Lampiran
Lampiran C” pp.144-148 which contained the particulars of the comparables relied on by JPPH. The comparables are listed as follows: 25 (a) Lot Perbandingan 1.1: PTD 1617191 HSD 473201; (b) Lot Perbandingan 1.2: 52350 GRN 60103; (c) Lot Perbandingan 1.3: PTD 201395 HSD 558956; (d) Lot Perbandingan 1.4: PTD 210920 HSD 512590; and (e) Lot Perbandingan 1.5: PTD 156609 HSD 471200. 30 13 [30] The analysis of the comparables by JPPH vis a vis the First Subject 5 Lot is found at “Rekod Rayuan Bahagian A Lampiran D” p.150. The learned JC stated in her Grounds of Judgment the following: “The necessary upward and downward adjustments to the value per square metre of each comparable were made to the differing factors before arriving at the fair value per square metre, in determining the market value of the First 10 Subject Lot.” [31] We find that in arriving at “the fair value per square metre” in determining the market value of the First Subject Lot, the learned JC did 15 not specify “the necessary upward and downward adjustments” made to “the differing factors.” According to the Respondent’s submission, the comparable factors are “Masa, Lokasi/Jalan Masuk, Bentuk, Saiz (METER PERSEGI), Jenis Tanah, Rupabumi, Pegangan Hakmilik, Kategori Tanah, Syarat and Perancangan”. We accept that these are the 20 comparable factors as they are listed in “Lampiran D” p.150, 1st column of table titled “Pelarasan Tanah.” [32] Following the adjustment, in relation to the First Subject Lot, at paragraph 28 of the Grounds of Judgment, the learned JC held Lot 25 Perbandingan 1.1 as the “best comparable lot due to its similar features and location which led JPPH to recommend the price of RM220 per square metre as fair and reasonable. During cross-examination, DW1 had explained in detail, to the satisfaction of the Court, the reasons for using Lot Perbandingan 1.1.” 30 [33] Having drawn the attention of the Court to the Common Plan depicting all the comparables with the First Subject Lot at “Rekod Rayuan Bahagian C, Jilid 2B” p.529, learned Counsel for the Appellant admitted “Lot Perbandingan 1.1” as the comparable lot that has the most similarities 35 14 in that it is nearest to the First Subject Lot; land use is for low cost flat, 5 just like the First Subject Lot, which is for low medium and low cost flat; and the date of transaction was 8/11/2016 but the transaction of the First Subject Lot was 16/6/2017, only about 7 months apart. It is significant that Counsel for the Appellant had candidly conceded that the Respondent’s valuer, Mr. Teoh Leong Seng (PW1) to borrow his words, “messed up and 10 used the wrong comparable but we concede that the most suitable comparable is comparable 1 but we are sticking to RM1.1 million as that is our appeal.” (We shall revert to the Appellant’s contention of the market price of the First Subject Lot being at RM1.1 million later). The concession made by the Appellant, in our view, dispensed with the need to deal with 15 arguments on the suitability of the remaining comparables, Lot Perbandingan 1.2, 1.3, 1.4 and 1.5. [34] We now turn to the nub of the Appellant’s substantive argument. Counsel for the Appellant drew our attention to “Rekod Rayuan Bahagian 20 A Lampiran C” p.144, at the 4th column bearing the notation “Balasan (B)” and “Nilaian (N)” and the analysis of the 5 comparables, Lot Perbandingan 1.1 to 1.5 at Lampiran D pp.149-150, in particular, p.150 3rd column which reads- “DUTI SETEM 25 NILAIAN RM150,000.00 PT 167191 (LOT 120598) 06/11/2016 RM10.92 (B) 30 RM220.00 (N)” [35] Counsel highlighted that SD1 during cross-examination admitted she was unable to show to the Court “pembandingan yang digunakan oleh 35 JPPH semasa menentukan angka [RM220 meter persegi] “and she also 15 agreed when it was put to her that “bahawa memandangkan apa yang 5 kamu telah katakan, kamu tidak terlibat di dalam keputusan menentukan angka RM220 meter persegi ini, betul?” (Rekod Rayuan Bahagian B” p.223). Counsel for the Appellant argued that based on the evidence given by SD1, it is clear that the market price RM220 per square metre was decided by JPPH