Estate of Dame Bernice Lake QC (Deceased) v The Attorney General of Anguilla

• Jurisdiction: Anguilla
• Judge: Michel JA
• Judgment Date: 11 December 2018
• Neutral Citation: AI 2018 CA 3
• Court: Court of Appeal (Anguilla)
• Docket Number: AXAHCVAP2016/0003
• Date: 11 December 2018

EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Mde. Louise Esther Blenman Justice of Appeal

The Hon. Mr. Mario Michel Justice of Appeal

The Hon. Mr. Paul Webster, QC Justice of Appeal [Ag.]

AXAHCVAP2016/0003

Between

[1] Estate of Dame Bernice Lake QC (Deceased)

[2] Conch Bay Development Limited

Appellants

and

The Attorney General of Anguilla

Respondent

Appearances:

Mr. Kendrickson Kentish, with him Mr. Kerith Kentish, instructed by Ms. Joyce Kentish & Associates, for the Appellants

Mr. Guy Roots QC, with him Mr. Ivor Greene, Senior Crown Counsel and Ms. Sherma Blaize for the Respondent

Civil Appeal - Compulsory Acquisition of Land — Land Acquisition Act — Compensation for compulsory acquisition — Compensation for injurious affection — Fusion and amalgamation of land — Stand-alone method of land valuation — Before and after method of land valuation — Highest and best use of land — Interest on compensation for compulsory acquisition and injurious affection

On 28 ^th November 2003, the Government of Anguilla compulsorily acquired a portion of land owned by the now-deceased Dame Bernice Lake QC (hereafter “Dame Bernice”). The portion of land acquired from Dame Bernice was part of a parcel of land owned by her comprising approximately 110 acres (hereafter “parcel 100”). Parcel 100 was separated by a road from another 260 acres of land owned by Dame Bernice's family (hereafter “parcel 126”). Following the acquisition, Dame Bernice entered into negotiations with the Government to determine the quantum of compensation to be paid to her for the compulsorily acquired land and for the diminution in value (referred to in the cases as ‘injurious affection’) of the remainder of parcel 100. Dame Bernice also sought compensation for the injurious affection of her family's land contained in parcel 126 on the basis that the entire 370 acres of land contained in parcels 100 and 126 were treated by her family as a single portion of land to be developed together. It was determined that the Government only required 10 out of the 26 acres of land acquired from Dame Bernice and so, by an agreement dated 28 ^th March 2008, the Government re-vested 16 of the 26 acres back to Dame Bernice. Dame Bernice died in 2011 and negotiations were continued by her estate and members of her family. When the negotiations between the parties broke down, the dispute was submitted to a Board of Assessment (hereafter “the Board”), in accordance with section 10 of the Land Acquisition Act, to settle the quantum of compensation payable to the Estate of Dame Bernice Lake and to a company called Conch Bay Development Limited, to which most of the remainder of parcel 100 and parcel 126 had been conveyed by Dame Bernice and her family. The Board, having heard the evidence of experts on both sides, awarded compensation to the Estate of Dame Bernice Lake for the 10 acres of land acquired from her, for the injurious affection of the remainder of her land, and for the period during which she was dispossessed of the 16 acres of land which was later re-vested to her. The Board also awarded interest on the awards of compensation from the date of acquisition to the date of the re-vesting of the 16 acres of land, awarded costs to the Estate of Dame Bernice Lake to be paid by the Government, made no order of compensation in favour of Conch Bay Development Limited and ordered that, as between Conch Bay Development Limited and the Government, each party was to bear its owns costs.

Dissatisfied with the quantum of compensation awarded, the awards of interest and with the fact that Conch Bay Development Limited was awarded no compensation, the Estate of Dame Bernice Lake and Conch Bay Development Limited appealed the decision of the Board.

The issues for determination before this Court were: (1) whether the two parcels of land, numbered 100 and 126, together constituted a fused parcel of land under the ownership and control of one family unit; (2) whether the 10 acres of land acquired by the Government were to be assessed on a stand-alone basis or as part of a larger portion of land from which they were derived and, if the latter, what method of valuation should be used to assess the value of the acquired land; (3) whether the highest and best use of the 10 acres acquired by the Government was residential development or high-end tourism development; (4) whether the Estate of Dame Bernice Lake ought to be awarded compensation for injurious affection and, if so, in what amount; (5) whether compensation ought to be awarded for the 16 acres of land held by the Government which were later re-vested to Dame Bernice and, if so, in what amount; (6) whether Conch Bay Development Limited is entitled to any compensation from the Government and to costs in the proceedings; and (7) the period of time from and to which interest should be awarded.

