Compulsory acquisition of land

 Section 40(1): All State land within territories of States and all minerals and rock material within
or upon any land in the State the rights to which have not been specifically disposed of by the
state authority shall be vested solely in the State authority.

 Art 13: right to property

 The right to property ownership is not absolute. This right has regarded as being subject to the
rights of the State as eminent domain, an inherent right of the state and an essential incident of
the state sovereignty. This mean the taking of the private property by the state authority can be
justified for the use of general public. However, the powers of the state as the eminent domain
to acquire land is subject to two fundamental conditions: private property is to be taken only for
public use / just compensation must be paid for the property taken.

 S Kulasingam & Anor v Commissioner of Lands, Federal Territory & Ors, Article 13(1) ensures
the sanctity of private property. That clause guarantees the right of any person not to be
deprived of his property save in accordance with law which simply means that no one can be
deprived of his property merely on the orders of the Executive but that he may be deprived of
his property only in accordance with law. The meaning of law in this case was referred to the
judgement of Ong Ah Chuan v Public Prosecutor which the 'law' to which citizens could have
recourse for the protection of fundamental liberties assured to them by the Constitution would
be a system of law that did not flout those fundamental rules. If it were otherwise it would be
misuse of language to speak of law as something which affords 'protection' for the individual in
the enjoyment of his fundamental liberties. (The meaning of law)

 S Kulasingam & Anor v Commissioner of Lands, Federal Territory & Ors, Article 13 as a whole
preserves the sanctity of private property but clause (2) of that Article allows certain inroads into
that general right. A justification for the inroads and the rationale in clause (2) is to be found in
the doctrine of salus populi suprema lex — the interests of the public are paramount, and that
private interests may in some circumstances be subordinated to the higher interests of the
public, when the State thinks it is proper to do so. (right of the state to acquire land)

 State of Bihar v Kameshwar Singh, The exercise of such power (power of compulsory acquisition
of private property by the State) has been recognized in the jurisprudence of all civilized
countries as conditioned by public necessity and payment of compensation.

The Purpose of Acquisition

 Section 3 LAA

 Section 3b LAA, ‘Beneficial to the economic development’

Honan Plantations Sdn. Bhd. v Kerajaan Negeri Johor & Ors, The declaration in Form D states that
the scheduled lands are to be acquired for the purpose of the second Malaysia-Singapore causeway
project and for the development of the Gelang Patah area. The issue is whether that stated purpose
falls within S3(b). It is clear that the amendment made to S3(b) has widened its scope even further.
Prior to its amendment, S3(b) authorizes a State Authority to acquire any land which is needed by a
person or corporation undertaking a work which in the opinion of the State Authority is of public
utility. According to s 3 of the Interpretation Acts 1948 and 1967, the word 'person' includes 'a body
of persons, corporate or unincorporated. To me, the words 'person' or 'corporation' as found in the
Act, either way, would include, inter alia, companies registered under the Companies Act 1965. It is
my view that the amendment made to s 3(b) in 1991 has further enhanced or have widened the
powers of a State Authority, viz a State Authority may now acquire any land which is needed by any
person or corporation, which would of course include companies registered under the Companies Act
1965, for any purpose which in the opinion of the State Authority is beneficial to the economic
development of Malaysia or any part thereof or to the public generally or any class of the public.
These words are wide and would seem to encompass a host of activities not merely restricted to
undertakings of works which are of public utilities. As long as the project or proposed development is,
in the opinion of the State Authority, beneficial to the economic development of the country or to the
State or to the public or any class of public and that land is needed within the vicinity of the targeted
area to carry out such a project or development, the State Authority is authorized under the said
S3(b) to acquire such land. The purpose can be anything as long as it is in the opinion of the State
Authority economically beneficial to the country, the State or to the public or any class of public.

 Public purpose

S Kulasingam & Anor v. Commissioner of Lands, Federal Territory & Ors, the expression 'public
purpose' is incapable of a precise definition. No one in fact has attempted to define it successfully.
What all the textbooks have done is to suggest the tests to be applied in determining whether a
purpose is a public purpose. Various tests have been suggested. But in my view it is still best to
employ a simple commonsense test, that is, to see whether the purpose serves the general interest of
the community.

