Lembaga Lebuhraya Malaysia v PENTADBIR TANAH DAERAH KLANG (BA-15-86-12/2020)

No law shall provide for the compulsory acquisition or use of property without adequate compensation.” [13] The law and proceedings relating to land acquisition are governed by the LAA. This is a special Act which provisions must be strictly adhered to. [14] The Court of Appeal in Sistem Lingkaran Lebuhraya Kajang Sdn Bhd v. Inch Kenneth Kajang Rubber Ltd & Anor Other Appeals [2011] 4 MLJ 403 observed as follows: “[4] The LAA 1960 is a special Act relating to the acquisition of land, the procedure for the assessment of compensation to be made on account of such acquisition and all matters incidental thereto, including the manner, procedure, and circumstances upon which any dissatisfied party to an award of compensation may pursue legal redress in the court. In view of it being a special Act we are unanimous that the statutory provisions therein must be strictly adhered to and made applicable to all relevant parties. All procedural steps leading for a final determination of any award shall be in accordance with the provisions of LAA 1960. This is clearly recognised in respect of all proceedings in the court, as can be seen from s. 45(2) of the LAA 1960 which reads:

Save in so far as they may be inconsistent with anything contained in this Act, the law for the time being in force relating to civil procedure shall apply to all proceedings before the Court under this Act.” [15] Section 14 of the LAA makes provision that awards of compensation for compulsory acquisition are assessed and decided on by a land administrator. [16] In the event there is any objection in respect of an award made by the land administrator, Section 36 of the LAA confers jurisdiction on the High Court to determine. Section 36 provides: “36. Reference to Court

(1)No reference to Court under this Act shall be made otherwise than by the Land Administrator

The land Administrator may, at any time of his own motion by application in Form M refer to the Court for its determination any question as to –

the true construction or validity or effect of any instrument;

the person entitled to a right or interest in land;

the extent or nature of such right or interest;

the apportionment of compensation for such right or interest;

the persons to whom such compensation is payable;

the costs of any enquiry under this Act and the persons by whom such costs shall be borne.

Without prejudice to the powers to the Court under this Part, the costs of any reference under subsection (2) shall be borne by such person as the Court may direct or, in the absence of such direction, by the Land Administrator.

After an award has been made under section 14 or compensation made under section 35 or Part VII the Land Administrator shall refer to the Court for determination any objection to such award or compensation duly made in accordance with this Part.” [17] Section 37 of the LAA provides the basis on which an aggrieved party may have the right to object to the award of the land administrator by way of a land reference to the High Court provided that the total amount awarded in compensation in respect of the acquired land is not less than three thousand ringgit. The High Court here is referred to as the land reference court. [18] Section 37 of the LAA reads:

Any person interested in any scheduled land who, pursuant to any notice under section 10 or 11 or any person interested pursuant to any compensation made under section 35 or Part VII who, has made a claim to the Land Administrator in due time and who has not accepted the Land Administrator’s award thereon, or has accepted payment of the amount of such award under protest as to the sufficiency thereof, may, subject to this section, make objection to-

the measurement of the land;

the amount of the compensation;

the persons to whom it is payable;

the apportionment of the compensation.

Where the total amount awarded in compensation does not exceed five thousand ringgit, the written award of the Land Administrator shall be final with regard to both the measurement of the land and the amount of compensation awarded, and no objection may be made under subsection (1) in respect thereof.

Where the total amount of any award exceeds thirty thousand ringgit, any Government or any person or corporation on whose behalf such land was acquired or being occupied or used pursuant to Part VII, shall be deemed to be a person interested and may make objections on any of the grounds specified in subsection (1). [Emphasis added] [19] In the case of Semenyih Jaya Sdn Bhd v. Pentadbir Tanah Daerah Hulu Langat and another case [2017] 3 MLJ 561, the Federal Court described the procedure in dealing with the opinions of the assessors, as follows:- “(a) by s. 40A, the matters are to be heard before a single judge. The court shall appoint two assessors to assist the judge in determining the objection made by the appellants against the amount of compensation awarded by the land administrator;

