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Page 1 of 10 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO: S-01(NCVC)(A)-229-03/2018 BETWEEN OKIDVILLE HOLDINGS SDN BHD [458944-P] … APPELLANT
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Court of Appeal of Malaysia17 May 2019S-01(NCVC)(A)-229-03/2018
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“10 GROUNDS OF JUDGMENT INTRODUCTION [1] The appellant owned an oil plantation land measuring 2772 hectares in Keningau, Sabah. Pursuant to a Sabah Government Gazette proclamation under s 3 of the Land Acquisition Ordinance (Sabah Cap. 69) [“SLAO”] published on 4.7.2013, a strip of the land measuring 16.495 hectares was”
“refore, there was no material effect due to the acquisition of Lot B. Lastly, it was submitted that Semenyih Jaya (supra) is distinguishable as the provisions of the SLAO is not pari materia with the Land Acquisiton Act 1960. Under the SLAO, the trial judge has wide power to assess damages after considering the opinion”
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Page 1 of 10 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO: S-01(NCVC)(A)-229-03/2018 BETWEEN OKIDVILLE HOLDINGS SDN BHD [458944-P] … APPELLANT
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THE DIRECTOR OF LANDS AND SURVEYS DEPARTMENT, SABAH … RESPONDENTS [In the High Court in Sabah and Sarawak at Kota Kinabalu Originating Summons No. BK1-24NCVC-38/6 of 2014 Between Okidville Holdings Sdn Bhd [458944-P] … Plaintiff And
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The Government of the State of Sabah
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The Director of Lands and Surveys Department, Sabah … Defendants] CORAM: VERNON ONG LAM KIAT, JCA YAACOB HJ. MD SAM, JCA YEW JEN KIE, JCA Page 2 of 10 GROUNDS OF JUDGMENT INTRODUCTION [1] The appellant owned an oil plantation land measuring 2772 hectares in Keningau, Sabah. Pursuant to a Sabah Government Gazette proclamation under s 3 of the Land Acquisition Ordinance (Sabah Cap. 69) [“SLAO”] published on 4.7.2013, a strip of the land measuring 16.495 hectares was compulsorily acquired for the purposes of construction of transmission lines. [2] As a result of the acquisition, the appellant’s land was severed and truncated into two separate and unconnected portions – the Northern portion (designated as Lot A in the survey plan) and the Southern portion (designated as Lot C). The strip of land acquired was designated as Lot B in the survey plan. A copy of the survey plan is attached to this written judgment marked “A”. [3] On 10.6.2014, the appellant filed an Originating Summons (OS) at the High Court pursuant to s 14 of the SLAO for a determination of their claim to compensation. On 5.8.2015, the appellant and the respondent entered into a consent judgment for the sum of RM1,589,639.00 in respect of the compensation for the acquired land. The hearing proceeded on the claim for RM11,082,550.00 (calculated at RM19,174.00 per hectare) on the ground that Lot C which had been severed and truncated from Lot A had been deprived of the road frontage and caused a drop in value of Lot C. The appellant’s claim for compensation for severance was dismissed by the High Page 3 of 10 Court on 20.11.2015. On appeal, the Court of Appeal took a different view and order a retrial in the High Court. After a re-hearing before another judge aided by two assessors, the learned Judicial Commissioner (JC) dismissed the appellant’s claim for compensation for severance with costs on 8.3.2018. Dissatisfied with the decision, the appellant appealed to the Court of Appeal. PROCEEDINGS IN THE HIGH COURT [4] The appellant’s valuer (PW2) adopted the “before and after method” by comparing the difference in value between the road frontage land (Lot A), the acquired land (Lot B) and Lot C to conclude there is a difference being a 20% drop in value of Lot C. PW2 compared the scheduled land with 4 other comparables and chose comparable no. 1 which shares similar characteristics. PW2 compared the difference in value between the main trunk road frontage lands and non-frontage lands, everything else being equal. PW2 arrived at the amount of RM11,082,550.00 as follows: RM 96,371.00 per hectare (RM39,000.00 per acre) Less 20% RM19,274.00 per hectare (RM 7,800.00 per acre) RM 77,097.00 per hectare (RM31,200.00 per acre)
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(i) Southern Portion of the Schedule Land = 575.0 hectare before acquisition
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575.0 hectare @ RM96,371.00 per hectare = RM55,413.325.00 Page 4 of 10 LESS After acquisition:
