PEMBANGUNAN IKRAM IKHLAS SDN BHD v Pentadbir Tanah Daerah Gombak

Case Significance

A land-reference decision increasing acquisition compensation on land value and development costs, while holding that a higher plot ratio in a gazetted transit-oriented-development plan does not by itself dictate valuation where the owner's own planning application proposed a lower ratio obtained after the valuation date.

This High Court decision at Shah Alam concerns a land reference in which the applicant, a property developer holding land near the Gombak LRT station under a joint-venture and power of attorney, objected to the compensation awarded by the Land Administrator for the compulsory acquisition of its land. The award had fixed the land value at RM2,280 per square metre together with development costs of RM651,171, and the applicant objected on the ground, among others, that the valuation had failed to reflect a plot ratio of 1:8. The reference was heard with the assistance of a government assessor and a private assessor. Having considered the parties' submissions and the assessors' reports, the Court allowed the applicant's objection as to land value and part of its objection as to development costs. It increased the land value from RM2,280 to RM3,400 per square metre and ordered the Land Administrator to pay additional compensation of RM10,764,320 for land value, together with a further RM2,194,835.15 for development costs. On the plot-ratio argument, however, the Court declined to value the land on the basis of a 1:8 ratio. It accepted the private assessor's point that the applicant's own planning-permission application drawing of September 2020 proposed a plot ratio of only 1:5, and that the planning permission had in any event been obtained only after the acquisition and valuation dates, so that it could not serve as an adjustment factor. Although the gazetted local plan placed the land within a transit-oriented development area carrying a 1:8 plot ratio, the Court held that this did not require the land to be valued using that ratio. The decision illustrates how a land-reference court, sitting with lay assessors, weighs comparable-sales evidence and proposed development parameters, accepting an upward adjustment to reflect the true market value of the land while declining to import a development intensity that was neither reflected in the owner's own planning application nor approved by the valuation date. Dissatisfied with the outcome, the applicant filed a notice of appeal.