Blakes Estates Ltd v Government of Montserrat
| Jurisdiction | Montserrat |
| Judgment Date | 01 January 2000 |
| Neutral Citation | MS 2000 HC 2 |
| Date | 01 January 2000 |
| Court | High Court (Montserrat) |
High Court
Compulsory acquisition - Compensation — Lands compulsorily acquired by government — Parties unable to agree on value of lands for purposes of compensation to owners — Board of Assessment established to assess, award and apportion compensation in accordance with Land Acquisition Ordinance — Claimant found to be unreasonable in amounts claimed — Grand total of $5,908,100 plus 65% costs awarded to claimant.
Lookout is the name given to certain lands in the Parish of St John that have been acquired by the Government of Montserrat. These lands were formerly owned by the Claimant, Blakes Estates Limited. Two separate acquisitions were made. The relevant date in respect of the first acquisition is 24th December, 1997. The lands thereby acquired, some 92.4 acres, are referred to herein as Lookout One. The relevant date in respect of the second acquisition is 30th December, 1998 and the lands thereby acquired, 102.4 acres, are referred to as Lookout Two.
Despite meetings and exchanges of correspondence, the parties were unable to agree on the value of the lands acquired for the purposes of compensation to the owners. This necessitated the establishment of this Board of Assessment Broadly speaking, our function was to “assess, award and apportion compensation” in accordance with the provisions of the Land Acquisition Ordinance.
Section 19 of that Ordinance stipulates, inter alia, that the land should be valued on the basis of its market value twelve months prior to the date when the land vested in the Crown. Before these proceedings commenced however, the Respondents conceded that for the purposes of the assessment they were content that the Board should assess the value of both sites by reference to the relevant dates of acquisition and not to a date one year earlier. In any event, both sides took the view that the value of the lands would have been the same at either date.
The parties further agreed that, notwithstanding the fact that there were two separate acquisitions, the same Board should assess the compensation payable in respect of each site. With the concurrence of the Chairman, the proceedings were therefore consolidated and one hearing was conducted.
The formal offer made by the Government for Lookout One was $3.3 million while for Lookout Two it was $1.5 million. Only Eastern Caribbean Dollars are referred to throughout this award.
In their closing arguments before us, the claimants sought to persuade the Board that the total value of Lookout One and Two combined fell some where between $16,910,235.00 and $31,378,040.00.
The Board heard evidence from witnesses tendered by each of the parties. During the course of the hearings the Board also availed itself of the opportunity to visit the lands acquired as well as a number of other development sites throughout Montserrat.
Lookout is undoubtedly a place of breath taking beauty. The lands, located at the north eastern part of Montserrat, afford one a sweeping view of the Caribbean Sea and the outlines of the island of Antigua. The members of the Board, on their visit to the site, experienced for themselves the cool and refreshing breeze that constantly passes over the sites.
The Board had no reason to dispute the picture given by one witness, Mr. Main Van Oppen, of the sites as observed by him. He described his August 1997 inspection of Lookout One in this fashion:
“… the site comprised an area of rough undulating grazing land with steeper scrub-covered slopes. Cat and Brimms ghauts form natural boundaries to the south-east and northern sides of the site. The soil appeared thin and was pad-covered with scrub trees, bare rock and strewn with boulders. There were signs of the presence of goats but (apart from some cattle referred to below) no other agricultural or forestry activity appeared to have been carried out on the site for many years. A small herd of cattle which I was given to understand had recently been evacuated from the volcanic danger zone in the south were grazing the site and at the time of inspection a post and barbed wire fence was being erected to contain them. There were no services within the site. Water and electricity was available at the road running alongside the extreme southern boundary and a connection had been made to the newly acquired school site. Apart from a rough track to the school site, there were no internal roads or tracks suitable for vehicular use.
