Attorney-General of Fiji v Ivan Harm Nam [2000] FJHC 41; Hbc0006j.99s (14 March 2000)

Fiji Islands - The Attorney-General of Fiji v Ivan Harm Nam - Pacific Law Materials

IN THE HIGH COURT OF FIJI

AT SUVA

CIVIL JURISDICTION

CIVIL ACTION NO: HBC 6 OF 1999

BETWEEN:

THE ATTORNEY GENERAL OF FIJI

Applicant

AND:

IVAN HARM NAM a.k.a. HARM TOY

and YEE YET SHAW

Respondent

Counsel: Mr N. Barnes for Applicant

Mr S. Chandra for Respondent

Hearing: 24th January 2000

Judgment: 14th March 2000

JUDGMENT

On 8th January 1999, the Plaintiff, the Attorney-General, made an application for a compulsory acquisition order under section 6 of the State Acquisition of Lands Act Cap. 135, and for an order to fix compensation in respect of that compulsory acquisition. On 4th November 1999, counsel for the Defendant agreed that a compulsory acquisition order should be made, but asked for trial on the question of compensation.

The hearing was held on 24th January 2000. This is the decision from that hearing.

The evidence from the affidavits, from Serupepeli Navuta (PW1) and Vidya Narayan (DW1), which is not in dispute, is as follows: The land in question is 90 square metres of CT9252, situated at Fletcher Road, Suva. The land, which is freehold is owned by the Defendant. The Government needed the 90 square metres to form part of the Nabua By-Pass Road which is part of a major up-grading project for the Kings Road from Nausori to Suva. On 21 January 1997, Government offered to purchase the land (at that time 45 square metres) for $33,000. The Defendant refused the offer, and asked for $113,160. The parties were unable to agree, thus this court action.

The part of the land acquired is in the back yard of the property. There is a building on the site. It is described as Commercial Zone B and the building holds a restaurant and a residential flat. The total property size is 607 square metres. It is a four-sided flat rectangular piece of land with a drainage reserve running across it. The property lies in a well-developed part of Suva. Unimproved value is $50,000. The land in that zone may be used for offices, commercial purposes, some industrial purposes, recreation and residential development.

These are matters not in dispute. What is in dispute is how the 90 square metres is to be valued, and how much should be paid to the Defendants as compensation.

PW1 Serupepeli Navuta, is a registered valuer with a Bachelors Degree in Land Management, and a Masters Degree in Business and Property. He has been a registered valuer since 1994. He is currently employed at Rolle Hiller & Parker (Estate Agents). Mr Navuta based his valuation on the development percentage allowed in Zone Commercial B property, the improvements on the site (the building), the fact that the land was at the rear of the property, the potential damage to the property by acquisition, and the current market value of properties in the area. He arrived at a figure of $24,750.00 for the 90 square metres, at $275.00 per square metre.

The Defendant’s witness used a different method of valuation. Mr Vidya Narayan has a Bachelor of Land Management, a Post-graduate Diploma in Land Management and a Diploma in Legal Studies. He was employed by the Lands Department as an estate manager and valuer for some twenty years. He has lectured in land valuation at the University of the South Pacific and has held senior positions in the Institute of Estate Management. He prepared a valuation report on the property on 2nd February 1998 which was tendered in court, together with a revised report which included legal and valuation costs of $8,000.

His report, which he said was based on section 40 of the Constitution, section 2 of the Crown Acquisition Act Cap. 135, and common law principles of compulsory acquisition of land, was based on the highest and best use of the land. He took into account loss of potential development of the land at the rear, change to the shape of the land, injurious affection (assessed at 10%), loss of goodwill (assessed at net income of the property), current market value of comparable property in the area and solatium to compensate the owner for suffering the bow of compulsory acquisition. The total he said the owner should be paid on the basis of his valuation is $113,160.00 plus interest from valuation to the present day.

Both counsel made written submissions which were helpful. Mr N. Barnes for the Attorney-General, submitted that the main consideration for the court was “the market value of the land at the date of the notice of intention to take such land.” He said that no particular damage was done to crops or trees, that the fact that the property was at the rear, meant that no injurious affection had occurred, and that the owners were not forced to relocate as a result of the acquisition. He submitted that on a comparison with other properties in the area the total figure of $24,750 was the correct amount to be ordered by the court.

