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2020 MarsdenLR 3218
COURT OF APPEAL PUTRAJAYA
JH CAPITAL SERVICES SDN BHD – Appellant
Versus
PENTADBIR TANAH DAERAH PETALING – Respondent
[Civil Appeal No: B-01(A)-134-03/2019]
The principle of equivalence mandates that compensation for acquired land should reflect true loss, considering market value and potential development, as upheld by rigorous adherence to statutory provisions.
Headnote:(A) Land Acquisition Act 1960 – Section 37 – Federal Constitution – Article 13 – Compensation for land acquisition – Appellant's land acquired for LRT 3 project, initial compensation awarded deemed inadequate – Award increased by High Court but still not meeting appellant's expectations regarding market value and potentialities of the land – High Court applied the principle of equivalence in assessing compensation. (Paras 10, 20, 25, 29)
(B) Appeals – Bar to appeals on quantum of compensation – The Land Acquisition Act limits appeals on the quantum awarded, with specific exceptions discussed within the judgment – Issues of law pertaining to compensation remain appealable under specific circumstances. (Paras 24-28)
Facts of the case: The appellant was dissatisfied with the Land Administrator's award following the compulsory acquisition of their land for LRT 3, arguing for a higher compensation based on multiple grounds, including market value and interests incurred during the purchase. (Paras 4-10)
Findings of Court: The appeal for an increase in compensation was denied, as the High Court's determination of RM5,000.00 per square meter was deemed reasonable and supported by established methods of valuation. (Paras 10, 29)
Issues: The primary questions included whether the initial compensation was adequate and if the principle of equivalence was adhered to in determining the compensation. (Paras 16, 17)
Ratio Decidendi: The court affirmed the necessity to follow the legislative provisions strictly and interpreted them in favor of landowners, emphasizing the need to consider potentialities of the land in valuation, while adhering to the established legal restrictions on appeals regarding compensation quantum. (Paras 16, 29)
Result: Appeal dismissed with costs of RM10,000.00.
Introduction
[1] This is an appeal in respect of a land reference under s 37 of the Land Acquisition Act 1960 ('the Act') heard and decided by the learned High Court Judge at Shah Alam, Selangor vide Land Reference No: BA-15-194-06/2018 on 23 February 2019. The appellant was not satisfied with the award given by the Land Administrator and has accepted the award under protest.
[2] At the High Court, the award was increased by the learned High Court Judge sitting with two Assessors. Dissatisfied with the decisions of the High Court, the appellant appealed to this Court.
[3] We heard the appeal and after hearing the parties, we dismissed it with costs. We now give our reasons.
Brief Facts
[4] The appellant was the registered proprietor of a piece of land held under HS (D) 102165, PT 15978 (Lot 52777), Mukim of Damansara, District of Petaling, Selangor Darul Ehsan ('the said Land'). The said Land was located in an area known as the Glenmarie Industrial Park, situated at the junction between Persiaran Kerjaya and Jalan Kerjaya.
[5] The said Land has an area of about 2,628 square meters or 28,288 square foot with a freehold title catagorised as commercial building.
[6] The appellant's land was subject to acquisition under the Act for the purpose of constructing the third Light Rapid Transit Line ('LRT 3') between Bandar Utama, Petaling Jaya and Johan Setia, Klang. The declaration of intended acquisition was gazetted on 23 February 2017.
[7] The Land Administrator conducted an enquiry pursuant to s 12 of the Act on 31 October 2017 to determine the amount of compensation payable to the appellant. At the conclusion of the enquiry, the Land Administrator awarded compensation in the sum of RM1,568,156.85. The amount comprises of RM497,000.00 being the value of the land acquired (2,628 square metre at RM4,500.00 per square metre equal RM11,826,000.00 minus RM11,329,000.00 paid to bank as chargor), RM300,000.00 being compensation for loss of rental income suffered from the termination of the tenancy agreement with two tenants and RM771,156.85 being compensation for acquiring a new site and expenses incurred for mobilisation to the new site. Further sum of RM3,746,346.00 was paid to the 1st tenant, Kemas Maju Motor Sdn Bhd and sum of RM2,079,490.00 was also paid to the 2nd tenant, Sadra Motor Sdn Bhd.
[8] The Land Administrator in his Award dated 31 October 2017, expressly stated that:
"Nilaian tanah oleh pihak JPPH ialah sebanyak RM4,500.00 semeter persegi. Manakala pihak penilai yang dilantik oleh tuan tanah menuntut nilaian sebanyak RM7,535.00 semeter persegi. Berdasarkan kepada kedua-dua laporan nilaian tersebut, saya memutuskan untuk memberi nilaian sebanyak RM4,500.00 semeter persegi iaitu sama dengan nilaian oleh pihak JPPH. Oleh itu pampasan tanah yang diambil seluas 2,628 meter persegi adalah sebanyak RM11,826,000.00" - see p 53, Vol 2, ROA.
[9] The appellant objected to the amount of compensation awarded to them by the Land Administrator by filing Form N requesting the Land Administrator to refer the matter to the Court for its determination pursuant to s 38 of the Act. The appellant contended that the compensation awarded was inadequate on the grounds that the Land Administrator had failed to consider, amongst others, the said Land was purchased at a price of RM10,749,360.00 on 10 September 2013 (principle of equivalence), potentialities, business compensation, relocation basis, extinguishment basis and replacement costs basis.
[10] The learned High Court Judge sat with two assessors to determine the adequacy of the compensation payable to the appellant. After hearing the evidence and submissions of parties, the Land Reference Court allowed the appellant's objection in part in respect of the current market value of the said Land which was increased from RM4,500.00 to RM5,000.00 per square metre. The Land Reference Court allowed an additional award for the sum of RM1,314,000.00 to be paid to the appellant. Other cl
