Malaysian Property Law

Section 38(2) of the Land Acquisition Act 1960: New Grounds of Objection, Leave of Court and Additional Compensation Claims

1. Case Study

Case Study: Can a Landowner Raise New Compensation Claims for the First Time During High Court Reference Proceedings?

Background

Mr. Rahman owns a substantial parcel of land that is partially acquired under the Land Acquisition Act 1960.

Following the acquisition, the Collector conducts an inquiry and makes an award of compensation.

Mr. Rahman is dissatisfied with the award.

He therefore objects to the Collector’s determination and invokes the statutory reference procedure so that the compensation dispute may be considered by the High Court.

In his original objection, Mr. Rahman identifies several grounds upon which he challenges the award.

However, he does not include claims for:

injurious affection;

severance;

and

consequential loss.

These matters are also not properly advanced during the inquiry before the Collector.

Section 38(2) of the Land Acquisition Act 1960

The relevant statutory provision is section 38(2) of the Land Acquisition Act 1960.

It provides:

“Every application under subsection (1) shall state fully the grounds on which objection to the award is taken, and at any hearing in court no other grounds shall be given in argument, without leave of the court.”

This provision creates two important requirements.

First, an applicant must state fully the grounds of objection in the application for reference.

Second, a ground not originally stated cannot simply be advanced during the High Court hearing as of right.

A new ground may be raised only with leave of the court.

Discovery of Additional Claims

After the reference proceedings have commenced, Mr. Rahman receives further legal advice.

His lawyers conclude that the acquisition has caused additional losses.

The remaining portion of his land has allegedly become less useful and less valuable because of the acquisition.

Access to part of the retained property has become more difficult.

The acquired portion has also divided the original holding in a manner that allegedly diminishes the usefulness and value of the remaining land.

Mr. Rahman therefore wishes to introduce additional claims for:

injurious affection;

severance;

and

consequential loss.

Mr. Rahman’s Argument

Mr. Rahman argues that section 38(2) does not create an absolute prohibition against introducing new grounds during the High Court reference.

The provision expressly states that additional grounds may be raised with leave of the court.

He therefore contends that the High Court possesses discretion to allow him to advance matters that were omitted earlier.

Government’s Response

The acquiring authority accepts that section 38(2) contains a power to grant leave.

However, it argues that Mr. Rahman cannot simply introduce new claims informally in oral submissions.

According to the authority, the landowner must comply with the procedural requirements governing an application to amend or expand the grounds relied upon in the reference proceedings.

It argues that no proper application for leave has been made.

There is no formal application.

There is no supporting affidavit.

There is no proper procedural step through which the additional claims have been placed before the court.

Accordingly, the authority argues that Mr. Rahman is barred from advancing them.

Relevant Authority:

Damansara Jaya Sdn Bhd v Pemungut Hasil Tanah Petaling

This issue arose in Damansara Jaya Sdn Bhd v Pemungut Hasil Tanah Petaling.

The court held that an objector may, provided prior leave of the court is obtained, make a fresh claim or raise a new ground of objection to the Collector’s award during the High Court reference proceedings.

The fact that the particular matter had not previously been raised at the inquiry before the Collector did not create an absolute substantive prohibition.

The critical requirement was that the objector obtain the court’s permission in accordance with section 38(2).

Leave Is Not Merely a Formal Phrase

The decision demonstrates that the words “without leave of the court” have practical significance.

The claimant cannot simply arrive at the High Court hearing and introduce completely new heads of compensation without following the required procedure.

Leave must actually be sought and obtained.

Additional Claims in

Damansara Jaya

The plaintiff applicant sought to introduce additional claims for:

injurious affection;

severance;

and

consequential loss.

However, no formal application supported by an affidavit was filed in accordance with the procedural requirements then governing the proceedings under the Rules of the High Court 1980.

The applicant therefore failed to take the proper procedural steps necessary to obtain leave to advance those additional claims.

Consequence of the Failure

The court held that the applicant was barred from advancing the additional claims.

This was not because section 38(2) absolutely prohibited new grounds.