at the end of the proceedings, the assessors are required to give their opinions in writing as to the appropriate amount of compensation to be awarded in this case pursuant to s. 40C of the Act. The assessors must give due consideration to all the heads of compensation claimed by the appellant under the Act;

the opinion of the assessors are to be recorded by the judge. The judge has the duty to consider both of the opinion of the assessors. The judge is to exercise his mind in determining the amount of compensation to be awarded to the appellant, based on the principle of equivalence; and

the provisions of sub-s 36(4) of the Act are to be given full effect. The judge shall not be bound to conform to the opinions of the assessors. In the event of any disagreement between the assessors with regard to the amount of compensation, the judge may elect to consider which is the two opinions in his view is appropriate in the circumstances of the case. The judge is also at liberty to depart from the opinion of either of the assessors and decide on the reasonable amount of compensation to be awarded to the appellant by giving reasons for so doing.” [20] Arahan Amalan Hakim Besar Malaya Bil. 1 Tahun 2017, dated 6 June 2017 which outlines the conduct and procedure of handling land acquisition cases by the land reference court that ought to be strictly adhered to. Analysis and Findings [21] During the land reference proceedings, this court was assisted by a government assessor, Encik Tan Eng Peik from Jabatan Penilaian dan Perkhidmatan Harta Malaysia, and a private assessor, Encik Azman bin Mamat of Nilai Harta Consultant Sdn Bhd. [22] The law provides that in having referred its objections to the land reference court, the applicant bears the burden of establishing a prima facie case that the respondent’s award of compensation is inadequate. Wah Yahya J (as he then was) in Ong Yan & Anor v. Collector of Land Revenue, Alor Gajah, Malacca [1986] 1 MLJ 405 in the following terms:- “In land acquisition cases the burden is on the applicant to make out a prima facie case of inadequate award. Only when he succeeds in doing so would the respondent be called upon to introduce his evidence; otherwise the applicant’s case must fail and the Collector’s award should stand”. [23] The compensation proposed by LLM’s valuer, the Landowner’s valuer and the government valuer are as reproduced below: “ Bil .

Tarikh Nilaian -

8.10.2015 8.10.2015 8.10.2015 2. Tarikh Lewat Periksa -

13.5.2016 2.11.2015 2.11.2015 3.

Tanah RM378,000.00 RM214,200.00 RM504,000.00 RM252,000.00

(ii) Kos Mencari Tapak RM21,680.00 RM0.00 RM28,218.00 -

(iii) Kos Kebenaran Merancang (55 unit rumah) RM641,822.00 RM25,000.00 RM200,323.00 -

(iv) Kehilangan Pendapata n/ Kacau Ganggu Perniagaan RM4,987,840.00 - RM7,481,760.00 -

