Malaysian Property Law

Injurious Affection, Section 38(2) and the Restriction on Raising New Compensation Issues for the First Time before the Federal Court

1. Case Study

Case Study: Can a Landowner Raise a Claim for Injurious Affection for the First Time before the Federal Court?

Background

Mr. Rahman owns a large parcel of land, part of which is compulsorily acquired under the Land Acquisition Act 1960.

The acquisition leaves Mr. Rahman with a substantial portion of unacquired land.

He maintains that the acquisition and the use to which the acquired portion will be put have adversely affected the value of the land that remains in his ownership.

He therefore considers that he has suffered injurious affection.

In broad terms, such a claim concerns damage or diminution in value suffered by the owner in relation to the remaining property as a consequence of the acquisition, subject to the statutory compensation framework.

Statutory Basis of the Claim

The relevant compensation head is ordinarily associated with paragraph 2(d) of the First Schedule to the Land Acquisition Act 1960, rather than “section 2(d)” of the Act.

Accordingly, where the source material refers to “section 2(d)”, it is useful to understand the reference as concerning the statutory compensation provision dealing with injurious affection.

The distinction is important for accurate statutory citation.

Mr. Rahman’s Valuation Report

Mr. Rahman appoints a professional valuer to prepare evidence for the compensation proceedings.

The valuation report addresses the market value of the acquired land.

However, it does not expressly plead or quantify a claim for injurious affection.

No separate valuation analysis is provided showing how the remaining land has allegedly diminished in value because of the acquisition.

Proceedings before the High Court

The compensation dispute proceeds to trial before the High Court.

Mr. Rahman argues that the compensation awarded is inadequate.

However, during the High Court proceedings, his counsel does not specifically advance a separate claim for injurious affection.

No substantive argument is made on that head of compensation.

The acquiring authority therefore does not have to meet a properly developed injurious-affection case at the trial.

Appeal to the Federal Court

After the High Court proceedings, the dispute eventually reaches the Federal Court.

For the first time, Mr. Rahman seeks to argue that he is entitled to additional compensation for injurious affection.

The Senior Federal Counsel objects.

The objection is straightforward.

The claim had:

not been pleaded in the appellant’s valuation report;

and

not been argued before the learned High Court judge.

The Senior Federal Counsel therefore contends that the issue is a new ground raised for the first time at the Federal Court stage.

Reliance on Section 38(2)

The Government relies upon section 38(2) of the Land Acquisition Act 1960.

Section 38(2) provides in substance that an application for reference must state fully the grounds upon which objection to the award is taken.

It further provides that no other ground may be given in argument at the court hearing without leave of the court.

The Government argues that Mr. Rahman cannot bypass this statutory restriction merely because the case has reached the appellate stage.

The Senior Federal Counsel’s Argument

The Senior Federal Counsel contends that the injurious-affection claim is not merely a different way of expressing an existing valuation argument.

It is a distinct head of compensation.

It may involve:

different factual allegations;

different valuation evidence;

different expert analysis;

and

a different evidential response from the acquiring authority.

Accordingly, allowing it to be introduced for the first time before the Federal Court would place the Government in the position of having to answer a claim that was never properly litigated at first instance.

The Importance of Leave

Mr. Rahman therefore cannot simply assume that the Federal Court will entertain the new issue.

If section 38(2) applies, he must first obtain the leave of the court to raise the additional ground.

Without such leave, the statutory restriction operates against him.

Relationship with

Damansara Jaya Sdn Bhd v Pemungut Hasil Tanah Petaling

The principle is consistent with Damansara Jaya Sdn Bhd v Pemungut Hasil Tanah Petaling.

In that case, the court recognised that a landowner is not invariably and permanently prevented from advancing a fresh compensation ground.

However, a new ground may be introduced only if the required prior leave of the court is obtained.

The crucial doctrine is therefore one of controlled flexibility.

The law permits the court to allow a new compensation issue in an appropriate case.

But the claimant has no unrestricted right to introduce one whenever convenient.