Rather, the applicant had failed to satisfy the statutory and procedural requirement of obtaining leave properly.

Important Distinction

The distinction is therefore between:

a new ground of objection that the court has permitted to be raised;

and

a new ground that the objector attempts to introduce without obtaining the necessary leave.

The former may be considered.

The latter is barred by section 38(2).

The Central Conflict

The principal questions are therefore:

Must all grounds of objection to the Collector’s award be stated in the original application?

Can an objector subsequently raise a fresh ground during the High Court reference?

Does failure to raise the claim before the Collector permanently bar it?

What is the effect of failing to obtain prior leave of the High Court?

The central principle is that:

section 38(2) requires an objector to state fully the grounds of objection, but the High Court may permit a fresh claim or new ground to be advanced during reference proceedings if prior leave is properly obtained; without such leave, the additional ground cannot be argued.

2. Questions and Answers with Case Examples

Question 1: What does section 38(2) require an objector to do?

Answer

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

The purpose is to identify clearly the issues that will be contested before the High Court.

Case Example

Issue

Whether a landowner may simply state that he is “dissatisfied with compensation” without identifying why.

Rule

The grounds of objection must be stated fully in the application.

Application

Mr. Rahman merely writes that the compensation is unsatisfactory without identifying any particular objection.

Conclusion

The application may fail to satisfy the requirement of section 38(2) adequately.

Question 2: Does section 38(2) absolutely prohibit new grounds?

Answer

No.

The statutory wording expressly permits additional grounds to be raised with leave of the court.

Therefore, the prohibition is qualified rather than absolute.

Case Example

Issue

Whether an omitted claim can ever be introduced after the reference proceedings begin.

Rule

A fresh ground may be advanced if the High Court grants leave.

Application

Mr. Rahman initially omits a severance claim but later applies properly for permission to add it.

Conclusion

The court has jurisdiction to consider whether leave should be granted.

Question 3: What did

Damansara Jaya

establish?

Answer

Damansara Jaya Sdn Bhd v Pemungut Hasil Tanah Petaling established that an objector may raise a fresh claim or new ground during the High Court reference proceedings provided prior leave of the court is obtained.

Case Example

Issue

Whether failure to advance a particular ground earlier automatically destroys the claim.

Rule

The omission is not necessarily fatal if leave is subsequently sought and granted under section 38(2).

Application

The objector failed to raise injurious affection before the Collector but later applies properly to add the claim.

Conclusion

The High Court may permit it.

Question 4: Does failure to raise a claim before the Collector necessarily prevent it from being raised in the High Court?

Answer

Not absolutely.

The court in Damansara Jaya recognised that a fresh claim or new ground may be raised during the reference proceedings.

However, the objector must obtain the High Court’s prior leave.

Case Example

Issue

Whether a claim omitted at the Collector’s inquiry can later be introduced.

Rule

Prior omission does not necessarily create an absolute substantive bar, but section 38(2) requires permission before the new ground may be argued.

Application

Mr. Rahman failed to raise consequential loss during the inquiry but makes a proper application for leave before the High Court.

Conclusion

The court may consider whether the new claim should be admitted.

Question 5: Why does section 38(2) require the grounds to be stated fully?

Answer

The requirement promotes procedural fairness and orderly litigation.

The opposing party should know the case it must meet.

The High Court should also know the precise matters falling within the compensation dispute.

Case Example

Issue

Whether an objector should be allowed to introduce entirely new heads of compensation without warning.

Rule

The statutory reference should proceed on clearly identified grounds unless the court grants leave to expand them.

Application

The Government prepares its valuation evidence on market value, only to discover during final submissions that three entirely new compensation claims are being asserted.

Conclusion

Section 38(2) prevents that type of procedural surprise unless the court permits the additional grounds.

Question 6: What is meant by “leave of the court”?

Answer

“Leave” means the permission of the High Court.

The applicant must ask the court to allow a ground not contained in the original objection to be raised.

It is not enough simply to announce the additional claim during argument.

