Land Acquisition Case Summary PDF

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University of Technology Mara, 40450 Shah Alam, Selangor Darul Ehsan.Title of the case: TENGAH ESTATES SDN BHD v PENTADBIR TANAH DAERAH KLANG (1996)Name Muhammad Amirul Amin bin Sha’ari Matric number 2020965969 Subject Land Acquisition (RES559) Lecturer’s nameDr. Ahmad Shazrin bin Mohamed AzmiSubmis...

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University of Technology Mara, 40450 Shah Alam, Selangor Darul Ehsan.

Title of the case:

TENGAH ESTATES SDN BHD v PENTADBIR TANAH DAERAH KLANG (1996)

Name Matric number Subject Lecturer’s name

Muhammad Amirul Amin bin Sha’ari 2020965969 Land Acquisition (RES559) Dr. Ahmad Shazrin bin Mohamed Azmi

Submission date: 30th January 2022 (Sunday)

Table of Contents (1) Issues ......................................................................................................................................... 1 (2) Facts .......................................................................................................................................... 1 (a) Subject property ..................................................................................................................... 1 (b) Argument ............................................................................................................................... 2 (c) Comparable properties ........................................................................................................... 2 (i) Lot 111, Mukim of Sungai Buloh ....................................................................................... 2 (ii) Lot 89 & Lot 370, 371 and 372, Mukim of Sungai Buloh. ............................................... 3 (iv) Lot 1168, Mukim of Damansara ....................................................................................... 3 (3) Decision made by judge .......................................................................................................... 4 (4) Reference .................................................................................................................................. 5

Name of the case: Tengah Estate Sdn. Bhd v. Pentadbir Tanah Daerah Klang (1996)

(1) Issues The issues involving the land acquisition of Lot of 1762, Mukim of Damansara, that are located in Petaling District in the state of Selangor. The problems started when there was an argument between the owner of the acquired land which is Tengah Estate Sdn. Bhd and the land administrator about the compensation fees. The complaint was giving their justification that the compensation fees was less than the actual value of the land, also the fees should include the surveyor’s fees. Consequently, they questioned the credibility of government valuer whether the government servant involved in valuation process of subject property were considering the material date, in other term is the date of sell and buy transaction of the comparable properties. In this case, there are one (1) subject property and four (4) comparable properties involved.

(2) Facts This civil legal case court proceedings were happened on 26 March 1996 and takes place in High Court of Shah Alam. The objector of this case is Tengah Estate Sdn Bhd while Klang District Land Administrator (Pentadbir Tanah Daerah Klang) acts as respondent. KC Tan from the legal firm of Syed Alwi, Ng & Teoh was appointed as the lawyer for the objector meanwhile Zaharah bt Ibrahim from State Legal Advisor acts as counsel for the respondent. The judge involved is KC Vohrah J. Likewise, Tuan Haji Yahaya and Encik Julian Xavier were the assessors that help the judge to give the best judgement. The case was referred according to Land Acquisition Act 1960.

(a) Subject property As mentioned above, subject property involved in land acquisition process in this case is Lot 1762 that were in Mukim of Damansara, Petaling, Selangor. The land was acquired by the State Government during that time for the purpose of highway construction. The highway now known as The New Klang Valley Expressway. The land’s area size is 29.428 acres. Moreover, the location of the subject property is quite strategic, in which it located approximately 16 km from Kuala Lumpur, 5 km from Subang International Airport also 2 km from the north of the Federal Highway. Also, the location of subject lot is outside of Petaling Municipality. However, the shape of the lot is not asymmetrical. The land use of this lot was agriculture initially, so it was surrounded with the 2 years old farm of oil palm trees and nearby ex-mining land within the material date of valuation. During the valuation process, valuer also taking into account about the housing estates 1|Page

that located beside the lot, such as Taman Mayang and Taman Rasa Sayang, but both housing area were located within Petaling Municipality. The appointed public valuer did the valuation assessment on the material date which were on 8 October 1981 by using comparison method. The comparison approach of property valuation is a way of determining the value of a property by comparing it to the value of previously sold comparable assets. In professional practise, this will entail looking at similar properties in the region and basing a valuation conclusion on their sales prices. Based on the opinion made by art and science of valuation after considering the differences between subject property and comparable properties, the valuer give justification that the subject property value during that time was RM 80,000 per acre. As a result, state government need to pay compensation fees as much as RM 2,354, 240 to the landowner.