The Central Conflict

The central question is:

Can a landowner raise a claim for injurious affection for the first time before the Federal Court where the claim was neither pleaded in the valuation report nor argued before the High Court, without first obtaining leave under section 38(2) of the Land Acquisition Act 1960?

The stronger principle is:

A distinct claim for injurious affection that was not included in the grounds previously advanced and was not litigated before the High Court cannot ordinarily be introduced as of right for the first time on appeal; section 38(2) requires the claimant to obtain leave before relying upon the new ground.

2. Questions and Answers with Case Examples

Question 1: What is injurious affection?

Answer

Injurious affection is a recognised head of compensation concerned, broadly, with injury or diminution in value suffered by the owner in relation to land remaining after the compulsory acquisition.

It is distinct from compensation representing simply the market value of the land actually taken.

The claimant must establish that the alleged loss falls within the statutory compensation framework.

Case Example

Issue

Whether the owner can claim for loss in value to the part of his property that was not acquired.

Rule

Where the statutory conditions for injurious affection are satisfied, diminution affecting retained land may be compensable.

Application

Part of an industrial site is acquired for a major infrastructure project, leaving the remaining portion with substantially impaired access and diminished market value.

Conclusion

A claim for injurious affection may arise, subject to proper pleading and proof.

Question 2: Is an injurious-affection claim the same as claiming a higher market value for the acquired land?

Answer

No.

The two claims address different losses.

Market-value compensation concerns the value of the land actually acquired.

Injurious affection concerns damage suffered in relation to the remaining property.

Case Example

Issue

Whether a landowner can treat all compensation losses as part of a single valuation figure.

Rule

Different statutory heads of compensation should be identified and established separately where the law requires.

Application

Mr. Rahman claims RM5 million for the acquired portion and a further RM800,000 because the retained land has fallen in value.

Conclusion

The second amount represents a distinct potential head of compensation and should be properly advanced as such.

Question 3: Why did the Senior Federal Counsel object to the injurious-affection claim?

Answer

The objection was that the claim had not previously formed part of the case properly presented by the appellant.

Specifically, it had:

not been pleaded in the appellant’s valuation report;

and

not been argued during the High Court trial.

It was therefore characterised as a new issue raised for the first time before the Federal Court.

Case Example

Issue

Whether a party may introduce an entirely new compensation head only after losing in the High Court.

Rule

Section 38(2) restricts reliance upon grounds not properly stated or previously advanced unless leave is obtained.

Application

The claimant litigates only market value before the High Court and introduces injurious affection for the first time on final appeal.

Conclusion

The new ground may be barred unless the court grants leave.

Question 4: Why is the valuation report important?

Answer

The valuation report normally identifies and supports the compensation claims being advanced.

If injurious affection is relied upon, expert evidence may be required to demonstrate:

the nature of the injury;

the causal relationship with the acquisition;

and

the resulting diminution in value.

Where the report contains no such claim, the opposing party may reasonably prepare its case on the basis that injurious affection is not in issue.

Case Example

Issue

Whether an acquiring authority suffers potential prejudice if a new valuation head is introduced late.

Rule

Procedural fairness requires reasonable notice of the case to be answered.

Application

The Government’s valuer prepares evidence solely on market value because the claimant’s report contains no injurious-affection analysis.

Conclusion

Allowing the claimant to introduce that issue only on appeal may cause substantial procedural unfairness.

Question 5: Why is it significant that the claim was not argued before the High Court?

Answer

The High Court is the court in which the compensation evidence and relevant factual issues are ordinarily tested in the reference proceedings.

If an issue was never argued there, the High Court would have made no findings of fact concerning it.

An appellate court may therefore lack the evidential and factual foundation required to determine the new claim properly.

Case Example

Issue

Whether an appellate court should decide an issue requiring factual findings that were never made below.

Rule

New issues are particularly problematic where they require additional evidence or factual determinations.

Application

Whether the remaining land has diminished by 20% requires competing valuation evidence, but no such evidence was tested before the High Court.

Conclusion

The appellate court has strong reason not to entertain the new claim as of right.

Question 6: What does section 38(2) require?

Answer

Section 38(2) requires the application for reference to state fully the grounds upon which objection to the award is taken.