Case Example

Issue

Whether an advocate may introduce a fresh ground orally without permission.

Rule

A new ground cannot be given in argument without leave.

Application

Counsel begins arguing severance even though it was never included in the original objection and no leave was sought.

Conclusion

The court may refuse to entertain the ground.

Question 7: Must leave be obtained before the new ground is argued?

Answer

Yes.

The principle in Damansara Jaya requires prior leave.

The applicant should therefore regularise the additional claim before attempting to argue it substantively.

Case Example

Issue

Whether permission can simply be assumed because the judge has heard part of the argument.

Rule

The applicant should obtain leave before advancing the new ground.

Application

Mr. Rahman begins presenting expert evidence on severance without first obtaining permission.

Conclusion

He risks having the entire additional claim excluded.

Question 8: What additional claims were involved in

Damansara Jaya

?

Answer

The applicant sought to add claims for:

injurious affection;

severance;

and

consequential loss.

These were additional heads of compensation that had not been properly introduced through the required procedure.

Case Example

Issue

Whether such compensation claims may simply be appended at the hearing.

Rule

They must form part of the stated grounds or be added with prior leave.

Application

An owner raises these heads only after the reference hearing has begun.

Conclusion

The claims cannot be advanced as of right.

Question 9: What is injurious affection?

Answer

In broad terms, injurious affection concerns diminution or injury to the value or utility of land retained by the owner as a consequence of the acquisition or the use associated with the acquired portion, within the statutory compensation framework.

Whether compensation is legally recoverable depends upon the applicable provisions and facts.

Case Example

Issue

Whether the remaining land has lost value because of the acquisition.

Rule

Where the statutory compensation framework recognises the relevant loss, diminution affecting retained land may form part of compensation.

Application

A new acquisition substantially impairs access to the owner’s remaining commercial property.

Conclusion

A properly pleaded claim for injurious affection may arise, subject to proof and the statutory requirements.

Question 10: What is severance?

Answer

Severance generally concerns loss caused because the acquired portion separates or divides the owner’s remaining land in a manner that reduces its value or usefulness.

Case Example

Issue

Whether partial acquisition has divided one economically integrated property into less useful parcels.

Rule

Where the statutory compensation principles apply, loss attributable to severance may be compensable.

Application

A strip acquired through the centre of an estate leaves two disconnected residual parcels.

Conclusion

A severance claim may arise if properly advanced and proved.

Question 11: What is consequential loss in this context?

Answer

Consequential loss refers broadly to additional loss said to result from the acquisition beyond the direct value of the land taken, subject always to the categories recoverable under the Land Acquisition Act 1960.

It is not an unlimited concept.

The claimant must establish that the particular loss is legally compensable and supported by evidence.

Case Example

Issue

Whether every commercial disadvantage following acquisition can automatically be claimed.

Rule

Only losses recognised by the statutory compensation framework are recoverable.

Application

The owner alleges various downstream business losses without demonstrating their legal connection to a compensable statutory head.

Conclusion

The claim may fail even if procedural leave has been granted.

Question 12: Why were the additional claims barred in

Damansara Jaya

?

Answer

The claims were barred because the applicant had not properly obtained leave to introduce them.

No formal application supported by an affidavit had been filed in accordance with the procedural rules then applicable under the Rules of the High Court 1980.

Case Example

Issue

Whether section 38(2) is satisfied merely because the applicant tells the court that additional losses exist.

Rule

The applicant must comply with the procedure necessary to obtain leave.

Application

No proper application is filed and no supporting evidence is provided.

Conclusion

The additional grounds may be excluded.

Question 13: Was the applicant barred because the court had no power to hear new claims?

Answer

No.

This distinction is important.

The High Court had power under section 38(2) to permit new grounds.

The applicant was barred because the necessary leave had not been properly obtained.

Case Example

Issue

Whether the statutory problem concerns jurisdiction or procedural non-compliance.

Rule

The court possesses discretion to grant leave, but the applicant must invoke that discretion properly.

Application

A valid potential claim exists, but the claimant never applies to add it.

