Court of Appeal
Civil Appeal No. 4 and 17 of 2002
2002: October 14 and 15 and 2003: March 27.

Mr. Michael Young, S.C. for the Appellants Holiday Lands Limited and Witte and Witte P.C.
Mr. Eamon Courtenay, S. C. and Mr. Jose Cardona for the Appellants Ministry of Natural Resources and the Attorney General.

Compulsory acquisition of land - Compensation - Appeal from award made by Board of Assessment - Land Acquisition Public Purposes Act - Method used to determine market value of acquired land - Marked divergence in views of valuers called by parties - Expert land valuer should have his evidence tested by tribunal of fact which is entitled to reject his opinion - Board rejecting opinions of valuers Board simply finding mean of two opinions of the valuers -- Method adopted by Board of Assessment in valuating land not a proper method and did not conform to valuation method prescribed by law - Section 19 of Land Acquisition Public Purposes Act - Appeals allowed - Matter remitted to a new Board.

J U D G M E N T

ROWE, P.

1. These two appeals were brought pursuant to section 24 of the Land Acquisition Public Purposes Act (hereinafter "the Land Acquisition Act") from the decision of the Board of Assessment (hereinafter "the Board") dated 27 February 2002. As the two appeals arose out of the same matter, they were heard together.

2. The Board awarded to Holiday Lands Limited and Witte & Witte P.C., the claimants, the sum of $4,554,000.00 as compensation for the acquired lands, the sum of $604,909.00 for injurious affection, with interest on the said sums at the rate of 8% per annum from March 1, 1996 to the date of payment. The claimants appealed against the award of interest on the basis that interest should have run from August 1, 1992, the date of acquisition of the property. The Minister and the Attorney General appealed against the awards for compensation and injurious affection on the basis that the Board adopted an impermissible method to determine the market value of the acquired land and that there was no evidence to support the award for injurious affection.

3. At the conclusion of the hearing before us, we allowed the two appeals, set aside the awards for compensation, injurious affection and interest and remitted the matter to the Board established under section 12 of the Land Acquisition Act for a new hearing and award.

4. In our oral reasons for the decision we said that we had come to the clear view that the method adopted by the Board in giving what it determined to be a just and fair valuation based upon the mean between the valuations given on the one hand by the claimants' valuator and on the other hand by the Government's valuator, both of which valuations the Board had rejected as being unreasonable, was not a proper method for the assessment of the value of the land acquired and did not conform to the valuation method prescribed by law. We propose to set out briefly the reasons which propelled us to our decision but will refrain from commenting upon the facts in the light of our decision to order a new hearing before another Board.

5. The claimant Holiday Lands Limited purchased three parcels of land, to wit, Parcel 1839 of 48.00 acres, Parcel 1840 of 50.30 acres, Parcel 1842 of 815.00 acres and Witte & Witte P.C. purchased Parcel 1841 of 5.65 acres, making a total of 918.95 acres, in Ambergris Caye, in 1982 from the estate of Eugene Tyler Allen for the sum of $430,000.00. On August 1, 1992, the Government compulsorily acquired Parcel 1841 of 5.65 acres and 546.35 acres of the land comprised in Parcel 1842. The parties did not arrive at an agreement as to the amount of compensation to be paid for the acquired lands and after numerous intermittent proposals and demands for settlement, a Board of Assessment was appointed in year 2001. The Board consisting of the Hon. Chief Justice, Henry Fairweather and Lincoln Eiley made their award on February 27, 2002. Mr. Fairweather, a very distinguished citizen of Belize, died prior to the hearing of this appeal.

6. The rules for assessment and award of compensation by a Board for land compulsorily acquired by the Government are provided for in section 19 of the Land Acquisition Act. It is sufficient for the purposes of this judgment to set out subsection 19(a) which provides that:

   "The value of the land shall, subject as hereinafter provided, be taken to be the amount which the land, in its condition at the time of acquisition, if sold in the open market by a willing seller, might have been expected to have realized at 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 of any damage sustained by the person interested by reason of severance or by reason of 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".

7. In order to perform its obligations under the Land Acquisition Act, the Board had for its consideration the claim as presented by the claimants and the response of the Government and it received oral evidence from the valuers called on both sides. The original claim presented was for $10.626m for compensation for acquisition of the lands. This was revised downwards to $9.2364m and represented a per acre value of $14,500.00. There was an original claim for $1.1548m for injurious affection which was uplifted to $1,155,195.00. The Government's valuer assessed the amount for compensation at $1.105m which represented a per acre value of $2,000.00 and made no recommendation for an award for injurious affection.

8. Mr. Hallett Moody, a qualified valuer, gave evidence before the Board and supported the claim as modified, Mr. Amir Cansino, the senior valuer for the Government, gave evidence for the Government and supported his valuation. We need not comment on the detailed evidence given by either valuer as the Board rejected in their totality the expert opinions given by both valuators. In disposing of the sub-division method of valuation relied on by Mr. Hallett Moody, expert for the Claimants, the Board said:

   "Therefore, the Board while appreciating the professional and thorough manner Mr. Moody deployed in personally inspecting the land (he spent some one week on the ground for this purpose) and his views that the requirements of the Land Utilization (sic) would not prevent a valuer from considering the use of the land for a subdivision because of the likelihood that approval would be forthcoming, cannot however accede to this method of valuation in the circumstances of the subject land, to arrive at a value for it for the purposes of assessing compensation due for its acquisition".