It also restricts the introduction of additional grounds during court proceedings unless the court grants leave.

Case Example

Issue

Whether an objector may keep some compensation claims undisclosed until a later stage.

Rule

The grounds should be fully identified, subject to the High Court’s power to permit additional grounds.

Application

A claimant includes market value only but later seeks to add severance and injurious affection.

Conclusion

Leave is required before the additional grounds may properly be pursued.

Question 7: Does section 38(2) completely prohibit fresh claims?

Answer

No.

Section 38(2) creates a qualified restriction.

A new ground may be advanced if the court grants leave.

Case Example

Issue

Whether an omitted injurious-affection claim is automatically lost forever.

Rule

The court retains discretion to permit a new ground where leave is properly sought.

Application

The claimant discovers an overlooked compensable effect and promptly seeks leave before the issue is litigated.

Conclusion

The court may consider allowing the claim.

Question 8: Can the claimant introduce the new ground without obtaining leave?

Answer

Ordinarily, no.

The express statutory condition is that an additional ground cannot be given in argument without leave of the court.

Case Example

Issue

Whether counsel can simply begin arguing injurious affection in appellate submissions.

Rule

A new ground is not available as of right.

Application

The issue is absent from the original claim and High Court proceedings, and no leave has been requested.

Conclusion

The court may refuse to entertain it.

Question 9: Why is prior leave important?

Answer

Leave gives the court control over the scope of the compensation dispute.

It allows the court to consider:

why the issue was omitted;

whether the opposing party will be prejudiced;

whether additional evidence is required;

whether the claim is legally arguable;

and

whether permitting it would serve justice.

Case Example

Issue

Whether a newly discovered claim should automatically be excluded.

Rule

The requirement of leave permits flexibility while protecting procedural fairness.

Application

The claimant explains the omission promptly and the opposing party can address the matter without serious prejudice.

Conclusion

The court may exercise its discretion to permit the new ground.

Question 10: Does obtaining leave mean the injurious-affection claim succeeds?

Answer

No.

Leave merely permits the claimant to advance the ground.

The claimant must still prove:

legal entitlement;

causation;

the existence of injurious affection;

and

the amount of resulting loss.

Case Example

Issue

Whether procedural permission establishes substantive compensation entitlement.

Rule

Admissibility of the ground and proof of the ground are separate matters.

Application

The court grants leave, but the valuation evidence fails to establish any diminution in the retained land.

Conclusion

The claim may still fail on its merits.

Question 11: How does this principle relate to

Damansara Jaya

?

Answer

It is consistent with the principle in Damansara Jaya Sdn Bhd v Pemungut Hasil Tanah Petaling.

That case recognised that a new compensation claim can potentially be advanced during court proceedings.

However, proper leave must first be obtained.

Case Example

Issue

Whether the statutory regime is absolutely rigid.

Rule

The court has discretion to allow new grounds, but the claimant must comply with section 38(2).

Application

An applicant wishes to add injurious affection after omitting it earlier.

Conclusion

The proper course is to seek leave rather than to argue the issue as though it had always formed part of the case.

Question 12: Why are appellate courts particularly cautious about new issues?

Answer

An appellate court normally reviews a case on the basis of the evidence and issues properly considered by the court below.

A wholly new issue may require evidence that was never adduced or tested.

It may also deprive the opposing party of the opportunity to respond properly at trial.

Case Example

Issue

Whether the Federal Court should undertake its own factual valuation inquiry.

Rule

An appellate court is generally poorly placed to determine a new fact-intensive issue lacking findings below.

Application

The Federal Court receives a new argument that the retained property has lost 30% of its value, but no trial evidence exists on the point.

Conclusion

There are strong procedural reasons not to determine the new claim without proper leave and an adequate evidential foundation.

Question 13: Is this merely a technical procedural rule?

Answer

No.

Section 38(2) promotes substantive procedural fairness.

It ensures that:

the acquiring authority knows the case it must meet;

relevant evidence can be prepared;

the High Court can determine disputed facts;

and

appellate courts review issues that were properly litigated below.

Case Example

Issue

Whether restricting new issues serves any legitimate purpose.

