IN THE COURT OF APPEAL OF THE REPUBLIC OF VANUATU
(Appellate Jurisdiction)

CIVIL APPEAL CASE No.04 OF 2011

IN THE MATTER OF: LAND ACQUISITION ACT [CAP.215]

BETWEEN:

THE REPUBLIC OF VANUATU
Appellant

AND:

BOETARA FAMILY AND ZEBEDEE MOLVATOL
Respondent

Coram: Hon. Chief Justice Lunabek
Hon. Justice Mansfield
Hon. Justice Fatiaki
Hon. Justice Spear
Hon. Justice Asher 

Counsel: Mr Frederick Gilu the Appellant
Mr Felix Laumae for the Respondents

Date of hearing: 1st April 2011
Date of judgment: 08th April 2011

JUDGMENT

Introduction

1.	The outcome of this appeal turns on the proper application of the provision of the Land Acquisition Act [CAP.315] ("the LA Act").

2.	It concerns two parcels of land of which the respondents are the declared custom owners. The land is within the Belbaraf area, in the South East section of the island of Santo, near Luganville.

3.	The two pieces of land are on lease titles Nos. 04/2643/004 containing 47.2980 hectares and 04/2643/005 containing 14.1052 hectares. They are part of the Vanuatu Agricultural College or are adjacent to it. The area has been in the possession of the Republic of Vanuatu since 1980. In 2003 the Vanuatu Agricultural College was built on the smaller piece. The larger piece of land has been used for the purposes of the College since 2008.

4.	On 20 May 2010, the Minister of Lands made a public declaration under s.6 of the LA Act to acquire the two parcels of the land for the public purpose of the College. That activated the provisions of the LA Act about compensation for the land to be acquired. It thereby gives effect to Articles 5(1)(i) of the Constitution which recognizes the fundamental right to protection from unjust deprivation of property. Article 77 empowers the Parliament to prescribe criteria for the assessment of compensation and the manner of its payment to persons whose interests in land are affected by legislation under Chapter 12 of the Constitution. 

The Legislation

5.	As this appeal turns on the terms of the relevant provisions of the LA Act, it is convenient to set them out.

6.	Section 9(1) relevantly provides:

 "In determining the amount of compensation to be awarded for any land or easement acquired under the provisions of this Act, the acquiring office or the Valuer-General under this Act shall take into consideration …"

 and it specifies 8 factors to be considered. Nothing turns on the particular 8 factors. It is accepted that they were considered.

7.	Section 9(2) provides:

"A determination must be in writing and a copy of it must be given to the custom owner or owners of the land, and any other person interested in the land."

8.	Section 10 is not directly relevant, and section 11 has been repealed.

9.	Section 12 provides:

"(1) Any custom owner or owners of the land or any other person interested in the land who is dissatisfied with a determination under section 9 may appeal to the Supreme Court within 30 days after the date on which the determination is made.

(2) If a determination is made under section 9 and no appeal is made under subsection (1), the decision of the acquiring officer is final."

10.	Section 13 provides:

"The acquiring officer shall within thirty days of the final determination of compensation payable under the provisions of this Act, notify in writing –

(a)	persons who are entitled to compensation in respect of the land or easement which is to be acquired;

(b)	the nature of the interests of those persons in the land which is to be acquired or over which an easement is to be acquired; and

(c) the amount of the compensation finally determined which in his opinion should be allowed for acquisition."

11.	Section 14 provides:

"A compensation payment determined under section 9 is to be made to the custom owner or owners of the land, and any other person interested in the land, as soon as practicable after the appeal period under section 12 expires."

12.	Once those steps are taken, including the payment of compensation under section 14, the Minister may, by gazetted order, direct the acquiring officer (defined in section 3 to be the Director of Lands or any prescribed officer) to take possession of the land and section 17 provides that, by that gazetted order, the land vests absolutely in the Republic of Vanuatu.

The facts 

13.	In this matter, the Director of Lands as the acquiring officer procured a valuation of the land by the Valuation dated 21 July 2009. It valued the land at a total compensation value of VT196,888,300.