Mr S. Chandra for the Respondent submitted that the Applicant had initially offered the Respondent $33,000 for 45 square metres, but that this sum was now reduced to $24,750 for double the area. He said that the court should make an award that was just and equitable in all the circumstances. He submitted that the court should take into account effect of acquisition on the land, the effect on the shape of the land, injurious effect, professional fees, loss of goodwill and solatium. He submitted that although there is no specific statutory provision to allow payment of solatium, and professional fees, it would be just and equitable to consider such payment.

Section 12 of the Crown Acquisition of Lands Act Cap. 35 provides as follows:

“In determining the amount of compensation to be awarded for land acquired under this Act -

(a) the Court shall take into consideration -

(i) the market value of the land at the date of the notice of intention to take such land;

(ii) the damage sustained by the person interested, by reason of the taking of any standing crops or trees which may be on the land at the time of taking possession thereof;

(iii) the damage, if any, sustained by the person interested, at the time of taking possession of the land, by reason of severing such land from his other land;

(iv) the damage, if any, sustained by the person interested, at the time of taking possession of the land, by reason of the acquisition injuriously affecting his other property, real or personal, in any other manner, or his earnings;

(v) if, in consequence of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any incidental to such change;

(b) but the court shall not take into consideration -

(i) the degree of urgency which has led to the acquisition;

(ii) any disinclination of the person interested to part with the land acquired;

(iii) any damage sustained by him which, if caused by a private person, would not render such person liable to a suit;

(iv) any increase to the value of land acquired likely to accrue from the use to which it will be put when acquired;

(v) any increase to the value of the other land of the person interested likely to accrue from the use to which the land acquired will be put; or

(vi) any outlay or improvements on or disposal of the land acquired, commenced, made or effected after the date of the notice of the intention to take such land.”

Section 40 of the Constitution of Fiji provides:

“The acquisition of property .........

(b) is subject to the payment of agreed compensation or, failing agreement, to the payment of such compensation and within such period as is determined by a court or tribunal to be just and equitable taking into account all relevant factors including:

(i) the use to which the property is being put;

(ii) the history of its acquisition;

(iii) its market value;

(iv) the interests of those affected; and

(v) any hardship to the owner.”

Section 40 of the Constitution does little more than define the way in which the court should approach making compensation orders under section 12 of the Crown Acquisition of Lands Act. Clearly the question of what is just and equitable in the circumstances is pivotal to any construction of section 12.

(i) The Market Value of the Land

The measure of the value of the land to be taken is the amount which the land might be expected to realise if sold by a willing seller, in the open market. (Halsbury 4th Ed. Vol 8 Para 250).

It was said in Cedar Rapids Manufacturing and Power Co. -v- Lacoste [1914] UKLawRpAC 4; (1914) AC 569 at 576, in relation to the U.K. Land Compensation Act 1961, that the owner of the land is entitled to the value to him. This comprises all the advantages present and future, which the land possesses. However any increase to the value of the land due to the development carried out by the State, is to be disregarded (section 12(b)(v) of the Fiji Crown Acquisition of Lands Act).

The basis of the value of the land is therefore the value to the owner. However, in Pastoral Finance Association Ltd. -v- The Minister (1914) AC 1083, it was held by the Privy Council that the owner is not entitled to have the capitalized value of the savings and profits which he derived from a business conducted from the use of the land included in arriving at a value for the land. At page 1088, the Privy Council said:

“Probably the most practical form in which the matter can be put is that they were entitled to that which a prudent man in their position would have been willing to give for the land sooner than fail to obtain it.”

Any other piece of land compulsorily acquired for the by-pass by the Director of Lands must therefore be disregarded. If there are no comparable sales in the neighbourhood, market value may be assessed by the capital value of the annual rent during the currency of any lease, and then on the basis of the best rent available.

In this case, both valuers looked at comparable properties sold in the Nabua area. Mr Narayan arrived at a figure of $42,121.51 after a comparative analysis. Mr Navuta considered sales of vacant freehold commercial properties and arrived at $24,750.00.