Conclusion

The claim may be procedurally barred despite its potential substantive merit.

Question 14: What broader principle emerges from section 38(2) and

Damansara Jaya

?

Answer

The broader principle is that compensation reference proceedings are governed by procedural discipline.

An objector must state the grounds fully at the outset.

However, flexibility exists because the High Court may permit a fresh ground.

That flexibility depends upon obtaining proper leave.

Case Example

Issue

How should finality and fairness be balanced in compensation references?

Rule

Parties should ordinarily be confined to stated objections, while the court retains discretion to permit additional grounds where justice and proper procedure justify it.

Application

The applicant discovers a genuine additional head of loss after filing the reference and promptly seeks leave with supporting material.

Conclusion

The court may consider allowing the amendment rather than treating the original omission as automatically fatal.

3. Case Study Revisited

Mr. Rahman’s Additional Compensation Claims

Mr. Rahman objects to the Collector’s compensation award.

He applies for a reference to the High Court under the statutory machinery of the Land Acquisition Act 1960.

Section 38(2) requires him to state fully the grounds upon which his objection is based.

His original application does not contain claims for:

injurious affection;

severance;

or

consequential loss.

Those matters were also not properly advanced at the Collector’s inquiry.

During the High Court reference, Mr. Rahman decides that these additional losses should be included.

He relies upon the wording of section 38(2), which allows new grounds to be given with leave of the court.

The principle in Damansara Jaya Sdn Bhd v Pemungut Hasil Tanah Petaling supports the proposition that the earlier omission is not automatically fatal.

An objector may make a fresh claim or raise a new ground during the High Court reference.

However, prior leave must be obtained.

In Damansara Jaya, the plaintiff applicant did not file the formal application supported by affidavit required under the procedural rules then applicable.

The proposed additional claims were therefore barred.

The crucial distinction is between:

the court’s power to allow a new claim;

and

the applicant’s entitlement to raise one without permission.

The first exists.

The second does not.

The dispute therefore concerns:

section 38(2) of the Land Acquisition Act 1960;

grounds of objection;

High Court reference proceedings;

fresh claims;

new grounds;

prior leave of court;

injurious affection;

severance;

consequential loss;

procedural compliance;

and

the consequences of failing properly to obtain leave.

4. Solution to the Case Study

Issue

The first issue is whether Mr. Rahman is restricted to the grounds contained in his original objection to the Collector’s award.

The second issue is whether section 38(2) permits him to raise new grounds during the High Court reference.

The third issue is whether a claim omitted at the Collector’s inquiry can subsequently be introduced.

The fourth issue is whether Mr. Rahman must obtain prior leave before advancing claims for injurious affection, severance and consequential loss.

The fifth issue is the consequence if he fails to comply with the procedure necessary to obtain leave.

Rule

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

At the High Court hearing, no additional ground may be advanced without leave of the court.

In Damansara Jaya Sdn Bhd v Pemungut Hasil Tanah Petaling, the court held that an objector may make a fresh claim or raise a new ground during the reference proceedings, including a matter not previously advanced before the Collector, provided that prior leave is obtained.

However, the applicant must comply with the procedural requirements governing the application for such permission.

On the facts of Damansara Jaya, the required formal application supported by affidavit was not filed under the procedural regime then applicable.

The additional claims were therefore barred.

Application

First: Original Grounds

Mr. Rahman was required to identify fully the grounds of objection in his original application.

His omission of the three additional compensation claims means they do not automatically form part of the High Court reference.

Second: Section 38(2) Discretion

The omission does not necessarily extinguish the claims completely.

Section 38(2) expressly permits the High Court to give leave for an additional ground to be advanced.

Third: Failure to Raise the Claims before the Collector

The fact that Mr. Rahman did not advance the claims at the original inquiry is relevant but does not necessarily create an absolute bar.

Damansara Jaya recognises the possibility of raising a fresh claim during the reference proceedings.

Fourth: Requirement of Prior Leave

Mr. Rahman must apply for permission before arguing the new heads of loss.

