DALAM MAHKAMAH PERSEKUTUAN
(BIDANGKUASA RAYUAN)
RAYUAN SIVIL NO.
ANTARA
BANGUNAN NG LEONG SING SDN BHD … PERAYU
DAN
PENTADBIR TANAH DAERAH WILAYAH
PERSEKUTUAN,
(Dalam perkara Kes Rujukan
Tanah No. S5-15-05 Tahun 1993
Dalam Mahkamah Tinggi Malaya
di Kuala Lumpur
Antara
Bangunan Ng Leong Sing Sdn Bhd … Pemohon
Dan
Pentadbir Tanah Daerah Wilayah
Persekutuan,
CORAM: ABDUL MALEK AHMAD, PCA
PAJAN SINGH GILL, FCJ
ALAUDDIN MOHD. SHERIFF, FCJ
JUDGMENT OF THE COURT
The
subject property comprises three contiguous lots namely Lots 143, 144 and 146
Mukim Bandar Kuala Lumpur of limited commercial land with a total area of about
29,921.6 square feet with direct frontage onto Jalan Ampang about one hundred
metres west of the junction at Jalan P. Ramlee and Jalan Yap Kwan Seng. The compulsory acquisition was gazetted on 10th
May 1990 for the purpose of the renovation and extension of the Bank Simpanan
Nasional headquarters. The subject
property is located in the Golden Triangle where skyscrapers abound either as
condominiums, offices, hotels or banks.
2. Although
the appellant contended that the market value was RM 480 per square foot, the
respondent only awarded RM 300 per square foot.
The High Court increased the award to RM 350 per square foot on 3rd
May 1996. Hence this appeal.
3. The
appellant had four comparables while the respondent had seven. The learned High Court Judge found that only
two of the appellant’s four comparables and only one of the respondent’s seven
comparables could be considered as the others were not appropriate.
4. In
his outline submissions, learned counsel for the appellant referred to two of
his four comparables which were along Jalan Ampang. These were the two comparables considered by
the learned High Court Judge. The first
was Lots 43, 44, 45 and 46 of section 44 which was sold for RM 420.75 per square
foot on 6th July 1990 and the second was Lots 43, 44, 133 and 135 of
section 58 sold for RM 380 per square foot on 20th March 1990,
according to the private valuer, but 3rd November 1989 according to
the government valuer. The latter was
the common comparable.
5. Learned
counsel submitted that the trial High Court Judge erred when he allowed only
five per cent over the price of RM 380 per square foot in favour of the subject
property for increase in value for the time factor, using the sale dates for
the two comparables in computing the monthly rate of increase, in view of the difference
in the sale date of the second comparable between the two valuers. We found this difference to be of no
consequence as it was only four months apart.
6. Employing
the method of dividing the differences in price by the number of months between
the sale dates, the rate of increase per month would be RM 5 per month, the
result of RM 40 divided by eight months.
Given that the difference in time between the sale date of the second
comparable and the acquisition date is slightly more than six months, the
figure in favour of the subject property would be RM 30 per month over the RM
350 for the second comparable making it closer to ten per cent than five per
cent.
7. Learned
counsel also pointed out that the learned High Court Judge accepted that a
smaller land attracts a higher value than a larger land relying on Ng Tiou
Hong v Collector of Land Revenue, Gombak (1984) 2 MLJ 35 where this court
held that the big area of the land, its location and nature do not render it
marketable as would the smaller lots in the neighbourhood.
8. The
manner the learned High Court Judge assessed the comparables was strongly
attacked by learned counsel for the appellant.
Considering that the subject property was only 29,921.6 square feet
compared to the first comparable’s 101,004.75 square feet and the second
comparable’s 142,114.5 square feet, learned counsel argued that the learned
High Court Judge arbitrarily arrived at the figure of five per cent for size in
favour of the subject property when comparing it with the second comparable
when the percentage ought to be higher, in fact as high as twenty per
cent. He reiterated that the learned
High Court Judge ought to have first ascertained the adjustment for size with
regard to the first comparable in relation to the second comparable.
9. He
grounded his submissions as regards the higher percentage from the observations
made by the learned High Court Judge in his judgment and from the information
available in the record of appeal in particular:
(a) the learned High Court Judge attributed the price difference of
RM40 per square foot between the first
and second comparables to the issue of time only;
(b) the first comparable is about 30 per cent smaller than the
second comparable;
(c) the price for the first comparable was RM420 per square
foot. The price for the second
comparable was RM380 per square foot;
(d) the learned High Court Judge noted that the first comparable had
planning approval with a higher plot ratio than the subject property which also
had planning approval. The learned High
Court Judge deducted 15 per cent off the price of the first comparable with
regard to the subject property. As the second comparable did not even have an
application for planning approval, it would mean that if it could still attract
a sale price of RM380 per square foot, the necessary adjustment in favour of
the first comparable, if it had not yet been sold, would have been at least 15
per cent over RM380 per square foot, hence taking the price to RM437 per square
foot;
(e) the learned High Court Judge deducted 15 per cent for location
of the subject property when comparing with the location of the second
comparable which was within the Golden Triangle. Given that the first comparable is located
even further, a slightly higher deduction of 20 per cent from the price of
RM380 per square foot would give a figure of RM304 per square foot;
(f) when the sum of RM40 per square foot for time as given by the
learned High Court Judge is added to the figure of RM304 per square foot, it
would put the figure at RM344 per square foot.