Ahmad bin Saman v Kerajaan Negeri Kedah, the land acquired in this case is situated in Langkawi and
locally or internationally Langkawi is well known as a tourist destination. The charm of its resorts and
beaches had captivated tourists all over the world. As a fast developing tourist destination it has
contributed to the bulk of the island's income. There is no doubt that the tourist industry is the prime
revenue earner for the island. As stated by the learned Legal Advisor, tourism, has become an
important industry for Malaysia and in this respect Langkawi has become one of the main foreign
exchange earners for the country. As a result it has brought a lot of benefits to the people of
Langkawi, in terms of better infrastructures, utilities, amenities and at the same time has generated a
lot of employment opportunities for the general public. Hence, the land is being acquired is within the
expression 'public purpose'.

Procedure for Land Acquisition

1. Publish Form A in Gazette - Section 4(1)

 A public notice is to be given by the land administrator - Section 52. Form A notice is valid for 12
months during which a declaration under s 8(1) LAA must be made by the State Authority. A
declaration in Form D shall then be published in the Gazette. If Form A notice lapses, the State
Authority may initiate a fresh proceeding: Section 4(4).

Ng Kim Moi (P) & Ors v Pentadbir Tanah Daerah, Seremban, Negeri Sembilan Darul Khusus (Negeri
Sembilan Township Sdn. Bhd. & Anor, Proposed Intervenors), when s 4(1) is read in the context of
the Act as a whole, it is clear that the word 'shall' that appears in that subsection is mandatory and
not merely directory in effect. Put in another fashion, the word 'shall' prima facie denotes a
mandatory provision and there is nothing in the context of the Act that points to a contrary meaning.
No Malaysian case was cited to us either in support or in opposition to the view I take. However,
there is a decision of the Indian Supreme Court on s 4(1) of the Indian Land Acquisition Act 1894. That
provision reads as follows: Whenever it appears to the appropriate Government or Collector that land
in any locality is needed or is likely to be needed for any public purpose, a notification to that effect
shall be published in the Official Gazette, and the Collector shall cause public notice of the substance
of such notification to be given at convenient places in the said locality. As may be seen the Indian
provision is similar to our s 4(1). Hence, the statutory intention is, therefore, clear, namely, that the
giving of public notice is mandatory. If so; the notification issued under s 4 without complying with
the said mandatory direction would be void and the land acquisition proceedings taken pursuant
thereto would be equally void.'
Pemungut Hasil Tanah, Daerah Barat Daya, Pulau Pinang v Ong Gaik Kee, the issue is the injustice
caused to the landowner by the delay in holding the inquiry and the making of the award. Because
the market value of the land has to be determined as the value prevailing on the date of the
declaration, the effect of the delay is that the landowner has to be awarded on the date of the award
the past value as on the date of the declaration without taking into account the increase in the price
of the land and the effect of inflation which have occurred in the meantime. Thus the longer the delay
in making the award is, the greater would be the injustice to the landowner. In this case the
landowner was awarded in 1981 the market price of the land prevailing in 1974. The learned Judicial
Commissioner questioned the reasonableness and the fairness of this award, and finally came to the
conclusion that even if the doctrine of exhaustion is not applicable, certiorari could still lie because
the delay resulted in an inadequate compensation to the landowner and such compensation is
contrary to clause (2) of Article 13 of the Federal Constitution. It is true that section 10 of the Act does
not prescribe the time within which the inquiry into the compensation must be held but looking at the
Act as a whole no one could deny that the proceedings under the Act are meant to be in a continuous
motion so that no such interruption or such undue delay or stoppage as to amount to an
abandonment of the acquisition could be regarded as within this motion. Under section 38 of the
Interpretation and General Clauses Ordinance, 1948 it is provided that "Where no time is prescribed
or allowed within which anything shall be done, such thing shall be done with all convenient speed
and as often as the prescribed occasion arises." What then is the "convenient speed"? In our view it
must be "as soon as possible" or "within a reasonable time", and not "as late as possible". Obviously
what amounts to "convenient speed" must vary from case to case and in our judgment seven years
delay is certainly not a "convenient speed" as it is so far outside the normal period of time that no
reasonable authority could ever regard it as reasonable.