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575.0 hectare @ RM77,097.00 per hectare = RM44,330.775.00 RM11,082.550.00 ============== [5] In reply, the respondent advanced 10 points: (i) Lot C has not lost any front road advantage as Lot C and Lot A remained under one title, (ii) the compensation for Lot B which had been accepted by the appellant included the compensation for severance, (iii) there was no diminution in value of Lot C as Lot C was only meant for agricultural purposes, (iv) Lot C is still accessible through the internal road of Lot B underneath the transmission lines which were not fenced, (v) SESB has never denied access for the appellant to use the internal road underneath the transmission lines, (vi) the internal road within Lot B is well maintained, in good condition and is accessible to the appellant, (vii) no weight should be given to PW2’s valuation report as it is only based on information obtained from Goggle and Government department. PW2 did not conduct her own site inspection, (viii) even though Lot C was truncated from Lot A, Lot C is still a big piece of land and is not totally rendered useless or uneconomical, (ix) there is no evidence to show that the oil palm production of Lot C was affected due to the severance, and (x) there is another public road providing access to the southern portion of the scheduled land. Page 5 of 10 [6] The respondent also relied on the evidence and a valuation report prepared by Jimmy Chee of the Land and Surveys Department (DW4). After conducting a site inspection, DW4 found that the area was not fenced and there was a public access gravel road which was well maintained and still in use along the subject land boundaries from the eastern portion to the southern portion. FINDINGS OF THE HIGH COURT [7] The learned JC considered the opinions of both assessors who concurred there should be no compensation for severance on the basis of the following points: The acquisition of Lot B did not completely sever Lot A and C as the access to Lot C is still possible by the internal road underneath the transmission lines; SESB still allowed the appellant to access the internal road from Lot B to Lot C; The availability of alternative access roads running the eastern boundary of the schedule land, i.e. to say Lot C has immediate frontage onto an access road along its eastern boundary. Although the alternative access road is not being used at the moment as there were trenches along the road, the obstacles may easily be overcome with minimal costs in the event the present access through Lot B is no longer an available option to the appellant. Page 6 of 10 [8] The learned JC found no reasons to depart from the opinions of the assessors and accordingly dismissed the claim for compensation for severance. SUBMISSION OF PARTIES [9] Learned counsel for the appellant canvassed the following points. First, the learned JC erred in law and in fact when he accepted the assessors’ opinion of the supposed absence of severance despite having himself found that there was indeed severance and further having acknowledged DW4’s admission of severance. Admissions are the strongest evidence in favour of the appellant’s claim (Esso Malaysia Bhd v Hills Agency (M) Sdn Bhd [1994] 1 MLJ 740). Second, the learned JC failed to make or arrive at an independent decision, as called for or made mandatory by the Federal Court in Semenyih Jaya Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat [2017] 3 MLJ 561 (FC). The learned JC also failed to appreciate that the role of the assessors were advisory only. Instead, the learned JC appeared to have rubber stamped the view of the assessors. Third, the learned JC failed to appreciate that the appellant’s valuation report which showed a drop in value of 20% was unrebutted. The respondent’s valuation report did not deal with severance; instead, it only dealt with Lot B. As such, the learned JC was bound to accept the valuation of PW2. In Page 7 of 10 essence, the appellant’s claim for severance is premised on the argument that Lot C has lost the road frontage which it previously enjoyed before Lot B was acquired. [10] In reply, learned counsel for the respondent argued that the appellant’s land measured 6,849 acres. The acquired land Lot B is a strip of land measuring 14 acres. Lot C, the southern portion measured 1,420 acres. As Lot B was acquired for transmission lines only, there was no denial access between Lots A and C. The roads within Lots A, B and C before acquisition are still passable without restriction. Even though Lot