KUALA LUMPUR (Feb 16): The federal government is disputing a valuer’s multibillion-ringgit estimates for mesne profit compensation in the Semantan Estate (1952) Sdn Bhd case involving land along Jalan Duta.
The long-standing legal dispute, which spanned from 1957 to 2021, culminated in the courts ordering the government to pay compensation for tresspassing on the land.
Mesne profits are “the rents and profits which a trespasser has, or might have, received or made during his occupation of the premises, and which therefore he must pay to the true owner as compensation for the tort which he has committed”, according to Jowitt’s Dictionary of English Law.
The valuer for Semantan Estate, CBRE | WTW chairman Foo Gee Jen, had estimated mesne profit without interest to be about RM3.1 billion for the period, while it may run to RM6.646 billion with simple interest and RM13.242 billion with compound interest.
On Thursday (Feb 16), senior federal counsel Mohammad Al Saifi Hashim claimed in the High Court here that Foo’s estimates were incorrect, not based on court orders, and do not represent the actual claim made by the liquidator of Semantan Estate.
Al Saifi showed the 2009 court order, which had ordered that the calculation should not be based on any interests charged.
However, 59-year-old Foo responded that he had been asked by the liquidator to vary his calculations on three different scenarios, namely with no interest, with simple interest, and with compound interest.
Al Saifi then pointed out that Section 11 of the Civil Law Act had stipulated that the calculation of interest upon interest is prohibited, to which Foo replied that he had no knowledge of the stipulation.
Foo, who has been a professional valuer since 1987, agreed with Al Saifi that this is a legal opinion or issue, but maintained that he had been instructed by the liquidator of Semantan Estate to assist the court in showing the figures with simple and compound interests.
Counsel for Semantan Estate Ira Biswas objected to further questioning the interest calculation, saying it is a point of law, but judge Datuk Ahmad Shahrir Mohd Salleh allowed Al Saifi to pursue it a little further.
The witness who was testifying for Semantan Estate defended his valuation, which is now being disputed by the Valuation and Property Management Department (JPPH).
High Court ruled govt tresspassed land in 2009
The land in question in the long-standing dispute covers 263.72 acres (106.72 hectares) now encompassing the National Archives, the government offices of the Inland Revenue Board, the Tun Razak hockey stadium, the Segambut roundabout, the Malaysian Anti-Corruption Commission Academy, the Shariah Court, and the Wilayah mosque.
It was acquired more than 60 years ago in 1956 from Semantan Estate for RM1.32 million. In 2009, the High Court ruled that the government had trespassed on the land, and the decision was overturned by the Court of Appeal in May 2012.
However, the Federal Court upheld the High Court's decision in November 2012.
The apex court ruled that the government had trespassed on the land, as it acquired the parcels in 1956 under the then Land Acquisition Enactment for the purpose of developing a diplomatic (duta) enclave.
Subsequently, on Nov 22, 2018, the Federal Court, led by then Court of Appeal president Tan Sri Ahmad Maarop, dismissed the government's application to review the November 2012 decision.
Semantan Estate claimed it retained its beneficial interest in the 263.27 acres of land in Mukim Batu, which it alleged that the government had taken unlawful possession of, and that the government should pay the company mesne profits as damages for trespassing, with the said damages to be assessed by the court.
It filed a judicial review in 2019 to reacquire the said disputed land, but this was dismissed by the High Court.
The Court of Appeal is scheduled to hear the appeal on May 10.
Foo, on being cross-examined by Al Saifi, admitted that the said buildings in question on the land are still government buildings.
He also accepted Al Saifi’s contention that he did not write in or sought permission from Kuala Lumpur City Hall, the government premises, to physically inspect the buildings in question, which may help in the valuation process.
While Foo admitted that physical inspection was necessary, he disagreed that he had violated valuation regulations in coming to the estimation.
Foo also told the court that he based the estimated rental price of the government properties on private properties in the Golden Triangle here and other surrounding areas.
The trial will continue on March 27, with the cross-examination of Foo.
Besides March 27, Ahmad Shahrir has fixed Sept 18 to 20 this year as hearing dates for the dispute with two JPPH valuers coming to testify for the federal government.