STATUTORY

VALUATION
RES 611 – LAND
ACQUISITION ACT
1960 (Amended)

ROHAYA ABDUL GHANI

AP 225
UITM PERAK
 LEARNING OUTCOMES

 At the end of the topic, the student

should be able to:
 a) explain the concept of land
acquisition 1960 Act
 b) identify the principles of land
acquisition valuation
 c) implement land acquisition valuation
LAND ACQUISITION
A REVIEW
OBJECTIVES OF LAND ACQUISITION
 The principle underlying acquisition of private property by the
state rest upon the famous “maxim sales populi est supra ma lax”,
that is, the welfare of the people or the public, is paramount law,

 and also on the “maxim necessitas publica major est quam privita”
which means ‘public necessities is greater than private.

 most countries in which land acquisition is practiced, the

constitution provides for protection of an individual right.

 The constitution not only allows acquisition of property in

accordance with law and procedure, also that such law should
provide for “just” or “fair” or adequate compensation.
What principle?
The Present Practice of Land Acquisition

a) Land acquisition is done through a process of law and in Malaysia it is done

according to the Land Acquisition Act, 1960 (as amended).

b) Article 13 of the Federal Constitution states:-

(i) No person shall be deprived of property save in accordance with law.
(ii) No law shall provide for the compulsory acquisition or use of property
without adequate compensation.
c) The State Authority under Section 3 of LAA 1960 (as amended) may acquire
any land which is needed:-
i. for any public purpose;
ii. by any person or corporation for any purpose which in the
opinion of the
State Authority is beneficial to the economic development of
Malaysia or to
the public generally or any class of the public; or
iii. for the purpose of mining or for residential, agricultural,
commercial or industrial purposes.
 “

The law requires the State to pay adequate

compensation”.
 Market Value
 Market Evidence
LAND ACQUISITION ACT 1960
 The principal land acquisition enactment in
Peninsular Malaysia is the Land Acquisition
Act 1960 (as amended).

 This Act contains the procedure governing the

acquisition of land, the principles regulating
the assessment and payment of
compensation and other incidental matters.
 LAND ACQUISITION ACT 1960
ACCORDING TO THE LAND ACQUISITION ACT
1960(AMENDED), THE LAND ADMINISTRATOR IS
REQUIRED TO DETERMINE THE COMPENSATION
FOR THE FOLLOWING PURPOSES:

❑ ACQUISITION OF LAND
❑ WITHDRAWAL FROM ACQUISITION
DETERMINATION OF COMPENSATION FOR LAND
ACQUISITION

LAND ACQUISITION ACT 1960 (AMENDED) – FIRST

SCHEDULE PRINCIPLES RELATING TO THE
DETERMINATION OF COMPENSATION

1. MARKET VALUE

2. MATTERS TO BE CONSIDERED IN DETERMINING

COMPENSATION

3. MATTERS TO BE NEGLECTED IN DETERMINING

COMPENSATION

4. LIMITATION ON AWARD
DETERMINATION OF COMPENSATION FOR
LAND ACQUISITION

1.0 MARKET VALUE

“The market value of land may be roughly

described as the price that an owner willing,
and not obliged to sell might reasonably
expect to obtain from a willing purchaser with
whom he was bargaining for the sale and
purchase of the land”
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

POTENTIAL VALUE
The market value to be determined must take into account the
potentialities of the land.

Potential value is not an item independent of the market value

of land - not to be valued as an independent and the two to be
added together in determining the compensation for the
acquired land. Market value must include potential value.

Potential development value should be determined on the basis

of evidence.
i. Evidence of general development in the area
surrounding the acquired land.
ii. Evidence of housing schemes near the acquired land
iii. Evidence of conversion of title, approved plan
iv. Evidence of demand
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

1.1 DATE OF VALUATION:

THE DATE OF PUBLICATION IN THE GAZETTE

NOTIFICATION UNDER SECTION 4 AND SECTION 8.