He cannot simply include them in submissions or expert evidence without the court’s approval.

Fifth: Procedural Compliance

If the applicable procedural rules require a formal application and supporting evidence, those requirements must be complied with.

Failure to do so may prevent the court from entertaining the additional claims.

Sixth: Substantive Merits Remain Separate

Even if leave is granted, Mr. Rahman must still prove that:

injurious affection occurred;

severance loss occurred;

the consequential losses claimed are legally compensable;

and

the amounts claimed are supported by evidence.

Leave merely permits the claims to be argued.

It does not establish that they will succeed.

Conclusion

Mr. Rahman is not absolutely barred from raising the additional claims merely because they were omitted earlier.

However, section 38(2) prevents him from advancing them as of right.

He must obtain prior leave of the High Court through the proper procedure.

If he fails to do so, the additional claims may be barred, as occurred in Damansara Jaya.

5. Critical Analysis

1. Section 38(2) Promotes Clarity in Compensation Litigation

The provision requires the objector to identify the case being brought against the Collector’s award.

This prevents compensation references from becoming open-ended proceedings in which new objections continually emerge without notice.

2. The Provision Balances Finality with Flexibility

Section 38(2) does not impose an absolute closed-door rule.

The High Court retains discretion to permit a new ground.

This flexibility is important because legitimate claims may occasionally be overlooked, discovered later or become clearer during preparation for the reference.

3. Leave of Court Is the Mechanism That Balances Competing Interests

The requirement of leave protects both sides.

It allows the claimant to seek permission to correct an omission.

At the same time, it protects the acquiring authority from unfair surprise.

The court can therefore assess whether introduction of the new ground would be fair and procedurally appropriate.

4. A Reference Is Not a Completely Fresh Compensation Inquiry

The High Court reference does not necessarily operate as though no earlier proceedings had taken place.

Section 38(2) requires the objector to define the grounds being referred.

This gives the statutory reference structure and discipline.

5. Failure to Raise a Ground before the Collector Is Not Necessarily Fatal

Damansara Jaya is important because it rejects an excessively rigid approach.

An objector may, with permission, advance a fresh claim that was not presented earlier.

The decisive question becomes whether proper leave is obtained.

6. Procedural Rights Must Be Exercised Procedurally

The existence of a statutory discretion does not mean that a claimant can ignore procedural requirements.

An applicant seeking exceptional permission must invoke the court’s jurisdiction in the manner required by the applicable rules.

7.

Damansara Jaya

Distinguishes Power from Entitlement

The court has power to allow new grounds.

The claimant does not have an automatic entitlement to advance them.

That distinction explains the outcome.

The claims were not barred because the court lacked jurisdiction to consider them.

They were barred because the applicant had failed properly to obtain leave.

8. The Historical Procedural Context Should Be Recognised

The case referred to compliance with the Rules of the High Court 1980, which governed the procedure at the relevant time.

The doctrinal principle remains that the proper procedural mechanism must be used to seek leave.

When applying the principle in a modern proceeding, attention should be given to the procedural rules currently applicable rather than mechanically assuming that the historical rules remain unchanged.

9. Leave Does Not Establish Substantive Entitlement

Even after obtaining leave, the objector must prove the new claim.

The court may permit an injurious-affection claim to be argued but ultimately reject it on the evidence.

Procedural admissibility and substantive entitlement are separate questions.

10. Additional Heads of Compensation Must Remain within the Statutory Scheme

An applicant cannot use section 38(2) to create heads of compensation that the Land Acquisition Act 1960 does not recognise.

The provision allows additional grounds of objection.

It does not enlarge the substantive compensation rights created by the Act.

11. The Rule Promotes Procedural Fairness to the Acquiring Authority

The Government or acquiring authority must have a fair opportunity to answer additional claims.

For example, a severance claim may require new valuation evidence.

An injurious-affection claim may require evidence concerning the retained land.

Proper leave procedure allows the court to manage these consequences.

12. The Best Approach Is a Two-Stage Analysis

A strong examination answer should ask:

Stage One: Is the ground already contained in the section 38 application?

