Land Acquisition in Malaysia: The Must Know & The Must Not

Land Acquisition –
The Must Know & The Must Not
A general overview on the processes, and means of opposing, a land
acquisition.
By Alliff Benjamin Suhaimi

Land Acquisition – A brief introduction
• Article 13 of the Federal Constitution protects one’s right to
property.
• However, this is not an absolute right.
• Section 3 of the Land Acquisition 1960 (“LAA”) allows the State
Authority to acquire any private land which is needed for:-
• Any public purpose;
• On behalf of any person or corporation for any purpose if, in the
opinion of the State Authority, it is “beneficial to the economic
development of Malaysia”
• For the purposes of mining, residential, agricultural, commercial,
industrial, and/or recreational purposes.

GENERAL PROCESS OF A LAND
ACQUISITION

Procedures for Acquisition
Notification to the Public
Entry and Survey
Marking of Land and Notation on Land Register
Enquiry by Land Administrator/ Summary Enquiry
Award by Land Administrator

Notification to Public
• The State Authority must publish its decision to acquire (Form A)
in the Government Gazette. (Section 4 of the LAA)
• The Land Administrator shall give public notice of the notification
of the decision to acquire the land, by:-
• Publishing the notification at either the District Land Office, on
public notice boards where the land is situated; or
• Publishing the notification near the land specified in that
notification.
• If the land is acquired for a public purpose, the State Authority
shall publish a declaration (Form D) stating as such in the
Government Gazette. (Section 8 of the LAA)

Persons interested
• The Section 2 of the LAA defines “persons interested” to
include every person claiming in interest in compensation
to be made on account of the acquisition of land under the
LAA. This does not include tenants at will.
• Examples of persons interested would include:-
• Registered proprietors;
• Occupiers; and a
• Any persons with a registered interest in the land.
• Only “persons interested” under the LAA are allowed to
raise an objection as to the Land Administrator’s Award,
and required to receive notification of any land acquisition.

Entry and Survey
• The State Director of Lands and Mines may authorize any of its officer or
person to enter the land by way Form B. Form B shall also specify the works
that those authorised officer can do. (Section 5 of the LAA)
• These works include: Surveying the land, marking levels and boundaries, as
well as all other acts necessary to ascertain whether the land is adapted for
the purposes for which it is to be acquired.
• The persons authorised must produce his letter of authority (Form B) and a
copy of Form A if requested, before they can enter into the land.
• There will be no forced entry on the land. However, persons authorised may
enter the land upon giving the occupier three (3) days notice.
• Where any persons authorised causes damage to the land, he shall as soon as
possible compensate the occupier for all such damage. (Section 6 of the LAA)

Enquiry by Land Administrator
• The Land Administrator then holds an Enquiry for the
hearing of claims to compensation for all interests in the
acquired land. (Section 10 of the LAA)
• It is at this stage that persons interested are able to raise
any objections and/or issues in relation to the acquisition.
• The parties can also have their lawyers present at an
Enquiry.
• The Land Administrator shall not hold the Enquiry earlier
than twenty-one (21) days after the date of publication of
the notice.

• Requirements:-
• Pursuant to Section 10 of the LAA, the Land Administrator shall
give public notice (Form E) of the Enquiry by the following
means:-
• Notification in the Gazette; and/or
• Copies of said notice being posted at the District Land Office, on
public notice boards in the relevant mukim or township; and
• In other such places on or near lands specified in the document as
the Land Administrator sees fit.
• Section 52 of the LAA – relates to manner of public notification.

• The Form E has to be served upon:-
• The occupier;
• The registered proprietor (where he is not the occupier);
• Any persons having a registered interest in the land; and
• Any person whom the Land Administrator knows or has reason to believe
to be interested therein. (Section 11 of the LAA)
• Under Section 53 of the LAA, service can be affected via:-
• Personal service;
• Personal service to any adult member of the interested person’s family
residing with him
OR
• Upon the outer door of the building in which the person ordinarily dwells
or carries a business; and
• On any public notice board in the town, village or mukim in which the
person to be served usually resides.

• Under Section 13 of the LAA, the procedure of an Enquiry
is as follows:-
• On the day of the Enquiry, the Land Administrator makes a
full enquiry into the value of all acquired land.
• This full enquiry includes inquiries into the respective
interests of persons interested, and any objections raised, if
any.
• Sections 12 and 13 of the LAA;
• The Federal Court decision of Semenyih Jaya Sdn Bhd v
Pentadbir Tanah Daerah Hulu Langat and anor case [2017]
3 MLJ 561.

