Blakes Estates Ltd v Government of Montserrat
| Jurisdiction | UK Non-devolved |
| Judge | Lord Carswell |
| Judgment Date | 15 December 2005 |
| Neutral Citation | [2005] UKPC 46 |
| Court | Privy Council |
| Docket Number | Appeal No. 29 of 2004 |
| Date | 15 December 2005 |
[2005] UKPC 46
Present at the hearing:-
Lord Nicholls of Birkenhead
Lord Hoffmann
Lord Rodger of Earlsferry
Lord Walker of Gestingthorpe
Lord Carswell
Privy Council
[Delivered by Lord Carswell]
In 1995 a devastating volcanic eruption caused massive damage on the island of Montserrat. The capital city of Plymouth was virtually destroyed and a large proportion of the island in the southern part, amounting to almost two-thirds of the whole, became unsafe for habitation. Thousands of inhabitants had to leave their homes and a very large problem of resettlement arose. The respondent government embarked on a policy of compulsory land acquisition to provide housing and associated amenities for people who had had to move from the unsafe area.
The respondent compulsorily acquired for this purpose two adjoining tracts of land owned by the appellant. The area known as Lookout One, comprising 92.4 acres, was acquired on 24 December 1997 and Lookout Two, comprising 102.4 acres, was acquired on 30 December 1998. A small area of some three acres had previously been acquired by agreement for construction of a school, the price for which was negotiated at $2.00 per square foot (all sums mentioned in this judgment are expressed in EC dollars).
It was accepted that the Lookout lands were well suited for development for the purpose of resettlement. The area was described as "a place of breathtaking beauty", with sweeping views and the benefit of cool breezes. Not all of it was capable of straightforward development, since a significant part of each site had steep contours. In paragraphs 8 and 9 of the judgment of Georges JA (Ag) in the Court of Appeal, with which the other members (Byron CJ and Redhead JA) concurred, he adopted the description of the lands given by Mr Martin Van Oppen, one of the valuation experts who gave evidence before the Board of Assessment, in the following terms:
"[8] Mr Martin Van Oppen a Valuation expert following an inspection in August 1997 described Lookout One thus:
'… 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 part-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 tract to the school site, there were no internal roads or tracks suitable for vehicular use.'
[9] And his description of Lookout Two after an inspection in November 1998 reads:
'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 side 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 respondent offered $3.3 million for Lookout One and $1.5 million for Lookout Two, a total of $4.8 million. The offer was refused by the appellant, which had claimed a very substantially larger sum of compensation. The matter went for decision to a Board of Assessment ("the Board") appointed under the Montserrat Land Acquisition Act, the members of which were Mr Justice Saunders (chairman), a practising valuer Mr Fred Campbell, nominated by the appellant, and Mr Rex McKay SC, appointed by the respondent. The appellant contended before the Board that the total value of the two areas of land in Lookout One and Lookout Two fell between $16,910,235.00 and $31,378,040.00. In a written decision given on 7 November 2000 the Board by a majority made a total award of $5,908,100.00 and ordered that the respondent pay 65 per cent of the appellant's costs.
The appellant appealed to the Court of Appeal of Montserrat (Byron CJ, Redhead JA and Georges JA (Ag)), advancing some twelve grounds of appeal, which were dealt with seriatim in the court's judgment given on 3 April 2003. The respondent cross-appealed on the issue of the valuation of commercial land and the award of costs. The court rejected most of the grounds of the appeal, but the appellant succeeded on ground 8, relating to very steep land on both sites, 11(a), relating to road reserves, and 11(c), relating to the school site. On these issues the Court of Appeal remitted the assessment to the Board for reconsideration. It allowed the cross-appeal on the value of commercial land, which it also remitted to the Board for reassessment. On the issue of costs it varied the Board's decision, ordering that each party should pay its own costs of the proceedings before the Board, and made the same order in respect of the costs in the Court of Appeal. The appellant appealed to the Privy Council against the decision of the Court of Appeal. The respondent has not cross-appealed and accordingly the remittal to the Board on grounds 8 and 11 is not affected by the present appeal and will proceed in due course.
The method of assessment of compensation for compulsory acquisition was prescribed by section 19 of the Land Acquisition Act (sometimes referred to as "the Ordinance") in the following terms, most of which represent familiar principles of valuation in such cases:
"19. Subject to the provisions of this Act, the following rules shall apply to the assessment and award of compensation by a Board for the compulsory acquisition of land –
(a) the value of the land shall, subject as hereinafter provided, be taken to be the amount which the land, if sold in the open market by a willing seller, might have been expected to have realized at a date twelve months prior to the date of the second publication in the Gazette of the declaration under section 3:
Provided that this rule shall not affect the assessment of compensation for any damage sustained by the person interested by reason of severance, or by reason of the acquisition injuriously affecting his other property or his earnings, or for disturbance, or any other matter not directly based on the value of the land;
(b) the special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which the land could be applied only in pursuance of statutory powers, or for which there is no market apart from the special needs of a particular purchaser or the requirements of any Government department;
(c) where the value of the land is increased by reason of the use thereof or of any premises thereon in a manner which could be restrained by any court, or is contrary to law, or is detrimental to the health of the inmates of the premises or to public health, the amount of that increase shall not be taken into account;
(d) where land is, and but for the compulsory acquisition would continue to be, devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, the compensation may, if the Board is satisfied that reinstatement in some other place is bona fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement;
(e) no allowance shall be made on account of –
(i) the acquisition being compulsory or the degree of urgency or necessity which has led to the acquisition;
(ii) any disinclination of the person interested to part with the land acquired;
(iii) any damage sustained by the person interested which, if caused by a private person, would not render such person liable to an action;
(iv) any damage, not being in the nature of deprivation of or interference with an easement, servitude or legal right, which, after the time of awarding compensation, is likely to be caused by or in consequence of the use to which the land acquired will be put:
Provided that nothing herein shall prejudice any claim under this Act for damage subsequently sustained in consequence of the use to which the land acquired is put;
(v) any increase to the value of the land acquired likely to accrue from the use to which the land acquired will be put;
(vi) any outlay or improvement of such land which has been made, commenced or effected within twelve months before the publication of the declaration under section 3, with the intention of enhancing the compensation to be awarded therefor in the event of such land being acquired for public purposes."
The parties agreed before the hearing before the Board that the value of the lands should be assessed as at the date of acquisition of each property instead of twelve months before the acquisition. It was not in dispute that the values at the two dates in each case would have been "much the same" and the Court of Appeal found (para 20) that neither party was prejudiced by the...
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