If yes, it may ordinarily be argued as part of the reference.

If no, ask:

Stage Two: Has prior leave of the High Court been properly sought and obtained?

If no leave has been obtained, section 38(2) prevents the new ground from being advanced.

6. Recommendations

1. State Every Compensation Objection Fully at the Outset

Landowners should identify all reasonably available grounds before filing the section 38 application.

2. Review Potential Heads of Compensation Before the Reference Is Filed

Possible claims such as severance and injurious affection should be investigated early.

3. Do Not Assume Omitted Grounds Can Simply Be Argued Later

Section 38(2) expressly requires leave.

4. Apply for Leave Before Advancing the Fresh Ground

The application should be made before substantive argument or evidence on the new issue is introduced.

5. Follow the Procedural Rules Applicable at the Relevant Time

Damansara Jaya arose under the Rules of the High Court 1980.

A current proceeding should comply with the procedural regime presently governing the High Court.

6. Support the Application for Leave Properly

The applicant should explain the proposed new ground, the reason for the earlier omission and the evidence supporting the application.

7. Distinguish Procedural Permission from Substantive Success

Obtaining leave merely permits the issue to be heard.

The claimant must still prove entitlement to compensation.

8. Avoid Prejudice to the Opposing Party

Where additional grounds require new evidence, sufficient procedural fairness should be given to the acquiring authority.

9. Ensure New Claims Fall within the Land Acquisition Act 1960

Section 38(2) does not create new substantive compensation rights.

10. Use a Clear Examination Formula

For any new ground, ask:

Was it stated originally?

If not, was prior leave obtained?

Was the proper procedure followed?

If leave was granted, can the substantive claim be proved?

7. Conclusion

Section 38(2) of the Land Acquisition Act 1960 imposes an important procedural discipline upon compensation references to the High Court.

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

The objector is ordinarily confined to those identified grounds.

However, the statutory rule is not absolute.

Section 38(2) expressly recognises that the High Court may permit an additional ground to be advanced by granting leave.

The decision in Damansara Jaya Sdn Bhd v Pemungut Hasil Tanah Petaling demonstrates how this qualification operates.

The court held that an objector may, with prior leave of the High Court, raise a fresh claim or new ground during reference proceedings even though the matter was not previously advanced at the inquiry before the Collector.

Accordingly, earlier omission does not necessarily extinguish the claim.

However, the objector cannot simply introduce the new ground informally.

The statutory requirement of leave must be observed.

In Damansara Jaya, the plaintiff applicant attempted to advance additional claims for:

injurious affection;

severance;

and

consequential loss.

No formal application supported by affidavit was filed in accordance with the procedural requirements then applicable under the Rules of the High Court 1980.

The applicant therefore failed properly to obtain the necessary permission.

As a consequence, the additional claims were barred.

The key doctrinal distinction is therefore:

The High Court has discretion to permit a fresh ground, but the objector has no automatic right to argue a ground that was not contained in the original section 38 application.

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

Under section 38(2) of the Land Acquisition Act 1960, an objector must state fully the grounds of objection to the Collector’s award, but the High Court may permit a fresh claim or new ground to be advanced during the reference proceedings if prior leave is properly obtained; where the objector fails to seek and obtain such leave in accordance with the applicable procedural requirements, the additional claim is barred.

The correct analytical sequence is therefore:

First, identify the grounds stated in the original reference application.

Second, determine whether the proposed argument is genuinely a new ground.

Third, if it is new, determine whether prior leave of the High Court has been sought.

Fourth, determine whether the application for leave complies with the applicable procedural rules.

Fifth, if leave is granted, determine whether the additional head of compensation is substantively recognised by the Land Acquisition Act 1960.

Sixth, require the objector to prove the additional loss through appropriate evidence.

Ultimately, Damansara Jaya demonstrates that compensation reference proceedings combine:

procedural finality;

judicial discretion;

fairness to both parties;

and

limited flexibility to correct genuine omissions through properly obtained leave of court.