• For the purposes of the Enquiry, the Land Administrator
has all the powers of a Court – i.e.:-
• The Land Administrator is able to summon and examine
witnesses;
• The Land Administrator is able to compel the production and
delivery of written statements; and
• The administration of oaths and affirmations can be
considered by the Land Administrator during the Enquiry.
• The Land Administrator is also able to hear the evidence
provided by a government valuer and/or the valuer of an
objecting party.

• Considerations:-
• The Land Administrator shall request from the State Director
of Town and Country Planning information on the following:-
• Whether the land is within a local planning authority area;
• Whether the scheduled land is subject to any development plan
under the law applicable to it relating to town and country
planning; and
• If there is a developmental plan, the land use stated in said plan.
• Section 9A of the LAA.

• Considerations (ctd): The Land Administrator
also has to consider the following matters set
out in the 1st Schedule of LAA:-
• The market value of the land;
• Any increase which shall be deducted from the total
compensation, in the value of the other land of the person
interested likely to accrue from the use to which the land
acquired will be put;
• The damage, if any, sustained or likely to be sustained by the
persons interested at the time of the Land Administrator’s
taking possession of the land by reason of severing such land
from his other land;

• The damage, if any, sustained or likely to be
sustained by the person interested at the time of
taking possession of the land due to acquisition
injurious;
• If, in consequence of the acquisition, he is or
will be compelled to change his residence or
place of business, the reasonable expenses
incidental to such change; and
• where only part of the land is to be acquired, any
undertaking by the relevant State/ Govt body for the
construction or erection of roads, drains, walls,
fences or other facilities benefiting any part of
the land left unacquired, provided that the
undertaking is clear and enforceable

• The Land Administrator shall not consider the
following matters set out in the 1st Schedule of
LAA:-
• The degree of urgency which has led to the acquisition;
• Any disinclination of the person interested to part with the land acquired;
• Any damage sustained by the person interested which, if caused by a private
person, would not be a good cause of action;
• Any depreciation in the value of the land acquired likely to result from the
use to which it will be put when acquired;
• Any increase to the value of the land acquired likely to accrue from the use to
which it will be put when acquired;
• Any outlay on additions or improvements to the land acquired, which was
incurred after the date of the publication of the declaration, unless such
additions or improvements were necessary for the maintenance of any
building and unless, in the case of agricultural land, it is any money which has
been expended for the continuing cultivation of crops on it.

Award by Land Administrator
• At the conclusion of the Enquiry, the Land Administrator shall
prepare a written award under his hand, which will be in the
form of Form G. (Section 14 of the LAA)
• In practice, an oral decision is normally given on the day of the
Enquiry itself. This is then followed up with a the issuance of a
written award in Form G.
• The Land Administrator will make a separate award for each
person interested established during the Enquiry.
• Every award shall be filed in the office of the Land Administrator
and shall be final and conclusive, regardless of whether the
persons interested attended the Enquiry.
• The service of this award shall be in Form H. (Section 16 of the
LAA)

RECENT DEVELOPMENTS & NOTABLE
CASES – CONSIDERATIONS AT AN
ENQUIRY

Reasonable Expenses
• In Exxonmobil Malaysia Sdn Bhd v Pentadbir Tanah
Daerah Petaling [2015] MLJU 0314, the Court of Appeal
held that the phrase “reasonable expenses”, must be
expenses incidental to the change in residence or place of
business.
• In that case, the issue was whether a loss of income derived
from the sale of petrol and diesel from the Appellant’s
petrol station was a reasonable expense.
• It was held that this loss of income was not incidental to
the change in residence or place of business, as hence not
claimable under the LAA.

Potential Value of Land
• In Bukit Rajah Rubber Co Ltd v Collector of Land
Revenue, Klang [1968] 1 MLJ 176b, the Court held that the
property must be valued not only with reference to its
condition at the time of acquisition but also its potential
development value.
• Ordinarily the objective assessment would be the price that
an owner willing and not obliged to sell might reasonably
expect to obtain from a willing purchaser.
• See also the decision of Pentadbir Tanah Daerah Kota
Tinggi v Siti Zakiyah bte Sh Abu Bakar & Ors [2006] 2
MLJ 426.

