KAOCHERN CORPORATION SDN. BHD. v Pentadbir Tanah Wilayah Persekutuan Kuala Lumpur (WA-15-13-04/2022)

In this case, the Applicant is the registered proprietor of two plots of adjacent land, and both lots were partially acquired by the Respondent for the purpose of “Lebuhraya Setiawangsa – Pantai Expressway (SPE) Tambahan”. The acquiring party was Lebuhraya DUKE Fasa 3 Sdn Bhd, the concessionaire for the said highway.

As there were two lots of land involved, held under Geran 80178 Lot 54992 (“Lot 54992”) and Geran 80176 Lot 54993 (“Lot 54993”) respectively in the Mukim of Kuala Lumpur, the Applicant had rightly filed two applications under Section 37 of the Land Acquisition Act 1960, by way of Form N, to require the Land Administrator to refer its objections to the High Court regarding the amount of compensation awarded by the Respondent.

There was no dispute about land value because the Applicant agreed that the valuation of RM10,000.00 per square meter used by the Respondent in his Award was the market value as at 30th December 2020, 3 which was the date of publication of the second Section 8 Declaration in the Government Gazette. An earlier declaration in year 2017 had lapsed. The issue for hearing and decision was only regarding the effect of “injurious affection” on the remaining land.

Since the two land references were regarding adjacent lands belonging to the same proprietor, I agreed that they ought to be heard together. I was aided by two assessors, namely Sr. Mohd Zamri bin Awang and Sr. Ery Zuwardi bin Anuar, and guided by their professional reports, this Court decided to award total additional compensation of RM3,450,605.60, in the form of two Awards for additional compensation, of RM2,375,989.60 for Lot 54992 and RM1,074,616.00 for Lot 54993 respectively, with late payment charges at 5% per annum from the date of Form K till date of payment. I am mentioning the total additional compensation awarded because the two lots of land are adjacent and could be developed as a single development, and this Court had considered this fact as a positive factor in favour of the Applicant.

The original total amount awarded by the Respondent was RM7,217,986.95. Thus, after adding the additional compensation of RM3,450,605.60 awarded by this Court for the partial acquisition of the two lots of land (excluding late payment charges), the total amount of compensation added up to a handsome sum of RM10,668,592.55. Background Facts [7] The Respondent in fact issued declarations twice under Section 8 of the LAA 1960 to partially acquire those two lots of land. The first declaration was published in the Government Gazette on 27th April 2017. As the land acquisition was not completed within two years, this 4 declaration lapsed by operation of S.8(4) LAA 1960 on 27th April 2019. The second declaration published on 30th December 2020 is applicable in this case. A screenshot of the Schedule (Jadual) is shown below:

As the partial acquisition was to be for the purpose of “Lebuhraya Setiawangsa – Pantai Expressway (SPE) Tambahan”, it was possible for the Highway Authority of Malaysia (translated as “Lembaga Lebuhraya Malaysia” and commonly referred to by its abbreviation as “LLM”) to support applications to reduce the setback distance, subject to approval by the Honourable Minister for Public Works (YB Menteri Kerja Raya). The statutory setback requirement is 13 meter.

The concessionaire did apply in year 2017 and obtained approval from the Honourable Minister, with LLM’s endorsement, to reduce the setback distance for Lot 54992 to 1.84 meter. For Lot 54993, the setback distance was approved to be reduced to only 1.5 meter. This was clearly stated in the Ministry of Public Works’s letter to LLM dated 24th October

