tLte meq"ning of the taord "tlrlree.sonable". // ls
          tnte the discretion must be exercised reasonablg.
           What does that mean? Latuyers familiar utith the
          phraseologA commonlg used in relation to the
          exercise of statutory discretions ofien use the word
           "Ltrlrea"sonable" in a rather comprehensiue ser.se. It
          is frequentlg used as a generol descnption of the
          things that must not be done. For instctnce, a- person
          entrusted uith a discretion must direct himself
          properlg in latu. He must coll his ou,,n attention to
          the matters tuhich he is bound to consider. He must
          exclude from his considerqtion matters tuhich are
          irreleuant to the matter that he has to consider. If he
          does not obeg those rules, he may trulg be said, and
          ofienis said to be acting unreasonably."

     The appellant was perfectiy entitled to insist to be paid
an open market price for his property. To make a section 55-
(1) declaration because the owner of the property demands to
get an open market va]ue for his property is clearly to take into
account an utterly irrelevant factor when invoking section 55-
(U of Town and country Planning Act. That conduct is
regarded in law as unreasonable. Besides, it was unfair. It is
unclear to what extent the failure to develop the land
influenced the mind of the Minister. The Minister's
                                11




declaration was under the circumstances, liable to be struck
down on the ground that it was unreasonable.

     Again the conduct of the Honourabie Minister on the
facts and circumstances of this case would suggest that the
Minister was influenced by an improper motive, namely to
punish the appellant for refusing to accept the level of
compensation for the land as determined by the Minister
himself. In that case the decision of the Minister was made in
bad faith and it would be liable to be struck down on that
ground: See the case of CONGREVE V. HOME OFFICF_ (L976)
Q.B.D 629, at 651 where Lord Denning M.R. said:
           "if the licence is to be reuoked and Ltis moneA
          forfeited the Minister tuoutd hque to giue good
          reosons to justifu it. Of course, if the licensee had
          done angthing wrong - if Lrc had giuen a cheque for
           12 pounds uthich wa.s dishonored, or if he hq.d
          broken the coruditions of the licence - the Minister
          could reuoke it. But tuhen the licensee has done
          notLting at all, I do not think the Minister can laufully
          reuoke tLrc licence, at any rate, uithout offering his
          moneA back, and not euen then except for good
          cause. If he should reuoke it without giuing reasons,
          or for no good reeson, the courts can set aside his
          reuocation and restore tlrc licence. It would be a
          misuse of the poLuer conferred on him bg Parliament:
          arud these courts haue authoitg - and, I would add,
          the duty to correct the misuse of pouter bg o
          Mirtister or Ltis department, no matter how much he
          maA resent it or u)arrL us of tLte consequences if ute
          do." See also ADMINISTRATM LAW BY WADE
          sth Edition 391.

     The appellant argues that the Minister's declaration in
terms of section 55-(1) of Town and Country Planning Act
also constituted expropriation of its property in terms of
section 44t+l of the constitution. The appellant submits
that to be valid the order made bv the Minister must satisfv
                               t2


the requirements of section 44-(4). it is contended that it
must be shown that the order was made for a public utility
and that an advance notice and appropriate compensation
was given to the party affected by the order. We disagree. The
order here was specifically made under the provisions of
section 55-(1| of Town and Country Planning Act. It is to
that Act and section that the court must direct its focus and
ensure that the Minister satisfied the essentiaL elements
prescribed in the relevant law before he made the impugned
order. It would be wrong to look beyond section 55-(1) to
determine whether the Minister acted properly when he made
the Vacant Land Development Order.

     We would, therefore, come to the conclusion that the
appeliant succeeded to establish, in the court below, sufficient
grounds which would have entitled the learned judge to
declare invalid the Minister's decision to promulgate a Vacant
Land Development Order on 30th March 2006 affecting the
appellant's property on title Bwaila 40 I 7. The Minister's
decision in our view violated the constitutional staldard of
administrative justice laid down in section 43 (a) of the
constitution; besides, the Minister's Order was unreasonable
and made in bad faith. It is iiable to be quashed and set aside
on those grounds. In the circumstances it would be
superfluous and unnecessary to consider the issue whether it
would not be fair to a-llow the Malawi Government to accuse
the appellant of failing to deveiop the property when the sarne
was destroyed by the tortious acts of its servants or agents.

     We come to the conclusion that the appellalt's appeal
must succeed. The decision of the learned judge in the court
below is set aside. The Vacant Land Development Order
over the appellant's property on title Bwaila 40 I 1 is quashed
and set aside. Costs are in the discretion of the court. We
would exercise our discretion to order each party to pay its
own costs.

The appeal is allowed.
                              13



Delivered in Open Court this 5th day of Novemb er,   2OO9

								
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