themselves when they made the analysis in 2018 10 being the date of the Valuation Report dated 19/2/2018 and not on 8/11/2016, the date of the transaction of Lot Perbandingan 1.1. Counsel further argued that whilst SD1 testified it was based on the comparable method, there was no comparable to justify the figure of RM220 per square metre as it was a figure plucked from the sky which is evident from 15 the footnote- “ANALISA COM DI ATAS:- 1.CADANG DINILAI @ RM220) SMP (ANALISA BALASAN COM1)” 20 [36] Counsel for the Appellant also argued that JPPH used Lot Perbandingan 1.1 as the basis to value the First Subject Lot but they did not use the price paid for Lot Perbandingan 1.1, i.e. the consideration of RM 10.92 (B) being the price on which the stamp duty was paid but 25 instead used RM220 per square metre which was the figure which JPPH themselves fixed as categorically admitted by SD1 during cross-examination (“Rekod Rayuan Bahagian B” pp.223-224). [37] Whilst we agreed with the submission of the Appellant that it is the 30 sales evidence of the actual price that must be used as the comparable, it is our considered view that the prices paid for such sales are qualified by the common rider “subject to making allowances for all the circumstances”. This is borne by the following oft quoted authorities of- 16 (a) Collector of Stamp Duties v. Ng Fah In & Ors. (supra) 5 where the Federal Court held that “… this amount [market value] can best be determined by looking at recent sales of comparable lands in the vicinity. The learned judge was aware of this principle. He was also aware of what the attitude of the court should be when considering comparable sales, for he quoted this passage from LAO v. Venkateswami (1967) 1 An WR 79 cited by 10 Aggarawala, volume 1, 4th edition, page 339: “The underlying principle of fixing the market value with reference to comparable sales is to reduce to the minimum the element of speculation. In a comparable sale the features are: (1) It must be within a reasonable time of the date of 15 notification, [in our case, the date of the transfer]; (2) It should be a bona fide transaction; (3) It should be a sale of land acquired or of the land adjacent to the land acquired; and (4) It should possess similar advantages. 20 It is only when all these factors are present that it could merit consideration as a comparable sale.”; (b) Ng Tiou Hong v Collector of Land Revenue, Gombak (supra) where the Federal Court opined that “Secondly, the market price 25 can be measured by a consideration of the prices of sales of similar lands in the neighbourhood or locality and of similar quality and positions…The safest guide is evidence of sales of similar lands of similar quality or position in the locality at or prior to the time of acquisition. The prices paid for such sales can be used as comparables subject to making allowances for all the 30 circumstances.”; (c) Setia Usaha Tetap Kementerian Pelajaran v. Collector of Land Revenue, Butterworth [1972] 2 MLJ 155 at p.157 where Chang Min Tat J (as he then was) wherein His Lordship after making 35 reference to the three (3) recognised methods of valuation under a 17 parallel legislation, namely, the land acquisition legislation in the 5 judgment of Buhagiar J in Nanyang Manufacturing Co v. The Collector of Land Revenue, Johore [1954] MLJ 69 opined that “Of these three methods, the learned Judge considered that the safest guide to determine the fair market value was evidence of sales of the same land or similar land in the neighbourhood after making due allowance for all the 10 circumstances.”; and (d) Malakoff Bhd v. Pemungut Hasil Tanah Seberang Perai Utara, Butterworth [2005] 1CLJ 365 at p.368, where the Federal Court echoed the view expressed in Ng Tiou Hong v Collector of 15 Land Revenue, Gombak stating, “In determining market value, our courts as a matter of course have adopted the comparable method of valuation of land where there is ample evidence of sales or awards involving similar lands. What this method entails was succinctly explained by the Federal Court in Ng Tiou Hong v Collector of Land