Right to be heard to the landowner

 S Kulasingam & Anor v Commissioner of Lands, Federal Territory & Ors, the issue is must the
acquiring authority afford to the owner of land proposed to be acquired an opportunity to be
heard before commencing proceedings to acquire the land. Objections are only limited to the
amount of compensation and matters connected therewith. On a proper reading of Article 13(2)
of our Constitution a pre-acquisition hearing is not required by the Constitution either expressly
or by implication.There is also nothing in the Act imposing any obligation for a pre-acquisition
hearing in marked contrast to the specific provisions of an inquiry and hearing in respect of the
quantum of compensation payable.

Challenging compensation

Article 13 of the Federal Constitution states that “no person shall be deprived of property save in
accordance with law” and allows for a lawful acquisition of private land by the government, provided
that the acquisition is in accordance with the Land Acquisition Act (LAA) 1960. Under the LAA,
landowners (or persons with registered interests) will be compensated by the government for
acquired land.

That said, landowners often find themselves dissatisfied with the compensation awarded by the land
administrator.(1) While there is an opportunity for landowners to object to the compensation, the
question remains as to what extent the compensation awarded by the land administrator can be
challenged. The Federal Court recently answered this question in its decision in Pentadbir Tanah
Daerah Johor v Nusantara Daya Sdn Bhd.(2) The apex court held that the high court is the highest
court that parties can go to when challenging the awarded compensation.

Land reference proceedings

Landowners, subject to limitations prescribed in sections 37(1) to 37(3) of the LAA, may object to the
land administrator’s award by making a written application, Form N, to the land administrator,
requiring the land administrator to refer the matter to the high court for determination. This is known
as “land reference proceedings”.
The procedure of land reference proceedings is outlined in the third schedule of the LAA. In brief,
parties adduce their valuer’s report and rebut the opposing party’s valuer’s reports.

Appealing
Section 49(1) of the LAA provides that a party to land reference proceedings may appeal against the
high court’s decision to the Court of Appeal and the Federal Court. However, there is no absolute
right of appeal.

Judicial Review of Notification under s 4 or s 8

 Yew Lean Finance Development (M) Sdn. Bhd. v Director of Lands & Mines Penang, under
Section 8(3) once a Gazette notification under section 8 is given, it is conclusively established
that the lands are needed for the purpose stated. The only complaint the owners of acquired
lands can have will be if provisions of the Act have not been complied with. Furthermore, if the
compensation awarded them is not adequate they have a right to appeal to the High Court.
Apart from that, the question of acquisition cannot be gone into.

Assessment of Compensation

 Section 10(2)
 Section 11
 Cahaya Baru Development Bhd. v Lembaga Lebuhraya Malaysia, The Land Administrator Johor
Bahru ('LA') served a notice in Form E under the Act on the plaintiff and the defendant giving
notice for the enquiry proceedings to determine the compensation to be awarded. An enquiry
under s 12 of the Act was held by the LA in respect of the acquisition. Upon the conclusion of the
enquiry the LA awarded a sum of RM30,734,903 ('the award') to the plaintiff as compensation
for the acquisition of 19.825 hectares of the said land. The LA served on the plaintiff and the
defendant a Form G dated 20 April 2006 under s 14 of the Act on the compensation awarded to
the plaintiff.
 Section 12(1)
 Section 14

The Duty of the Land Administrator During Inquiry

 Pemungut Hasil Tanah, Daerah Barat Daya (Balik Pulau), Pulau Pinang v Kam Gin Paik

Principles on Fixing Adequate Compensation

First Schedule LAA (Market value)

 Market value

1. Common factors to be considered

Willing seller/willing buyer criteria:

