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Encik Wong Sing Nang: Mr. Speaker, Sir, I rise to take part in the debate on the Land Code (Amendment) Bill, 1998. First and foremost, there are three separate considerations that we have to take into account. The first is, as the Honourable Minister says, in determining the amount of compensation to be awarded for any land which is native area land. The awarding authority cannot take into account that such land is in fact a Native Area Land and therefore ought to be lower than that of a mixed zone land. Tuan Speaker, this is the most welcome amendment to the Land Code without which the principle of valuation in respect of the Native Area Land for the purpose of compensation to the disadvantage of the land owner concerned. I say this because for example in the Sibu Jaya Housing Estate a lot of the lands which were acquired for low cost housing were Native area lands and therefore considered to be worth less than mixed zone lands which obviously is very unfair to their owners. So, we hope that with the amendment to this particular area of the Land Code the rule to be made under it in future, respecting compensation to owners of Native Area Lands would be fairer and would enable their owners to have a fair and reasonable compensation. This is my first observation.

The second point which I want to make is that regarding the principle of valuation, an area which I would like to deal with a little more substantially than with the Native Area Land. Clause 3 of the Bill is to amend Section 60 of the Land Code so that the market value of the land to be resumed shall be assessed with reference only to the existing use thereof and in anticipation of its continued use having regard to the purpose of its use as stipulated in the land title.

Clause 4 of the Bill is to amend Section 61 so as to exclude, for the purpose of determining market value of resumed land, evidence of sales of compensable properties unless the court is satisfied that such sales were made bona fide and not for speculative purpose and, the burden of proof providing bona fides or otherwise lies on the persons who refer the matter to the court under Section 56(1). Clause 4 also seeks to exclude from consideration any enhancement or probable enhancement of the value of the resumed land as a result of development undertaken by the Government in the vicinity for the period of seven years as proposed in the Bill.

Section 60 of the Land Code sets out the matters to be considered in determining compensation while Section 61 sets out the matters to be disregarded in determining compensation. This amendment bill is to make additional matters to be considered and disregard both to Section 60 and Section 61 of the Land Code.

Compulsory land acquisition is indeed a controversial subject for quite a period of time. The intention of the Government to develop it often conflicts with the interests of private land owners. The problem here as the Honourable Minister rightly pointed out is how to compromise this conflicting interests when deciding, what is reasonable and what is fair to the land owners. Apart from empowering the executive to compulsorily acquire lands the law relating to land acquisition also seeks to resolve this conflict between the State and private land owners by awarding adequate compensation to those affected. Much frustration has been expressed in some quarters that the take over of lands by the Government has been at the unfair expense of the land owners. Under valuing of the properties, delays in payment, and the cost incurred in the employment of independent valuer to help settle disputes, are some of the problems confronting the land owners.

To a large extent the small land owners are hardest hit. Compulsory acquisition invariably involves resettlement of homes and most of these land owners have insufficient money to buy new houses. One of the most important matters to be taken into consideration as provided under Section 60(1)(a) of the Land Code is the market value of the land which based on decided court cases has been interpreted to be the resumed value as at the date of publication of notification under Section 47, or if no such notification has been published, the market value at the date of declaration made under Section 48.

Other considerations to be taken into account include any increase in the value of the lands of the person interested which is likely to accrue from the use to which the lands resumed will be put. Hence market value is one of the many factors to be taken into consideration to determine compensation. The Land Code does not define what actually is meant by market value but from the cases decided by the court, the generally acceptable definition has been propounded by the Learned Judge in the Nanyang Manufacturing Company against C.L.R. Johore. His Lordship in that case defined market value as, and I quote: ?The market value of a land may be roughly described as the price that the owner is willing but not obliged to sell might reasonably expect to obtain from a willing purchaser with whom he was bargaining for sale and purchase of land?. This was the judicial definition of market value and has been a generally accepted definition.

I now deal with the problem of delay in paying out compensation. The imposition of Section 47 on private land should be only for a specific period of time. Under the present Section 47 there isn?t any legal time frame for Section 47 to remain attached to the land title once imposed. It could therefore remain for the whole term of tenure of the land concerned. There were many instances where the land under Section 47 has been there for 15 or even 20 years and only when Section 48 is imposed will compensation be assessed and such assessment will be based on the value of the land at the time when S.47 was imposed, such an unfair practice must be rectified.