This was his description of Lookout Two:
“Lookout Two is located to the north-east of and contiguous to the Lookout One site. This parcel of land comprises an area of 102.47 acres or thereabouts. When inspected in November, 1998 it was noted that this site comprised a somewhat similar terrain to that of the Lookout One site excepting that the land falls away gently to the ocean with a cliff forming its natural coastal boundary. Cat and Brimms ghauts form natural boundaries to the south-east and northern sides of the site. This site contains a larger percentage of steep land than Lookout One. Access was via a recently constructed road put in by the acquiring body to service the Lookout One development But for the acquiring body's adjacent development, this site must be considered somewhat remote from the main centres of population”.
The reference in the description of Lookout One to a school site and a brief background to its purchase by Government should be explained at this point Since July, 1995 Montserrat has been ravaged by volcanic eruptions. Approximately two-thirds of the island, the more developed southern part, has been rendered unsafe as a result of the volcanic activity. In the words of one witness, Mr. Haynes-Smith:
“The unsafe zone holds the abandoned capital of Plymouth, the airport and other commercial, industrial, residential and agricultural areas. As a result of this phenomenon, residents have been forced to migrate to the north or safe zone and to the neighbouring islands of Antigua, St Kitts and Guadeloupe. Some have migrated to Britain, Canada and the United States of America”.
By reason of their location, such of the Lookout lands as could be built upon were ideally suited for development. Up to the date of acquisition, the owners of the lands had not however made any application to the Chief Physical Planner for subdivision or other development of any of those lands.
With the volcano erupting in the south of the island, as early as 1995, the Government expressed an interest in the lands at Lookout Government first purchased three acres for the construction of a school During the negotiations that preceded the purchase, Dr. Lee, the President of the Claimant company, sought a price per square foot of $5.00. The Government representatives resisted this figure. They were prepared to offer between $1.35 to $1.65. Ultimately, Dr. Lee states that an appeal was made to his nationalistic and humanitarian instincts and the lands upon which the school is presently sited were eventually purchased by the Government at $2.00 per square foot Having visited the site it is worthy of note to record that the school lands were fairly flat and within close proximity to the existing main road.
In arriving at its Award, the Board reminded itself of Lord Romer's injunction that:
“No one can suppose, in the case of land which is certain, or even likely, to be used in the immediate or reasonably near future for building purposes, but which at the valuation date is waste land, or is being used for agricultural purposes, that the owner, however willing a vendor, will be content to sell the land for its value as waste or agricultural land, as the case may be. It is plain that in ascertaining its value the possibility of its being used for building purposes would have to be taken into account. It is equally plain, however, that the land must not be valued as though it had already been built upon a proposition that is embodied in sect 24 (5) of the Act and is sometimes expressed by saying that it is the possibilities of the land, and not its realised possibilities, that must be taken into consideration”. See: Sri Raja v. Revenue Officer [1939] All E.R.317 - 322 .
Ultimately, the Board concluded that it should rely on the residual method of valuation as the basis for arriving at the market value of the lands acquired. In doing so, the Board has not ignored comparisons of land transactions in Montserrat during the relevant period.
The method of valuation accepted by the Board was the one used by Mr. Van Oppen, a witness for the respondent In their Closing Arguments, Counsel for the Claimant intimated that they had no quarrel with Mr. Van Oppen's method. This method requires one to ascertain the net value of the lands by first engaging in a hypothetical sub-division of the land and then to calculate the gross sum capable of realisation from the sale of the sections therein. From the resulting sum is deducted such expenses as the infrastructure costs, professional fees, finance charges and other such allowances as well as the expenses related to the acquisition. See: Carlton Heights Ltd, v. Min. of Works (1963) N.Z.L.R. 366 and Marshall v. Minister of Works (1950) N.Z.L.R. 339.
The learned judge in the Carlton case made the important point, at page 371 of the judgment, that “The valuation of land suitable for subdivision, being a matter repairing a wide practical knowledge of the subdivision of land and the application of that knowledge to situations of a hypothetical character, is peculiarly within the province of experienced professional valuers”.
Critical to determining our Award therefore was our assessment of the testimony of the expel witnesses who gave evidence. To what extent did they impress us with their knowledge and...
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