Appeal by four dive operators on Sipadan Island dismissed

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KOTA KINABALU: The Federal Court here yesterday dismissed with costs an application for leave by four dive operators on Sipadan Island to appeal against the Court of Appeal’s decision for breach of legitimate expectations and loss of buildings.

The four applicants are Sipadan Dive Centre Sdn Bhd, Borneo Sea Adventures Sdn Bhd, Pulau Bajau Sdn Bhd and Sipadan Borneo Resort Management Sdn Bhd.

Counsel Alex Decena acted for the first applicant while counsel Shireen Sikayun acted for the second, third and fourth applicants and named the state government as sole respondent.

The five-panel sitting chaired by Justices Tun Arifin Zakaria, Tan Sri Abdul Hamid Embong, Dato’ Hasan Lah, Datuk Zainun Ali and Dato’ Jeffery Tan Kok Wha found no merit in the application.

They ordered RM10,000 costs to be deposited to the respondent, represented by former State Attorney-General (AG) Datuk Roderic Fernandez.

Earlier, the applicants, amongst others, submitted to the Federal Court that the respondent had permitted the four to operate their dive business on the island for about 11 years.

They argued that the respondent gave no rational grounds for vacating the four from the island therefore breaching their legitimate expectations that they should have been allowed by the respondent to continue operating their dive businesses on the island.

In reply, the respondent submitted that there were no legitimate expectations by the four on this case because they had been given adequate notices to vacate the island since 2003.

On October 19, 2010, High Court judge Datuk David Wong Dak Wah ordered that damages for breach of legitimate expectations against the four be assessed by the registrar.

He ruled that the government had failed to give reasonable notice to wind down the businesses of the four dive operators.

The judge also ordered damages to be assessed for loss of buildings in view of the government’s failure to give adequate notice to dismantle the structures.

He set interest at a rate of eight per cent per annum on the assessed amounts from the date of the judgment to full settlement of the same.

The four dive operators filed the suit on March 1, 2007, to seek a declaration from the court that they were entitled to be compensated for the demolition of their buildings and/or loss of their proprietary interests in their dive sports centers on Sipadan Island and/or breach of their legitimate expectations.

They were seeking more than RM6 million in special damages from the state government on the losses incurred from the demolition of their lodges and resorts on the island.

However, on January 14, a three-panel Court of Appeal led by Justices Datuk Mohd Hishamudin Mohd Yunus, Datuk Azahar Mohamed and Datuk Balia Yusof Haji Wahi overturned the High Court decision.

The three-panel sitting unanimously allowed the appeal by the state government with agreed costs of RM60,000 in favor of the appellant.

In their ruling, they said the four operators had been illegally operating on Sipadan Island and were not entitled to reasonable notice by the appellant.

The court further held that the four operators’ pleadings for breach of legitimate expectations were vague and multiple in nature.