Revenue, Gombak…”. The case of 20 Malakoff Bhd v. Pemungut Hasil Tanah Seberang Perai Utara, Butterworth was cited by the Respondent. [38] In light of the golden thread i.e. “subject to making allowances for all the circumstances” which runs throughout the authorities quoted 25 above, evidence of sales involving similar lands is not the sole criterion. In fact, the consideration of the price paid in respect of the comparable used is acknowledged by the Respondent in their submission but they added that “that is not the end of it.” 30 [39] In this regard, we agreed with the Respondent’s submission that the consideration of the price paid in respect of the comparable used is not the sole determinant to determine the market value of the First and Second Subject Lots. Besides the prices of sales of similar lands in the 18 locality, in order to determine at the market value, there are other factors 5 which the Respondent has to consider as enunciated by the Federal Court in Ng Tiou Hong v Collector of Land Revenue, Gombak which we have reproduced at paragraph 24 above. [40] This brings us to the question of whether JPPH can use JPPH’s own 10 opinion of the value of the comparables instead of the actual price paid. In other words, this turns on the issue on the use of (N) and not (B) in the JPPH Valuation Report. We find that the Counsel for the Appellant had conducted a thorough cross-examination of SD1 (“Rekod Rayuan Bahagian B” pp.221-230). In rebuttal, learned Senior Revenue Counsel 15 for the Respondent attempted to rely on the clarification from SD1 during re-examination at “Rekod Rayuan Bahagian B” pp.250-252 and submitted that SD1 “had carefully pointed out how (N) came about.” Senior Revenue Counsel also submitted that SD1 had explained (i) the basis of (N) where JPPH had carried out the practice in which to use 20 comparables to determine the reasonable market value for a particular valuation; and (ii) that the details of comparables are not stated in the adjustment made because it is not related to the First and Second Subject Lots; it concerns only the comparable lots. 25 [41] Regretfully we disagreed with the said submission of Senior Revenue Counsel. Having perused the answers proffered by SD1 during re-examination, we find that SD1 has not explained how the value ‘N’ of RM220 per square metre can be used to determine the market value of the First Subject Lot. Firstly, in our considered view the answers of SD1 30 given in re-examination by Senior Revenue Counsel are of no evidential value for the following reasons: 19 (a) When asked by “apakah asas-asas nilaian yang digunakan 5 untuk mendapatkan nilaian jabatan? Dan adakah comparable digunakan untuk mendapatkan nilaian tersebut ataupun tidak?”, SD1 answered- “jabatan kami masih menggunakan practise…ia itu menggunakan perbandingan-perbandingan balasan bagi 10 menentukan harga pasaran yang munasabah dan bersesuaian untuk penilaian tersebut dilakukan.” Thereafter we noticed SD1’s answers became answers given to leading questions (as emboldened) as can be seen below- “Muazmir: Alright. Tetapi detail-detail perbandingan tersebut 15 tidak terkandung di dalam pelarasan. Betul. Muazmir: Kenapa? Tidak perlu kot. Muazmir: Tidak perlu. Because ia tidak berkait dengan lot 20 subjek? Betul. Muazmir: Ia hanya lot perbandingan? Ya.” 25 (Emphasis added) (b) The fact that SD1 admitted that the details of the comparables are not stated in the adjustment made because it is not related to the First and Second Subject Lots and it concerns only the 30 comparable lots is not acceptable because as per the analysis table, all details of comparables used are stated therein. SD1’s answer in fact fortified that there was no comparable to justify the figure of RM220 per square metre as admitted by SD1 in cross-examination. 