Govt challenges Semantan valuer's assessment of 1956 Duta Enclave land value

KUALA LUMPUR (Aug 21): The government on Friday challenged the valuation presented by Semantan Estate (1952) Sdn Bhd's valuer to the High Court, contending that his estimation for the 263.272-acre ‘Duta Enclave’ land compensation based on 1956 market rates was flawed.

The dispute centred on whether the land should have been assessed strictly as agricultural property, or whether the assessment should take into consideration its proximity to the residential parcels of Kenny Hills, now known as Bukit Tunku, and warranted higher valuation.

Hearing over the matter proceeded as High Court judge Roslan Mat Nor denied an adjournment sought by the parties, despite the government's settlement offer last week.

During cross-examination by senior federal counsels Nurhafizza Azizan and Azza Azmi, CBRE | WTW adviser Foo Gee Jen, 63, was challenged repeatedly over his court-submitted valuation report, in which he refused to categorise the property purely as agricultural land.

Nurhafizza: The subject (Duta Enclave) land was agricultural land?

Foo: I disagree.

Nurhafizza: Do you have any record that it is not agricultural land?

Foo: No.

Nurhafizza: At the time, the property subject to valuation was rubber estate?

Foo: Existing use was rubber estate.

Nurhafizza: The portion acquired was 263.272 acres?

Foo: Yes.

While Foo conceded that the land's existing use in 1956 was a rubber estate and there were no records stating otherwise, he maintained that the valuation must reflect its location adjacent to Kenny Hills.

Foo argued that parts of the acquired plot bordered Kenny Hills, with access to a public road. Because Kenny Hills had already transitioned into residential land, he maintained that the subject land carried significant appreciation potential prior to its compulsory acquisition by the government in 1956.

Foo was further challenged over the timeline he used in his calculation of comparable transactions. His valuation incorporated transactions from Kenny Hills after the acquisition date, which supported an estimated market value of between RM5,879 and RM6,000 per acre.

The government, however, contended that comparable sales should rely on transactions from 1955 up to the acquisition date of Dec 3, 1956, which yielded a valuation of RM3,300 per acre.

Semantan Estate was previously compensated at RM5,282 per acre by the Selangor government for the plot. It had demanded RM13,000 per acre during land inquiry hearings at the time, before accepting the initial payout under protest. In the end, they were awarded a total of RM1.32 million in 1956, which the court subsequently deemed inadequate.

The courts have also ruled the pre-Merdeka compulsory land acquisition as unlawful and amounted to trespass, and ordered appropriate compensation for Semantan Estate based on 1956 market rates, as well as mesne profit (damages for unlawful occupation).

While the compensation is being assessed in this ongoing trial, the mesne profit proceeding is being heard before a separate High Court judge, with a decision pending. The parties, however, are undergoing mediation.

Semantan valuer: 1956 acquisition closer to Merdeka

Foo attributed his decision to include post-acquisition transactions in his comparable assessments to the Merdeka sentiment that was prevailing at the time, following Tunku Abdul Rahman's February 1957 announcement of Malaya's independence date that boosted market sentiment.

When asked if this was his personal opinion, Foo pointed to the land transactions in Kenny Hills that directly reflected that sentiment. When it was put to him that his valuation was not supported by any documentation or report, Foo disagreed.

Senior federal counsel Azza then argued that Foo's valuation was flawed because the subject property had private access roads, while Kenny Hills had public roads.

Foo agreed that public roads may result in higher valuation, but said he could not confirm whether the road in the subject land was private or otherwise from archival map markings alone.

He also contended that Semantan Estate had requested a further discovery order on the transaction that took place 70 years ago as it was not provided with the full details. But the court had ruled against further applications for discovery.

Foo further pointed out that the compulsory acquisition had reduced access to the remaining unsold estate, diminishing its value.

Asked why he did not rely on 1958 reports by AA Wragg and AIG Harding, Foo said there was no equivalent comparative reports at the material time. He also said he could not independently verify the authenticity of their reports.

Lead counsel for Semantan Estate, Ira Biswas, then objected to the line of questioning as hearsay because the original authors were deceased.

Wragg was Malaysia's first chief valuer who had laid the groundwork for the nation's property valuation profession in the mid-1950s. His appraisal, known as the Wragg Report, remains a key historical reference for valuers.

Foo also took issue with the government setting aside 30%-40% of the land area for public facilities (roads, drainage and power substations), saying that no more than 20% would be required given the low-density development typical of the 1950s.

“If we look at the material time, the (developments then were) low density and there would not be high-rise developments to support higher density for township developments,” he said in disproving the government’s valuation.

Last week, Foo testified that the government's valuation was not accurate and not reflective of the prevailing situation.

Besides Ira, Janet Chai Pei Ying and Alexie Ng Ying Ching of Messrs Chooi & Co appeared for Semantan Estate. The company itself — founded by Eng Lian Group and Ng Chin Siu & Sons Rubber Estates Sdn Bhd, the vehicles of two prominent land-owning families — is undergoing voluntary liquidation.

Eng Lian Group is best known for developing Bangsar in Kuala Lumpur, including its main commercial area, Bangsar Village. Ng Chin Siu & Sons Rubber Estates has been less active in recent years, though it once owned much of Desa Sri Hartamas and Mont Kiara.

Hearing continues before Roslan on Sept 1 and Oct 16.

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