(b) Argument On the other hand, the landowner, now become the objector, claimed that the compensation fees were not the actual value of the acquired land. They stated that the compensation fees amount should be RM 140,000 per acre excluded the surveyor’s fees. They give justification that the valuer is not considering the availability of electric and water supply on the subject property. Besides, the land is close to residential areas. Also, the valuer gives negative adjustment to the subject property in the term of location factor when it was compared to Lot 111 (will explained later). Likewise, he did not consider giving positive adjustment for the subject property for the time and road frontage factors for the same comparable lot. Let us see the comparable properties that were used in valuation assessment of subject property.

(c) Comparable properties (i) Lot 111, Mukim of Sungai Buloh The sales data shown that it was purchased for RM163,318 per acre in 1979, approximately one year and two months before the significant date. Despite being outside the Petaling Municipality area, it is immediately next to the Petaling Jaya boundary and nearby to a residential area, Taman Megah, as opposed to the subject lot, which is 2.5km to the west. It is almost same in area to the subject lot, but it is of regular shape, as opposed to the subject property, which is irregular in shape and inconvenient. Unlike the subject property, which was an agricultural estate under oil palm, the lot had instant development potential (Taman Mayang Jaya). As Lot 111 is 2|Page

located within Petaling Municipality area unlike subject property, and nearer to Kuala Lumpur, so the attorney from the side objector acknowledges that there will be downward adjustment from the transaction sales value of Lot 111, which means the subject property value will be lower compared to Lot 111. According to government valuer, the downward adjustment for the market value of subject property that were made was 60% not only based on differences of characteristics between Lot 111 and subject property, but also with the similarities between Lot 111 and the other sets of comparable properties. (ii) Lot 89 & Lot 370, 371 and 372, Mukim of Sungai Buloh. Lot 89 transaction value was estimated at RM 130, 719 per acre while Lot 370, 371 and 372 at RM 42,000 per acre. Both set Lots 370- 372 and Lot 89 data transaction were in 1979. Nevertheless, the difference in value is because Lot 89 are located within the area of Petaling Municipality area contrast with Lots 370- 372. Lot 89 really had great potential for future development at that time. Moreover, this lot size area was just as same as subject property, but their shape is symmetrical. Meanwhile, the initial land use of Lots 370-372 is agriculture which was just same as subject lot and the combination size of these three (3) lots also similar to size area of the subject property. (iii) Lot 108, 263, 269, and 369, Mukim of Sungai Buloh. This set of comparable properties were transacted in about RM 55,000 per acre as the value decrease as it located far away from Petaling Jaya. The size of these set of lots was similar to the size area of subject property but they were symmetrical in size. (iv) Lot 1168, Mukim of Damansara Counsel for the objector relied on a comparable Site 1168, Mukim of Damansara of 12.915 acres purchased on 8 October 1981 for the same objective as the subject lot, for the construction of the New Klang Valley Expressway. It was purchased for RM130,000 per acre. It's roughly the same size as the subject property, however it's right next to a housing area lot. However, as the Legal Adviser pointed out, the collector in making the award most likely took since the area acquired is near to Taman Mayang and near to the border of Petaling Jaya. Most of the Lot 1168 extends westward from its border with Taman Mayang.

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(3) Decision made by judge Both assessors Tuan Haji Yahaya and Encik Julian Xavier give the same opinion which was that the claims that were made by the landowner also known as the objector should be rejected. This is because the valuer that did the valuation assessment for the subject property had done his job fairly by using his knowledge and experiences in valuation field, also the compensation fees that were given by State Government to the objector is more than enough and considered generous as the actual market value of the acquired land might be less than the compensation fees. The judge was agreed with the point of view that were made by both assesors. At the same time, the claim for surveyor’ fees also declined. According to the justification that were made by Hashim Yeop A Sani SCJ in the Supreme Court decision of Harrisons and Crosfields (M) Sdn Bhd v Pemungut Hasil Tanah, Wilayah Persekutuan [1988] 2 MLJ 299, there is nothing in the Act or the Schedule to support making an award that includes the surveyor's costs.

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(5) References TENGAH ESTATES SDN BHD v PENTADBIR TANAH DAERAH KLANG, 15-23-89 (HIGH COURT, SHAH ALAM Mac 26, 1996).

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