I accept that the 90 square metres severed from a developed piece of land on which a building stands, can be properly compared with a vacant piece of land such as CT8357, sold in 1995. However I accept the analysis offered by Mr Narayan in that he has added to the sale price in 1995 an increase to 1998 (the date of valuation) to cover the appreciated value of the land. The average inflation rate from 1995 to 1999, according to the Consumer Price Index being about 4% annually, I consider the 11.5% increase suggested by Mr Narayan to be high. Taking into account the inflation rate, and the development of the Nabua area, I consider a rate of 10% increase to the 1995 sale price to be a fair assessment. This would increase the purchase price per square metre from $272.00 to $300.00 per square metre. For a total of 90 square metres, I therefore award a sum of $34,272.00.

(ii) Damage

Any damage to the building or land will be repaired by the Director of Lands. No award is payable under this head.

(iii) Damage by Severance

Mr Narayan suggests that the shape of the land makes future development difficult. Mr Navuka disagrees. He says the building of the road enhances the land. I accept that development at the rear portion of the land was unlikely and that the front portion of the land remains unaffected by the acquisition. I am not satisfied that it is just or equitable to award a sum for the change in the shape of the land over and above the market value.

(iv) Injurious Affection

Compensation is payable for injury to the land by the acquiring authority’s construction of works on the land taken. Thus injurious affection payment was awarded where land was taken for the building of a highway in Re Great Eastern Rly Co. and LCC (1907) 98 LT 116.

All forseeable damage must be taken into account in assessing the award (Mercer v. Liverpool St. Helens and South Lancashire Rly Co. [1904] UKLawRpAC 44; (1904) AC 461.

It was held in Stockport, Timperly and Altrnoham Rly Co. (1864) 33 LJ QB 251 that the measure of compensation for damage to the land not taken by reason of severance or other injurious affection, is the extent to which it has depreciated in market value. Damage by severance may be reduced by beneficial works, but any increased value may not be set off against the value of the land taken.

In Master and Fellows of University College Oxford v. Secretary of State for Air (1938) 1KB 652 the Court held that the claimants were entitled in law to claim for injurious affection to the remainder of their property by reason of the use to which the land to be purchased may be put by the acquiring authority.

In R v. Mountford, ex parte London United Tramways 1901 Ltd. (1906) 2KB 814, the Court held that in assessing compensation to be paid, the applicant was entitled to compensation for any depreciation in the value of his remaining property by reason of the land taken being used to widen a road. He was not entitled to compensation for depreciation caused by the running of trams along the street.

In this case, there is no dispute that the Respondent’s land will be used for a highway which will run through the 90 square metres acquired. As such the Respondent is entitled to the value of depreciation caused to his remaining land, by virtue of the building of the highway on the acquired land.

The evidence of the effect of severance in this case, is that the highway would cause noise and smoke pollution, and that the proposed by-pass, which would have five lanes, would be adjacent to the severed property. Mr Narayan assessed loss by injurious affection to be 10% of the value of the land which he assesses, is a total of $19,439.20. The applicant says that no award should be made for injurious affection at all, because the building of the highway enhances access to the property.

In fact, the evidence is that the highway will sweep past the property. There will be no access to the Respondent’s property from the highway. There will be no parking. The only access will be visual. There will undoubtedly be pollution and noise which will make the property less attractive to potential future buyers. I accept the evidence of Mr Narayan that a 10% on value award is reasonable for injurious affection and I award $19,439.20 accordingly. Although the Applicant disputes the total value of the land to be $194,392.00, I accept Mr Narayan’s assessment on the basis of other sales in the neighbourhood.

The Respondent also asks for 10% as solatium. There is no statutory provision for solatium. Solatium is described as “non-financial disadvantage resulting from the necessity to relocate” (Geita Sebea -v- Territory of Papua [1941] HCA 37; (1941) 67 CLR 544. The Respondent suggest a figure of $19,439.20 based on 10% on the value of the property. I consider that in the absence of clear statutory authority, I have no powers to order an award for solatium and I disallow this claim.

(v) Professional Fees

The Respondent asks for $8,000 to cover professional fees. The Court may order the acquiring authority to pay all reasonable costs relating to acquisition. Clearly, in order to conduct this case, the Respondent had to employ a solicitor and a valuer. I consider a payment of $8,000 to cover costs of both to be entirely reasonable and I order such payment accordingly.

In summary I find as follows:

(1) Compensation for market value $34,272.00

(2) Injurious Affection 19,439.20

(3) Professional Fees 8,000.00

___________

TOTAL $61,711.20

___________

Nazhat Shameem

JUDGE

At Suva

14th March 2000

Hbc0006j.99s