Rule

Procedural rules help preserve fairness and orderly adjudication.

Application

A complex new claim requiring expert valuation evidence is introduced only at the final appellate stage.

Conclusion

The restriction prevents unfair surprise and protects the integrity of the reference process.

Question 14: What is the central rule for an exam answer?

Answer

The central rule is:

A landowner should fully state all grounds of objection to the Collector’s award. A fresh compensation claim, including injurious affection, is not necessarily absolutely barred if omitted earlier, but it cannot be introduced as of right; prior leave under section 38(2) must be obtained, particularly where the issue was neither pleaded nor argued before the High Court.

Case Example

Issue

Whether a claim for injurious affection raised for the first time before the Federal Court is automatically entertainable.

Rule

A genuinely new ground requires leave under section 38(2).

Application

The claim was absent from the valuation report and the High Court proceedings.

Conclusion

Without leave, the claimant may be precluded from advancing it.

3. Case Study Revisited

Mr. Rahman’s New Injurious-Affection Claim

Mr. Rahman’s land is partially compulsorily acquired.

He challenges the compensation award.

His valuation report contains no separate claim for injurious affection.

The High Court proceedings also contain no argument on that issue.

The High Court therefore makes no specific determination concerning:

whether Mr. Rahman’s remaining land was adversely affected;

whether any diminution in value was caused by the acquisition;

or

what amount of additional compensation would be appropriate.

The matter later reaches the Federal Court.

Mr. Rahman then seeks, for the first time, to rely upon injurious affection as an additional basis for compensation.

The Senior Federal Counsel objects.

The objection is based on two central facts:

the claim was not pleaded in the valuation report;

and

the claim was not argued before the High Court.

It is therefore characterised as a new issue.

Section 38(2) of the Land Acquisition Act 1960 becomes crucial.

That section requires the grounds of objection to be fully stated.

It also provides that an additional ground may not be given in argument without leave of the court.

Mr. Rahman therefore cannot simply treat the injurious-affection claim as automatically open before the Federal Court.

He must first overcome the procedural restriction.

The principle complements Damansara Jaya Sdn Bhd v Pemungut Hasil Tanah Petaling.

A fresh claim is not necessarily prohibited forever.

However, proper leave is required.

The case therefore concerns:

injurious affection;

the statutory compensation framework;

section 38(2);

full statement of grounds;

valuation reports;

High Court reference proceedings;

new issues on appeal;

leave of court;

procedural fairness;

and

the distinction between obtaining leave and proving substantive entitlement.

4. Solution to the Case Study

Issue

The first issue is whether the injurious-affection claim constitutes a new ground.

The second issue is whether the appellant may raise that ground for the first time before the Federal Court.

The third issue is whether section 38(2) requires leave before the new ground may be advanced.

The fourth issue is whether the failure to plead the claim in the valuation report and argue it before the High Court supports exclusion of the new issue.

The fifth issue is whether, even if leave is granted, the appellant can substantively establish entitlement to compensation for injurious affection.

Rule

Section 38(2) requires an objector to state fully the grounds upon which objection to the award is taken.

An additional ground cannot be given in argument without leave of the court.

The principle developed in Damansara Jaya confirms that a fresh claim is not invariably prohibited.

However, the claimant must obtain prior leave.

Where a distinct compensation issue was:

not pleaded in the valuation material;

not argued before the High Court;

and

not determined by the trial judge,

there is a strong basis for treating it as a new ground requiring the court’s permission.

Application

First: Nature of the Claim

Injurious affection is a distinct head of compensation.

It is not simply another expression for dissatisfaction with the market value of the land acquired.

Accordingly, Mr. Rahman’s proposed argument constitutes a new compensation issue.

Second: Valuation Report

The claim was not contained in his valuation report.

The acquiring authority therefore received no proper expert notice that diminution in value to the retained property formed part of the compensation dispute.

Third: High Court Proceedings

No argument on injurious affection was presented at trial.

The High Court consequently made no relevant factual findings.

This is particularly important because such a claim may require detailed expert valuation evidence.

