PUTRAJAYA (Feb 4): The Court of Appeal has dismissed an appeal by See Hee Yang Property Management Sdn Bhd over loss of profit following the acquisition of nearly two acres of its 4.53-acre land in Klang for the construction of the West Coast Expressway (WCE).
The landowner had initially obtained planning approval from Shah Alam City Council (MBSA) to build 74 units of two-storey terraced houses, each valued between RM500,000 and RM630,000, and secured a RM3.25 million loan for the project.
Subsequently, the Selangor government acquired six of the 74 lots under the Land Acquisition Act. As a result, See Hee Yang revised its plan, seeking to develop the remaining land into 55 smaller and lower-priced houses.
The Klang district land office awarded the developer RM6.129 million in total compensation for the acquired land, including RM4.987 million attributed to projected loss of profit. The company sought to challenge this compensation in the High Court, but the lower court rejected the claim.
Court of Appeal judge Datuk Wong Kian Kheong, sitting with Datuk Azimah Omar (now a Federal Court judge) and Datuk Ismail Brahim, upheld the High Court’s decision in a 70-page judgment. The court ruled that the developer’s claim for business disturbance did not constitute injurious affection under the Land Acquisition Act, as no construction had commenced at the time of acquisition.
“This differs from cases like Semenyih Jaya, where development had already begun. In this instance, loss of profit or business cannot be factored into the market value of the acquired land,” Judge Wong said.
The court also confirmed that the compensation based on market value offered by the Klang district land office was appropriate. The High Court had adopted a standard market value of RM1,520.15 per square metre, consistent with five previous land references averaging RM1,500 per square metre.
“The High Court did not err in law in confirming the district office’s award. The compensation, granted on Sept 29, 2017, aligns with statutory provisions, and no further land reference is necessary,” the judge added.
The appellate court dismissed the appeal and ordered See Hee Yang to pay RM30,000 in costs each to the Malaysian Highway Authority and the Klang land district office.
Cheah Sin Chin and Gan Yu Lin of Messrs Azwar & Associates represented the developer, while Koh Yew Chong and Justin Leong Chee C’Jun of Messrs Lee & Koh represented the Malaysian Highway Authority. Etty Eliany Tesno and Norfariza Ridzuan appeared for the Selangor state legal advisor’s office.
The ruling reinforces the principle that compensation for land acquisition is determined primarily by market value, rather than projected profits, which is a key consideration for developers of industrial land in Selangor, factory projects in Puchong, and industrial property in the Subang area. It also has implications for residential developers and investors in commercial property in KL and office space in Bukit Jalil, as statutory land acquisition can impact project planning and financial projections in both industrial and mixed-use zones.
Malaysia