Illegal Conduct not a Basis for
Compensation
• In the decision of Mohd Shah bin Daud v Pentadbir Tanah
Dan Jajahan Kota Bharu [2016] MLJU 240, the Court of
Appeal held that illegal and/or unlawful acts cannot be a
basis for compensation.
• In that case, the Court did not allow the appellant’s other
claims for costs of filling and leveling the land because they
arose from unlawfulness. The local council had admitted to
said acts being unlawful acts of trespass.
• In addition, the costs incurred were also incurred by the
local authority, and not the appellant himself. Hence, the
costs were not claimable.

CONTESTING AN AWARD OF
COMPENSATION

Land Reference Proceedings
• Section 37 of the LAA allows a person interested to object to an
Award of compensation given by the Land Administrator.
• Requirements:-
• Persons interested made a claim to the Land Administrator in due time
(Section 38 of the LAA);
• If the person interested was present or represented at the Hearing of Award:
Six (6) weeks from the date of the Land Administrator’s Award.
• In any other case: six (6) weeks from Form H (Notice of Award and Offer of
Compensation), or six (6) months from Form G, whichever expires first.
• Persons interested have not accepted the Land Administrator’s award; or
• Persons interested have accepted payment of the amount under protest as
to its sufficiency.

• Matters that can be challenged during a Land Reference Proceeding:-
• Measurement of land
• Amount of compensation payable
• Persons to whom compensation is payable
• Apportionment of compensation
• Note: The compensation awarded must be above RM3,000.00 in value.
• How to initiate Land Reference Proceedings:-
• By written application in Form N to the Land Administrator.
• The Applicant must state the grounds on which the objection is taken in the
Form N.
• The Land Administrator shall require a deposit of RM3,000.00 or 10% of the
amount claimed from the applicant, whichever is less (Section 39 of the LAA).
• In the event the deposit is not paid within thirty (30) days of its being required, the
application for reference shall be deemed to have been withdrawn and the Land
Administrator’s Award shall thereupon be final.

• The Land Administrator has six (6) months to refer the
matter to the Court by reference once an application is
made (Section 38 of the LAA).
• If the Land Administrator does not refer the matter:-
• The person interested may apply directly to Court to obtain
directions that the Land Administrator do as such or appear
before Court to tender evidence.

• Process of Land Reference Proceedings:-
• The Court shall consist of a Judge sitting alone (Section 40A of the LAA).
• Where the objection before the Court is in regard to the amount of
compensation, the Court shall appoint two (2) assessors, these being a
Govt assessor and a private assessor) to aide the Judge in determining
the amount of compensation to be awarded.
• Note: While preciously Section 40D of the LAA mandates that the
amount of compensation is to be decided upon by the assessors, the
Federal Court has declared that these specific sub-provisions of Section
40D are unconstitutional.
• Therefore, the Judge shall arrive at his own decision (“Land Reference
Order”) on the amount of compensation to awarded after having taking
into consideration the opinions of the two (2) assessors.

Appealing Land Reference
Order
• Section 49(1) of the LAA allows for a person interested to
appeal a Land Reference Order to the Court of Appeal and
Federal Court on the following issues:-
• The measurement of land acquired;
• Persons to whom compensation is payable; and
• The apportionment of compensation.
• Any Land Reference Order made concerning the quantum
of compensation made by the Judge is final and not-
appellable (Section 49(3) of the LAA).

RECENT DEVELOPMENTS – APPEALING
A LAND REFERENCE ORDER

Section 40D of the LAA
Section 40D of the LAA :
(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.
(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) Any decision made under this section is final and there shall
be no further appeal to a higher Court on the matter

Unconstitutionality of Section 40D (1) & (2)
• The recent apex court decision of Semenyih Jaya Sdn Bhd v
Pentadbir Tanah Daerah Hulu Langat [2017] 3 MLJ 561 has
held that Section 40D(1) and (2) is unconstitutional.
• The Federal Court in Semenyih Jaya held that Section 40D(1)
and (2) infringed Article 121 of the Federal Constitution, as it
takes away the judicial power vested in a judge in the High Court
to make a determination.
• In essence, the decision states that the opinion of the assessors
should not be binding on the judge in question.
• As such, the Federal Court has called for these provisions to be
struck down.