35 (c) What JPPH did in using the value ‘N’ of RM220 per square metre to determine the market value of the First Subject Lot, as 20 submitted by the Counsel for the Appellant is tantamount to 5 valuation upon a valuation; a revaluation of the comparable which is erroneous. [42] With respect to the learned JC, nowhere in her Grounds of Judgment did she consider the Appellant’s argument of the reason why 10 the value ‘N’ of RM220 per square metre ought not be used to determine the market value of the First Subject Lot. The learned JC merely stated in paragraph 28 of her Grounds of Judgment that “During cross-examination, DW1 had explained in detail, to the satisfaction of the Court, the reasons for using Lot Perbandingan 1.1.” and accepted JPPH’s recommendation 15 of the price of RM220 per square metre as fair and reasonable market value for the First Subject Lot. [43] Therefore in our judgment, despite referring to Ng Tiou Hong v Collector of Land Revenue, Gombak, and agreeing that JPPH had 20 used the comparable method of valuation, the learned JC erred in holding that JPPH had used due care and diligence in arriving at the market value of the First Subject Lot when Her Ladyship failed to apply the principle established in the aforesaid Federal Court authority of “the prices of sales of similar lands in the neighbourhood or locality and of 25 similar quality and positions” which is binding on her by the doctrine of stare decisis. [44] From the analysis of the 5 comparables, Lot Perbandingan 1.1 to 1.5 at Lampiran D pp.149-150, it is obvious that in so far as Lot 30 Perbandingan 1.1 is concerned, there was no percentage of adjustment made to the value per square metre vis a vis the comparable factors referred to in paragraph 31 above. This means that the price paid for Lot 21 Perbandingan 1.1 is the actual price paid after factoring in the 5 consideration of “subject to making allowances for all the circumstances.” Therefore, using the price paid for Lot Perbandingan 1.1, which is RM10.92 per square metre, the market value of the First Subject Lot measuring 9.474 square metre is RM 103,456.08 only (9.474 square metre x RM10.92). 10 [45] Notwithstanding the above, to reiterate, Counsel for the Appellant conceded that the most suitable comparable is Lot Perbandingan 1.1 but the Appellant were sticking to RM1.1 million as that was their appeal. When pressed by the Court as to why they were sticking to RM1.1 million 15 as the market price of the First Subject Lot, Counsel for the Appellant replied that purchase price of the First Subject Lot is RM1 million and for stamp duty assessment, market price is either higher or the consideration, it could not go below the purchase price. 20 [46] In the circumstances, in respect of the First Subject Lot, since it is our finding that the learned JC was plainly wrong in her findings and the application of the law, in the exercise of our appellate intervention, we order that the stamp duty be assessed based on the market value of RM1.1 million. (See Ahmad Zahri bin Mirza Abdul Hamid v. Aims 25 Cyberjaya Sdn Bhd [2020] 1 LNS 494 (FC) at paragraph 47; and MMC Oil & Gas Engineering Sdn Bhd v Tan Bock Kwee & Sons Sdn Bhd [2016] 2 MLJ 428 (CA) at paragraphs 5-19). Second Subject Lot 30 [47] With respect to the Second Subject Lot, there is no dispute that JPPH applied the comparable method of valuation as reflected in the JPPH Valuation Report at “Rekod Rayuan Bahagian A Lampiran C” 22 pp.174-178 which contained the particulars of the comparables relied on 5 by JPPH. The comparables are listed as follows: (a) Lot Perbandingan 2.1: 137699 GRN 449268; (b) Lot Perbandingan 2.2: 45309 PN 56050; (c) Lot Perbandingan 2.3: 72991 GRN 65305; (d) Lot Perbandingan 2.4: PTD 222154 HSD 548197; and 10 (e) Lot Perbandingan 2.5: PTD 56074 HSD 227507. [48] The analysis of the comparables by JPPH vis a vis the Second Subject Lot is found at “Rekod Rayuan Bahagian A Lampiran D” p.180. The learned JC stated in her Grounds of Judgment the following: 15 “[48] The necessary upward and downward adjustments to the value per square metre of each comparable were made to the differing factors before arriving at the fair value per square metre of the Second Subject Lot. 20 [49] From the adjustment made by comparing the Second Subject Lot to the Lot Perbandingan 2.1-2.5, the value that was obtained was within the range of MYR670-MYR755 per square metre. Ultimately, Lot Perbandingan 2.4 was taken as the best comparative lot due to its similar features and location, which led JPPH to recommend the price to 25 MYR670 per square metre as fair and reasonable. During cross-examination, DW1 had explained in detail, to the satisfaction of the Court, the reasons for using Lot Perbandingan 2.4.” 