Arawak Homes Ltd v The Attorney General and Another
| Jurisdiction | UK Non-devolved |
| Judge | Lord Carnwath |
| Judgment Date | 21 November 2016 |
| Neutral Citation | [2016] UKPC 34 |
| Court | Privy Council |
| Docket Number | Appeal No 0012 of 2016,Privy Council Appeal No. 0012 of 2016 |
| Date | 21 November 2016 |
Lord Neuberger; Lord Kerr; Lord Clarke; Lord Carnwath; Lord Hughes
Privy Council Appeal No. 0012 of 2016
Privy Council
Property law - Land compulsorily acquired — Valuation of land — Whether the judge assessed the compensation for the lots zoned for residential development in a manner which took no proper account of their value to the appellant — Assessment of market value — Whether the judge erred in rejecting the claim for compensation for 193 further lots taken for the construction of “offshoots” of the highway — Whether the Court of Appeal erred in failing to determine the said claim on its merits — Whether the Court of Appeal erred in setting aside the judge's award in respect of the second group of acquisitions — Whether the judge erred in failing to rule on the appellant's title to the property — Whether the court erred in directing payment to the Treasurer — Court's discretion as to costs — Acquisition of Land Act, sections16, 28 and 29 — Ryde International plc v. London Regional Transport [2004] EWCA Civ 232.
Thomas Roe, Q.C.; Neville L Smith, Q.C.; Sharlyn R Smith and Tavares K Laroda (Instructed by Axiom Stone Solicitors) for the appellant
James Guthrie, Q.C. and Rowan Pennington-Benton (Instructed by Charles Russell Speechlys LLP) for the defendant
This appeal concerns a claim by Arawak Homes Ltd (“Arawak”) for compensation in respect of three tracts of land compulsorily acquired by the government between 1995 and 2001 under the Acquisition of Land Act (“the Act”). The land is in the Pinewood Gardens area of Nassau. It is part of the former “Pinewood Gardens Subdivision”, laid out in 1972 by its original developer Pinewood Gardens Ltd. In 1983 Arawak acquired some 3,000 numbered lots and two other tracts of land on the estate. Competing claims have been made to parts of the land but generally without success (see for example the judgment of the Board in Dean v. Arawak Homes Ltd (The Bahamas) [2014] UKPC 24, in which some of the background is discussed.).
The main provisions of the Act were described in the Board's judgment in Bethel v. Attorney General of the Commonwealth of the Bahamas [2013] UKPC 31. As explained there, the starting point for acquisition for public purposes is the publication of a notice of intending acquisition in the Gazette under section 6, following which title may be acquired by notice of appropriation under section 18. Compensation, in default of agreement, is to be determined by the Supreme Court on an application by the promoters or any person interested (section 15), and is to be assessed in accordance with principles set out in sections 28ff. Where land has been acquired by notice of appropriation under section 18, interest runs at 5% from the date of the notice until payment (section 18(1) proviso). Article 27 of the Constitution requires provision for the making of “prompt and adequate compensation”. It will be necessary to look at some of the provisions in more detail in connection with the specific grounds of appeal.
Formal notices were served as follows:
i) By a declaration of intending acquisition under section 6 dated 10 March 1995, the Minister of Education and Training gave notice that some 13 acres were needed for use as a public school. By notice under section 18 dated 27 April 1995, it was declared that 10.766 acres had been appropriated (“the first school site”). This site was used to build the Cleveland Eneas School. 6.213 acres of this land was zoned for commercial development.
ii) By declaration under section 6 dated 30 March 1999, notice was given that the land described, some 84 acres, was needed for public purposes including for construction of a school, housing and public roads. By notice under section 18 dated 25 June 1999, it was declared that the 84 acres had been appropriated for those purposes. Following a court challenge by Arawak, an amended section 18 notice was issued dated 3 May 2001, purporting to limit the acquisition to 13.246 acres (“the second school site”). The Sadie Curtis School was built on this site. Issues have been raised as to the validity and practical effect of the amended notice.
iii) A notice under section 6 dated 30 November 1999 stated the intention to acquire a strip of land (coloured in pink on a plan attached to the notice) to build a highway; the acreage was not stated. An amending notice, dated 3 May 2001, was more specific, listing the relevant plots by number in a schedule to the notice, amounting to “16 acres or thereabouts” (“the highway land”). Although no notice of appropriation is before us, the case proceeded before the judge on the basis that this land also was validly acquired under section 18 at or about the same time for what became the Charles W Saunders Highway.