Mr. Speaker, Sir, in the case of Ting King Yee @ Ting King Yu and 17 others against Minister for Resources Planning and Another (1994) 4 CLJ 435 a Miri High Court case the late Learned Judge Datuk John Chong held that the award of compensation based on the market value at the date of publication of Section 47 notice is perfectly valid. The award was made in line with the provision of Section 51(b) of the Land Code, which inter alia requires the award of compensation to be made in accordance with Section 60 under which the amount of compensation to be awarded shall be the market value at the time of the publication of the notification under Section 47 or if no such notification has been published, the market value at the date of the declaration made under Section 48. The learned Judge further held that Section 47 and Section 48 of the Land Code are mutually exclusive of each other and do not form part and parcel of the acquisition process, so that the question of delay for 13 years in that case is irrelevant in so far as the making of Section 48 declaration is concerned.

The long delay in the actual acquisition of the land imposition of Section 47 had indeed caused a lot of difficulties, misunderstanding and grumblings against the Government. It is the prevailing view among the majority of the land owners that a legal time frame should be see for Section 47 to remain valid after it has been imposed and, that once that time has expired Section 47 should automatically lapse and be without effect.

My view in this matter is supported by the judgment of the then Chief Justice of Borneo Justice Tan Sri Dato Lee Hun Hoe in Superintendent of Land and Survey, Fifth Division, Limbang against Lim Teck Hoo and another (1980) 1 MLJ 58. I quote, ?Because of the delay in compensation there must be a time-frame to impose Section 47. I take the view that under the Sarawak Legislation, it is possible for more declarations than one to be made under Section 48 in respect of land comprised in a notification under Section 47. I am aware that where compensation has to be determined with reference to the material date under Section 47, any delay in making a declaration under Section 48 is bound to cause the person whose land is to be acquired to suffer pecuniary loss if land prices have arisen between the period of notification under Section 47 and declaration under Section 48. I hope the Government would try to minimise the delay in making the declaration. One way of preventing long delay would be to fix a time whereby notification under Section 47 would automatically lapse. Another way is to withdraw resumption under Section 79 as soon as the land is no longer required for public purpose.

The point I want to make here is that the imposition of Section 47 and the actual declaration under Section 48 will take a very long period of time. So, because of the delay and because of the administrative work, by the time Section 48 is declared it may be ten years, maybe 15 years after, before compensation is paid out which compensation if paid out much earlier the land owner would probably be able to use the money to buy an alternative piece of land.

For this reason, it is therefore my observation that the Government should seriously consider to imposing a time-frame for Section 47. For example, a period of five years after which it would automatically lapse. This is in response to the sentiment of the people.

The present land resumption under the Land Code is certainly subject to a lot of criticisms. The main one is of course the delay in compensation. No doubt reference may be made to the High Court for determination but it will take a long time. In fact to my knowledge, there are a lot of land reference cases still pending decision in the High Court which may take 15 or even 20 years. So, in this sort of scenario, why don?t the State Government consider setting up an independent Land Tribunal to sort out the matter expeditiously as has been done in Singapore?

In Singapore the law on compulsory acquisition is governed by the Land Acquisition Act 1966 which sets up an Independent Lands Tribunal. (Interruption)

Tuan Speaker: Honourable Member for Pelawan, we are not debating on Section 47 or Section... (Interruption)

Encik Wong Sing Nang: I finish Section 47 already, Tuan Speaker. (Interruption)

Tuan Speaker: We are focusing on valuation of the land under Section 60 and Section 61... (Interruption)

Encik Wong Sing Nang: I am coming to that...(Interruption)

Tuan Speaker: Could you shift your...(Interruption)
Encik Wong Sing Nang: Yes, yes, certainly, Tuan Speaker.

Section 3 of the Bill is to amend Section 60 so that the market price of the resumed land shall be assessed with reference only to the existing use thereof and shall not be deemed to exceed the price which a bona fide purchaser might reasonably be expected to pay for the land on the basis of its existing use or in anticipation of the continued use of the land and, no account shall taken into of any potential use of the land for any other higher or more intensive use.But, one may ask what is meant by ?bona fide? sale? The price obtained in a particular sale may not be the proper market price of the property sold. ?Market Value? means the value which a parcel of land would realise if sold in the market. The Seller must be a willing seller, a forced sale affords no criterion of the market value. The purchaser must be a prudent purchaser, that is one who makes his offer after making necessary inquiries as to the value of the land. A bona fide sale would therefore be one where the above criteria are satisfied.