Constitutionalityof Section49(3) of the LAA
• However, it is noted that the Federal Court has held that
Section 49(3) of the LAA is not unconstitutional and within
the rights of the Court as per the Courts of Judicature Act
1964 in the following cases:-
• Semenyih Jaya Sdn Bhd v Pentadbir Tanah Daerah Hulu
Langat and anor case [2017] 3 MLJ 561; and
• Ng Chin Chai v Pentadbir Tanah Segamat and ors appeals
[2016] MLJU 1702.
• This effectively means that persons interested are still
prevented from appealing any decision as to the value of
compensation of land awarded in a Land Reference
Proceeding.

CHALLENGING AN ACQUISITION -
JUDICIAL REVIEW

Challenging a Land Acquisition
• Persons interested can also contest the actual acquisition of
the land in itself.
• This is done by way of a judicial review in the civil courts.
• In general, a judicial review application can be initiated if
the Land Administrator and/or the State Authority fails to
comply with the requirements of the LAA.

Grounds for Challenging an
Acquisition
• The general grounds for challenging a land acquisition has
been enunciated by the Court of Appeal in the decision of
Ahmad Saman v Kerajaan Negeri Kedah [2004] 1 CLJ 21,
as follows:-
• When the acquiring authority (Land Administrator or State
Authority) has misconstrued its statutory powers;
• Where the purpose of the land acquisition does not come within
Section 3;
• Where it can be shown that the acquiring authority has acted in
bad faith; or
• Where the acquiring authority has acted contrary to the law.

Compliance with Statutory
Requirements
• The case of United Allied Empire Sdn Bhd v Pengarah Tanah
dan Galian Selangor & Ors [2018] 1 MLJ 661 (COA) has held
that the compliance of the statutory requirements of the LAA are
mandatory in a compulsory acquisition of land.
• The State Authority failed to issue a Form A as required under
Section 4 of the LAA, thus resulting in no public notice of the
acquisition said land. The Land Administrator also failed to
endorse the memorial on Form K, pursuant to Sections 23 and 66
of the LAA.
• The Court of Appeal held the non-compliance of the statutory
provisions of the LAA was fatal to the land acquisition. The land
owner was awarded a declaration and certiorari (order) to quash
said acquisition.

Compliance with Statutory
Requirements
• These impact of procedural non-compliance was also discussed in
the decision of Ee Chong Pang & Ors v The Land Adminsitrator of
The District of Alor Gajah & Anor [2013] 3 CLJ 649 to result in a
said acquisition to be unconstitutional.
• In this case, the Court of Appeal emphasize that the LAA is a
legislation which empowers State Authority to deprive a person of
his property.
• Therefore, the provisions of the LAA must be given a strict interpretation
in favour of the person deprived of his property, in order to give meaning
to the constitutional protection under Article 13(1) of the Federal
Constitution.
• In that case, Form A was never published by the State Authority and
hence, the land acquisition exercise not being carried out according to the
law was contrary to Article 13(1) of the Federal Constitution

Time Period To Challenge
• There has also been a recent clarification on the time
requirement to file a Judicial Review under Order 53 Rule 3(6) of
the Rules of Court 2012.
• Order 53 Rule 3(6) states that a judicial review application is to
be filed three (3) months from the date the grounds of the
application first arose or when the decision was first
communicated to the respondent.
• The Federal Court decision of Kijal Resorts Sdn Bhd v Pentadbir
Tanah Kemaman & Anor [2016] 1 MLJ 544 has clarified that
time to file a judicial review begins when the applicant has actual
knowledge of a land acquisition decision that time begins to run –
i.e. the delivery of Form E.

Purpose of Acquisition
• In the recent decision of Selangor State Government & Anor v
Kuala Lumpur Kepong Sdn Bhd [2017] 9 CLJ 31, the purpose of
acquisition was for the public purpose of expanding the sanitary
landfill.
• However, the Appellant had not met and complied with the
necessary requirements and qualifications under the
Environment Quality Act 1974 for landfill use.
• It was held that any compliance with requirements (ie. to actuate
the purpose) under other statutes is irrelevant at the Acquisition
stage.
• Nor is the consideration that the subject land could have been
leased instead of compulsorily acquiring it relevant.

Thank You
Have questions?
Contact us at tp@thomasphilip.com.my
T: +603-62015678 | F: +603-62035678 | E: tp@thomasphilip.com.my
5-1 Jalan 22A/70A, Wisma CKL, Desa Sri Hartamas, 50480 Kuala Lumpur, Malaysia
www.thomasphilip.com.my

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