Fourth: Federal Court

Mr. Rahman is attempting to raise the matter only at the appellate stage.

The Government is therefore entitled to argue that the claim cannot be entertained as of right.

Fifth: Section 38(2)

Before relying on the new ground, Mr. Rahman must obtain leave.

If he fails to do so, section 38(2) provides a basis for preventing him from advancing the claim.

Sixth: Substantive Proof

Even if leave is granted, Mr. Rahman must still establish through proper evidence that the statutory requirements for injurious affection are satisfied.

Leave does not create a right to compensation.

Conclusion

The Senior Federal Counsel has a substantial procedural objection.

Because the claim for injurious affection was neither pleaded in the valuation report nor argued before the High Court, it constitutes a new issue.

Under section 38(2), Mr. Rahman cannot ordinarily advance that new ground as of right without obtaining leave of the court.

5. Critical Analysis

1. Section 38(2) Prevents Compensation Litigation from Becoming Open-Ended

The statutory reference process requires the parties to identify their disputes with reasonable precision.

Without that requirement, compensation proceedings could continually expand as litigation moved through the court hierarchy.

Section 38(2) imposes necessary discipline.

2. Injurious Affection Is a Distinct Compensation Head

A claimant should not assume that a general objection to compensation automatically encompasses every statutory head of loss.

Injurious affection may require a separate factual and valuation inquiry.

It should therefore be clearly identified.

3. The Valuation Report Has Procedural and Evidential Importance

Valuation evidence performs more than a numerical function.

It defines the basis upon which the expert says compensation should be assessed.

Failure to include injurious affection may mean the acquiring authority has no reason to prepare responding expert evidence on that issue.

4. Trial-Level Adjudication Matters

The High Court must ordinarily have the opportunity to examine evidence and make findings.

A new claim raised only before the Federal Court risks bypassing that essential fact-finding function.

This is especially problematic where the claim depends upon valuation evidence.

5. Appellate Review Is Not a Substitute for a New Trial

The Federal Court primarily determines appeals on issues properly arising from the proceedings below.

It is generally unsuitable as the first forum for resolving a fact-intensive compensation claim never tested at trial.

6. The Leave Requirement Provides Necessary Flexibility

A strict absolute rule could sometimes produce injustice.

An omitted claim may be legitimate.

Section 38(2) therefore preserves judicial discretion through the leave mechanism.

This allows the court to distinguish between a genuine omission deserving correction and an unfairly late attempt to reconstruct the litigation.

7. Procedural Fairness Protects Both Landowner and Government

Compulsory acquisition law understandably protects landowners because their property is taken without consent.

However, procedural fairness is bilateral.

The acquiring authority is also entitled to know the case it must answer and to present appropriate evidence.

8. New Grounds and New Arguments Should Be Distinguished

A party may sometimes make a new legal argument in support of a ground already properly before the court.

That is different from introducing an entirely new head of compensation requiring new facts and evidence.

A claim for injurious affection that never formed part of the original compensation dispute is much more likely to constitute a genuinely new ground.

9. Leave Is Procedural Permission, Not Substantive Entitlement

This distinction is essential.

The court may say:

“You may argue the injurious-affection claim.”

That does not mean:

“You have proved injurious affection.”

The claimant must still establish the claim under the applicable statutory principles.

10.

Damansara Jaya

and the Present Federal Court Reasoning Are Consistent

Both principles support the same basic proposition.

A claimant is not necessarily forever imprisoned by the original formulation of the claim.

However, expansion of the dispute requires judicial permission.

The statutory safeguard is therefore flexible but controlled.

11. Section 38(2) Protects the Integrity of the Reference Procedure

The reference begins with specifically identified objections to the Collector’s award.

Those objections define the issues for adjudication.

The requirement of leave ensures that the statutory reference does not lose its procedural structure.

12. The Best Examination Analysis Uses Three Separate Questions

A strong answer should ask:

Was injurious affection properly raised originally?

If not:

Was leave obtained to introduce it later?

If leave was granted:

Has the claimant proved substantive entitlement to compensation under that head?

These are three separate inquiries.