It was highlighted by learned counsel for the Applicant that the approval then was intended for land not subjected to any land acquisition, as the words “yang tidak melibatkan Pengambilan Tanah” are self-explanatory. A copy of the said letter and its schedule are shown below. The Applicant’s Claim for Injurious Affection of its remaining land [10] Whilst the Applicant has agreed to accept the valuation of RM10,000.00 per square meter decided by the Respondent in his Award as the market value as at 30th December 2020, it put up a robust claim for compensation for “injurious affection” caused to its remaining land. [11] The heads of Claims put up by the Applicant were for injurious affection caused by the setback that would be required from the new boundary of the remaining land, injurious affection due to “reduction of gross development value and increase in building costs”, injurious affection due to “loss of visibility from the Federal Highway” and early possession of land because the acquiring party had entered the acquired part of the land early, before the acquisition was completed. Early entry in urgent cases is permissible under the LAA 1960; the issue is about compensation to be awarded. [12] The Applicant submitted, inter alia, that the approval granted by the Minister for Public Works in year 2017 was not for the purpose of land to be acquired, that the Section 8 declaration published in the Government Gazette on 27th April 2017 had lapsed by operation of law on 27th April 2019, and there was no approval for setback reduction granted prior to the current acquisition which was based on a second declaration published on 30th December 2020. [13] In short, the Applicant’s stand is that there was no valid approval by the said Minister to reduce the setback distance to the only 1.7 meter for Lot 54992 and 1.5 meter for Lot 54993 respectively, and therefore compensation for the area required to comply with the setback requirement ought to be awarded. [14] The Applicant had sought compensation for injurious affection caused by the setback required, a high percentage of 70% of the value of the setback area, which it calculated as 462.27 square meter. [15] It was also submitted that there would be significant differences in the future development of the two lots of adjacent land due to the changes caused by the partial acquisition that diminished their size. A report prepared by a professional architect, one Mr.Thirilogachandran from Messrs TLC, was exhibited in his affidavit filed in these proceedings, to claim injurious affection due to “reduction of gross development value and increase in building costs”. Under this head, a sum of RM9,320,000.00 was claimed. [16] As for injurious affection due to “loss of visibility from the Federal Highway” the Applicant sought a sum equivalent to 20% of the value of the remaining land as compensation. [17] Finally, as it was undisputed that the acquiring party did take possession of the required part of the two lots of land early, compensation was sought under this head of claim. The Applicant had submitted that the date of early possession was 3rd February 2017 left it to the Respondent to assess the amount. A claim of late payment charges at 5% per annum on the compensation was also sought, to be computed from 3rd February 2017 until date of payment. [18] As authority for claiming compensation for early possession of land being taken by the acquiring party, the Applicant relied on Amitabha Guha v Pentadbir Tanah Daerah Hulu Langat [2021] 4 MLJ 1. Analysis of the Facts and Law [19] Since a picture is said to be worth a thousand words, having the relevant part of a survey plan that shows the partial acquisition of the two lots of land would be helpful. It is reproduced below. [20] The part shaded in red shows the acquired area of the two adjacent lots of land. It could be seen that the partial acquisition had caused the width/depth of the two lots to be reduced. The width/depth of Lot 54992 was reduced by about 21.6 meter while the width/depth of adjacent Lot 54993 was reduced by about 13.5 meter. The total remaining area is 2,528.788 square meter (1,763.959 sq meter in Lot 54992 + 764.829 sq meter in Lot 54993). [21] The part shaded in blue is claimed by the Applicant as the “setback area” required for future development to comply with the statutory requirement to set back the building (to be built) from the boundary line, and to justify its claim for 70% of the value of this area. Thus, the issue of approval for reduction of the setback distance became a highly contentious issue due to its great significance. If the approval granted in October 2017 by the Public Works Minister for reduction of the setback distance is applicable, it would allow the Applicant to plan the development of the land with a setback distance of only 1.84 meter for Lot 54992 and 1.5 meter for Lot 54993 respectively from the edge of the highway mainline to the edge of the highway reserve instead of the statutory distance of 13 meter – which would also mean that injurious affection caused to the remaining land would be minimised. [22] Now, if the more recent endorsement by LLM to further reduce the setback distance for Lot 54992 to 1.7 meter is to be allowed, it would further minimise the injurious affection caused. [23] On the issue of approval for reduction of setback, I hold that this court is bound to regard it as a situation of no final approval being granted by the Honourable Minister for Public Works even though there is a very high likelihood of such approval being granted in the future. My reasons for making this finding are as stated below. [24] First, it was erroneous to regard the LLM as having the power to approve the reduction of setback. Regulation 2(1) and 2(3) of the Highway Authority Malaysia (Set Backs Of Highway) Regulations 2007 states as follows: “(1) Any person preparing a design for the construction of a highway for the purposes of this Act shall provide a distance of 13 meters from the edge of the highway mainline to the edge of the highway reserve on both sides of the highway main line as setback of the highways;

