3 November, 2017
IN THIS ARTICLE, SIEW HUEI IRA ANALYSES WHETHER IT IS CONSTITUTIONAL TO EMPOWER THE ASSESSORS TO DECIDE ON THE AMOUNT OF COMPENSATION FOR COMPULSORY LAND ACQUISITION CASES IN THE CASE OF SEMENYIH JAYA SDN BHD V PENTADBIR TANAH DAERAH HULU LANGAT.
Introduction
On 20 April 2017, the Federal Court in the case of Semenyih Jaya Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat[1] made a landmark ruling on the nature and extent of the assessors’ role in deciding on the amount of compensation for compulsory land acquisition cases.
Background facts
In this case, Semenyih Jaya Sdn Bhd (“the Developer”), who was the registered proprietor of a piece of land located in the District of Ulu Langat (“the land”), was notified of the intended compulsory acquisition of the land under the Land Acquisition Act 1960 (“the LAA”). The Land Administrator then conducted an enquiry to determine the amount of compensation payable to the Developer arising from the compulsory acquisition of the land and awarded compensation amounting to RM20,862,281.75 to the Developer. Dissatisfied with the award made by the Land Administrator, the Developer objected to the adequacy of the award. The objection was referred to the High Court for determination.
The objection was heard and determined by the High Court Judge who sat with two assessors. The High Court affirmed that part of the Land Administrator’s award relating to the valuation of the land, allowed the Developer’s claim for severance and injurious affection but dismissed the other claims of compensation sought by the Developer.
On appeal, the Court of Appeal dismissed the Developer’s appeal against the decision of the High Court.
Issues before the Federal Court
Dissatisfied with the Court of Appeal’s decision, the Developer applied for and obtained leave to appeal to the Federal Court. One of the issues for consideration by the Federal Court was whether section 40D of the LAA, which empowers the assessors to decide on the amount of compensation in compulsory acquisition cases, was constitutional.
The position prior to amendment in 1984
Before 1984, section 42 of the LAA contained a provision for assessors to aid the judge on the issue of compensation. Whilst the assessors played a vital role in advising the judge, it was the judge who was empowered to decide on the issues arising out of land reference proceedings as well as the amount of compensation to be paid in respect of the land acquired.
The 1984 amendment
Between 1984 and 1998, the role of the assessors was completely removed and a Judge sat alone to hear the appeal on compensation in the land reference court.
The 1997 amendment (present position)
The role of assessors was restored by the introduction of section 40D of the LAA. Section 40D of the LAA provides as follows:
“(1) Except as provided in this section the Court shall consist of a Judge sitting alone.
(2) Where the objection before the Court is in regard to the amount of compensation, the Court shall appoint two assessors (one of whom shall be a valuation officer employed by the Government) for the purpose of aiding the Judge in determining the objection and in arriving at a fair and reasonable amount of compensation.
(3) ….”
The decision of the Federal Court
The Federal Court observed that on the face of it, section 40A of the LAA appeared to be in order. However, upon closer scrutiny, the Federal Court observed that there was a difference between the existing section 40D of the LAA and the position prior to 1984.
Prior to 1984, the role of assessors was limited to assisting the judge on technical issues. This was consistent with the common law practice of appointing persons with special skills, knowledge or experience to assist judges during judicial proceedings to answer questions which may require such expertise.
The existing section 40D of the LAA however empowers the assessors to decide on the amount of compensation to be awarded arising out of the acquisition and such decision is final and non-appealable. The Federal Court held that this provision effectively usurps the power of the court in allowing persons other than the judge to decide on land reference proceedings. The Federal Court concluded that this provision therefore has the effect of undermining the judicial power of the judiciary and is unconstitutional. The Federal Court stressed that the power to award compensation in land reference proceedings is a judicial power that should rightly be exercised by a judge and no other.
By striking out the provision of section 40D of the LAA as being unconstitutional, the Federal Court has redefined the role of assessors in land reference proceedings. The Federal Court explained that the assessors are required to listen to the proceedings and evaluate the evidence. They may also be required to answer questions within their competence. At the end of the proceedings, the assessors are required to give their opinion as to the appropriate amount of compensation to be awarded in a particular land reference proceeding. The Federal Court stressed that it is then for the judge and the judge alone to deliberate and decide on the amount of compensation.
The Federal Court made it clear that the declaration that section 40D of the LAA is unconstitutional shall have prospective effect and hence, will only affect pending cases at first instance or at the appellate stage.
Conclusion
Following the decision in Semenyih Jaya Sdn Bhd, the new Chief Judge of Malaya, Tan Sri Ahmad Maarop, issued a new practice direction (Arahan Amalan Hakim Besar Malaya Bil 1 Tahun 2017) on 6 June 2017 expressly stating that the decision in Semenyih Jaya Sdn Bhd applies to all cases still pending and not finally disposed of.
The decision in Semenyih Jaya Sdn Bhd has finally provided clarity on the role of assessors in land reference proceedings.
[1] [2017] 3 MLJ 561
For further information, please contact:
Siew Huei Ira, Shearn Delamore & Co
irasiew@shearndelamore.com