- Ng Tiou Hong v Collector of Land Revenue Gombak, market value means the compensation that
must be determined by reference to the price which a willing vendor might reasonably expect to
obtain from a willing purchaser. The elements of unwillingness or sentimental value on the part of the
vendor to part with the land and the urgent necessity of the purchaser to buy have to be disregarded
and cannot be made a basis for increasing the market value. It must be treated on the willingness of
both the vendor to sell and the purchaser to buy at the market price without any element of
compulsion. The market price can be measured by a consideration of the prices of sales of similar
lands in the neighbourhood or locality and of similar quality and positions.
Previous Sale of Comparable/Similar Lots of Land:

- Pentadbir Tanah Daerah Petaling v Glenmarie Estate Ltd, It would be more reliable to follow the
normal guide accepted by this court in determining the fair market value of the scheduled lands by
considering the sales of similar lands in the neighbourhood after making due allowances for all
circumstances, when such evidence is available.

Potential Development (not to be considered)

- Bukit Rajah Rubber Co Ltd v Collector of Land Revenue, Klang, The property must be valued not only
with reference to its condition at the time of acquisition but also its potential development value. The
proper method to arrive at a fair market value of the land acquired, taking all relevant considerations,
is to assess its existing value with its inseparably essential element, i.e. its potential development
value.

2. Matters to be Considered in Determining Compensation

3. Matters to be Neglected in Determining Compensation

Temporary Occupation of land(TOL)

 Section 5
 Form 4A

Land over which TOL may issued

 Section 65(1)
 Section 43 and Part thirty-three (A) - person/body whom TOL can issued

Purpose of TOL

 Section 65(2)
 Section 69
 Form 4

 Mohamed v Kunji Mohidin, the plaintiff was the holder of a temporary occupation licence giving
him the right to occupy land and pluck coconuts from trees on the land. The defendant was
subsequently given a temporary occupation licence in respect of the same land with plaintiff
land for the purpose of rearing poultry.

 Koperasi Pasaraya Malaysia Bhd. v Uda Holdings Sdn. Bhd. & Ors, An act of the Government to
grant TOL on road is deemed to be valid unless otherwise ordered by the Court. The only way to
invalidate an act or decision of the state authority in granting TOL on road is by applying for an
order of mandamus, prohibition or certiorari by way of judicial review. The procedure of making
such application are clearly stated under O.53 of the Rules of the High Court.
Land Administrator under No Duty to Renew TOL

 Teh Bee v K Maruthamuthu, there is provision for temporary occupation licence to be renewed
annually but there is no obligation on the part of the authorities to grant a renewal of a
temporary occupation licence for any subsequent year. In accordance with the terms and
conditions which appear in the form of a temporary occupation licence the licence may be
canceled immediately.

The Rights of and Restrictions on TOL Holder

 Exclusive Possessory and Not Proprietary Right

- Julaika Bivi v Mydin, Temporary Occupation Licence gives to the holder of it the right to exclude
others. At the time the plaintiff was granted the license, the defendant was in possession of part of
the house with the consent of the previous TOL holder. The plaintiff then took action in tort of
trespass against the defendant. The action was in favour of the plaintiff.

 No Assignment of TOL

- Section 68

- Narayanan v Kannamah, even if the deceased held a temporary occupation licence on the state land
in question that the licence was temporary and not transferable upon the death of the deceased. The
issuance of a temporary occupation licence to the deceased will not convert the state land into an
alienated land. Simply put, after the issue of the temporary occupation licence, the land was still state
land and the deceased had a mere licence to occupy it temporarily.

- Paruvathy v Krishnan, a licence only confers a personal right to the licence holder. This right comes
to an end when the holder in the case of a natural person dies or in the case of a company or a firm or
other bodies is dissolved. Being a personal right, the legal relationship thereby created is only
between the licensor and the licensee. The licence is therefore non-transferable or incapable of
assignment at the option of the licensee. It is not a right in rem which its holder can deal with . Thus
any assignment or arrangement purporting to transfer or assign the whole or any part of the licensed
land will be of no effect.

 Termination of TOL upon Death/Dissolution

- Section 68

- Narayanan v Kannamah

- Papoo v Veeriah, neither the land the subject matter of the temporary occupation licence nor
anything which is attached to the land can be transferred or pass on intestacy.

