LAND ACQUISITION 2Sharifah ZubaidahLAW 3111- March 2009

Coverage:

•1) Award of Compensation•2) Assessment of Compensation•3) Challenging Land Acquisition

Proceedings•4) Special Provisions for Acquisition by

Private Sector

Award of Compensation

Finality of Award of Compensation

•See s.14(2) LAA.•Every award prepared…shall be final and

conclusive evidence of :•1) the area of any scheduled land,•2) its value in the opinion of the LA,•3) apportionment of the compensation

awarded.

•See however s.37, giving a right to persons interested to apply to court to object against the amount of compensation.

Issue: Whether the LA must give reasons for his award?

•PHT Daerah Barat Daya Pulau Pinang v Kam Gin Paik [1983] (FC):

•No, so long as there is an award made in Form G, there is no need for the LA to give reasons for his award. (See s. 14(2) – finality and conclusiveness of award.)

Can a person object if area of land is actually larger than the area

assessed?

•See s.14(3) LAA.•Any difference in the area of land

assessed will not invalidate the award unless the difference is larger than ¼ of a

hectare or 1% of the scheduled land, whichever is greater.

Oliver Young v CLR Batu Pahat [1972]• Issue: Whether it was proper for one

Collector to hold the enquiry in the acquisition proceedings and for another to make the award?

•Held:•From s.12 LAA, the Collector who conducts

the enquiry must assess the compensation.•Thus, the assessment of award was invalid

and there should be an new enquiry done by another Collector.

Assessment of Compensation

• The assessment of compensation to be awarded is done by referring to Principles

Relating to the Determination of Compensation in the First Schedule.

(Please refer.)• 4 Matters:

• 1) ‘Market Value’.• 2)Matters to consider.• 3) Matters to neglect.

• 4) Limitation.

How is Market Value Ascertained?

Market value as of when? (para. 1(1))

•‘Reference date’:•a) Date of publication of Form A. (if

followed 12 months thereafter by Declaration under s.8);

•b) In any other cases, at date of publication s.8 Declaration.(Form D)

Method of Valuation? (para. 1(1A))• ‘any suitable method’.• May refer to prices

paid for recent sales of lands with similar characteristics as the scheduled land within same vicinity, particularly the last transaction within 2 years of the reference date.

Other Matters as regards Market Value:• If part only of land is

acquired, refer to market value of whole land but consider also particular features of that part. (1B)

• If leasehold property can have regard to date of expiry of lease but not any subsequent alienation. (1D)

• Must consider any implied or express condition restricting the use of land. (1(2))

• If Malay Reservation land or Malay holding or customary land – such status not to be considered. (1(2A)

• Must consider specific land use of land as indicated in the development plan prepared by the town planning authority. (1(2BA))

1st Schedule Now Recognises the Reinstatement Principle

• In Lembaga Amanah Sekolah Semangat Malaysia v CLR Dindings [1978], the school (OBS)objected to the amount of compensation and argued that the principle of reinstatement should be applied – the cost of placing the claimant in the same position to that he occupied when he was dispossessed.

• Held: The LAA does not provide for the reinstatement principle.

• Now, it does. See para 1(2C) –added in 1998 Amendment.

• If land is presently used for a purpose that has no general demand/market for the purpose (e.g. training centre, recycling centre, etc.) assessment shall be made on the basis of reasonable cost to the proprietor of using or purchasing other land for the same purpose.

Outward Bound School, Lumut

Definition and Concept of Market Value

• Defined in Nanyang Manufacturing Co. v CLR Johor [1954]:

• “The market value of the land may be roughly described as the price that an

owner willing and not obliged to sell might reasonably expect to obtain from a willing purchaser with whom he was bargaining

for the sale & purchase of land.”• (per Buhagiar, J.)

Ng Tiou Hong v CLR Gombak [1984]•Federal Court observed:•1. Market value means the

compensation must be determined by reference to the price a willing vendor might reasonably expect to obtain from a willing purchaser.