Held: Allowing the appeal in part and making an award of costs to the Estate of Dame Bernice Lake, that:

• 1. There was ample evidence before the Board on which it could find that parcel 100 and parcel 126 were not fused or amalgamated. The fact that the two parcels of land were not contiguous and that they were not at the material time owned by the same person, was more than sufficient to justify the finding by the Board that parcels 100 and 126 were not fused or amalgamated. The Board therefore did not err in finding that parcels 100 and 126 were in fact two separate and distinct parcels of land owned by different members of the Lake family.

  Mon Tresor and Mon Desert Limited v Ministry of Housing and Lands and another [2008] UKPC 31 followed. Section 18(2) of the Land Acquisition Act R.S.A. c. L10 considered.

• 2. Section 18(2) of the Land Acquisition Act requires that the valuation of the acquired land be undertaken on the basis of the open market value of the land at the time of its acquisition, and not at an earlier or later time. Section 18(2) cannot be construed to mean that in undertaking the valuation, no regard should be had to the fact that the acquired land is but a severed part of a larger piece of land, from which larger piece it acquired its value. The valuer's task therefore is to assess the open market value of the land at the material time, keeping in view that the acquired land is a severed portion of a larger piece of land from which larger piece it derives its value. Accordingly, the Board was wrong to apply the stand-alone method of valuation of the acquired land and ought instead to have applied the ‘before and after’ method of valuation.

  Hamilton v Minister of Lands [2012] NZLVT 2 applied; Abbey Homesteads Group Ltd v Secretary of State for Transport [1982] 2 EGLR 198 considered; Roads and Traffic Authority of New South Wales v JL & MM Muir Properties Pty Ltd [2005] NSWCA 460 applied.

• 3. The highest and best use of land is the most profitable use to which land could be put that is legally permissible, physically possible and financially feasible. Although there are parts of parcel 100 which are proximate to the airport runway, there are also parts of it which are coastal lands and it cannot be seriously disputed that the land was suitable for high-end tourism development in addition to local residential development. The highest and best use therefore of parcel 100 is mixed residential and high-end tourism development. Marrying the two valuations produced by the parties’ valuation experts, the likely offspring is US$657,500 per acre of land. Applying this averaged valuation to the 110 acres of land contained in parcel 100, the ‘before’ valuation is US$72,325,000, the after valuation (ignoring provision for injurious affection) is US$65,750,000, and the valuation of the 10 acres acquired by the Government is US$6,575,000.

  Attorney General v HMB Holdings Ltd [2014] UKPC 5 considered.

• 4. Compensation ought to be awarded to the Estate of Dame Bernice Lake for the dispossession of Dame Bernice of the 16 acres of land acquired from her in November 2003 and re-vested to her in March 2008. Applying the only formula presented to and accepted by the Board for valuation of the 16 acres of land, it would be valued at US$10,520,000; the rental value calculated at 5% of the market value for 3 years and 5.75% for 1 year and 4 months would be US$2,384,533.33, which is the amount payable to the Estate of Dame Bernice Lake for the temporary dispossession of Dame Bernice of the 16 acres.

• 5. Compensation for injurious affection only arises when a piece of land is compulsorily acquired from a larger portion of land and the acquired land is intended to be or is actually used for a scheme or project which adversely affects the value of the remainder of the land. On the facts of the present case, the Estate of Dame Bernice Lake is entitled to be compensated for the injurious affection of the 100 acres of land retained by Dame Bernice after the acquisition of 10 acres by the Government which, according to the expert evidence accepted by the Board, is to the extent of 50% of 20 acres and 25% of 22 acres. On the re-assessed value of the affected land, 20 acres is valued at US$13,150,000, and so 50% of that value is US$6,575,000; 22 acres is valued at US$14,465,000, and so 25% of that value is US$3,616,250. The total amount payable, therefore, to the Estate of Dame Bernice Lake for injurious affection of the 100 acres of land retained by her, is US$10,191,250.

  Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 applied; Roads and Traffic Authority of New South Wales v JL & MM Muir Properties Pty Limited [2005] NSWCA 460 considered.

• 6. Conch Bay Development Limited did not, at any material time, own any land which was in whole or in part acquired by the Government of Anguilla. The company is not therefore entitled to be compensated in addition to or instead of the Estate of Dame Bernice Lake for the land acquired by...