SECTION 4 (PRELIMINARY NOTICE)

THIS DATE IS APPLICABLE ONLY IF, NOTICE UNDER SECTION 4 IS FOLLOWED BY

NOTIFICATION UNDER SECTION 8 WITHIN 12 MONTHS

SECTION 8 (DECLARATION THAT LAND IS REQUIRED FOR A PUBLIC PURPOSE)

THIS DATE IS APPLICABLE IN CASE THERE

IS NO NOTIFICATION UNDER SECTION 4 OR
NOTIFICATION UNDER SECTION 8 IS MORE
THAN 12 MONTHS AFTER SECTION 4.
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

1.2 VALUATION METHOD TO ASSESS THE MARKET VALUE

THE ACT DOES NOT SPECIFY ANY SPECIFIC METHOD TO BE

APPLIED TO ASSESS THE MARKET VALUE, HOWEVER THE
VALUER UNDERTAKING THE TASK TO DETERMINE THE
MARKET VALUE MUST TAKE INTO CONSIDERATION THE
FOLLOWING:

▪ THE RECENT SALES OF LANDS WITH SIMILAR

CHARACTERISTICS SITUATED IN THE VICINITY.

▪ PARTICULAR CONSIDERATION TO THE LAST

TRANSACTION ON THE SUBJECT LAND, TRANSACTED
WITHIN 2 YEARS FROM THE DATE OF ASSESSMENT
THAT IS EITHER DATE UNDER SECTION 4 OR SECTION 8.
(The Er Boon Yan Principle - Er Boon Yan & Ors v The Collector of Land Revenue, Port Dickson)

16
 PRINCIPLE IN DETERMINATION OF MARKET
VALUE

RECOGNIZED METHODS OF VALUATION TO DETERMINE THE

MARKET VALUE AS CITED BY BUHAGIAR J IN NANYANG
MANUFACTURING CO. V. THE COLLECTOR OF LAND
REVENUE JOHORE(1954) MLJ 69:

(a) THE OPINION OF EXPERTS OR VALUATORS

(b) THE PRICE PAID WITHIN REASONABLE TIME, IN

BONA FIDE TRANSACTION OR OF THE LANDS ADJACENT
TO THE LAND ACQUIRED AND POSSESING SIMILAR
ADVANTAGES;
AND

(c) A NUMBER OF YEARS’ PURCHASE OF THE ACTUAL , OR

IMMEDIATELY PROSPECTIVE, PROFIT FROM THE LANDS
ACQUIRED

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 PRINCIPLE IN DETERMINATION OF MARKET
VALUE

ADDITIONAL METHODS OF VALUATION AS OF LAND

MENTIONED IN ONG YAN & ANOR. V. COLLECTOR REVENUE
ALOR GAJAH, MALACCA (1986)1 MLJ 405

(a) COSTING METHOD THAT IS, BY ADDING TO THE

PRIMORDIAL VALUE OF THE LAND ANY COSTS OF
IMPROVEMENT AND ALL ELEMENTS OF PROFIT; AND

(b) THE RESIDUAL METHOD, THAT IS BY RETROCESSIVE

DEDUCTION OF THE COST OF DEVELOPMENT AND
BUILDING FROM A BUILT UP PROPERTY SO AS TO
ARRIVE AT THE RESIDUAL COST OF THE LAND.

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PRINCIPLE IN DETERMINATION OF
MARKET VALUE

To conclude the following methods are

generally used by valuers to determine the
market value for compulsory acquisition :-
 Comparison method
 Investment method
 Cost method
 Residual method
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE
 COMPARISON METHOD:

Consideration of evidences :
▪ Sales of comparables within 2 years from date of acquisition.
▪ Sale of the same land- to consider last transaction within 2 years from the
date of valuation
(Para1(1A)
▪ For part of land taken, MV to be determined by reference to the whole land
(Para 1(1B)
▪ Post -gazette Sale transaction (ignore).
(Para1(1C)

Other consideration of evidences.