Kos Faedah Pinjaman RM100,000.00 - - -

(vi) Bayaran Fi kepada PBT - RM3,000.00 RM281,499.00 -

(vii) Kos Kontraktor Kerja Tanah - - RM160,000.00 - Jumlah RM6,129,342.00 RM242,200.00 RM8,655,800.00 RM252,000.00 ” [24] The Land Administrator, the respondent in both land references, made an award of a total compensation sum of RM 6,129,342.00. This amount is made up of RM 378,000.00 for land value, RM 21,680 for cost of finding new site, RM 641,822.00 for cost of planning permission (55 unit of houses), loss of income amounting to RM 4,987,840.00 and costs of interest on loan amounting to RM 100,000.00. [25] LLM made an objection against the award of the respondent on the basis that the amount of compensation was too high. Sin Hee Yang, the Landowner objected to the award of the Land Administrator on the grounds that the award did not reflect the value of the land; the owner of the Scheduled Land were derived of the compensation as provided by para 2(d) of the First Schedule of the LAA and finally, that the compensation awarded for development costs, loss of income and/or business compensation did not commensurate and did not reflect the loss incurred by the Landowner, Sin Hee Yang. [26] Section 2 of the First Schedule to the LAA is vital in the assessment of compensation arising out from a compulsory acquisition. [27] The Federal Court in Ng Tiou Hong v. Collector of Land Revenue Gombak [1984] 2 MLJ 35 explained the main principles in determining the market value as follows: “Under the Act there is no provision relating to the method of valuation. However the Courts have adopted the principle of valuing the scheduled land as a whole especially in cases where the area is large and owned by numerous individual owners in different portions. In Chuah Say Hai & Ors v. Collector of Land Revenue, Kuala Lumpur [1967] 2 MLJ 99 Gill J’s ruling in that case was later re-affirmed by their Lordships of the Privy Council in Collector of Land Revenue v. Alagappa Chettiar [1971] 1 MLJ 43 46 which held that under the Land Acquisition Act, 1960 the scheduled lands are to be valued as a whole. The learned judge in that case valued the whole of the 23 acres as a single unit even though the totality of the land acquired were held by the applicants in seven separate titles for areas varying between approximately 11 acres and just under half-acre. He was right in law in doing so. … There are of course other principles that have to be applied according to the facts and circumstances of a particular case along the lines provided by the First Schedule to the Act and as decided from time to time by the courts. We consider the following as the main principles: — First, market value means the compensation that must be determined by reference to the price which a willing vendor might reasonably expect to obtain from a willing purchaser. The elements of unwillingness or sentimental value on the part of the vendor to part with the land and the urgent necessity of the purchaser to buy have to be disregarded and cannot be made a basis for increasing the market value. It must be treated on the willingness of both the vendor to sell and the purchaser to buy at the market price without any element of compulsion. Secondly, the market price can be measured by a consideration of the prices of sales of similar lands in the neighborhood or locality and of similar quality and positions. Thirdly, its potentialities must be taken into account. The nature of the land and the use to which it is being put at the time of acquisition have to be taken into account together with the likelihood to which it is reasonably capable of being put to use in the future e.g. the possibility of it being used for building or other developments. Fourthly, in considering the nature of the land regard must be given as to whether its locality is within or near a developed area, its distance to or from a town, availability of access road to and within it or presence of a road reserve indicating a likelihood of access to be constructed in the near future, expenses that would likely be incurred in levelling the surface and the like. Fifthly, estimates of value by experts are undoubtedly some evidence but too much weight should not be given unless it is supported by, or coincides with, other evidence. [Superintendent of Lands and Surveys, Sarawak v. Aik Hoe & Co Ltd [1966] 1 MLJ 243, Vyricherla Narayana Gajapatiraju v. The Revenue Divisional Officer, Vizagapatam [1939] AC 302 312, and Nanyang Manufacturing Co v. Collector of Land Revenue Johore [1954] MLJ 69 ]. 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 circumstances”. [28] The need to take into account paragraph 2 of the First Schedule to the LAA in making an assessment on amount of compensation was stated in the Court of Appeal in JH Capital Services Sdn Bhd v. Pentadbir Tanah Daerah Petaling [2020] 4 MLJ 1 where Kamardin Hashim JCA stated the following: “It is clear to us from the learned High Court Judge’s judgment that the current market value based on the comparable transactions was considered and accepted by the Judge. The learned Judge did aware and had considered about the proposed future development of the said land. The learned High Court Judge did not erred in his findings”. Land Value [29] Pertaining to the value of land, LLM’s valuer was of the view the value should be RM 850.00 per square metre. Sin Hee Yang’s valuer’s were of the view the Scheduled Land were valued at RM 2,000.00 per square metre. The respondent’s valuer gave the value of the land as RM 1,000.00 per square metre. The award by the Land Administrator was RM 1,500.00 per square metre. [30] There was a common comparable in Lot PT 85536 Mukim dan Daerah Klang. The date of valuation for this Lot PT 85536 Mukim dan Daerah Klang was 12.6.2014, whereas for the Scheduled Land, the date of valuation was 8.10.2015. The assessor Encik Azman bin Mamat used this common comparable and made overall adjustments which amounted to 10%. This resulted in the adjusted value for Lot PT 85536 may be fairly fixed at RM 1,520.15 per square metre. The Land Administrator had awarded a compensation of RM 1,500.00 per square metre. [31] Encik Tan Eng Peik the assessor from Jabatan Penilaian dan Perkhidmatan Harta Malaysia, was of the view the common comparable most suitable was PT 4500. This was due to the transaction date of 21.01.2015 before the valuation of 8.10.2015. Other factors were the location of PT 4500 which is in Mukim Klang and similar characteristics as the Schedule Land. After overall adjustments were made, the adjusted value for PT 4500 was RM 1,076.43 per square metre. The Land Administrator had awarded compensation of RM 1,500.00 per squre metre. [32] This court had in following land reference cases maintained the value of the compensation at RM 1,500.00 per square metre:

