Article 13 of the Malaysian Federal Constitution guarantees the fundamental right to acquire, hold and enjoy property. However, it is not an absolute right since ownership of property can be subjected to compulsory acquisition by the State in accordance with the law. Be that as it may, the Constitution does still safeguard the landowner’s right to receive adequate compensation as a result of his or her land being acquired as specifically provided under Article 13(2). [1]
In cases where the total amount of award exceeds RM30,000.00, the Land Acquisition Act 1960 (Revised 1992) (“LAA”) provides the mechanism and procedures for interested persons, typically landowners, to lodge an objection via filing of Form N (or ‘Borang N’ in Malay) within the prescribed timeline to protest the award made by the Land Administrator via a land reference (or ‘perujukan tanah’ in Malay) to the High Court.
The Form N itself provides the following selection of grounds for which interested persons may rely upon in their objection against the award:-
- i) the measurement of the land;
- ii) the amount of the compensation;
- iii) the persons to whom it is payable; and/or
- iv) the apportionment of the compensation.
Strictly speaking, the High Court in land reference proceedings will not entertain any ground that is not specifically stated or grounded by the interested persons in their Form N.
At the High Court, parties are required to adduce expert evidence and/or valuation reports via affidavits to address the issues as raised in Form N.
The hearing will be heard by a High Court Judge. However, when the objection in question is in relation to the amount or quantum of compensation, the High Court will have to appoint 2 assessors to assist the Judge during the hearing to determine the objection and thereafter to arrive at a fair and reasonable amount of compensation.
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Determination of the Amount of Compensation
In the past, a High Court Judge is bound by the decision of the 2 assessors in regards to the issue of compensation as this was provided for in the LAA by virtue of Section 40D[2]. In short, the Judge had little to no say but was compelled to accept the value determined by the 2 assessors during the hearing, or elect to concur with one of the decisions of the assessors should there be a difference in opinion amongst the assessors.
A dramatic turn of events however took place in April 2017 when the Federal Court in the case of Semenyih Jaya Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat & Another Case [2017] 5 CLJ 526 (“Semenyih Jaya”) made a prospective overruling[3] that Section 40D of LAA is unconstitutional as the said section took away the function and judicial power vested in the High Court Judge to make a determination.
Post Semenyih Jaya, a High Court Judge now enjoys full liberty to decide the amount of compensation and can depart from the findings of the 2 assessors should the Judge disagree with the opinions of the 2 assessors.
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Rights to defend an Award accepted without protest
It is not the end of the story for some landowners who had accepted the Land Administrator’s awards without any protest.
In certain cases, the paymaster (for whom the land is compulsorily acquired on behalf by the authority under the LAA) who is deemed to be an interested person by definition under the LAA would lodge objection via filing of Form N to the Land Administrator to argue that the award is above the acceptable price.
In principle, the Land Administrator who shall be named as the Respondent in such a land reference proceeding at the High Court will act as the defender for the landowner to defend the award granted to landowner.
To much delight, a fairly recent Federal Court authority of Spicon Products Sdn Bhd v. Tenaga Nasional Bhd & Anor [2022] 4 CLJ 195 (“Spicon Products”) has opened the gateway in light of the spirit of the Federal Constitution by allowing a landowner who has, without any objection, accepted an award of compensation made by the Land Administrator, to nevertheless be entitled to intervene and participate in the land reference proceedings although the said proceedings were initiated by another interested party, namely the ‘paymaster’ who had objected to that award of the Land Administrator.
The Federal Court in Spicon Products had also highlighted that the landowner’s participation in the land reference proceeding is in fact consonant with the rules of natural justice and will assist the court in its determination of the objection lodged.
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[1] 13(2) provides that ‘no law shall provide for the compulsory acquisition or use of property without adequate compensation.’
[2] 40D. (1) – In a case before the Court as to the amount of compensation or as to the amount of any of its items the amount of compensation to be awarded shall be the amount decided upon by the two assessors.
40D. (2) – Where the assessors have each arrived at a decision which differs from each other then the Judge, having regard to the opinion of each assessor, shall elect to concur with the decision of one of the assessors and the amount of compensation to be awarded shall be the amount decided upon by that assessor.
[3] This means that all cases determined before this Judgment in April 2017 will not be disturbed, and that this decision will only bind pending cases.
This article is intended to be informative and not intended to be nor should be relied upon as a substitute for legal or any other professional advice.
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About the Author
Chau Yen Shen
Associate
Halim Hong & Quek
yschau@hhq.com.my