•2. Market price can be measured by considering the price of sales of similar lands in the locality.

Cont.:

•3) Its potentialities must be taken into account. i.e. land use and future development potential. (See also Bukit Rajah Rubber Co. v CLR Klang [1968] on this point.)

•4) The location of the land, whether near a developed town, access roads, etc.

•5) Estimates of value by experts.

Syed Agil Barakbah in Ng Tiou Hong:

•“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 can’t be the basis for increasing the market value.”

Matters to Be Considered In Determining Compensation in 1st

Schedule• 6 Factors:• a) Market Value• b) Increase in value of other land belonging

to the person as a result of acquisition.• c) Severance• d) Injurious affection• e) Forced change of residence or place of

business.• f) Where only part of land is acquired, an

undertaking to build roads, drains, walls, fences, etc. benefitting part of land not acquired.

CLR v Looi Lam [1981] 1 MLJ 300•Govt acquired part of the Resp.’s land to

change the course of Sg. Benus that passed through Kg. Bahru.

•As a result of the river deviation work done by the Govt. after the acquisition, the house belonging to the Resp. was badly damaged and required extensive repair.

•No compensation was paid in the award for damage to the house.

•Resp. applied to the court which then awarded a further RM8101 as compensation for severance damage and a further RM40, 185 as compensation for damage of the house. (‘injurious affection’).

•Court referred to para 2(d) of First Schedule: “damages likely to be sustained” – thus, may claim.

Consolidated Plantation Bhd. V Pemungut Hasil Tanah Kelang [1984] 1 MLJ 273•Govt acquired a portion of the land belonging

to the appellant co. for a housing scheme.•At the enquiry, the app. Co. asked for a total

compensation as follows:•a) value of land.•b) diminished value of land not acquired.•c) accomodation•d) loss of water supply and consequential

closing down of mill.

•e) surveyor’s fee.•Collector’s award only on market value

and nothing else.•High Ct. allowed claim for b, d and e as

there was no dispute as to the injurious affect of the acquisition on the App.’s oil palm mill as they lost a part of the catchment area for their water.

6 Matters to be Neglected in 1st Schedule:

• a) degree of urgency

• b) disinclination of the person to part with the land.

• c) damage sustained that will not be a good cause of action.

• f) Outlays, additions, improvements to the

land after Form D is gazetted.

• d) depreciation in value of land likely to result from the use it is acquired.(e.g. solid

waste site)

Can a person accept compensation under protest?

•Yes, see s.30(a) and s.37(1) LAA 1960.•Such application to refer the matter to the

court must be made within 6 WEEKS of the LA’s award (if applicant was present) and is made in Form N under s. 38 LAA.

•The grounds of the objection must be stated fully in Form N. (s. 38(2))

Locus Standi to File Objection

•S. 37(1) states : •“any person interested who… has

received any notice under ss. 10 or 11 … has made a claim to the LA in due time and who has not accepted the LA’s award/ has accepted under protest…”

•Thus, the claimant must fulfill the following criteria:

Statutory Criteria:

•1) Must be ‘a person interested’ (see s.2)

•2) Must have received the notices in either s. 10 or 11. (Form E or Form F)

•3) Must have made a claim to the LA in due time (see s. 38) as regards objecting to the award or accepting the award under protest. (s. 30).

‘person interested’ (s.2)

•“Includes every person claiming an interest in compensation to be made on account of acquisition of land under this

Act but does not include a tenant at will.”

•CR: s. 37(3) LAA as regards a government agency/company undertaking work of

public utility where award exceeds RM15,000.

Lembaga Lebuhraya Malaysia v Cahaya Develpmt S/B (COA) [2011] 2

MLJ 729

• P’s land acquired u- s.3(109a) for public purpose to build the Senai-Pasir Gudang- Desaru Expressway.