BA-15-87-12/2020 PT 130785 HSM 48228 Mukim Klang, Daerah Klang.

(ii) BA-15-89-12/2020 PT 130746 HSM 48189 Mukim Klang, Daerah Klang.

(iii) BA-15-90-12/2020 PT 130747 HSM 48190 Mukim Klang, Daerah Klang.

(iv) BA-15-91-12/2020 PT 130786 HSM 48229 Mukim Klang, Daerah Klang.

BA-15-92-12/2020 PT 130786 HSM 48229 Mukim Klang, Daerah Klang. [33] Based on the common comparable and the adjusted value for Lot PT 85536 which may be fairly fixed at RM 1,520.15 per square metre, and the decision of the previous land reference as stated in paragraph 32 above, and having being satisfied with the amount of compensation awarded, this court maintained the amount for land value at RM 1,500.00 per square metre. Cost of finding new site [34] For the cost of finding a new site, the Landowner made a claim for RM 28,218.00. This claim was made up of RM 15,120.00 for agency fees in searching for a new land, RM 9,120.00 being costs of stamp duty and legal fees amounting to RM 3,978.00. [35] The Land Administrator had made an award of RM 21,680.00 for the cost of finding a new site. However, there was no details as to how this amount was arrived at by the Land Administrator. [36] Paragraph 2(e) of the First Schedule of the LAA reads:

“Matters to be considered in determining compensation In determining the amount of compensation to be awarded for any scheduled land acquired under this Act there shall be taken into consideration the following matters and no others: …

if, in consequence of the acquisition, he is or will be compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change; and …” [37] In relation to the costs of legal fees, stamp duty and agency fees, KC Vohrah J in Kok Keat & Anor v Pentadbir Tanah Daerah Petaling [1994] 4 CLJ 718, stated: “…there was nothing in the Land Acquisition Act 1960 to justify the inclusion of such fee.” [38] In the case of Buildings and Land Director v Shun Fung Ironworks [1995] AC 111, the Privy Council set out the conditions to be fulfilled by a Landowner: “Three principal questions arise on relocation claims. (1) Can the business be relocated, or has it effectually been extinguished? Most businesses are capable of being relocated, but exceptionally this may not be practicable: for example, another suitable site may not exist. If the business is not capable of being relocated, then perforce compensation will have to be assessed on the extinguishment basis. (2) Does the claimant intend to relocate? The claimant must have reached a firm decision to relocate his business, and he must be reasonably assured that he will be able to do so. (3) Would a reasonable businessman relocate the business?” [Emphasis added] [39] The case of Buildings and Lands Director (supra) requires the Landowner to demonstrate that the business was capable of being relocated, that the Landowner intends to relocate and that a reasonable person would relocate. [40] Before this court, there was nothing to show or prove the above conditions to enable this court to allow a claim for costs of finding new site. Additionally, the Scheduled Land was overgrown and there was no building on the said land. There was no development on the Scheduled Land. [41] In the view of this court, the Land Administrator had wrongly paid the amount to the Landowner, Sin Hee Yang. In the view of this court, there is nothing to substantiate this claim for costs of finding a new site. Taking these factors into consideration and the opinion of both assessors, this court is of the view this amount of RM 21,680.00 should be returned to LLM. Costs of Planning Permission [42] The Land Administrator had awarded an amount of RM 641,822.00 for the cost of obtaining new planning permission. For the purposes of this land reference, the Scheduled Land is No PT 130749. This