 Sale of undivided share for determining market value.
 Documentary evidence for proving sales transactions
 Previous awards
 Offer made by intending purchasers
 Acceptance of valuation as fair by some of the landowners

-
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

COST METHOD

 Economic principle of contribution.

 MV = MV (Land) + Depreciated Building Value
 Process: Estimate the value of land/ estimate the
current cost of erecting new building (dimensions,
accommodation, size of accommodation, material
quality, type, workmanship, finishes, other land
improvement, Professional fees, profit margin)
LAND AND IMPROVEMENTS
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

INVESTMENT METHOD

 For property capable of producing an income.

 Principle: the property that has utility is capable of
producing income.
 Example: Residential, commercial buildings for rental.
 MV = Net Income X Year’s Purchase
INCOME GENERATING PROPERTY
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE
RESIDUAL METHOD

 Suitable for site with development potential (Potential

Use).
 Potential Use; (a) valuer should take the present and
future use of land; (b) future potential not too remote
and consider possibilities realised or not realised; (c)
future potentiality is in the MV (value of land inclusive
of potential or Value as it stands and then adding
something to it for the potential)
 MV = GDV - TDC
VACANT LAND WITH DEVELOPMENT POTENTIAL
(PDG. JAWA)
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

1.3 LAND TO BE VALUED AS A WHOLE

 In the case of part of the land is to be acquired,
the market value of the scheduled land has to be determined by reference to
the whole land as shown in the document of title of the scheduled land after
having regard to the particular feature of that part.

 The valuer should first determine the value of the subject property and then
determine the value of the scheduled land after making the necessary
adjustments. In Federal Court of Ng Tiou Hong v Collector of Land Revenue,
Gombak, the judges said that ‘ under the Act there is no provision relating to
the method of valuation. However the Courts have adopted the principle of
valuing the scheduled land as a whole especially in cases where the area is
large and owned by numerous owners in different portions. It is now trite law
that under the LAA the scheduled lands are to be valued as a whole’.

27
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

1.4 TRANSACTION AFTER MATERIAL DATE OF

VALUATION
 In assessing the market value, disregard the evidence of any
sales transactions effected after the date of valuation.
 The transaction that occurs after the material date of valuation
carry little weight since the Government’s intentions would already
have been public knowledge even if it be to show that the amount
of the award was insufficient.
 Where the sale transaction of a comparable land had taken place
long after the date of the acquisition of the scheduled land, it
cannot be taken into account as the land price would have
appreciated considerably by then.

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 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

1.5 LAND HELD UNDER LEASEHOLD INTEREST

In a situation where the scheduled land to be acquired is

held under a title for a period of years, the valuer must take
into consideration the unexpired term of the lease as
stated in the document of title.

However the valuer shall have to disregard the likelihood of

a subsequent alienation to the person or body who is the
proprietor thereof immediately before the expiry of the
lease.

29
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

1.6 EXPRESS AND IMPLIED CONDITIONS OF TITLE -

 While assessing the market value of the acquired land, any
express condition limiting the use of the land cannot be ignored.
Land may be subjected to certain uses and if the use restricted for
such purpose, the land should be valued as such. Where there are
no implied or express conditions to impede the development of the
acquired land and no amount was required for conversion, the
acquired land will command a higher value.
 A land with an agriculture title cannot be made as though the title
condition had already been converted to industrial, commercial
and residential purposes when in actual fact, it was limited to
agricultural purposes at the material date.

30
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE
(b) The effect of any prohibition, restriction or
requirement imposed by or under the Antiquities Act
1976 in relation to any ancient monument or
historical site within the meaning of that Act on the
scheduled land.
Para 1(2)
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

1.7 MALAY RESERVE LAND

Acquisition of a Malay reservation land, Malay holding under the

Malay Reservations Enactment of Trengganu, or customary land
in the State of Negeri Sembilan or the State of Malacca.