The new Clause 3 of Section 60 of the code, provides that no account shall be taken of the potential value of the land. This provision is similar to Singapore Land Acquisition Act 1966. In Singapore, potential value is ignored when the questions of compensation is to be assessed. The market value should nevertheless include a reference to a potential value.

Tuan Speaker, market value has been defined by our Federal Court in the Collector of Land Revenue against Noor Chahaya binte Abdul Majid (1979) 1 MLJ 180 where the it was held that market value must include potential value. In that case, the learned Judge at first instance, while rightly directing himself that potentiality is a factor to be taken into consideration in assessing compensation, had nevertheless formed the erroneous view that the market value and potential value are separate items to be determined separately and then to be added together. The market value is in fact assessed as one composite figure which includes any development potential the land may have.Tuan Speaker, under the Indians Land Acquisition Act 1894, Section 23 leaves it open to the wisdom of the Court to decide, whether or not market value shall include potential value. This
principle has also been fully accepted in England as well. Tribunals in assessing compensation may in my view take into account not only the present purpose to which the land is applied, but also any other more beneficial purpose to which in the course of events it might within a reasonable period be applied, just as any other land owner might do if he were bargaining with a purchaser in the market.

The general principles applicable to compensation cases were summed up very nicely by Mr. Justice Eve, in the famous case of South Eastern Railway Company against L.C.C. (1915) 2 Chancellery 252 where the learned Judge said that in ascertaining market value considerations should be given to the followings:-

(a)   The value to be ascertained is the value to the vendor, not
                   its value to the purchaser;
(b)   In fixing the value to the vendor, all restrictions imposed on
                  the   user land and enjoyment of the land in his hand are
                  to be taken into account,   but   the   possibility   of   such
                  restriction   being modified   or   removed for his benefit
                 is not to be overlooked;
          (c)   Market price is not a conclusive test of real value;
         (d)   Increase in   value   consequent to the   execution of the
                undertaking for or in connection with which the purchase
                is made must be disregarded; e)    The value to be ascertained is the price to be paid for the
                   land   with all its potentialities and with all the use made of
                  it by the   vendor;

(f)    The   true   contractual   relations of the parties --- that of
                   purchaser and vendor --- is   not to be observed by and
                   endeavouring to construe   it   as   another   contractual
                   relation altogether -- that of indemnify and indemnified.?

Tuan Speaker, it is my observation that because market value include potential value, therefore, the clause should be amended and delete the words ?no account shall be taken into of any potential value of the land for any other higher or more intensive use? be deleted. It should be left to the wisdom of the High Court Judges because the doctrine of probable use or potential value is acceptable only within certain limitations. It always implies a certain amount of conjecture about future probabilities and this has sometimes led to claim founded on scheme of utilisation or adaptation, of too speculative a character and impractical imagination or of very remote possibility.

Tuan Speaker, the new Section 61(h) provides two additional matters to be disregarded in determining compensation. Firstly, evidence of sale of comparable properties which are not bona fide (example sales between connected persons), and secondly, those sales for speculative purposes. The onus of proof is on the appellant or person who refer the matter to court under Section 56(1). The conditions imposed by Clause (h) is a bit harsh. The appellant is unlikely to be in possession of facts surrounding transactions of which he is not a party. The normal rule in the law of evidence is to lead your evidence which can be challenged by the opposite party either from statements made in cross examination or by the opposite party himself adducing evidence of a contradictory nature. It seems that, the appellant in effect is required to prove a negative averment since a positive averment can always be converted into a negative statement by appropriate linguistic manipulation. The Singapore Land Acquisition Act 1966 Section 34 contained a similar clause to our new Section 61(h).

Tuan Speaker, with the above observations, my main contention is that the principle of valuation should be based on the cases decided by the High Court and the Federal Court, the market value should include the potential value of the land and the clauses that have been borrowed from the Singapore Land Acquisition Act 1966 which are now in our new Land Code (Amendment) Bill should be implemented. Probably the situation in Singapore pertaining to the land matter is slightly different from the matters we have to consider in Sarawak. For our State, the area of land is so much bigger than in Singapore.

So, with that observation, I rest my speech. Thank you, Tuan Speaker.