14.	On 6 August 2010, the Director of Lands by a document headed "Notice of Final Determination" gave two notices to the respondents (and possibly to others) that the amount of compensation payable to the respondents for the acquisition of the land was-

(1) in respect of the land in registered survey plan 04/2643/004 the sum of VT152,471,300, and 

(2) in respect of the land in registered survey plan 04/2643/005 the sum of VT44,417,000.

Neither of those notices was signed by the Director of Lands, but it is accepted that they were sent by him or on his behalf. Each notice contained the endorsement: "If you are not satisfied with the amount of compensation awarded you may within 30 days of this Notice, appeal to the Land Referee."

15.	The respondents regarded those notices as service on them under s.9(2) of the LA Act of the determination of the Director of Lands of the amount of compensation for the land to be acquired. They did not wish to appeal to the Supreme Court under s.12(1) as they were not dissatisfied with the determination. After 30 days, they said that s.12(2) operated to make the decision of the Director of Lands about the amount of compensation to be awarded final. They asked for payment of the compensation.

16.	This case arose in the Supreme Court because the compensation the respondents claimed had not been paid. The respondents asked for a declaration that the compensation payable for the two pieces of land was VT196,888,300 and for an order that that sum be paid to them. 

17.	It now appears, as the judge at first instance recorded, that the reason it was not paid arose from a change in the person holding office as the Minister of Lands. The new Minister thought that the determination of the Director of Lands was excessive. He asked the Valuer-General to provide an independent valuation of the two pieces of land. By valuation of 23 September 2010 the Valuer-General valued the two pieces of land as having a total value of VT30,866,000. That is obviously a much lower figure. The Director of Lands did not at the time formally tell the respondents of that lower valuation. The Republic of Vanuatu wanted to be able to substitute the much lower valuation as the proper amount of compensation, and so did not pay the larger sum.

18.	There was some concern about service of that application. As this Court considers that the parties' respective rights and obligations under the LA Act had become fixed by 6 September 2010, well before the Supreme Court proceedings were started, nothing really turns on that. The Supreme Court action was started on about 16 December 2010. An attempt to serve the claim under Rule 5.8(3) of the Civil Procedure Rules on the State Law Office on 23 December 2010 was unsuccessful, because that office was closed. The proceedings were given to the Director of Lands (who was then the named defendant) on 4 January 2011. He sent them to the State Law Office on 31 January 2011. There were further discussions in January and February 2011 between the respondents and certain Ministers and officers of the Republic of Vanuatu. On 26 January 2011, there was a proposal for the progressive payment of the compensation of VT196,888,300. The Republic of Vanuatu clearly knew of the proceedings.

The decision of the Supreme Court 

19.	The matter came before the Supreme Court on 2 March 2011, on an application for summary judgment. By reasons published on 3 and 7 March 2011, the Supreme Court said that all legal requirements and procedures under the LA Act had been followed, so that the Republic of Vanuatu by the operation of the LA Act was bound to pay the compensation of VT196,888,300. The primary judge made a declaration to that effect, and gave judgment for that sum.

20.	The Supreme Court ruled that an arrangement for payment of that compensation, reached on 26 January 2011, by four instalments up to 29 September 2011 was more realistic, and so ordered payment of the compensation by those instalments. 

21.	In addition the Supreme Court ordered the Republic of Vanuatu "to pay back rents from 1980 until 19 January 2010". Those amounts were to "be subject to further discussions and agreement between the parties". 

22.	No order for costs was sought.
Consideration

23.	The principal ground of appeal is that the orders of the Supreme Court effectively forced the Republic of Vanuatu to undertake a compulsory acquisition of the two pieces of land and dictated the terms of that acquisition.

24.	In our judgment, that proposition is not correct.

25.	The process of compulsory acquisition is prescribed under the LA Act. That process was followed, at least to the point of giving notice under s.9(2) of the determination of the Director of Lands about the compensation to be paid to acquire the particular land.
 
26.	The Minister had made a declaration on 20 May 2010 under s.6 of the LA Act that the two pieces of land were required for public purposes. It was duly published in the Gazette. Notice as required by s.7 to the custom owners had been given.

27.	The next step under the LA Act is the determination of the amount of compensation to be awarded. It is important to note that the LA Act prescribes a system which requires the fixing of the compensation before the acquisition of the land can finally take place.

