Govt valuer disagrees with Semantan Estate’s private valuation

• Government valuer Halimatul Saeidah Abd Ghani, 49, said the private valuer had not shown proof that he had failed to obtain permission to inspect or measure the government buildings on the 263.72-acre (106.72-hectare) ‘Duta enclave’, which the Federal Court had in 2012 ruled that the government had trespassed on in its acquisition of the land since 1956.

KUALA LUMPUR (June 17): A government valuation property expert told the High Court on Tuesday that she disagreed with the calculation of ‘mesne profit’ by a private valuer appointed by voluntarily-liquidated company Semantan Estate (1952) Sdn Bhd.

Government valuer Halimatul Saeidah Abd Ghani, 49, said the private valuer had not shown proof that he had failed to obtain permission to inspect or measure the government buildings on the 263.72-acre (106.72-hectare) ‘Duta enclave’, which the Federal Court had in 2012 ruled that the government had trespassed on in its acquisition of the land since 1956.

“He should show proof that he had failed to obtain permission to get the building plans, rather than making a valuation of the property based on estimation of the buildings’ measurement,” Halimatul Saeidah said.

“In my view, his explanation of not getting the plan, which could not be accessed by the public, should not be used as a reason for not getting the plan. The private valuer had cut short the measure by relying on satellite images,” she said.

A private valuer, Foo Gee Jen, who is the chairman of CBRE|WTW, had previously testified in the trial that his estimation of the value of ‘mesne profit’ from 1956 to 2021 was in the range of between RM3.1 billion and RM13.242 billion.

The government, meanwhile, assessed it to be RM290 million, as stated by senior federal counsel Mohammad Al-Saifi Hashim in his opening statement in representing the government in the long-standing civil proceedings.

A mesne profit is a sum expected to be paid by someone or the government for wrongfully occupying property of the rightful owner. In fine, according to Jowitt’s Dictionary of English Law, mesne profits are “the rents and profits which a trespasser has, or might have, received or made during his occupation of the premises, and which therefore he must pay to the true owner as compensation for the tort which he has committed”.

The controversial land acquisition, which was supposed to house the various foreign embassies—hence the name ‘Duta’—now comprises 12 government buildings. Among them are the National Archives, the Inland Revenue Board, the Tun Razak hockey stadium, the Segambut roundabout, the Malaysian Anti-Corruption Commission Academy, the Institute of Islamic Understanding, and the tennis stadium.

It also includes the Kuala Lumpur Syariah Court and the Wilayah Mosque that were built after 2011.

Halimatul Saeidah, who is now a senior lecturer at the National Valuation Institute, added that she used the Decapitalisation of Market Value method, and described Foo’s reliance on year-to-year valuation to get the value of the land as not accurate.

“The analysis and interpretation is based on assumption only,” she alleged.

Semantan lawyers try to prove govt’s calculation inaccurate

During cross-examination by Semantan Estate’s counsel Ira Biswas, Halimatul Saiedah disagreed with the lawyer that her calculation and method used between 1957 and 2011 were not proper and accurate.

Halimatul Saeidah agreed with Biswas that she utilised the extrapolation method of calculation in calculating returns, but when it was pointed out that this was against the Malaysian Valuation Standard, the witness disagreed.

When challenged that her reliance on the extrapolation method in valuation for 1957 to 2011 was incorrect and hence the valuation done was incorrect, the witness disagreed.

The “extrapolation method” is to estimate values outside the range of a dataset by extending a known sequence or trend and is mainly used to predict future values.

The witness agreed that she based her valuation on the property being an estate land from 1956 to 2011, and when it was pointed out that the buildings were erected on the property in 1974, she merely acknowledged the presence of those buildings.

She disagreed when it was suggested by Biswas that her valuation of that being an estate land until 2011 was wrong and inaccurate.

Her evidence is based on her assessment done from 1956 to 2011, as another government witness is expected to testify on the whole period until 2021 in coming days.

However, Halimatul Saeidah agreed with Biswas that if the approach taken in valuation is wrong, the whole valuation could also be wrong.

When further shown that 70% of the disputed area was made up of car parks in government buildings, the government valuer disagreed.

Biswas also showed that internal examination of the buildings was not required according to the Malaysian Valuation Standard, but Halimatul Saeidah disagreed.

The witness agreed that rentals of the surrounding area could be considered as a consideration in the valuation of market rate; however, she disagreed to limiting it to five-year intervals.

Halimatul Saeidah agreed that in her calculation, she did not show evidence of rental, including of land nearby, as she said that rentals could be an inaccurate indicator.

Biswas also asked the witness whether the value of the Duta land was comparable to Shah Alam, especially the Seafield area which was once an estate. The witness replied that she does not know.

The trial before judge Datuk Ahmad Shahrir Mohd Salleh continues on Wednesday with the witness’ re-examination by Al-Saifi.

Meanwhile, other pending appeals at the Court of Appeal

This mesne profit case is different from the scheduled Court of Appeal decision slated for June 24, where the appellate court’s decision will decide on the federal government’s appeal to transfer the land title from the government back to Semantan Estate, and Semantan Estate’s cross-appeal over the dismissal of the judicial review to recover the land.

The government claims that the company was only entitled to damages, and not the land title.

Semantan is also cross-appealing the stay granted by the High Court to stop the transfer of the land title.

The federal government had acquired the land in 1956 for RM1.3 million. But in a 2009 High Court decision, the government was deemed to be illegally trespassing, and this was affirmed by the Court of Appeal and Federal Court.

As a result of the Federal Court’s decision being upheld, Semantan filed three separate applications: firstly to recover the land, to seek a transfer of the land title, and for the calculation of mesne profit.

On Aug 7 last year, Ahmad Shahrir ordered the transfer of the land title from the government to Semantan, resulting in the ongoing appeal to be decided by the appellate court next week.

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