The above facts shall not be taken into consideration when

determining the market value, except in the case where,
the scheduled land is to be devoted after the acquisition,
solely to a purpose for thebenefit of persons who are eligible
to hold the landunder such written law.
Para 1(2A)

32
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

1.8 USE UNDER DEVELOPMENT PLAN

Scheduled land to be acquired is located within a local planning
Authority area.
When assessing the market value of Such land, the specific land
use for that land as indicated in the development plan shall be
considered.
(Para 1(2BA)

The compensation payable is based on the planning approved

(provided a planning certificate is produced). If land is gazetted
for public purpose, to value as such. If it is not, to value with all
its potentialities.

33
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

34
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

1.9 PRINCIPLES OF REINSTATEMENT

 The use of this method is to assess the market value of

property so acquired that it has no general demand or
market for that purpose. The law requires assessment be
made on the basis of reasonable cost to the proprietor of
the scheduled land to purchase other land devoted to the
same use.
 Refers to properties with the following characteristics:
 no general demand
 such use must continue if not for the acquisition
 a bona fide intention to purchase other land devoting it
to the same purpose
 assessment would be cost of reinstatement

35
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE
1.10 SECTION 214A NLC (ESTATE LAND)
 Dealings of estate land is governed under section 214A NLC – to
discourage the fragmentation of estate lands of economics and
social considerations. Approvals from the Estate Land Board
must be obtained in any transfer, conveyance etc of estate land..

When assessing the market value of scheduled land to be

acquired which is an estate land, or forms part of an estate land
within the meaning of section 214A of the National Land Code,
the market value shall not in any way be affected by the fact that
it can be sold to one person.
Para 1(2D)
The compensation will be based on the value of an estate.

37
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

38
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE

1.11 IMPROVEMENTS EFFECTED TO THE ACQUIRED

LAND

If the market value of any scheduled land has been

increased, or is currently increased in either of the
following ways, such increase shall be disregarded:

(a) An increase by means of any improvement made by the

owner or his predecessor in interest within two years before
the declaration under section 8 was published in the
Gazette, unless it be proved that such improvements was
made bona fide and not in contemplation of proceedings for
the acquisition of the land;
Para 1(3)

39
Before After
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE
(cont..)

(b) An increase by reason of the use of the land, or of any

premises thereon, in a manner which could be restrained
by any court, or is contrary to law, or is detrimental to the
health of the inmates of the premises or to the public health.
Para 1(3)

41
 PRINCIPLE IN DETERMINATION OF
MARKET VALUE
1.12 THE VALUE OF ANY BUILDING ON ANY LAND

shall be disregarded if that building is not

permitted by virtue of:

(a) the category of land use; or

(b) an express or implied condition or restriction,
to which the land is subject or deemed to be
subject under the State land law.

42
 DETERMINATION OF COMPENSATION FOR LAND
ACQUISITION

Matters to be considered in determining compensation

 The market value as determined in accordance with para 1 of the

First Schedule.

 If there is any increase in the value of the other land of the person
interested as a result of the purpose of the acquisition, the increase
will be deducted from the total compensation. (BETTERMENT)

43
BETTERMENT

The principle:
 The interested party should not stand to gain
from the acquisition.
 Arises in 2 ways:
 enhanced by the declared purposes
 enhanced by actual construction.
 BETTERMENT

“Any increase in the value of the other land of the person

interested likely to accrue from the use to which the land
acquired will be put; which shall be deducted from the total
compensation”
 An example would be a new road scheme which provides
access to a land which hitherto had no access.
 Compensation for market value would be the value of the
land taken but the appreciation in value of the remaining
land should be set off against the compensation payable to
the owner.
 BETTERMENT

Example:
Total Area of Land : 30 acres
Acquired land : 20 acres
Remaining Land : 10 acres
Value of land before Acquisition (2nd layer lot) @RM150,000 per
acre
Value of land after Acquisition (Road Frontage) @RM200,000
per acre
 BETTERMENT

VALUATION FOR BETTERMENT

Market Value of
Acquired land 20acres @ RM150,000/acre RM3,000,000

Less: Betterment (remaining land)