• Form D stated that the acquisition was for the Ministry of Public Works.

• RM30 million plus was awarded as compensation.

• D’ raised objection to the amount of compensation as they (LLM) had been given responsibility to supervise and execute the project.

Cont.:• P contended that the

D was not a ‘person interested’ and thus may not file an objection.

• HC held that as the acquisition was not made under s. 3(1)(b), therefore the D was not a ‘person interested’ to file an objection.

• D appealed to COA’• COA held:• “As the ‘paymaster’ of

the highway project, and being served with Form E as a person interested, and read with s. 37(3) LAA, the App. was a person interested that was entitled to make a claim.”

Grounds: (s. 37(1))

Whether the period of 6 weeks to file Form N in s. 38(4) can be enlarged by

the court?• Yes, if the applicant

can show ‘special circumstances’.

• See: Singapore Para Rubber Estate Ltd. v PTD Rembau, Negri 9 [2008] 6 MLJ 763

• App. had accepted compensation under protest as to its amount and filed Form N but it was out of time.

• Issue: • Whether the Resp.’s

non-compliance with certain statutory requirements under the Act and Article 13 of the FC when making the award constituted ‘special circumstances’ entitling the court to enlarge the time for submission of Form N?

Held:

•The burden was on the App. to establish ‘special circumstances’ thereby entitling the court to exercise its discretion to enlarge time under s. 38(4) of the Act.

•This discretion must be exercised sparingly.

•No special circumstances in this case.

Procedure upon Receipt of Form N•1) LA will require a deposit from the

applicant of either RM3000 or 10% of the amount claimed as security for costs of reference and appeal. (s.39(1))

•2) LA will refer the matter to the court within 6 months through Form O.

•3) Court will issue Form P (s. 43) notifying the applicant, the LA and all interested persons on the date hearing.

Draman b. Kassim v Land Administrator, Hulu Terengganu [1990]

3 MLJ 465 •App.’s MR land ws acquired for a ‘store

site for the PWD of Hulu Terengganu.’•App. dissatisfied with the quantum of

compensation as 2 parcels of land in the same district had been rejected as comparisons to determine market value.

•HC increased the compensation fr RM4800 per acre to RM7000 per acre. App. Appealed to the SC for RM16000 per acre. Appeal dismissed.

Jitender Singh v PTD Wilayah Persekutuan [2008] 7 MLJ 479

•Held:•Where the court is aided with 2 valuers

and both valuers had applied similar factors to assess compensation, the court

should elect to adopt the valuation in favour of the landowners. Consonant with

spirit of Art. 13 of the Federal Consti.

Other grounds from case law:

•1) Delay in holding enquiry.

•2) Delay in making award and payment.

•3) Ultra-vires the constitution.

•4) Breach of natural justice.

•5) Non-compliance with the Act/ legal

impropriety.•6) Acquisition

was ‘mala fide’.

Judicial Review

•Applications under grounds other than s. 37, is done by way of judicial review.

•Usually application is for a declaration and a writ of certiorari to quash the decision of the State Authority to acquire the said land.

Delay in making enquiry• Oriental Rubber & Oil

Palms S/B v PHT Kuantan [1983]

• Form D was gazetted in 1975 but enquiry was only held 5 years later. (1980).

• App. applied for certiorari to quash the award.

• Held: • Court granted certiorari

to quash the award.• The delay caused Form

D to be exhausted and of no effect.

• See also: PHT Daerah Barat Daya P. Pinang v Ong Gaik Kee (7 years delay – certiorari granted to quash award.)

Delay in Payment of Award• Tan Boon Bak & Sons

Ltd. V Govt of the State of Perak & Anor. [1983] 1 MLJ 117

• P sued the State of Perak and the CLR, inter-alia, on the ground that the unreasonable delay on the part of the Collector in making payment of compensation awarded by him contravened

• S. 29(1) of the LAA 1960 and Art. 13 Federal Constitution.

