Lembaga Lebuhraya Malaysia v Pentadbir Tanah Daerah Klang (B-01(A)-167-04/2019 Didengar Bersama B-01(A)-180-04/2019)

MMC TEPAT TEKNIK SDN BHD … RESPONDEN-RESPONDEN Didengar bersama DALAM MAHKAMAH RAYUAN MALAYSIA (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO: B-01(A)-180-04/2019 ANTARA MMC TEPAT TEKNIK SDN BHD … PERAYU

LEMBAGA LEBUHRAYA MALAYSIA …RESPONDEN-RESPONDEN 2 (Dalam Mahkamah Tinggi Malaya Di Shah Alam Dalam Negeri Selangor Darul Ehsan Rujukan Tanah No: BA-15-255 12/2016 Antara Lembaga Lebuhraya Malaysia ... Pemohon Dan Pentadbir Tanah Daerah Klang ... Responden) (disatukan mengikut Perintah bertarikh 08.11.2017) (Dalam Mahkamah Tinggi Malaya Di Shah Alam Dalam Negeri Selangor Darul Ehsan Rujukan Tanah No: BA-15-257-12/2016 Antara MMC Tepat Teknik Sdn Bhd ... Pemohon Dan Pentadbir Tanah Daerah Klang ... Responden) CORAM: HARMINDAR SINGH DHALIWAL, JCA SURAYA OTHMAN, JCA HAJJAH AZIZAH HAJI NAWAWI, JCA JUDGMENT OF THE COURT 3 INTRODUCTION [1] Both appeals relate to the compulsory land acquisition of Lot 1604, Lot 1605 and Lot 1608 by the Government. MMC Tepat Teknik Sdn Bhd (“MMC Tepat Teknik”) appeals against the Learned High Court Judge decision to set aside the First Respondent’s Award for the value of buildings constructed on Lot 1605 and the award of compensation for Lot 1605. MMC Tepat Teknik also appeals against the Learned High Court Judge decision to make an order that the award for existing business contract had to be reduced from RM 5,864,609.00 to RM3,602,105.00. The Lembaga Lebuhraya Malaysia (“LLM”) appeals against the decision of the Learned High Court Judge which affirmed the compensation awarded by the First Respondent for the value of building in Lot 1605. [2] We heard the appeals and unanimously allowed MMC Tepat Teknik’s appeal in part. However, LLM’s appeal is dismissed. We maintain part of the High Court decision and set aside the Learned Judge decision on the claim for existing business contract, which the High Court had reduced the award by the Land Administrator from RM 5,864,609.00 to RM3,602,105.00. We found that there was an error made by the Learned Judge and therefore we allow the sum of RM5,864,609.00 be reinstated in substitution of RM3,602,105.00. We made no order as to costs as agreed to by the parties. We now give our reasons. 4 THE BACKGROUNDS FACTS [3] MMC Tepat Teknik at all material times was the registered owner of the land of Lot 1604, Lot 1605 and Lot 1608 situated in Sg Kandis, Selangor (separately referred to as "Lot 1604, "Lot 1605” and "Lot 1608", collectively referred to as "Subject Property”) [4]

Although the building on Lot 1605 complied with the category of land use and express condition under the land title, counsel submitted that the building on Lot 1605 is still illegal for violating the zoning under the local plan pursuant to Section 18(1) of the Town and Country Planning Act 1976. Counsel for LLM submitted that where there is a conflict between the category of land use and the express condition under the land title and the zoning under the local plan in that the zoning under the local plan must take priority as decided by the Court of Appeal in Majlis Perbandaran Subang Jaya v Visamaya Sdn Bhd & Anor [2015] 5 MLJ 554. MMC Tepat did not adduce any evidence that it has indeed obtained the requisite planning permission before building the factory on Lot 1605 pursuant to Sections 19(1) and 20 of the Town and Country Planning Act 1976 or that it has obtained the requisite Certificate of Completion as required under the Uniform By-Laws of the Street, Drainage and Building Act 1974. 