- Fatimah v Moideen Kutty, every contract of tenancy in respect of a house on State land contains an
implied term that the tenancy is valid only for the duration of the landlord's licence to occupy the
land. On the expiration of the landlord's licence either by effluxion of time or by the death of the
licensee, the contract of tenancy must be deemed to have come to an end and the relationship of
landlord and tenant extinguished.

 Sale of House Built on TOL Land

- Hee Cheng v Krishnan, the alleged contract was in fact an attempt to sell and to purchase
defendant’s rights under the temporary occupation licence and therefore unlawful by reason of s 24
of the Contracts (Malay States) Ordinance 1950.
- Cheo Lean How v Fock Fong Looi, Too Sun, the holder of the temporary occupation licence did not
sell the dwelling house erected on State land held under temporary licence to Loke Seng. It was Chung
Yen who sold the building to Loke Seng. Too Sun merely signed Ex. P6 as a witness and he was not a
party to the transaction. Besides, Ex. P6 made it abundantly clear that the sale was in respect of the
dwelling house put up by Chung Yen only. Ex. P6 was not against Rule 41 of the Land Rules and was
therefore not illegal or void.

 Tenancy of House Built on TOL Land

- Govindaraju v Krishnan, the wording of rule 41 of the Land Rules was that no licence for the
temporary occupation of State land shall be transferable. "Dealings" which do not amount to a
"transfer" are not therefore caught by the rule. The letting of two rooms on the premises did not
amount to a transfer of the licence.

- Cheo Lean How v Fock Fong Looi, the court held that a holder of TOL is allowed to invite anyone to
stay on the land and that person will only be regarded as an invitee.

Ban Seng v Yap Pek Soo, rule 41 of the Land Rules prohibits the transfer of a temporary occupation
licence. It does not prohibit any dealings which do not amount to a transfer. Thus, if the holder of a
temporary occupation licence builds a house on State land and lets it out on rent, such letting does
not amount to a transfer of the licence. Rule 41 of the same Rules says that no licence for the
temporary occupation of State land shall be transferable. This means that on a contract for the sale
and purchase of a house built upon a piece of land in respect of which a temporary occupation licence
has been issued, the purchaser cannot claim specific performance or sue for damages for a breach of
the contract.

 Application of Equitable Estoppel Against TOL Holder

- Paruvathy v Krishnan, the principle of equitable estoppel can in a proper case be invoked against
the holder of a temporary occupation licence.

 No Right to Compensation Against A Subsequent TOL Holder

- Teh Bee v K Maruthamuthu, But in no circumstances however can a person who has occupied land
on a temporary occupation licence acquire a right to be compensated by a subsequent holder of a
temporary occupation licence of the land or by a subsequent registered proprietor thereof under
qualified or final title for any expense that he might have incurred over the land during the period in
which he occupied it under a temporary occupation licence.

LAROW

 Section 57, 58
 Section 388

 Che Nik bte Bakar v Pentadbir Tanah, Kuala Krai, Section 390(3) of the National Land Code 1965
allows for the creation of public right of way on private land. The principle of inviolateness of
land must be considered in the light of the doctrine of salus populi supreme lex – the interests of
the public are paramount, and that private interests may in some circumstances be subordinated
to the higher interest of the public, when the State thinks it is proper to do so. In the absence of
an alternative route, there was thus an urgent public necessity for the land administrator to
grant a public right of way across the appellant's land, even though it was against the principle of
inviolateness of land.
Procedure for private LAROW

 Section 390

 Ng Men Soon & Satu Lagi v Pentadbir Tanah Daerah Muar & Satu Lagi, the interpretation of the
word “creating”or “create” in s 390(3) of the NLC provides an explanation to the power of the
land administrator to “create” a land administrator’s right of way on an existing way/road which
previously did not have a lawful land administrator’s right of way.

For Whose Benefit

 Section 389 (1) & (3)

Enquiry

 Section 390(2) & (3)

 Taat Yik Plantations Sdn. Bhd. v Pentadbir Tanah Hilir Perak & Ors, bearing in mind the
principle of inviolateness of land, it is clear from s 390(2) of the NLC that it is incumbent on the
land administrator to either hold an enquiry or make such other investigation as he thinks
appropriate upon receiving an application for a private right of way. Although it is left to the land
administrator to choose either one or the other mode of satisfying himself, once he has chosen,
he has a duty to ensure that the enquiry or such other investigation is carried out properly so
that its purpose as set out in the law is achieved.

