Abdul Malik Ishak J:

The Parties

[1] For ease of reference, the parties will be referred to as follows:

(a) UDA Holdings Berhad is the plaintiff in the original action and it is the first defendant in the counterclaim and will hereinafter be referred to as "UDA Holdings";

(b) Melewar Leisure Sdn Bhd is the defendant in the original action and it is the plaintiff in the counterclaim and it will be referred to hereinafter as "Melewar"; and

(c) CH Williams Talhar & Wong Sdn Bhd is the second defendant in the counterclaim and will hereinafter be referred to as "CH Williams".

The Facts Of The Case

[2] UDA Holdings owns a piece of land held under H.S.(D) 50341 for P.T. No: 1 and H.S.(D) 51859 for P.T. No: 2 located at section 31, Bandar Kuala Lumpur, District of Wilayah Persekutuan (hereinafter referred to as the "land"). Originally on that land stood a wet market. That wet market was subsequently re-developed by Melewar into a famous centre of culture and commerce - known locally as the Central Market and the Central Square.

[3] By way of a lease agreement dated 5 September 1989 (hereinafter referred to as the "the lease agreement"), UDA Holdings leased the land and the old building that housed the wet market (hereinafter collectively referred to as the "the demised premises") to Melewar for a period of 75 years commencing from 20 April 1989. With the advantage of a long lease, Melewar developed the demised premises and turned it into the Central Market and the Central Square as alluded to earlier.

[4] The lease agreement can be seen at pp. 5 to 17 of the common bundle and it was, pure and simple, a commercial transaction between UDA Holdings and Melewar. Briefly, by that lease agreement the parties agreed that:

(i) Melewar would re-develop all parts of the demised premises at its own costs and exclusively deal with the demised premises throughout the span of 75 years by sub-leasing, sub-letting or even give licences to third parties (see ss. 2.03, 3.03(a) and 5.01(d) of the lease agreement);

(ii) in exchange for this special privilege, Melewar was required to make an up-front payment of RM25.36 million to UDA Holdings (see s. 3.01 of the lease agreement);

(iii) the sum of RM25.36 million was duly paid by Melewar to UDA Holdings (see the evidence of Fadzidah binti Hashim (PW1) under cross-examination at p. 5 of the notes of evidence); and

(iv) upon expiry of the lease agreement, Melewar would surrender the demised premises including all the buildings and structures built or developed by Melewar to UDA Holdings free of any payment or compensation (see s. 3.03(a) of the lease agreement).

[5] On 23 July 1994, the government gave notice of its intention to compulsorily acquire part of the land under the Land Acquisition Act 1960 ("LAA") for the purpose of "Projek Sistem Kedua Transit Aliran Ringan (LRT) untuk Kuala Lumpur" as reflected in Form "A" of s. 4(1) of the LAA at p. 30 of the common bundle. And the gazette notification of such notification in compliance with s. 4(3) of the LAA can be seen at pp. 33 to 35 of the common bundle.

[6] On 26 October 1994, by way of Form "D" issued pursuant to s. 8 of the LAA as seen at pp. 36 to 37 of the common bundle, the Land Administrator of Wilayah Persekutuan ("the Land Administrator") declared that approximately 1,774.29 square metres from the land owned by UDA Holdings had been compulsorily acquired by the Government. At the time of the acquisition, only six years had run on the lease, and Melewar still had 69 years left.

[7] On 23 December 1994, the Land Administrator by way of Form "E" pursuant to s. 10 of the LAA as reflected at pp. 39 to 40 of the common bundle gave notice to UDA Holdings and Melewar that an enquiry would be held into claims for compensation arising from the acquisition.

[8] On 13 February 1995, the Land Administrator conducted the enquiry and this can be seen from the notes of evidence at pp. 23 to 29 of the common bundle. The representatives from UDA Holdings, Melewar and