Govt wins Duta land dispute, retains title but ordered to compensate

• The sum of compensation decided by the High Court will have to be deducted by RM1.325 million, which was paid by the government in 1956.

PUTRAJAYA (June 24): The federal government will retain the massive 'Duta enclave' land as the Court of Appeal ruled on Tuesday that Semantan Estate (1952) Sdn Bhd is not entitled to the land title.

The appellate court also dismissed Semantan Estate's appeal to acquire the land and its buildings. The decision of the three-member bench led by newly elevated Federal Court judge Datuk Lee Swee Seng was unanimous.

However, Lee ordered that compensation be paid by the government as assessed by the High Court following the illegal acquisition based on the 1956 market rate with 6% annual interest until payment of the sum.

Parties are given 90 days for the assessment (valuation) and go back to the High Court.

The sum of compensation decided by the High Court will have to be deducted by RM1.325 million, which was paid by the government in 1956.

Lee, who sat with Datuk Azimah Omar and Datuk Wan Ahmad Farid Wan Salleh, also said the trial for mesne profit at the High Court will continue, and the calculation for mesne profit from 1956 will not end until Semantan Estate receives the rightful compensation.

The court ordered parties to bear their own costs.

Separately, High Court judge Datuk Ahmad Shahrir Mohd Salleh is presiding over the trial for mesne profit, which will resume next month in Kuala Lumpur. Mesne profits are profits an entity receives following wrongful possession of their assets.

Central to the issue is Section 29(1)(b) of the Government Proceedings Act (GPA) 1956.

Section 29(1)(b) of the GPA states that in any proceedings against the government for the recovery of land or other property, the court shall not make an order for the recovery of the land or the delivery of the property, but may in lieu thereof make an order declaring that the plaintiff is entitled as against the government to the land or property or to the possession thereof.

Following this, Lee in his decision said the court shall make no order for recovery of the land in line with the GPA.

The judge said that because of the GPA clause, Semantan Estate’s attempt to obtain the land title and to have the land and buildings returned to it may be restrained and restricted.

“The words mean what they say. There is a prohibition, and no order is to be made to the recovery of the land. This is to ensure public authority can perform its duty and obligation,” he said.

“Even if the government is supposed to pay, the acquisition is considered to be lawful,” the judge added.

Semantan Estate entitled to compensation

Lee said the court also agreed with the submissions made by the senior federal counsels Shamsul Bolhassan, Ahmad Hanir Hambaly @ Arwi, and Liew Horng Bin, representing the government, that by giving back the land and further making payments, it would be seen as double compensation.

Hence, the judge said that this is not an insurmountable problem as the mesne profit and full compensation would be assessed by the court.

Lee said the mesne profit proceeding is currently being conducted, and the court ordered for full compensation be assessed by the court.

“This, however, cannot continue forever, and ever and ever. The company is entitled to receive compensation that is properly carried out by the Land Acquisition Act for public purposes, as in this case the construction of stadiums and public offices.

“Adequate compensation should be paid, and this is taking into account the market value of the land in 1956, which was rubber estate land,” he said.

He ordered that the assessment be done based on the 1956 market value of the land and directed parties to prepare an expert value report which would be assessed by the High Court.

The court ordered the valuation report be made within 90 days from Tuesday, June 24, and fixed case management for the assessment of compensation for June 30.

Supporting judgement

Wan Ahmad Farid in his supporting judgement noted that the 2009 High Court judgement by Judicial Commissioner Zura Yahya ruled that the government had trespassed on the land, but did not make any order for the impugned land to be transferred to Semantan Estate.

“There is no evidence before this court that Semantan Estate had sought clarification from the learned judicial commissioner as to whether the impugned land ought to be transferred and registered by the Federal Land Commissioner to Semantan Estate as a consequential order.

“In short, there was no attempt made to ‘work out’ the order so as to give effect to the initial order. It is to be recalled that the ‘liberty to apply’ rule for consequential order is implied in every court order. Semantan Estate did not exercise this right at the material time,” he said.

The judge said the first remedy order allowed by Zura is that the company retains beneficial interests in the property, stopping short of directing the impugned land to be transferred and registered in the name of the company.

He put that the definition of ‘beneficial interests in an immovable property’ meant the person can only enjoy the benefit from the property.

“He has no registered interest in the land. However, he can still enjoy the benefit or profit from the land where he has a beneficial interest. Since Semantan Estate retained the beneficial interest in the impugned land, the learned JC was entirely correct in making a further order that it is entitled mesne profit to be assessed by the High Court that was affirmed by the Court of Appeal and Federal Court.

“It is for these reasons [that the Aug 7 decision that ordered the transfer of the land from Federal Land Registrar to Semantan Estate] had fallen into an appealable error and warrants a curial intervention. The High Court judge should not have made an order for the land to be transferred and registered in the name of Semantan Estate when there was no such order stated,” he said.

Ahmad Shahrir on Aug 7 directed the Federal Land Registrar to effect the transfer of the land within three months of the court order, resulting in the federal government’s appeal. Ahmad Shahrir also allowed a stay of his decision on Sept 12.

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