Arawak issued proceedings in the Supreme Court in 2004 under section 15 as interested persons seeking compensation for compulsory acquisition of land within the Pinewood Gardens Subdivision. The claim came before Adderley J in 2011. He gave judgment on 14 November 2012, awarding $4,400,310, which he directed to be paid to the Treasurer under section 16 of the Act pending proof of individual claims before the court (para 74).
Arawak appealed to the Court of Appeal which delivered judgment on 22 December 2014. It upheld the judge's assessment in respect of the first school site, subject to some minor adjustments, but set aside the award in respect of the other claims, remitting them to the Supreme Court.
The issues raised by the grounds of appeal can be conveniently considered under four main heads:
(1) Valuation
i) The judge assessed the compensation for the lots zoned for residential development in a manner which took no proper account of their value to Arawak as land suitable for residential development (as shown by evidence of profitability of Arawak's own sales);
ii) He assessed the compensation for the 6.213 acre site zoned for commercial development by reference to an untested assertion that it was prone to flooding, ignoring Arawak's evidence to the contrary;
(2) The “offshoots”
iii) The judge erred in rejecting the claim for compensation for 193 further lots taken for the construction of “offshoots” of the highway;
iv) The Court of Appeal erred in failing to determine this claim on its merits, and in deciding instead to set aside the judge's award in respect of the second group of acquisitions and remit them for rehearing;
(3) Payment to the Treasurer
v) The judge erred in failing to rule on Arawak's title to the expropriated property but instead ordering the money to be paid to the Treasurer;
(4) Costs
vi) The judge had no proper reason for depriving Arawak of 30% of its costs.
(1) Valuation
Section 28 sets out in paragraphs (a) and (b) respectively matters to be taken, and not to be taken, into consideration in determining compensation. Of the former the relevant matters for present purposes are (a)(i) “the market value of the selected land” at the date of declaration of intending acquisition under section 6; (a)(ii) any damage sustained “by reason of severing such land from other land of the persons interested”; and (a)(iii) any damage sustained by the persons interested by reason of the acquisition “injuriously affecting other property belonging to him whether real or personal in any other manner or his actual earnings”. The distinction between the paragraphs is given added significance by section 29, under which a further award is to be made of 10% of the market value under paragraph (a)(i).
As under many common law systems, these provisions reflect principles derived from the Land Clauses Consolidation Act 1845 (8 & 9 Vict, c 18) and subsequent case-law. However, care must be taken in applying cases decided under the 1845 Act, or indeed under other statutory codes derived from it (such as the English Land Compensation Act 1961). Section 28 is relatively prescriptive in form, and spells out in perhaps more than usual detail the components of the assessment, positive and negative. Thus paragraphs (a)(ii) and (iii) can be seen as reflecting the familiar heads of claim for severance, injurious affection, and loss of business profits. Although those heads were well-established in the cases long before this Act, and although those cases may be of assistance by way of analogy, primary attention must be given to the words of the section itself.
Mr Roe QC, who appeared for Arawak on this appeal, has put some emphasis on the concept of “value to the owner”, which became an established principle under the 1845 Act, and is still regarded as an underlying principle in the modern law (see eg Transport for London v. Spirerose Ltd [2009] UKHL 44, [2009] 1 WLR 1797, paras 89–93 per Lord Collins). There is a useful discussion of the development and significance of the concept in Barnes The Law of Compulsory Purchase and Compensation (2014), para 3.10. He explains how it is reflected in the law under the Land Compensation Act 1961: on the one hand in the rules (statutory or common law) requiring disregard of increases or decreases in value attributable to the purpose of acquisition, and on the other in the right to claim for “disturbance”, such as lost business profits. The expression “value to the owner” as such does not appear in section 28, but the principles can be seen in its detailed provisions. Thus section 28(a) lays down “market value” as the basic rule, but then makes specific provision for other forms of damage to the owner; conversely section 28(b) excludes various factors which are irrelevant to the value to the owner, such as for example (para (i)) urgency of acquisition and (para (v)) increases in value from the use to which the land is to be put when acquired. Thus, while the concept of value...
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