Notwithstanding subregulation (1), the Authority may, with the approval of the Minister, on grounds of public interest, provide a distance of a setback of a highway which is less than the distance prescribed in subregulation (1).” (emphasis added) [25] As could be seen from Regulation 2(3) above, the power to provide a distance of setback less than 13 meter is “with the approval of the Minister, on grounds of public interest”. Though the Minister would no doubt rely on the recommendation of LLM to approve any such reduction of setback, the ultimate power is vested on the Minister. There was no such approval granted by the Minister as at the date of hearing of these proceedings. [26] The evidence in this case shows that whilst the approval required for reduction of setback distance for Lot 54993 may remain the same as approved in year 2017, i.e. at 1.5 meter, the setback distance for Lot 54992 would have to be further reduced to 1.7 meter to minimise the injurious affection caused to the remaining land in both lots. It was in evidence that LLM had in fact endorsed the further reduction of setback distance for Lot 54992, as could be seen in the following excerpts of documents issued by LLM: [27] Even though LLM has recommended and endorsed the reduction of the new setback distance for both Lot 54992 and Lot 54993, it is not open to this Court to regard a recommendation or endorsement by LLM as an approval – for as pointed out above, the ultimate power to approve is vested in the office of the Minister himself. An endorsement by LLM shall remain just as endorsement unless approval is granted by the Minister (see Regulation 2(3) cited above). [28] Even though there was no approval by the Minister applicable to both lots for the post-acquisition situation, the unequivocal endorsement issued by LLM has resulted in a high probability of the Applicant receiving approval from the Minister in the future, to reduce the setback distance to 1.5 meter and 1.7 meter for Lot 54993 and Lot 54992 respectively. The assessors’ professional opined to me during our discussion that this is a factor that we ought to consider in deciding the diminution in value of the remaining land, for the purpose of assessing compensation for injurious affection. I agree with their practical viewpoint. [29] I am fully aware that the Federal Court in Semenyih Jaya Sdn Bhd v. Pentadbir Tanah Daerah Hulu Langat [2017] 3 MLJ 561 had clarified the approach to be taken by this Court in hearing land reference matters. We have duly considered all the heads of claims brought by the Applicant – which I had summarised above. I am also aware that I may seek guidance from the two assessors, must consider their reports but am not bound to follow either of them, provided that I have valid reasons to depart from their reports. A copy each of the reports prepared by the learned assessors to aid me, are attached hereinbelow for reference. Conclusion and Decision [30] Since the Applicant has agreed to accept the valuation of RM10,000.00 per square meter used by the Respondent, this rate was maintained. [31] On the issue of early entry into the land, I agree with the assessors that the rental method used by the Respondent was reasonable. It was by applying a rate of RM11.00 per square meter per month for a period of 57 months, and awarding RM305,374.65 for Lot 54992 and RM120,492.30 for Lot 54993. As a matter of fact, I was under the erroneous impression during the hearing that a lower rate of RM9.30 per square meter per month was used. Based on the advice of the assessors, I was of the view that rental of vacant land in that area at a rate of RM9.30 per square meter per month would be fair. Hence, the rate of RM11.00 per square meter per month was in fact on the high side. However, since there was no land reference filed by the acquiring party, this head of award was maintained. [32] I decided that compensation for injurious affection ought to be separated into 3 parts instead of awarding a single lump sum. I so decided because I agree with the Government Assessor’s view on this approach as being capable of achieving greater clarity and fairer results. [33] Even though we considered the remaining land in Lot 54992 and its adjacent Lot 54993 as a single plot of land – which was a factor in favour of the Applicant – when deliberating on the issues of injurious affection to the remaining land, we decided to apportion the additional compensation into two separate awards – since two separate land reference were filed, which we had heard together. [34] Based on the plan shown in para [19] above, we worked out the “setback area” of Lot 