9. Nothing was therefore left of this method of valuation that could be used by the Board for its assessment and award. Then the Board considered the market data approach and rejected the opinions of both valuers based on the evidence that they presented. This is what the Board said at paragraph 27 of its Award:

   "Given the limitation on the market data submitted by Mr. Cansino already noted above, and the qualification Mr. Moody himself noted on his market data that "The subject property is one of the last few remaining vacant land of such size (552 acres) in the township of San Pedro. There has been little or no sales of parcels of such size within the town proper at the time of acquisition", the Board is unable to accept the value of the subject land as stated by either valuer."

Again, there is nothing left in the evidence and opinions of the experts on the market data approach to valuation.

10. It is to be recalled that the Board had made a visit to the locus in quo and it appears from what the Board said at paragraph 28 of the Award that it was influenced by its observations during the visit to the locus to determine that the comparative method was the more appropriate method for the assessment of the compensation due to the claimants. It seems to us that if the Court rejected the opinions of the experts on the market data, it did not have any facts on which it could make a fair and reasonable assessment. Further, the Board did not accept that a sale to Government was a factor that could validate Mr. Cansino's opinion on the market data approach.

11. We accept the views expressed in the Law of Compulsory Purchase and Compensation by Keith Davies when he says at p. 114:

    "The assessment of compensation, as a detailed process, is a matter for valuers and not for lawyers. It is thus a question of fact, but expert fact needing to be proved by the testimony of expert witnesses, who in this context must be valuers".

In His Majesty The King v. Frost, [1931], Ex. CR. Exchequer Court of Canada, Audette, J, was dealing with a statute in pari materia with section 19 (a) of the Land Acquisition Act and he had before him valuations from five valuers on the side of the claimant ranging from a low of $18,000.00 to a high of $30,000.00 and on the part of the defendant, four valuations ranging between $8,500,00 and $10,3000.00. The Judge commented:

"There is a great gap between these valuations, a wide divergence of views and opinions as to what the market value is and how it should be estimated, The Court faced with this conflicting evidence of the optimist and perhaps the pessimist, must be guided by the reasons supporting each witness' views, bearing in mind the soundness of the same and the balance of probabilities".

12. It is clear from this statement of the law that an expert land valuer should have his evidence tested by the tribunal of fact in the same way as any other expert witness and where the tribunal is unable to accept an opinion of the valuer due to a flaw in his reasoning or for other substantial cause, the tribunal is entitled to reject the particular opinion. In this case, the Board acknowledged the great gulf that existed between the valuations given by the experts for the claimant and the Government, but did not go on to say what portions of the opinions of each of the experts it accepted so as to form the basis of its award.

13. Our attention was drawn to the decision of Goold and Rootsey v. Commonwealth of Australia et Ors. [1993] Australian Law Reports 135. There the trial judge had a number of sales of property some of which were not in the immediate vicinity of the property that was compulsorily acquired. From the evidence provided by the valuers, the trial judge carried out a comparative exercise to determine which if any of those properties bore a sufficient relationship to the subject land. He gave his reasons for refusing to treat some properties as comparable. When the judge had narrowed the comparative exercise to one property on the low side put forward by the claimant and another, the highest put forward by the Government, he then considered the advantages which the subject land had over the low price and all the disadvantages that it suffered in relation to the property on the high side. He gave percentage discounts or additions as appeared appropriate and by that method he arrived at a market value for the property. (See paragraphs 62-67 of the judgment). We commend the approach of Wilcox, J. in Goold and Rootsey, (supra) in cases such as this where the valuers might have to range far afield to find sales for the consideration of the Board.

14. The Board declined to take into consideration the sale to Government in 1993 of a parcel of land of 135 acres in Ambergris Caye and relied on a passage from Real Estate Valuation in Litigation, 2nd Edition at p. 222 which states that:
    
    "In a perfect world appraisers would always find an abundance of comparable market data and there would never be a need to even consider using a sale to the government as a comparable (because)…when a government purchase occurs, the buyer and seller are not "typically motivated" and the property sold was not typically exposed in the open market".

In our view, there is no rule of general application that sales to government can never be considered for purposes of comparison when a Board is called upon to make assessments and awards pursuant to the Land Acquisition Act. As the learned author of Real Estate Valuation in Litigation, from whom the above quotation is taken has said,

"But because of the unique needs of some governmental agencies, there is sometimes an inadequacy of private market data with which to develop a reliable indication of market value. Indeed without resorting to sales to the government as comparables, it would be impossible to develop an indication of market value by the sales comparison approach at all".

We bear in mind that Belize is a very small society and that a Board in making an assessment, can take into consideration all the probabilities and then make adjustments based on such evidence as expert witnesses may proffer as to how government sales might differ, if at all, from other sales, properly called open market sales. A Board, in our view, can take into consideration government sale(s) where the land is in a vicinity which bears relevance to the property compulsorily acquired.

15. There was some evidence before the Board of sales in the town of San Pedro. The Board commented that: "There has been little or no sales of parcels of such size within the town proper at the time of acquisition" and then the Board went on to apply the "fair and reasonable" approach to take the mean between the per acre figure of $14,500.00 recommended by Mr. Moody and the $2,000.00 per acre, recommended by Mr. Cansino, and arrived at its assessment of $8,250.00 per acre. The Board's assessment was not based upon any expert evidence. The arithmetical mean between two opinions of valuators does not conform to the open market principle mandated by section 19(a) of the Land Acquisition Act.

16. We canvassed with counsel various ways in which the Court could keep jurisdiction of this matter and remit only specific questions for the reconsideration of the Board. Having regard to the death of Mr. Fairweather, the original Board would no longer be available to reconsider this matter and in the end the appeals were allowed and the entire mater remitted to a new Board of Assessment.

17. It was for these reasons that we allowed the appeals and remitted the matter to a new Board. We made no order as to costs of the appeal.

----------OO----------