Only RM50,000 ‘nominal damages' for hotelier after MBPP wins appeal
PUTRAJAYA : The Court of Appeal has awarded RM50,000 in nominal damages to a hotel operator that succeeded in a lawsuit against a Penang local authority for revoking its temporary permit six months before its expiry in 2016.
A three-member panel chaired by Justice Ruzima Ghazali said the High Court had assessed damages based on a promotional brochure and drew an adverse inference against the Penang City Council (MBPP).
'We also find that the formula used was speculative, and the hotel is only eligible for nominal damages,' Ruzima said in allowing the council's appeal.
The panel substituted the RM865,000 in general and exemplary damages previously awarded by the High Court to Maritime Waterfront Suites Sdn Bhd (MWS) and its owner, Noorzaina Mat Zain, with RM50,000 in nominal damages.
It also set aside the RM100,000 in costs awarded by the High Court and exercised its discretion for both parties to bear their own legal expenses in the appeal.
Four years ago, the Federal Court ruled that MBPP had acted illegally by revoking the temporary permit issued to MWS and its proprietor.
In the judicial review, the bench chaired by Justice Vernon Ong declared the council's decision to revoke the permit as 'illegal, irrational, unreasonable, and disproportionate'.
The apex court then remitted the matter to the High Court to assess the amount of damages and compensation to be paid.
MWS had operated a hotel at Karpal Singh Drive in Jelutong, having obtained a temporary operating permit valid from Nov 1, 2015 to Oct 31, 2016.
The temporary permit was granted under a Penang government moratorium programme for unlicensed hotels aimed at legalising them.
Applicants were required to apply for the relevant approvals from local authorities during this transition period.
Jelutong Development Sdn Bhd, the land and building owner where the hotel was located, applied to MBPP to rezone the building from 'commercial-offices' to 'commercial-hotel' to enable MWS to operate legally.
However, MBPP rejected the rezoning request, and on April 22, 2016, decided to revoke the previously granted permit to MWS.
The hotel operators later sued MBPP, seeking compensation and reinstatement of the permit.
Karin Lim, M Murgan and Clifford Ong represented the council, while Ong Yu Shin and Lim Wooi Ying acted for MWS and Noorzaina.
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