10 [16] Counsel argued that the Learned Judge had failed to give due consideration to the undisputed fact that the building on Lot 1605 spans across both Lot 1605 and Lot 1604. Counsel contended that the Learned Judge had correctly overturned the Land Administrator's award for consultancy fees to build a new factory in the sum of RM2,983,803.00 as the buildings on the subject Lots are illegal. Counsel for LLM pointed out that the Learned Judge erred in material facts and failed to distinguish between the losses of ongoing projects and projects under negotiations. MMC Tepat Teknik did not suffer any losses from the ongoing projects and rightfully, MMC Tepat Teknik also did not make any claim for it. As such, counsel for LLM submitted that the Land Administrator's award for the damages for losses of ongoing projects must be overturned. [17] As regards to the losses of projects under negotiations in the sum of RM3,602,105.00 as claimed by MMC Tepat Teknik, the Land Administrator did not award any compensation because he is of the opinion that it was not certain if MMC Tepat Teknik would have entered into such contracts as the contracts are still under negotiations and MMC Tepat Teknik’s counsel agreed with the Land Administrator’s reasoning and agreed to drop its claim. Therefore, counsel for LLM submitted that no compensation should be awarded for the damages for losses of projects under negotiations. The Learned Judge had wrongly maintained the Land Administrator's award for overhead costs in the sum of RM370,181.00 and for relocation costs in the sum of RM4,592,334.00. MMC Tepat Teknik had started the relocation project before the acquisition date on 08.10.2015 and therefore the relocation costs are not related to the land acquisition. Counsel submitted 11 that the Learned Judge's decision to disallow any claim for staff costs in the sum of RM4,999,439.00 must be maintained. THE MMC TEPAT TEKNIK SUBMISSION [18] Counsel for MMC Tepat Teknik submitted that the Land Administrator’s Award for the value of buildings in Lot 1605 should be maintained. LLM opposes the award for value of buildings in Lot 1605 on the basis that Lot 1605 is an industrial land with residential zoning, but the industrial factories and buildings therein were built without proper planning permission, authorization or consent by the local authority. Counsel submitted that this argument is baseless and misconceived as it was never raised in any of LLM’s Valuation Report or rebuttal reports. LLM's own valuer gave value for the buildings in Lot 1605 at RM6,066,550.00. [19] Counsel argued that the Learned Judge erred in failing to adequately consider the legal effect of the Legalisation Scheme and MMC Tepat Teknik's compliance with it. MMC Tepat Teknik had applied for the conversion of Lot 1604 and 1608, and in the meantime time, obtained MBSA’s Support and Pentadbir Tanah Daerah Klang's Special Permit. MMC Tepat Teknik therefore had a legitimate expectation recognized and enforceable in law that they would have been allowed to continue to use the land as a factory. [20] Counsel for MMC Tepat Teknik contended that the circumstances of this case must be appreciated in the light of the undisputed content of the 12 Legalisation Programme. The circumstances are unusual and unlike any other cases that has previously been decided. As a result of the Land Acquisition, MMC Tepat Teknik had to relocate from Klang, Selangor to Kemaman, Terengganu. Counsel submitted that the costs of appointing a building consultant was a reasonable expense incidental to MMC Tepat Teknik relocation to Kemaman. Therefore, the Learned Judge's decision to set aside the Land Administrator’s award of RM2,983,803.00 for consultant's fee ought to be reversed by this Court. [21] Counsel for MMC Tepat Teknik submitted that the Government Assessor had erroneously advised the Learned Judge that the contracts for existing projects and the contracts under negotiations (“Item A and item B”) were for the same type of business disruption. Therefore, the Learned Judge had erroneously reduced the amount for item A from RM5,864,609.00 to RM 3,602,105.00. OUR DECISION [22] We heard the appeal on 11.02.2020 and found merits in MMC Tepat Teknik’s appeal. We allowed MMC Tepat Teknik’s appeal in part. We found that there is no merit in LLM’s appeal and therefore we dismissed the appeal. We maintain the decision of the High Court and set aside the issue on costs for existing business contract, which the High Court had reduced the award from RM5,864,609.00 to RM3,602,105.00. We found that the High Court had made an error which merits our intervention. 