54992 to be 306.0153 square meter (27.081 meter x 11.3 meter = 306.0153 square meter). As for Lot 54993, we worked out the “setback area” to be 154.8935 square meter (13.469 meter x 11.5 meter = 154.8935 square meter). [35] After discussion with both assessors, I agree with the view of the Government Assessor that the first part of injurious affection which was caused to the “setback area” was a reduction in its market value by approximately thirty percent (30%). Thus, for Lot 54992, a sum of RM918,045.90 (RM10,000.00 x 30% x 306.0153 sq meter) was awarded while for Lot 54993, a sum of RM464,680.50 (RM10,000.00 x 30% x 154.8935 sq meter) was awarded. [36] As for the second part of injurious affection, which was impairment due to “loss of visibility from the Federal Highway”, we were of the view that the loss was minimal for the remaining land because there was no serious obstruction of view. Further, any building erected there in the future would be multi-storey and quite clearly visible from all angles. Therefore, this Court decided that the injurious affection caused to by the “loss of visibility” should, at most, be five percent (5%) of the value of the remaining area less the setback area. [37] By using 5% as the diminution in value, this Court awarded as follows: for Lot 54992, a sum of RM728,971.85 for the remaining area of 1,457.9437 sq meter, i.e. after deducting 306.0153 sq meter from the remaining area of 1,763.959 sq meter, while for Lot 54993, a sum of RM304,967.75 was awarded for the area of 609.9355 sq. meter i.e. after deducting 154.8935 sq meter from the remaining area of 764.829 sq meter in Lot 54993. For the avoidance of doubt, the “setback area” was deducted because it had already received an award based on a 30% diminution in value. If the Minister for Public Works does grant the approval in the future – as highly recommended by LLM – the loss of visibility would be further minimised because the setback distance would be much less. [38] I agree with the assessors that the third part of injurious affection would be the impairment on the remaining land. Under this head, I also agree with the assessors, and decided that the injurious affection under this head of claim should, at most, be five percent (5%) of the remaining area less the setback area. [39] Hence, under this head of “impairment on the remaining land”, I decided that for Lot 54992, a sum of RM728,971.85 for the remaining area of 1,457.9437 sq meter, i.e. after deducting 306.0153 sq meter from the remaining area of 1,763.959 sq meter should be awarded. As for Lot 54993, applying the same five percent (5%), a sum of RM304,967.75 was awarded for the area of 609.9355 sq. meter. [40] Based on the reports prepared by the assessors and our discussion, I was satisfied that the awards for injurious affection, which this Court has divided into three parts, would adequately compensate the Applicant and satisfy Article 13 of the Federal Constitution. Those two lots of land could still be jointly developed in the future. There was no severance of those two lots due to the partial acquisition. They are still adjoining each other and their shape are still regular, i.e. not turned into an irregular or triangular shape. [41] By adding up the respective sum stated above, a total additional compensation of RM3,450,605.60, was ordered in the form of two awards: RM2,375,989.60 for Lot 54992 and RM1,074,616.00 for Lot 54993. [42] As for late payment charges, I declined the Applicant’s prayer to order late payment charges to run from year 2017. In exercise of my discretion under S.48 of the LAA 1960, I decided to issue the usual order: to award late payment charges at 5% per annum on the total additional compensation, to be computed from the date of issuance of Form K till date of payment. I am of the view that this is fair because a generous award for injurious affection caused to the “setback area” had been issued Counsel for the Appellant: David Ng Yew Kiat (Leah Marie Samuel with him) SOLICITORS FOR THE APPELLANT: MESSRS STEVEN THIRU & SUDHAR PARTNERSHIP, Advocates & Solicitors Unit A1-12-01, Arconis Mont Kiara, Jalan Kiara, 50480 MONT KIARA KUALA LUMPUR Counsel for the Respondent: Iskandar Zulkarnaen (FC) Watching Brief (DUKE Phase 3 Sdn Bhd), Adi Harman bin Mawardi (Mohamad Amir Ardzhar with him) SOLICITORS FOR THE RESPONDENT: JABATAN PEGUAM NEGARA MALAYSIA Cawangan Wilayah Persekutuan Kuala Lumpur Unit Penasihat, Tingkat 5, Wisma Chase Perdana, Off Jalan Semantan, 50512 DAMANSARA HEIGHT KUALA LUMPUR Government Assessor Sr Mohd Zamri Bin Awang Private Assessor Sr Ery Zuwardi Bin Anuar CASE(S) REFERRED TO:

