By Khairie Hisyam
Decades after its acquisition, a unanimous Court ruling found that a large piece of land in Kuala Lumpur, occupied by various government agencies, had been illegally acquired by the then government of British Malaya in 1956.
The High Court decision ruled that the acquisition of 263.272 acres of land owned by private firm Semantan Estates (1952) Sdn Bhd was not “lawfully” executed and that the government has been “a trespasser” ever since. Made on 29 December 2009, the High Court ruling was subsequently upheld by the Court of Appeal on 18 May 2012. The Federal Court then refused leave to appeal to the government on 21 November 2012, effectively making the High Court ruling final and binding.
Public records show that Semantan Estates has only two directors, 76 and 85 years old respectively. At press time Semantan Estates was in the process of being liquidated and had no assets or liabilities.
Notably, one of Semantan Estates’ directors is Ng Tian Ming, who is also listed as a director of property developer Eng Lian Enterprise Sdn Bhd which developed the Bangsar Baru neighbourhood, widely said to be heart of Bangsar. Eng Lian Enterprise is the second largest shareholder in main market-listed Toyo Ink Group Bhd with 3,891,410 shares or 9.09 percent, according to Toyo Ink’s annual report for 2012. Ng appears to be the founder of Eng Lian Enterprise as the date of his directorship appointment coincides with the registration date of Eng Lian Enterprise.
Timeline of events
According to the High Court judgment, on 5 November 1956 Semantan Estates received an acquisition notice dated 31 October 1956 stating that the government needed 225 acres for the purpose of creating a diplomatic enclave. The letter also summoned all interested parties to state the nature of their respective interests in the land and the amount and particulars of their claims to compensation for such interests and their objections, if any, to the measurements made.
During the hearing which was held on 20 November 1956, it was revealed that the government required 250 acres. Semantan Estates objected and requested for the final plan for the land. In a subsequent hearing seven days later, Semantan Estates made a claim for RM13,000 per acre in compensation but only received an award of RM5,282 per acre which totalled RM1.32 million.
On 22 December 1956, Semantan Estates wrote to the government saying that it accepted the award “under protest as to the sufficiency of the amount” and that it intends to seek legal redress. Semantan Estates wrote a subsequent letter dated 10 January 1957 to the government stating that it did not accept the award and required the matter to be referred to court.
In February 1958, the government gave notice that more land from Semantan Estates was needed, for extensions to the Diplomatic Enclave, but there was no official hearing, nor was there any award of compensation made under the Enactment. In May 1958, the government wrote to Semantan Estate admitting that the compensation award in 1956 was “invalid” and that the “the enquiry of 27 November 1956 as a whole was a nullity”. Another enquiry for 202-odd acres was scheduled for June of 1958 but it was later postponed and “finally abandoned”.
Semantan Estates filed the civil suit for trespass in 1989, and it came up for trial in 2009.
Compensation repercussions and market value
One major effect of the court decision will be the cost to the government in compensating the original land owners. The Court of Appeal made no ruling on damages and it is unclear whether negotiations are underway between the government and Semantan Estates. The 263.3 acres of land translates into about 11.4 million sq ft.
Messrs Chooi and Co, the legal firm acting on behalf of the plaintiff, declined to comment about whether there are any ongoing negotiations for damages or on any expected quantum of compensation.
A survey by KiniBiz on transacted prices in the area revealed that one transaction in gated-and-guarded residential estate Hartamas Heights broke the RM400 psf mark in July 2011. Hartamas Heights is separated from the Federal Territories Mosque by Sunrise Bhd’s Solaris 3 mixed development which includes shop offices, office towers and a shopping mall, said to have been a RM1.3 billion development project.
Looking across Jalan Duta, the neighbouring Bukit Tunku (formerly known as Kenny Hills) area saw a property transaction reaching RM560 psf in January 2011. Slightly southwards from Kenny Hills, the Taman Duta area saw a residential property transaction in February 2011 reaching RM469 psf.
Where is the land?
Source: Director of National Mapping
The exact area of land involved in this case is unclear. As the land title was prepared in the 1950s before Malaya’s independence in 1957, it would presumably have changed today.
According to the High Court judgment, the land involved was part of the land held originally under the title CT No. 12530 Lot 4647 which encompassed an area of about 700 acres.
Ira Biswas, Partner of Messrs Chooi and Company who represented Semantan Estate in court, has confirmed the actual area involved is not in dispute and is the 263.272 acres as referred to in the High Court judgment.
Earlier this year, Singapore-based The Straits Times reported that the area “would almost certainly include the Jalan Duta Government Complex which includes the Internal Revenue Board (and) the Ministry of International Trade and Industry”.
A comparison between the area’s present-day map and a map of Kuala Lumpur and Petaling Jaya published by the Director of National Mapping, Malaysia in 1991 shows that the government complex’s location corresponds with the location of a plot of land called Ladang Batu. Part of what was then the Ladang Batu estate now houses several residential and commercial developments by private developers.
Source: Ho Chin Soon Research
However, a party privy to the court proceedings told KiniBiz that according to the map area submitted to the High Court, there are no private developments on the land involved.
Evolution of land acquisition law
In the 1950s, the land acquisition law was enacted in the Land Acquisition Enactment (Cap 140) whereas today it is enacted in the Land Acquisition Act 1960.
“I do not think there are any fundamental differences in the ideology of the acquisition laws then and now,” commented Ira. “Whilst the Government may compulsorily acquire land under the law, the procedures prescribed must be strictly adhered to. The current legislation additionally permits compulsory acquisition of land if needed by a person or corporation for any purpose which in the opinion of the State Authority is beneficial to the economic development of Malaysia or to the public generally or any class thereof.”
Malaysian land acquisition law operates under the concept of eminent domain. This concept empowers the state to acquire private property even if the owner does not consent to it. The federal and state governments in Malaysia can exercise this power to any piece of land for any bona fide public purpose with fair compensation paid to the owner of the land.
Therefore, the Malaysian law on land acquisition is primarily concerned with the governing rules on compulsory land acquisition procedure as well as compensating the dispossessed land owner. As the Federal Constitution enshrines the right to property whereby no person shall be deprived of property save in accordance with law, this ruling upholds that right in recognising that there cannot be any compulsory acquisition of property without adequate compensation.
This would mean that any award made by the Land Administrator in the acquisition of land could still be referred to the Courts for a final adjudication if the original land owner does not feel the award suffices.
“But other than by acquisition, the government actually has other options to secure land for development, for instance via joint venture or direct purchase through negotiation,” said Associate Professor Dr Sr Anuar Alias from the Department of Estate Management, Faculty of Built Environment, University of Malaya who was quoted by New Straits Times in November 2012.
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