Concept v National Roads Auth

• Jurisdiction: Cayman Islands
• Judge: (Quin, J.)
• Judgment Date: 24 November 2009
• Court: Grand Court (Cayman Islands)
• Date: 24 November 2009

Grand Court, Civil Division

(Quin, J.)

CONCEPT LIMITED

and

NATIONAL ROADS AUTHORITY (acting by DIRECTOR OF LANDS AND SURVEY)

R.D. Alberga, Q.C. and Ms. L.D. DaCosta for the appellant;

G. Roots, Q.C. and Mrs. V. Ellis for the respondent.

Cases cited:

(1) Cooke v. Environment Secy.(1973), 27 P. & C.R. 234; 229 E.G. 1117, applied.

(2) Ford v. Immigration Appeals Tribunal, 2007 CILR 258, referred to.

(3) Fraser v. Fraserville, [1917] A.C. 187, referred to.

(4) Horn v. Sunderland Corp., [1941] 2 K.B. 26; [1941] 1 All E.R. 480; (1941), 39 L.G.R. 367; 105 J.P. 223; 110 L.J.K.B. 353; 85 Sol. Jo. 212; 165 L.T. 298; 57 T.L.R. 404, dicta of Scott, L.J. followed.

(5) Hoveringham Gravels Ltd. v. Chiltern D.C.UNK(1977), 76 L.G.R. 533; 35 P. & C.R. 295; 243 E.G. 911; [1977] J.P.L. 784; [1977] RVR 243, considered.

(6) Inland Rev. Commrs. v. Gray, [1994] S.T.C. 360; [1994] RVR 129; (1994), 38 E.G. 156; [1994] N.P.C. 15, referred to.

(7) Purfleet Farms Ltd. v. Transport Secy., [2003] 1 P. & C.R. 20; [2003] 1 E.G.L.R. 9; [2002] RVR 368; [2002] N.P.C. 125; [2002] EWCA Civ 1430, dicta of Potter, L.J. applied.

(8) Trocette Property Co. v. Greater London CouncilUNK(1974), 72 L.G.R. 701; 28 P. & C.R. 408; [1974] J.P.L. 472; 118 Sol. Jo. 660; [1974] RVR 306, dictum of Megaw, L.J. applied.

Legislation construed:

Roads Law (2005 Revision), Second Schedule, para. 1(1): The relevant terms of this sub-paragraph are set out at para. 15.

para. 2(6): The relevant terms of this sub-paragraph are set out at para. 64.

para. 6(1): The relevant terms of this sub-paragraph are set out at para. 14.

Development and Planning Law-compulsory acquisition-fair compensation-in valuation of land compulsorily acquired, to assume that owner was ‘willing seller’ and determine market value as separate and distinct parcel ignoring any retained land

Development and Planning Law-compulsory acquisition-fair compensation-assessment of compensation for land compulsorily acquired under Roads Law-Roads Assessment Committee to consider heads of claim under Second Schedule, para. 6(1) on own motion-owner entitled to be put, so far as possible, in same position as if land not taken-necessary to protect unrepresented claimants

Development and Planning Law-compulsory acquisition-fair compensation-severance-compensation to be awarded when part of land compulsorily acquired reduces value of that retained or restricts future development

The appellant challenged the Road Assessment Committee”s valuation of part of its land that had been compulsorily acquired and it also sought compensation for severance and costs.

The appellant owned land part of which was compulsorily acquired by the National Roads Authority to enable the construction of a road. The appellant pursued compensation for the value of its land in accordance with s.9 of the Roads Law (2005 Revision). Negotiations between the appellant and the Director of Lands and Survey took place, but as a value could not be agreed (the appellant was offered approximately CI$70,000 and CI$110,000 but valued the land at over US$650,000), the claim was referred to the Roads Assessment Committee. The Roads Assessment Committee awarded the appellant nearly CI$180,000 for the property but did not award any sum for severance damages because no details had been provided to establish such a claim. The Roads Assessment Committee exercised its discretion to make no award as to costs, even though the appellant had been successful in increasing the valuations it had been previously offered, because of its ‘exaggerated claim.’

On appeal, the appellant submitted that (a) the Roads Assessment Committee had wrongly valued its land by treating the acquired land as a

separate parcel of land rather than determining its value from that of the whole parcel of land of which it formed part; and (b) it had failed to apply the principle that a landowner was entitled to be put in the same position as if the land had not been taken from it and should therefore have considered compensation sustained by way of severance of the land from that retained, even though it had not been explicitly claimed. The appellant sought US$435,640 for the value of the land and US$585,000 for damage sustained by severance. The appellant also contended that the Committee”s finding as to costs should be set aside.