After Acquisition 10acres @ RM200,000/ acre RM2,000,000

Before Acquisition 10acres @ RM150,000/ acre RM1,500,000 (RM500,000)

Amount of Compensation RM2,500,000

 DETERMINATION OF COMPENSATION FOR LAND
ACQUISITION
Matters to be considered in determining
compensation (cont…)

 The damage (if any) sustained or likely to be sustained by the

person interested at the time of the land Administrator’s taking
possession of the land by reason of severing such land from his
other land.(SEVERANCE)

48
SEVERANCE

“Severance is depreciation of lands by virtue of its own

inadequacy after being cut off from other land previously held
with it”

 The phrase “damage due to severance” can have two

interpretations:
a) damage caused to the rest of the owner’s land by the
loss of part which is taken.
b) damage caused where one part of an owner’s land is
separated from the rest from the other part. (Eg:
acquisition of a strip of land through a farm separating
the farm into two or more parts)
SEVERANCE

Depreciation in value of remaining land caused by the loss of

the acquired land.
 There must be partial taking . The land taken and the
remaining land held under same title or ownership or
physical location and each giving enhanced value to the
whole.
 There must be damage to the remaining the land.
➢ caused by the loss of portion taken
➢ caused by separating one part from the other
Where damage is extensive, acquiring body may acquire the
remaining portion.
SEVERANCE
 EXAMPLES OF SEVERANCE

a) An urban property reduced in damage after another part of it had been taken for
slum clearance purpose.
b) A piece of land acquired from a firing range reduced the safety area so that the
range could no longer be used. A large sum has to be paid for the depreciation of
the remainder.
c) The area of the remaining land is inadequate for the actual or proposed use.
d) By reason of the acquisition, the owners are permanently disabled from providing
for the hotel a swimming pool, recreational facilities which they would have done.
Therefore the appellant has suffered substantial financial loss from the reduction of
the rental values of the hotel.
e) Depreciation in the possibility that the land cannot be occupied and enjoyed as one
compact holding.
f) Separation of farm buildings from the farm by the construction of a road across the
property i.e. increased cost in working a farm severed from another.
g) Road front land acquired although still with access could leave the land remaining
recessed such as reduced in value.
 DETERMINATION OF COMPENSATION FOR LAND
ACQUISITION

Matters to be considered in determining

compensation (cont…)

 The damage (if any) sustained or likely to be sustained by the

person interested at the time of the land Administrator’s taking
possession of the land by reason of the acquisition injuriously
affecting his other property, whether movable or immovable, in
any other manner.(INJURIOUS AFFECTION)

53
INJURIOUS AFFECTION

“Depreciation in value to the land due to the exercise of

statutory powers ( caused by intended use of the portion
acquired.)”

Where the land is held with land taken then such

depreciation will give a right to compensation provided that
the compensation can be traced to some act by
government or acquiring authority.
 Depreciation in value of remaining land
 Closely linked with concept of severance but include:
 His other property, movable and immovable
 Use which cause a diminution of value of other land
 depreciating the value of land due to noise, dust etc.
INJURIOUS AFFECTION

Injurious Affection

Non existence
of direct
access must
be
compensated
Railing blocking the assess into by estimating
the subject lot the amount of
injurious
affection.
INJURIOUS AFFECTION