28.	Section 9 imposes two steps in that process. The first is under s.9(1). The Director of Lands (or the Valuer-General) is required to determine the amount of compensation for the land to be acquired. He did so by adopting the valuation of 21 July 2009. There is no suggestion that that valuation, or the determination based on it, was not made in good faith.

29.	The second step is the giving of notice of the determination to the custom owners under s.9(2). In our view, the notices of 6 August 2010 referred to in [14] above were notices under s.9(2). There is no form prescribed in the LA Act, or in the Land Acquisition (Forms) Regulations (Order 32 of 1994) (the Regulations), for the giving of notice. The form used appears, erroneously, to have been taken from Schedule 6 to the Regulations, so it uses the title 'Notice of Final Determination'. It also has the endorsement referring to the Land Referee also noted in [14] above. That is also clearly in error. The Land Referee has become the Valuer-General by Act 22 of 2002.

30.	Nevertheless, it is clear what the purpose of those notices was. It was to tell the custom owners what determination had been made by the Director of Lands about the amount of compensation to be paid for the two pieces of land, so as to fulfill the obligation under s.9(2). That is what those notices conveyed. We have no doubt that they then applied so that the respondents, as custom owners, had 30 days to dispute that determination in the Supreme Court.

31.	The respondents did not wish to appeal to the Supreme Court from that decision. That determination, therefore, by s.12(2), became the final decision about the amount of compensation payable by the Republic of Vanuatu for acquiring the land. 

32.	Under the LA Act, the next step is the formal notification of final determination. The Director of Lands has not issued notification of final decision, but it is a procedural step to formalize the process. There is no discretion to decline to take that step, once notice of the determination made under s.9(1) has been given under s.9(2) and there has been no appeal to the Supreme Court under s.12(1), and the 30 day period specified in s.12(2) has elapsed. In fact the Director of Lands is remiss in not having given notice of the final determination within the further period of 30 days, as required by s.13 of the LA Act.

33.	Accordingly, we do not consider that the primary judge erred in declaring that the compensation payable for the acquisition of the land in question is VT196,880,300. That figure is fixed by the processes prescribed by the LA Act. It was fixed on 6 September 2010, that is 30 days after the notices of 6 August 2010.

34.	However, the final step before that sum becomes payable is the notice of final determination to be given by the Director of Lands under s.13. That notice itself must be gazetted. Until that is done, the compensation may not become payable. The primary judge did not consider the significance of the failure of the Director of Lands to take that step. We would therefore set aside the order for payment of that sum as premature. We will also remit the matter to the Supreme Court, so that the respondents may have an opportunity to amend their statement of claim to seek a mandatory order directing the Director of Lands to give formal notice of the final determination of the amount of compensation payable for the compulsory acquisition of the land. That is his statutory duty. Upon that notice being given, the compensation will become payable. Indeed, having regard to the terms of s.14, it is clearly arguable that the compensation for the acquisition of the two pieces of land became payable at the expiration of 30 days from the giving of proposed compensation determination on the respondents under s.9(2). The expiration of the 30 day period meant they could no longer appeal to the Supreme Court to seek a different amount of compensation under s.12(1), so s.12(2) then finally fixed the amount of compensation. That date, in this matter, is 6 September 2010 as noted above. Upon the compensation being paid, the Minister can cause the Republic of Vanuatu registered as the owner of the land.

35.	Counsel for the Republic of Vanuatu argued before the primary judge that the Supreme Court should allow the Republic to decide between the competing valuations it had available. The problem with that argument is that the earlier valuation, adopted by the Director of Lands as the basis for determining the amount of compensation for the two pieces of land under s.9(1) thereby became the decision about the proper amount of compensation (unless the Supreme Court in proceedings under s.12 made a different determination). Under the LA Act, that determination became the decision in effect of the Republic of Vanuatu through the Minister of Lands. The procedures prescribed by the LA Act have that operation. They do not entitle the Republic of Vanuatu to change its mind. There is, as noted, no suggestion that the determination was made in bad faith. Nor is it suggested that there was any clerical or similar mistake, so that the service of the determination on the respondents under s.9(2) did not really represent the terms of the determination itself.