B was acquired, it is still accessible through underneath the transmission lines; as such there is no permanent severance of Lot C. Further, Lots A and C are still registered under one land title. As such, Lot C is still considered as a portion of the subject land. It was also contended that road frontage was never an issue. There was and continues to be unrestricted access between Lot A and C to public and internal roads. The learned JC was correct to find that there was no severance as Lot C was still accessible. [11] Learned counsel for the respondent also argued that the appellants have failed to prove that they suffered damage due to severance in terms of loss of road frontage advantage to Lot C. The appellant’s case is based on the valuation report prepared by PW2 a registered valuer. However, PW2 admitted under cross-examination that (i) her opinion on severance was based on cases which she conducted in West Malaysia and not in Sabah,
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(ii) she had never carried out any valuation in Sabah, (iii) she did not insert the material date of inspection in her valuation report because she did not conduct a site inspection of the subject land or comparables in her report, Page 8 of 10 and (iv) the information contained in her report were gathered from Google and Government department. As such, little weight if any should be attached to PW2’s report. PW2 had also agreed under cross-examination that she did not provide any evidence to show that Lot C had depreciated in value due to its loss of road frontage advantage because she thought that it was not necessary. It was therefore submitted that PW2’s opinion is unsupported by evidence and is merely PW2’s own assumption. Further, Lot C’s harvest was the same as Lot A’s. Therefore, there was no material effect due to the acquisition of Lot B. Lastly, it was submitted that Semenyih Jaya (supra) is distinguishable as the provisions of the SLAO is not pari materia with the Land Acquisiton Act 1960. Under the SLAO, the trial judge has wide power to assess damages after considering the opinions of the assessors. DECISION [12] After hearing of submissions of counsel on 14.5.2019, we adjourned the matter for decision on 17.5.2019. [13] After considering the oral and written submissions of the parties, we unanimously agreed that the fact of severance suffered by Lot C as a result of the acquisition of Lot B is not seriously disputed. Accordingly, the appellant is entitled to compensation for the loss suffered consequent to the severance of Lot C. Page 9 of 10 [14] Notwithstanding the fact of severance, we observe that the description is merely illustrative as the land in question, i.e., Lots A and C remain under one single land title. The severance in this case was legal in the sense that the subject land has been broken up into two separate and distinct lots. As such, we were given to understand by the appellant’s counsel that application for separate issue documents of title for Lots A and C are in process. Be that as it may, there is also the fact of physical severance as argued by the appellant counsel. That argument is based on a diminution in value of Lot C of 20% premised on the factors contained in PW2’s valuation report. [15] We have considered the opinion of both valuers and the comparables employed in the reports. We do not think that the diminution in value of Lot C is as high as 20%. In the overall circumstances of this case, we think that a diminution in value of 5% is more reasonable and appropriate. In arriving at our decision, we have also considered the arguments of respondent counsel and the totality of the evidence on the record. As such, we allowed damages for severance in the amount computed at the rate of 5% of loss in value of Lot C together with interest as provided under the SLAO. We then stood down the matter to enable the parties to work out the computation on the final judgment amount. [16] Counsel of parties came back and reported that based on a 5% diminution in value of Lot C, the amount of damages came to RM2,770,677.00. Consequently, we allowed the appeal and gave judgment for RM2,770,677.00 together with interest at 6% calculated from the date of Page 10 of 10 Gazette to date of payment. Costs of RM20,000.00 subject to allocator was also awarded to the appellant. sgd (Vernon Ong) Judge Federal Court Malaysia Dated : 14th October 2019 Counsel: For the Appellant: Eric Chong Messrs. ECL Associates For the Respondent: Dulce Majawit Jabatan Peguam Besar Negeri Sabah
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