13 [23] Based on the submissions, there were three amounts claimed for business disruption by MMC Tepat Teknik i.e. RM5,864,609.00, RM3,602.105.00 and RM370,181.00. The amount of RM5,864,609.00 was for the value of existing contracts which had already been entered into by MMC Tepat Teknik and currently being performed. We are of the view that these contracts would have encountered difficulties in their performances as a result of business disruption caused by the land acquisition. However, RM3,602,105.00 was for the value of new contract which were under negotiation. We found that the Learned Judge had erred and failed to distinguish between the losses of ongoing projects and project under negotiations. We are of the view that the Learned Judge had erred in holding that these two claims were for the same type of business disruption, thus had erroneously reduced the amount of compensation from RM5,864,609.00 to RM3,602,105.00. [24] This can be seen in the Judgment of the Learned Judge at para [13] which held as follows: “13. Pihak Pengapit Kerajaan menjelaskan bahawa pihak pemohon memohon RM3,602,105.00 tetapi telah diberikan pampasan oleh Pentadbir Tanah berjumlah RM5,864,609.00. Pentadbir tanah telah memberikan pampasan melebihi yang dituntut. Pengapit Kerajaan mengesyor pampasan diberikan sebagaimana yang dituntut iaitu RM3,602,105.00. Dalam keadaan sedemikian saya turut bersetuju agar Award Pentadbir Tanah Kelang dipinda kepada RM3,602,105.00. Pampasan baru dibenarkan RM 3,602,105.00 Pampasan dibayar oleh Pentadbir Tanah RM 5,864,609.00 Lebihan bayaran pampasan RM 2,262,504.00” 14 [25] From the Judgment, the Learned Judge had agreed with the Government Assessors that the amount claimed by MMC Tepat Teknik for business disruption are only RM3,602,105.00 thus reducing the amount of compensation from RM5,864,609.00 to RM3,602,105.00. [26] We were minded to interfere with the High Court’s decision on the issue of costs of business disruption of existing project. We found the Learned Judge was plainly in error in reducing the sum from RM5,864,609 to RM3,602,105.00. We are satisfied that the Land Administrator’s Award of RM5,864,609 is justified and reasonable and therefore we allow MMC Tepat Teknik appeal in part. In respect of the other issues raised, we found no legal error on the findings of the High Court Judge and therefore we maintained the Learned Judge decision. Appeal 180 by MMC Tepat Teknik allowed in part. Appeal 178 by LLM dismissed. We made no order as to costs. -Signed-Dated: 19 January 2022 (SURAYA OTHMAN) Judge Court of Appeal Malaysia 15 CASE(S) REFERRED TO: 1) Majlis Perbandaran Subang Jaya v Visamaya Sdn Bhd & Anor [2015] 5 MLJ 554. LEGISLATION REFERRED TO: 1) section 53(2) of the National Land Code 1965; 2) section 18(1), 19(1) and 20 of the Town and Country Planning Act 1976; and 3) Uniform By-Laws of the Street, Drainage and Building Act 1974. COUNSEL (S): CIVIL SUIT NO: B-01(A)-167-04/2019 For the Appellant - Steven How (with him S. Shahman) Messrs Kumar Jaspal Quah & Aishah K-8-6, 2, Jalan Solaris Solaris Mont Kiara 50480 Kuala Lumpur For the 1st Respondent - Etty Aliany Tesno Kamar Penasihat Undang-Undang Pejabat Setiausaha Kerajaan Negeri Selangor Bangunan Sultan Salahudin Abdul Aziz Shah 40503 Shah Alam, Selangor 16 For the 2nd Respondent - Nahendran Navaratnam (with him Felix Raj, Wong Wye Wah & Ahmad Aizek) Felix Raj Chambers 8, Jalan 7/18, Seksyen 7 46050 Petaling Jaya, Selangor CIVIL SUIT NO: B-01(A)-180-04/2019 For the Appellant - Nahendran Navaratnam (with him Felix Raj, Wong Wye Wah & Ahmad Aizek) Felix Raj Chambers 8, Jalan 7/18, Seksyen 7 46050 Petaling Jaya, Selangor For the 1st Respondent For the 2nd Respondent - - Etty Aliany Tesno Kamar Penasihat Undang-Undang Pejabat Setiausaha Kerajaan Negeri Selangor Bangunan Sultan Salahudin Abdul Aziz Shah 40503 Shah Alam, Selangor Steven How (with him S. Shahman) Messrs Kumar Jaspal Quah & Aishah K-8-6, 2, Jalan Solaris Solaris Mont Kiara 50480 Kuala Lumpur