6. Recommendations

1. Identify Every Potential Head of Compensation Early

Landowners should investigate injurious affection, severance and other potentially compensable losses before filing the reference.

2. Include the Claim in the Valuation Report

Where injurious affection is relied upon, the valuation report should properly address and quantify the alleged diminution.

3. Plead the Ground Clearly in the Reference Proceedings

A general objection to quantum should not be assumed to preserve every possible compensation head.

4. Present the Issue before the High Court

Fact-intensive compensation matters should be properly argued and supported by evidence at first instance.

5. Do Not Introduce a Completely New Claim for the First Time on Final Appeal

Doing so creates serious difficulties under section 38(2) and general appellate principles.

6. Seek Leave Promptly if an Omission Is Discovered

The sooner permission is sought, the easier it may be to avoid prejudice to the opposing party.

7. Explain Why the Ground Was Not Raised Earlier

A properly supported request for leave should address the reason for the omission.

8. Consider Evidential Prejudice

The court should consider whether the Government requires new valuation or factual evidence to meet the added claim.

9. Distinguish Permission from Proof

Even after leave is obtained, expert and factual evidence remains necessary to establish injurious affection.

10. Use a Clear Exam Formula

For an omitted compensation claim, analyse:

original pleading;

trial argument;

section 38(2) leave;

appellate stage;

prejudice;

and

substantive proof.

7. Conclusion

The Federal Court’s treatment of the proposed claim for injurious affection demonstrates the importance of procedural discipline in compensation references under the Land Acquisition Act 1960.

The appellant sought to rely upon injurious affection even though that claim had not previously formed part of the case properly developed before the courts.

The Senior Federal Counsel objected on two important grounds.

First:

the claim for injurious affection had not been pleaded in the appellant’s valuation report.

Second:

the claim had not been argued during the trial before the learned High Court judge.

The issue was therefore characterised as a new matter raised for the first time before the Federal Court.

Section 38(2) became directly relevant.

That provision requires an objector to state fully the grounds upon which the Collector’s award is challenged.

It further prevents another ground from being advanced in argument without leave of the court.

Accordingly, a claimant cannot ordinarily preserve every conceivable head of compensation merely by making a general objection to the award.

Where injurious affection constitutes a distinct claim requiring separate factual and valuation evidence, it should be properly identified and advanced.

If it has been omitted, the law retains a degree of flexibility.

As illustrated by Damansara Jaya Sdn Bhd v Pemungut Hasil Tanah Petaling, a fresh claim is not necessarily permanently barred.

However, the claimant must first obtain the permission required by section 38(2).

The requirement is particularly important where the proposed ground is raised only at the appellate stage.

An appellate court should not ordinarily be required to determine for the first time a factual and expert issue that:

was never pleaded;

was never supported in the relevant valuation report;

was never argued before the High Court;

and

was never the subject of factual findings at trial.

For Malaysian Property Law, the central principle can therefore be stated as follows:

A claim for injurious affection that was neither included in the appellant’s valuation case nor argued before the High Court constitutes a new ground if subsequently raised for the first time on appeal, and section 38(2) of the Land Acquisition Act 1960 requires leave of the court before such an additional ground may properly be advanced.

An important statutory citation point should also be remembered:

the compensation head of injurious affection is ordinarily referred to under paragraph 2(d) of the First Schedule to the Land Acquisition Act 1960, rather than “section 2(d)”.

The correct analytical sequence is therefore:

First, determine whether injurious affection was included in the original grounds of objection.

Second, examine whether it was supported in the valuation evidence.

Third, determine whether it was argued and adjudicated before the High Court.

Fourth, if it is genuinely new, determine whether leave under section 38(2) has been obtained.

Fifth, consider whether permitting the ground would cause procedural prejudice or require further evidence.

Sixth, if leave is granted, determine separately whether the claimant has proved substantive entitlement to compensation for injurious affection.

Ultimately, the doctrine balances:

the landowner’s right to claim all compensation lawfully due;

the acquiring authority’s right to know the case it must answer;

the integrity of the High Court reference process;

the proper function of appellate courts;

and

the controlled flexibility provided by the leave mechanism in section 38(2).