Injurious Affection

Elevated Road Project at Jalan Sultan Azlan Shah / Jalan Gopeng

Access for vehicle block

INJURIOUS AFFECTION

No Access Road Will Affect The Income

of the Petrol Station

Customer will find

alternative for other
petrol station due to
incovienence to make
U-Turn
 INJURIOUS AFFECTION
 The remedy for injurious affection as in all cases of compensable
nuisances is damages. In considering the damages that is
payable, the following points need to be considered.
a) Compensation is only payable to person interested;
b) There must be an acquisition on a part of the land otherwise
there can be no claim for injurious affection;
c) The damage must be such as would otherwise be a nuisance
or an actionable wrong;
d) It has been held that damage should arise from the execution
of the purpose declared or authorized by the acquisition;
e) Injury must be an injury to land and not merely be a personal
injury or an injury to trade;
f) It must be caused by the construction of the works and not by
their subsequent user. All claims are limited on the land taken.
INJURIOUS AFFECTION
Examples:
 Sewage depot (Cowper Essex v Acton Land Board)
 Ferry- Acquisition of land for a bridge with the opening
of the bridge, the ferry business operated by the owner
of remaining land claimed loss of earnings. (Collector
of Dinajpore v Ginja Rath Roy)
 Acquisition for building an embankment resulting in the
loss of the river frontage and Metropolitan Board off the
loss of:
o loss of privacy
o the increase of dust and noise
o the creation of the embankment and road
(Duke of Bucceleuch and Queensburry v The
Metropolitan Board of Works)
 Oil Mill Operation – Use of land for industry preventing or
reducing the supply of water to an oil mill. The need to turf the
exposed slope to prevent contamination of water by works done
on the land ( Consolidated Bhd v PHT Klang, 1984)
 Burial Ground – the use of the land for a burial ground thus
depreciating the remaining land – offending sight (Semantan
Estate v CLR Kuala Lumpur)
 Loss of frontage – May seriously affect the land remaining (Datuk
Dr Murugsu Sockalingam v Supt of Lands and Mines First
Division Sarawak)
 Depreciation of building or remaining land where works
done on the land acquired caused damage to the structure
(Mooi Lam v CLR Kuala Lumpur).
 Construction and use of a camp may depreciate the value
of adjoining part of the estate for such depreciation such
as loss of privacy, loss of amenities, vulgarization of the
neighborhood; compensation must be assessed ( Re Neds
Point Battery ).
 Where land is acquired for a rifle range the owner is
entitled for compensation for any reasonable depreciation
in value of his other land by reason of the fact that the rifle
range will interfere with his working of such field ( Wernike
v Secretary of State ).
 Loss of easement ( support light etc)
 Land rendered useless by being in the flight path of incoming
and outgoing aircraft ( Datuk Dr Murugasu Sockalingam )
Rejected on lack of evidence.
METHOD IN ASSESSING THE SEVERANCE AND INJURIOUS
AFFECTION

a) loss in value of retained land by taking a percentage of the

market value.
b) costs to remedy the loss.
c) loss of profits or earnings from land capitalized to
compensate for loss.
 Generally the accepted method of computing severance and
injurious affection is by the “Before and after method”
 SEVERANCE AND INJURIOUS
AFFECTION
VALUATION FOR SEVERANCE AND INJURIOUS AFFECTION

Value of Land Acquired 2.825acres @ RM20,000 per acre RM56,500

Plus: Severance & Injurious Affection (remaining land)

After Acquisition 3.85acres @ RM8,000 per acre RM30,800

Before Acquisition 3.85acres @ RM20,000 per acre RM77,000 RM46,200

Amount of Compensation RM102,700

 DETERMINATION OF COMPENSATION FOR LAND
ACQUISITION
Matters to be considered in determining
compensation (cont…)

 If, in consequence of the acquisition,

he is or will be compelled to change his residence or place of
business, the reasonable expenses, if any, incidental to such
change. (Disturbance claims)

65
INCIDENTAL EXPENSES
If a person is compelled to move from his place of business
or residence, any reasonable expenses related to the
removal are compensable. These include:
a) cost of removal furniture, goods, equipment etc.
b) cost of electrical installation and renovations to new
building.
c) legal fees for putting up agreement for the new tenancy.
d) adaptation of fixtures, fittings and chattels.
e) Replanting and adapting new premises in certain cases
such as replacement of carpets and curtains.
f) Publicity cost including letterheads, business cards,
and advertising cards.
g) Costs reasonably incurred in looking for alternative
accommodation including surveyors fee.
LOSS OF EARNING