The respondent submitted in reply that (a) the Roads Assessment Committee had been correct to value the land as a distinct parcel; (b) the Committee was not entitled to investigate and assess compensation for other damage on its own motion; (c) nevertheless, the claim for severance compensation was flawed; and (d) the Committee was justified in not awarding the appellant its costs.

Held, awarding increased compensation for market value and the recovery of costs, but refusing the claim for severance compensation:

(1) In accordance with the provisions of the Roads Law, when valuing land compulsorily acquired for the purposes of para. 6(1)(a) of the Second Schedule, the Roads Assessment Committee would assume that the appellant was a ‘willing seller’ and determine the market value of the subject land as a separate and distinct parcel and not as part of the owner”s larger holding. The value of the retained land must be ignored and therefore the market value of the subject land was determined at approximately CI$200,000 (paras. 30–32; para. 35).

(2) Paragraph 6(1) of the Second Schedule of the Roads Law made it clear that the Committee should investigate of its own motion the other heads of claim and, where appropriate, assess any damage the claimant suffered in the compulsory acquisition. This was necessary because there would be many claimants without legal representation who would need to be protected in the interests of justice. The objective would be to put the appellant, so far as money could do so, into the same position as if its land had not been taken from it, so that it would receive no more or no less than the loss it had sustained. Severance compensation would be given where the loss of the part of land compulsorily acquired depreciated the value of that retained (or for example if the future development of the land was restricted). Here there was no evidence that the value of the retained land had been reduced by the acquisition or its potential for future development affected and no compensation would therefore be awarded for severance (para. 39; paras. 42–45; paras. 60–62).

(3) A departure from the usual costs order would only be justified when the claimant”s conduct had led to an obvious and substantial escalation in costs over and above those it was reasonable to incur in vindication of its right to compensation. There was no evidence that the appellant had acted in an improper manner which had led to a ‘waste of substantial time and

expense’-its claim had been bona fide and achieved a substantial increase on the initial offer from the Director of Lands and Survey-and therefore, in the light of its ultimately successful application, it would be entitled to its costs of the proceedings before the Roads Assessment Committee (paras. 70–75).

1 QUIN, J.: At the outset of this hearing on August 11th, 2009, I made a preliminary ruling and allowed the appellant”s application, pursuant to the Grand Court Rules, O.55, r.6(2), r.7(5) and O.20, r.8(1), and granted leave to the appellant to amend its Form B claim for compensation under s.9(2) of the Roads Law (2005 Revision), along with any consequential amendments necessary to the appellant”s notice of originating motion and grounds of appeal.

2 For the purposes of this appeal, the court was provided with the following material, together with the evidence of Liam John Day, on

behalf of the appellant, and Iain Andrew Franklin, on behalf of the respondent.

[The learned judge then listed the material that had been provided to the court, and continued:]

3 In order to consider the salient issues before the court and come to a determination on these issues, I think it is important to set out the history, background and chronology of events in this matter.

History

4 The appellant was the owner of a property (registration section West Bay Beach, South Block 12C, Parcel 195) consisting of approximately 1.15 acres. The appellant”s property has a commercial two-storey building, comprising of four shop units on the ground floor and one unit on the upper floor.

5 On May 5th, 2005, a notice was published in the Cayman Islands Gazette in compliance with s.3 of the Roads Law, indicating the intention of the National Roads Authority (‘NRA’) to construct a road for which purpose there was a need to compulsorily acquire 0.25 acres of land which formed part of Block 12C, Parcel 195, referred to herein as the ‘subject land.’ In compliance with s.6 of the Roads Law, the Governor authorized the respondent to enter onto the appellant”s land and to construct the road, thereby compulsorily acquiring for this purpose the subject land, which amounts to 0.25 acres or 10,891 sq. ft.

6 On July 27th, 2005, the appellant through its agent gave notice of its intention to make a claim for compensation in accordance with s.9(1) of the Roads Law. On December 8th, 2005, the appellant served its notice in Form B in accordance with s.9(2) of the Roads Law. This notice was acknowledged by the respondent on January 3rd, 2006. The appellant”s Form B notice was amended pursuant to this court”s order, dated August 11th, 2009. On January 16th, 2006, Mr. Franklin, on behalf of the Director of Lands and Survey, recommended compensation for the subject land in the sum of CI$70,791.50 or CI$6.50/sq. ft., but the offer was rejected by the appellant. On January 30th, 2006, Mr. Franklin, again for the Director of Lands and Survey, recommended an increased offer in the sum of CI$109,000 or CI$10/sq. ft. for the subject land, but the offer was again rejected.

7 The appellant, through...