• There was a delay of 7 years.

• Ajaib Singh, J.: ‘As soon as may be’ in s. 29 should be read as meaning..’as soon as he is in a position or is able to do so.’

Held:

•As in this case the sum awarded was to come from the Perak State Economic Development Corporation (SEDC) and it was in the process of reorganisation, the delay did not render the acquisition void.

•Special circumstances of the case rendered the delay reasonable.

Ismail b. Bakar & Ors. v Director of Lands and Mines, Kedah [2011] 5 MLJ

197 (COA)•Held:•A 9 year delay in paying compensation is

grossly unreasonable and contravenes s. 29 of the Act and Art. 13(1) of the Federal Constitution.

•The purported acquisition was invalid, null and void.

Ultra-vires the Constitution

•S. Kulasingam & Anor. v Comm. Of Land, Federal Territory & Ors. [1982] 1 MLJ 204

•Issue:•App.s argued that s.3 of the LAA infringes

the equality provision under s.8(1) of the Fed. Consti. because it does not provide any guidelines on policy/ principles as to how the choice of land for such purposes is made.

Held:

•S. 3 says that the State Authority may acquire ‘any land’ which is needed for any ‘public purpose’.

•It does not provide for the acquisition of any land for ‘any purposes’.

•The acquisition in this case was therefore not ultra-vires the FC.

‘Mala fide’ (see discussion in your textbook)•Syed Omar Alsagoff’s case•Yeap Seok Pen v Govt of Kelantan [1986]•Stamford Holdings S/B v Kerajaan Negeri

Johor [1998] 2 AMR 997•Ahmad bin Seman’s case.

Acquisition of land under s.3(b) and (c) LAA 1960

•LAA 1960 - amended in 1998 to include provisions on the administrative

framework for land acquisition where it is done by application of a

person/corporation under para. (b) and/or (c) of section 3(1).

Condition:

•An application for land acquisition under s.3(2) will not be approved if the applicant

had already obtained ‘development approval’ (i.e. planning permission from

the local planning authority, etc.) and the project is not for public utility.

•(see s.3(6))

How to Apply?

•1) Application is made in writing to the Land Administrator.

•2) LA transmits application to the State Economic Planning Unit (State EPU) or the

•FT Special Committee for Land Acquisition for land in FT.

•3)

Requirements (s.3(3)):

•a) project proposal•b) lay out and land acquisition plan•c) preliminary Government valuation

report•d) fee and deposit required under the LA

Rules

How will the State EPU/FT Special Committee decide?

•See s.3A:•(a) public interest,•(b) capacity & capability of applicant to

carry out the project,•(c) feasibility of the project,•(d) the development approval granted to

the applicant.

Possibility for Land Owner to Participate in Project

• s.3A(2) allows the State EPU/ FT Committee to consider the participation of the land owner in the project where development proposal has been obtained and the project is for public utility.

• S.3A (3) and (4) allows the applicant to negotiate terms with the land owner on the type of arrangement for participation.

• If negotiations are successful, no land acquisition.• If fails, land acquisition may proceed.• Application then transmitted to the State

Authority with State EPU/FT Committee recomendations.

Special Committee for Land Acquisition (s. 3C)

•Jawatankuasa Khas Pengambilan Tanah (‘JKPT’).

Magnasari Sdn. Bhd. v Kerajaan N. Perak & Ors. [2013] 7 MLJ 557

Special Committee for Land Acquisition•See members of this committee listed in

s.3C.•Application for land acquisition will be

considered by this committee (s.3D)before it is approved by the State Authority under s.3E.

Withdrawal of Application for LA•An applicant for land acquisition under

s.3(2) may withdraw its application before the Declaration of Intended Acquisition is gazetted under s.8 LAA 1960 by giving notice in writing to the LA.

•Persons interested may be compensated for any inconvenience caused by the initial application of the applicant from the deposit put in by the applicant earlier.