Expedient

 Si Rusa Inn Sdn. Bhd. & Ors v The Collector of Land Revenue Port Dickson & Ors , The Concise
Oxford Dictionary (5th Ed) defines the word 'expedient' as 'advantageous', 'suitable', and as a
noun, it is defined as a 'contrivance' or 'device'. 'Contrivance' is defined as an act of contriving,
deceitful practice, invention, etc. Therefore, when it is expedient to do something, it is
conceivable that such action may sometimes partake of an unprincipled quality, or that such
action may sometimes be contrary to principle.

 Taat Yik Plantations Sdn. Bhd. v Pentadbir Tanah Hilir Perak & Ors, the first defendant did not
give any reasons as to why he had made the order other than to state in the order that he was
satisfied based on the evidence adduced at the enquiry that it was expedient to grant the right
of way . The first defendant has misdirected himself as to what the term 'expedient for a private
right of way to be created' means. He went on the assumption that all that was required to
establish that term was the bare statement from the third defendant that Sungei Perak was a
dangerous route because its sampan had capsized twice causing its produce to fall into the river
and endangering the lives of its captains and workers.

Equal Opportunity to Be Heard To All Parties

 Taat Yik Plantations Sdn. Bhd. v Pentadbir Tanah Hilir Perak & Ors, the enquiry should have
been reopened or a new enquiry held to enable the plaintiff to give its views on the proposed
route as set out in the third plan before the first defendant made the final order. The failure to
do so constituted a breach of one of the rules of natural justice, that is, the right to be heard or
audi alteram partem, and consequently, the order was bad because the plaintiff was not given a
fair hearing.
Cost of survey

 Ng Men Soon & Satu Lagi v Pentadbir Tanah Daerah Muar & Satu Lagi, the plaintiffs and the
second defendant entered into an agreement allowing the second defendant to use a road built
on their own expense.

Sharing of LAROW

 Section 394, form 28C

 Liow Tow Thong v Pentadbir Tanah Alor Gajah , The language of s 390 of the NLC only permits
the creation of a private right of way in favour of a person who applies for that right. Where
other persons wish to share a right of way which has already been granted then they should
proceed through s 394 of the NLC.

Compensation

 Section 393

Obstruction of LAROW

 Section 428

Extinction of LAROW

 Section 395

 Tong Tiong Lim v Pentadbir Tanah Daerah, Johor Bahru, Section 395(1)(b) of the NLC gives the
power to the land administrator to hold an enquiry and thereafter order the right of way already
made to be extinguished if satisfied that it is inexpedient for it to continue to exist.

Right of way by dedication

 Lye Thean Soon & Ors v Syarikat Warsaw, The grant of a right of way is merely a right of passing
and repassing . The public acquires by dedication has no right of property in the soil. The owner
of the soil, after dedication, retains all his rights in the soil and may exercise those rights just as
he pleases so long as he does not interfere with the public right of passing and repassing along
the surface. Apart from legislation, dedication is also a method by which a right of way may be
created. Any public right of way of any width may be said to be a highway. The foundation of
public right lies in dedication and dedication presumes a dedicator who in this case can only be
the owner of the land over which the right of way has been granted. In the absence of any
definite proof of actual and deliberate dedication, the courts are entitled to adopt the legal
fiction of assuming dedication from proved facts.
Procedure of registration of title

 Part Five – Chapters 1, 2, 3 and Five (A) of NLC

Forms of titles

 Form 5B / 5BK – Grant

 Form 5C / 5CK – State Lease
 Form 5D / 5CK – Mukim Grant
 Form 5E / 5CK – Mukim lease
 Form B1 – plan for final title land
 Form B2 – plan for QT land
 Form 11A / 11AK – computerized Registry document of title
 Form 11B / 11BK – computerized Land Office document of title