30 [49] We find that in arriving at “the fair value per square metre” in determining the market value of the Second Subject Lot, the learned JC did not specify “the differing factors” to which “the necessary upward and downward adjustments” were made. According to the Respondent’s submission, the comparable factors are “Masa, Lokasi/Jalan Masuk, 35 Bentuk, Saiz (METER PERSEGI), Jenis Tanah, Rupabumi, Pegangan Hakmilik, Kategori Tanah, Syarat and Perancangan”. We accept that these are the comparable factors as they are listed in “Lampiran D” p.180, 1st column of table titled “Pelarasan Tanah.” 23 [50] Following the adjustment, in relation to the Second Subject Lot, at 5 paragraph 49 of the Grounds of Judgment, the learned JC held Lot Perbandingan 2.4 as the “best comparable lot due to its similar features and location which led JPPH to recommend the price of RM670 per square metre as fair and reasonable. During cross-examination, DW1 had explained in detail, to the satisfaction of the Court, the reasons for using 10 Lot Perbandingan 2.4.” [51] The learned JC opined that “[50] The market value of MYR 13,970,000 was arrived at by multiplying the value per square metre which is RM670 to the land are size of 20,875 square metres and rounded up to 15 the closest thousand.” [52] Regarding the Second Subject Lot, Counsel for the Appellant during oral submission conceded that the JPPH Valuation Report is more accurate than the Respondent’s Valuation Report except for the following: 20 (a) the wrong comparable was used: the Appellant contended that Lot Perbandingan 2.2 is the more accurate comparative lot and not Lot Perbandingan 2.4 which was used by JPPH as the best comparative lot to determine the market value of the Second Subject Lot; and 25 (b) that JPPH had used the wrong figure of (N) instead of (B) which is not in accordance with the legal principle based on the sales evidence of the actual price that must be used as the comparable following the authorities which we have alluded to in 30 paragraph 37 above. According to the Counsel for the Appellant, the argument in respect of the second error made by learned JC is the same as that submitted regarding the First Subject Lot. 24 [53] In respect of the first error, i.e. the wrong comparable was used, 5 Counsel for the Appellant argued that Lot Perbandingan 2.4 used by JPPH was the wrong comparable for the following reasons: (a) the comparable lot is the furthest comparable from the Second Subject Lot; 10 (b) the land is designated for Holiday Homes/Strata Housing which is different from the Second Subject Lot which is for Apartments; and (c) the comparable lot was transacted on 20/9/2013 that is more 15 than 3 years and 9 months prior to the Appellant’s date of transaction. Counsel submitted that the most suitable comparable would be Lot Perbandingan 2.2, bearing in mind the following features- “Area: 28,140 sqm 20 Land Use/Tenure: Apartment/Leasehold 99 yrs Date: 21/12/2016 Transaction (B):” We find there is merit in the submission of Counsel for the Appellant as it 25 is visually evident from the Common Plan For Comparables in respect of the Second Subject Lot, “Rekod Rayuan Bahagian C, Jilid 2B” p.531, that in terms of the land use and the date of transaction, prices of sales of similar lands in the neighbourhood or locality, that the more appropriate comparable lot would be Lot Perbandingan 2.2 (see Ng Tiou Hong v 30 Collector of Land Revenue, Gombak). [54] In respect of the second error that JPPH had used the wrong figure of (N) instead of (B), Counsel for the Appellant submitted that in respect of Lot Perbandingan 2.2, where (B) was RM 14,000,000,00 and (N) was 35 25 assessed by JPPH as RM 31,000,000.00, which on analysis, the market 5 value was determined at RM 497.51 per square metre and RM 1,100.00 per square metre respectively. Counsel for the Appellant highlighted that SD1 was cross-examined as follows: “Ng: Sekiranya kamu gunakan 497 tolak 20 peratus atau apa dinyantakan untuk adjustment. Apakah nilai tanah subjek? 