However, it is known that the first comparable was sold at RM420 per
square foot. Hence, the remaining
difference of RM76 per square foot can only be attributed to size. This figure of RM76 is equal to 20 per cent of
the sale price of RM380 per square foot for the second comparable;
(g) hence, the learned High Court Judge erred when he held that the
20 per cent as stated by the appellant’s valuer to be excessive since the
increase for reason of favourable size cannot therefore be less than 20 per
cent in any case given that the subject property is not bigger than the first
comparable.
10. The
learned High Court Judge, he added, when comparing the subject property with
the first comparable, deducted 15 per cent off the price of RM420 per square
foot for the first comparable on the ground that the first comparable was
approved for a higher plot ratio than the subject property. It was respectfully submitted that the
learned High Court Judge erred on this point because whilst the approved plot
ratio for the first comparable was 5.27, the plot ratio of 4.07 for the subject
property was when the approval was for a 14 storeyed building only. The approval for the subject property was
later revised and approved for a 17 storeyed building. Hence, the learned counsel for the appellant
argued that the deduction of 15 per cent is inaccurate and ought to have been
much lower.
11. The
appellant’s valuer had allowed a figure of 15 per cent in favour of the second
comparable because it is better located being on the side of Jalan Ampang which
coincides with what is commonly known as the Golden Triangle. This has been accepted by the learned High
Court Judge.
12. Learned
counsel for the appellant further submitted that the learned High Court Judge
was correct in adding 10 per cent to the price of RM380 per square foot in
favour of the subject property since the subject property already had planning
approval whereas the second comparable did not.
13. Based
on the foregoing, he said, there is a total of 25 per cent over the price of
RM380 per square foot for the second comparable in favour of the subject
property, that is to say, 10 per cent for time, 10 per cent for planning and 20
per cent for size all in favour of the subject property less 15 per cent for
location against the subject property.
This would place the value of the subject land at RM475 per square
foot. However, before us, learned
counsel conceded that the award should be five per cent higher than the RM380,
namely RM399 per square foot.
14. The
learned Senior Federal Counsel for the respondent replied that the learned High
Court Judge had adopted the normal considerations for land acquisition cases
for market value with the usual adjustments based on his experience and
knowledge relying on Hajjah Halimah binte Hussain & Anor. v. Collector
of Land Revenue, Kuantan (1981) 2 MLJ 12 where at page 15 it is stated:
“The
issue before the learned judge was, what was the value of the land at the
material date which was May 24, 1973?
Value must mean market value, which in turn means the price which a
willing seller, not obliged to sell, might reasonably expect from a willing
purchaser with whom he was bargaining for sale and purchase of the land (Nanyang
Manufacturing Co. v C.L.R. Johore (1954) M.L.J. 69. It is plain from the notes of evidence and
submissions and from the judgment that everybody was aware that the best way of
determining this amount is by looking at sales of comparable lands in the
vicinity at or about the material date.
What
are the questions before us? The
questions before an appellate court are usually different from those before a
court of first instance. A court of
first instance generally speaking is looking for truth, whereas an appellate
court is looking for error.
In
the case of an appeal against the alleged inadequacy of the value put on land
by a trial judge, the questions before us, as explained in Collector of
Stamp Duties v. Ng Fah In & Ors (1981) 1 MLJ 288, heard in the same
week as this one are: in determining the value, has the learned judge acted on
a wrong principle, or misapprehended the facts, or has he for some reason made
a wholly erroneous estimate of the value of the land? It is not enough if only there is a balance
of opinion or preference one way or another: the scale must go down heavily on
the ground of insufficiency against the allegedly low value put on the land by
the learned judge.
We
should be reluctant to interfere with the learned judge’s award – because he
lives in Kuantan not far from the land, and because out of respect for his
local knowledge and experience.”.
15. However,
he conceded that the learned High Court Judge had contradicted himself for
downward adjustment for size. He
reminded the court of the pipeline encumbrance under the subject property which
would cause the value to go down five per cent leaving us with the same amount
as decided by the learned High Court Judge.
He stressed that we should not be concerned with mathematical
calculations. The swift reply from
learned counsel for the appellant was that the pipeline could not be removed.
16. We
have looked at the affidavits and the valuation reports and have considered the
arguments and the authorities. We took
note that the pipeline had been constructed in the early part of the twentieth
century and, being in fact one of the oldest water pipelines in the country
still supplying water, it has never been and cannot be regarded as an
encumbrance.
17. We
fully agree that the learned High Court Judge had fallen into error when making
adjustments for size and since learned counsel for the appellant had conceded
before us to RM399 per square foot, which is based on five per cent above RM380
per square foot which was awarded for the second comparable, we feel that this
is a fair amount in these circumstances.
18. The
appeal is accordingly allowed with costs.
The award of RM350 per square foot is increased to RM399 per square
foot. The deposit is refunded to the
appellant.
Dated 29th July 2005.
(ABDUL MALEK AHMAD)
PRESIDENT
OF THE COURT OF APPEAL
Date of Hearing:
Date of Decision:
Counsel:
Ajit Kumar Hastir for the appellant
(Solicitors:
M/s Watson Peters & Mohd Fuad)
Dato’ Mohd Zaki Md Yasin, Senior Federal Counsel,
for the respondent
(Attorney-General’s Chambers)