Amitabha Guha v Pentadbir Tanah Daerah Hulu Langat [2021] 4

Semenyih Jaya Sdn Bhd v. Pentadbir Tanah Daerah Hulu Langat [2017] 3 MLJ 561

Section 8 of the Land Acquisition Act 1960.

Section 8(4) of the Land Acquisition Act 1960.

Section 48 of the Land Acquisition Act 1960.

Article 13 of the Federak Constitution. 5 Regulation 2(1) and 2(3) of the Highway Authority Malaysia (Set Backs Of Highway) Regulations 2007. LAPORAN PENGAPIT HAKIM KERAJAAN NO. RUJUKAN TANAH : WA-15-13-04/2022 & WA-15-14-04/2022 DALAM MAHKAMAH TINGGI MALAYA KUALA LUMPUR PENGAMBILAN TANAH SEBAHAGIAN TANAH LOT 54992, GERAN 80178 DAN LOT 54993, GERAN 80176, MUKIM KUALA LUMPUR, DAERAH KUALA LUMPUR WILAYAH PERSEKUTUAN KUALA LUMPUR UNTUK PROJEK LEBUHRAYA SETIAWANGSA-PANTAI EXPRESSWAY (SPE) (TAMBAHAN) KAOCHERN CORPORATION SDN. BHD. (PEMILIK BERDAFTAR – 1/1 BAHAGIAN) ... RESPONDEN Yang Arif Hakim : Y.A. Tuan Gan Techiong Pengapit Kerajaan : Sr Mohd Zamri bin Awang Pengapit Swasta : Sr Ery Zuwardi bin Anuar Pemohon : Kaochern Corporation Sdn Bhd - (1/1 bahagian) Responden : Pentadbir Tanah Wilayah Persekutuan Kuala Lumpur Peguam Pemohon : Tetuan Steven Thiru & Sudar Partnership Penasihat Undang-Undang Responden : Peguam Persekutuan, Jabatan Peguam Negara Malaysia, Cawangan Wilayah Persekutuan Kuala Lumpur Penilai Pemohon : Radhakrishnan a/l Rengasamy Jones Lang Wootton Sdn Bhd Penilai Responden : Aqeela binti Mohd Fauzi Jabatan Penilaian dan Perkhidmatan Harta

1.0 FAKTA KES Pengambilan tanah untuk tujuan awam iaitu Projek Lebuhraya Setiawangsa-Pantai (SPE) (Tambahan) di atas sebahagian Lot 54992, Geran 80178 dan Lot 54993, Geran 80176, Mukim Kuala Lumpur, Daerah Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur. Bil Perkara Fakta Kes 1.1 Alasan bantahan: Tuntutan untuk Kesan Kemudaratan (Injurious

Affection) Pampasan yang ditawarkan untuk bahagian tanah yang diambil tidak mencerminkan harga tanah nilai pasaran dan nilai-nilai tanah di sekitarnya.

Pemilik tanah dinafikan haknya untuk mendapatkan pampasan yang munasabah dan berpatutan ke atas kawasan jarak undur Lebuhraya (yang berada di luar bahagian tanah berjadual) seperti yang tertera di dalam pelan yang dilampirkan di dalam Laporan Penilaian Tetuan Jones Lang Wootton bertarikh 26.3.2021 (Appendix G) untuk kesan kemudaratan seperti yang diperuntukkan di dalam Perenggan 2(d)