The Federal Court is expected to decide on the procedures local councils can impose before hiking assessment rates.

A three-member bench, led by Chief Justice Md Raus Sharif, today granted leave to hear two questions of law from the Hang Tuah Jaya Municipal Council (MPHTJ) in Malacca.

The municipality was appealing previous court rulings stipulating that objections from the people have to be heard before approval is sought from the state government to increase assessment rates.

According to Raus, this is the first time the apex court will decide on the matter. The other two judges on the bench were Justices Zainun Ali and Zaharah Ibrahim.

The lawyer for MPHTJ, Lambert Rasaratnam, said local councils nationwide practised two methods when it comes to raising the assessment rates.

Some councils raise rates after hearing objections from residents, while others only hear  objections after the raise.

Ratepayers and residents can voice their objections through the Appeals Board, Rasaratnam said.

However, Gobind Singh Deo, the lawyer for Ayer Keroh assemblyperson Khoo Poay Tiong, pointed out that Section 143(3) of the Local Government Act 1976 stipulates that local councils should hear objections first before going to the state government to gazette the increase. 

To this, Rasaratnam said that as stipulated under the Local Government Act, objections can be heard before a board after rates are raised, and be reviewed thereafter.

In May, the Court of Appeal upheld the decision of the High Court in Malacca against the raising of rates before objections are heard.

Justice David Wong Dak Wah, who led the Court of Appeal bench, unanimously dismissed the council's appeal with no order as to costs.

Previously, judicial commissioner Mohd Firuz Jaffril declared the increase in assessment rate as null and void as it did not comply with the procedures of the Local Government Act 1976.

In his judgement, Firuz said approval from the state on new assessment rates has to be obtained once it is verified by the local authority, and after the objection period.

“This approval for the new assessment rates has to be done or approved by the state government before Dec 31, 2014, before it is to be implemented,” the judicial commissioner said.

“In my finding, the gazette 731 dated Dec 18 is just information only (on the proposal) and not gazetted as stated under Section 141(1) of the state approval,” Firuz added.

One of the two questions to be posed before the court in the final appeal is whether a proper construction of the Act, as well as the procedural requirements of Section 141 and 142, are preconditions that should be fulfilled before a state authority can approve, and a local authority can confirm a new valuation list.

If answered in the affirmative, the council will ask if any consequential increase in rates payable is ultra vires of Section 143, and illegal, null and void under the Act.

This even if the valuation list is approved by the state authority and confirmed by the local authority concerned within the time prescribed by Section 143(1), and if the procedural requirements of Section 141 and 142 were substantively fulfilled – albeit after the time prescribed in Section 143(1), but before the coming into force of the valuation list.