10 D1: 8,301,252.86.” (“Rekod Rayuan Bahagian B” p.239) Based on the evidence of SD1, Counsel for the Appellant submitted that 15 the market value of the Second Subject Lot ought to be RM 8,301,252.86 and not RM6,735,000.00 (paragraph 10 p.19 of the Originating Summons at “Rekod Rayuan Bahagian A”, which he conceded was an error. [55] In respect of the second error, that JPPH had used the wrong figure 20 of (N) instead of (B), we find that the learned JC had erred for the same reasons which we have given in respect of the First Subject Lot and we agreed with the submission of Counsel for the Appellant that the market value of the Second Subject Lot ought to be RM 8,301,252.86. 25 [56] In the circumstances, in respect of the Second Subject Lot, on account of the first and second errors, since we find that the learned JC was plainly wrong in her findings and the application of the law, in the exercise of our appellate intervention based on the authorities cited in paragraph 46 above, we order that the stamp duty be assessed based on 30 the market value of RM 8,301,252.86. Refund of excess payment [57] Under this ground of appeal, Counsel for the Appellant argued the learned JC had erred when Her Ladyship dismissed the appeal and did 35 26 not make any order of refund. Counsel submitted at the very minimum, 5 there should be a rectification order in view of the clear provision of s.39, Act 328 and that there is no dispute as to excess payment. The Appellant paid RM70,920.00 and RM 432,000.00 in respect of the First and Second Subject Lots respectively. Based on the amended assessment by the Collector of Stamp Duty, the stamp duty payable was RM 56,670.00 and 10 RM413,100.00 in respect of the First and Second Subject Lots respectively. Therefore, the Appellant paid excess stamp duty of RM 14,250.00 and RM 18,900.00 in respect of the First and Second Subject Lots respectively. Counsel for the Appellant argued that the learned JC should have invoked s.39 (4), Act 328 which provides that it is mandatory 15 for the Court to order the refund because of the excess payment. [58] Without labouring further, Senior Revenue Counsel submitted that they are not averse to this ground of appeal. In our judgment, it is mandatory for any excess payment of stamp duty which has been paid 20 shall be refunded as has been explicitly provided under s.39(4), Act 328. Assuming the learned JC was correct in her decision, then the excess sum totalling RM 33,150.00 (14,250.00 and RM 18,900.00 in respect of the First and Second Subject Lots respectively) ought to be refunded to the Appellant. 25 [59] However, given our findings that there had been an erroneous assessment of the stamp duty payable by the Appellant based on the market value of the First and Second Subject Lots, we therefore order that the refund of excess stamp duty shall be made by the Respondent after 30 the necessary adjustments are being made to the computation based on our assessment of the market value of the two properties. 27 Conclusion 5 [60] For the reasons adumbrated above, we found merit in the appeal which warranted appellate intervention. In the premises we unanimously allowed the appeal with costs subject to allocatur and we set aside the Order of the High Court dated 31/10/2019. We further ordered the following: 10 (1) for the First Subject Lot, stamp duty to be assessed based on the market value of RM 1.1 million; (2) for the Second Subject Lot, stamp duty to be assessed on the market value of RM8,301,252.86; and 15 (3) excess duty shall be refunded to the Appellant. Dated: 22/7/2021 20 -sgd-LAU BEE LAN Judge Court of Appeal Malaysia 25 Putrajaya COUNSEL: Y. K. Chin together with C. H. Ng for the Appellant 30 [Messrs. Y. K. Chin, Johor Bahru] Muazmir bin Mohd. Yusof together with Nordiana bt. Sham for the Respondent [Lembaga Hasil Dalam Negeri (LHDN), Cyberjaya] 35