36.	In addition, for the reasons we have given, the Republic of Vanuatu was not denied procedural fairness in the matter being heard on the summary judgment application in early March 2011. It was well aware of the proceedings. In fact, as the primary judge recorded, discussions between the respondents and certain officers and Ministers of the Republic of Vanuatu on 26 January 2011 had agreed to terms on which the compensation fixed by the Director of Lands was to be paid. It is correct that the primary judge did not allow further time for formally proving the later and lesser valuation, but for the reasons we have given that valuation could not have altered the amount of the compensation to be paid.
 
37.	There were other subsidiary submissions of the Republic of Vanuatu which, upon examination, were not made out. Those submissions unsuccessfully raised questions about the validity of the earlier declarations under s.6 and their service under s.7. They raised the question of the validity of the notices serving the determinations of the Director of Lands under s.9(2) because they do not appear to be signed. As we discussed above, there was no real dispute that they were served with the authority of the Director of Lands, so there was no dispute about their authenticity. There is no statutory requirement that they be signed, although no doubt that is the normal course.

38.	A further submission was put that the s.9(2) notices were not served on the Minister of Lands, as a "person interested in the land" so that the Minister of Lands should still be served with those determinations and could then appeal to the Supreme Court under s.12 to challenge them. The flaw in that argument is that the determination, under the LA Act, is made on behalf of the Minister of Lands. The Minister wanted to acquire the two pieces of land, and under Part 3 of the LA Act the process of deciding on the appropriate compensation in substance started with the determination on his behalf, through the Director of Lands (or the Valuer-General). The reference in s.9(2) to giving notice to "any other person interested in the land" does not include the Minister of Lands who is in reality serving the determination.

39.	There are two further observations it is appropriate to make:

(1) It is clear that there are two very different views about the value of the land being acquired. It is not possible to know at present which is the more correct one. The structure of the LA Act does not provide for that issue to be decided, once notice of a determination under s.9(1) has been served under s.9(2), unless there is an appeal to the Supreme Court under s.12. It he Republic of Vanuatu wishes to avoid a similar circumstance in the future, it might administratively direct that all determinations under s.9(1) be supported by a valuation of the Valuer-General, or at least where the proposed determination exceeds a specified value. It might amend the LA Act to limit the persons who may make a determination under s.9(1) to the Valuer-General. That is a matter for it.

(2) As we observed, the Regulations or at least schedule 6 to the Regulations may not be entirely appropriate to the compulsory acquisition processes under the LA Act as it now stands.

40.	For the reasons given, the Court makes the following orders:

(1) The appeal, in so far as it seeks to set aside the declaration that the two determinations of the Director of Lands as the acquiring officer dated 6 August 2010 are valid and final, is dismissed.

(2) The appeal, in so far as it entered judgment against the appellant in favour of the respondents in the sum of VT196,888,300 and in so far as it fixed terms for the payment of that sum be set aside.

(3) The matter is remitted to the Supreme Court for further hearing, including considering any application by the respondents to amend their statement of claim to seek an order directing the Director of Lands to give notice to the respondents pursuant to s.13 of the LA Act of the final determination of compensation, and to publicize that determination in accordance with s.13 of the LA Act.

41.	The Court notes that the decision of the primary judge did not constitute any enforceable order for the payment of back rents, as that required further discussions and hopefully agreement. There was little or no evidence to support such a claim presented to the primary judge. The proceeding in the Supreme Court at that time named the Director of Lands as the defendant. There was no evidence that from 1980 he had occupied the two pieces of land being acquired, or which identified the person or entity who had done so. There was no evidence to indicate that whoever occupied those pieces of land from 1980 did, or did not, have an arrangement with any persons on behalf of the custom owners to do so. It may be that they had been occupied rent free because they were being used for community purposes. Those matters are yet to be addressed.

42.	As the respondents have largely succeeded on the principal issue on this appeal, we direct the appellant to pay the respondents their costs of the appeal.

DATED at Port-Vila, this 8th day of April 2011

BY THE COURT

Hon. Vincent Lunabek CJ

Hon. John Mansfield J

Hon. Raynor Asher J

Hon. Daniel Fatiaki J

Hon. Robert Spear J