 Earnings means what is acquired by labour, service or

performance.
 It has no application in cases where the loss of income
complained of is a loss of the income of the property itself which
is being acquired.
 Income from land is not earning in this context because it is rent
and market value would have covered that portion of income.
 A person is entitled to claim damages for loss earnings if he
earns on such business in the acquired premises and by the
acquisition he is deprived of his profits by reason of the fact that
he cannot find any other place where he can carry on the
business in which he was engaged in the acquired premises.
LOSS OF EARNING:
The following items are usually compensated under this heading:
a) depreciation of fixtures.
b) depreciation of stock.
c) loss of goodwill.
“Goodwill may be taken to mean probability of the
business being maintained at a certain level of profit
when it is continued at the same place”.

❖ The measure of damage will be the diminution of the

profit level at the new place or the total loss in profits
owing to extinguishment of the business.
 INCIDENTAL COST & LOSS OF EARNING

Example:
 In Dr. J. B Ponnampalam VS. P.H.T Wilayah Persekutuan.
 Summary of items damages approved by High Court is as follows:-
a) Cost of electrical installations and renovations at the new
premises: RM 9,782.00 (Sec 2 Para (e) First Schedule LAA 1960)
b) Cost of Transporting belongings from old premises to the new
premises: RM 1,000.00 (Sec 2 Para (e) First Schedule LAA 1960)
c) Legal Fees for putting up agreement for the new tenancy:
RM 206.50 (Sec 2 Para (e) First Schedule LAA 1960)
d) Loss of net income as the result of stopping practice during the
shifting period: RM 1,000.00 (Sec 2 Para (d) First Schedule LAA 1960)

TOTAL RM11,988.50
 DETERMINATION OF COMPENSATION FOR LAND
ACQUISITION
Matters to be considered in determining
compensation (cont…)

 Where only part of the land is to be acquired, any

undertaking by the State Authority, or by the Government,
person or corporation on whose behalf the land is to be acquired,
for the construction or erection of roads, drains, walls, fences or
other facilities benefiting any part of the land left unacquired,
provided that the undertaking is clear and enforceable.
(Accomodation works)

70
ACCOMMODATION WORKS

 when the present state of improvements is disturbed by the

construction of a road or a drain, it has been found earlier and
more convenient for the contractor of the acquiring authority to
put back the improvement.
 Therefore if the acquiring authority undertakes to carry out the
accommodation works then claims under such headings need
not be entertained.
 DETERMINATION OF COMPENSATION FOR LAND
ACQUISITION
Matters to be neglected in determining
compensation

(a) The degree of urgency which has led to the acquisition.

(b) Any disinclination of the person interested to part with the

land acquired.

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 DETERMINATION OF COMPENSATION FOR LAND
ACQUISITION
Matters to be neglected in determining
compensation (cont…)

(c) Any damage sustained by the person interested which if

caused by a private person, would not be a good cause of
action.
(d) Any depreciation in the value of the land acquired likely to
result from the use to which it will be put when acquired.

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 DETERMINATION OF COMPENSATION FOR LAND
ACQUISITION
Matters to be neglected in determining
compensation (cont…)

(e) Any increase to the value of the land acquired likely to accrue
from the use to which it will be put when acquired.

(f) Any outlay on additions or improvements to the land acquired,

which was incurred after the date of the publication of the
declaration under section 8, unless such additions or
improvements were necessary for the maintenance of any
building in a proper state of repair and unless, in the case of
agricultural land, it is any money which has been expended
for the continuing cultivation of crops on it.

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 DETERMINATION OF COMPENSATION FOR LAND
ACQUISITION
Limitation On Award

Where at any inquiry made by the Land Administrator under section

12, or in any statement in writing required by the Land
Administrator under section 11 (2), any person interested has :

(a) made a valuation of or claimed compensation for any land or

any interest therein, such person shall not at any time be
awarded any amount in excess of the amount stated or
claimed;
(b) Refused or has omitted without sufficient reason to be allowed
by a Judge, to make a claim to compensation, such person
shall not at any time be awarded any amount in excess of the
amount awarded by the Land Administrator.

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