KP ASLI SDN. BHD. v Pentadbir Tanah Daerah Gombak

Case Significance

Applies paragraph 3(3A) of the First Schedule to the Land Acquisition Act 1960 so that buildings erected in breach of a title's land-use category or express conditions attract no compensation on compulsory acquisition.

This High Court decision at Shah Alam gives the reasons for a land reference under section 38 of the Land Acquisition Act 1960 (Akta Pengambilan Tanah 1960), arising from the compulsory acquisition of land in the Gombak district for the East Coast Rail Link (Projek Laluan Rel Pantai Timur, or ECRL) project. The registered proprietor, dissatisfied with the compensation awarded by the Land Administrator, referred the award to the High Court, which sat with the assistance of two assessors as the Act requires for valuation questions.

The principal legal question was whether buildings erected on the acquired land, in contravention of the express conditions and the category of land use attaching to the title, were entitled to be compensated under paragraph 3(3A) of the First Schedule to the Act. On the facts, the proprietor had been using the land as a transport hub for the distribution of poultry, an activity that the court found conflicted with the express condition of fruit cultivation, contravened section 127 of the National Land Code, and lacked any local-authority approval for the buildings. Applying paragraph 3(3A), which the court quoted, the value of any building on the land is not to be taken into account if the building is not permitted by reason of the category of land use or an express or implied condition or restriction. On that basis the court held that buildings violating the land-use conditions were to be disregarded and that the associated claims did not need to be paid, and it likewise declined the enhanced claim for disruption of operating costs.

Having considered the valuation with its assessors, the court maintained the compensation that the Land Administrator had awarded. The judgment also records the important jurisdictional point under section 49(1) of the Act that, where the decision comprises an award of compensation, there is no further appeal from it. The case is a clear application of the rule that unauthorised structures on acquired land attract no compensation.