Before:

A Board of Assessment constituted of:

Mr. George C. R. Moe, Chief Justice (Chairman)
Mr. James A. Waight
Mr. Charles B. Chavannes

Compulsory Acquisition of Land - Principles to be taken into account in assessing the quantum of compensation payable.

AWARD

By a declaration in Belize Gazette in accordance with the provisions of section 3 of the Land Acquisition (Public Purposes) Ordinance (Chapter 114) the Minister of Natural Resources acquired 992 square yards of land belonging to Mr. Eduardo Aguilar and being a portion of Lot 928 situate on North Front Street, Belize City. Mr. Aguilar made his claim to compensation but no agreement was reached as to the amount to be paid to him. The Minister of Natural Resources then caused this Board to be appointed to consider all questions and claims relating to the payment of compensation in respect of the above mentioned acquisition.

At hearing it was agreed between the parties that the matter for determination by the Board was the amount of compensation payable. In making an assessment and award of compensation of the compulsory acquisition of land the Board is guided by the rules set out in section 19 of the Ordinance. Reference is made first to subparagraph (a) thereof which provides: - "19. Subject to the provisions of this Ordinance, the following rules shall apply to the assessment and award of compensation by a Board for the compulsory acquisition of land-

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;

The first point for consideration was the condition of the land at the time of acquisition. The Board kept in mind the principle formulated by the Privy Council in Fraser v. City of Fraserville [1917] A. C. at page 194 "the value to be ascertained is the value to the seller of the property in its actual condition at he time of expropriation what all its existing advantages and with all possibilities, excluding any advantage due to the carrying out of the scheme for which the property is compulsorily acquired." Again in Maori Trustee v. Ministry of Works [1959] A. C. 1 it was pointed out that in matters of this nature it is fundamental that the land must be valued in its state at the time of the taking. The land must be valued for what it in fact was on the relevant date.

At the time the land formed a portion of Lot 928 located in a neighbourhood housing several commercial enterprises. Such an enterprise was carried out on the Lot 928 itself. That enterprise, the Eden Cinema, occupied most of the site i.e. 61'x 218' of the 79'x 317'. At one time the lot also housed vats which were used for other commercial purposes but at the time of acquisition only the bases for these vats were present. There was at the time a small wooden house at the northern end of the lot. There was evidence from the Lands Officer in the Lands and Surveys Department that the rear portion of Lot 928 could be used for commercial purposes. There was similar evidence from Mr. Eckert Lewis, a valuer on behalf of the Caribbean Development Bank, Commercial banks and Insurance companies in Belize that the rear portion of Lot 928 was commercially viable. The whole tenor of the evidence as given before the Board and what the Board saw on a view of the locality is that the land is in a commercial area i.e. even at the time of acquisition. The Board took the view that the facts that at the time the relevant portion of Lot 928 was not used for business or commercial purposes and was accommodating a small residence or that planning permission would be necessary for any development did not stop the land from being commercially viable. The Board was guided by the proposition elaborated by Lord Romer in Vyricherla Narayana Gajapatiraju (Raja) v. Vizagapatam Revenue Divisional Officer [1939] A. C. 302 at page 313 that "land compulsory acquired is not to be valued merely by reference to the use to which it is being put at the time at which its value has to be determined but also by reference to the uses to which it is reasonably capable of being put in the future." On the relevant date the land was in fact commercially viable land.

The Board therefore concluded that in acquiring a portion of Mr. Aguilar's property, the Minister acquired commercially viable land.
The Board then turned to the question of the value of the land. It was agreed between the parties that the relevant date of assessment was the 27th September 1978. The question to be answered by the Board was what was the market vale of that portion of commercially viable land on 27th September 1978 or what price would a properly qualified person acquainted with all the essential facts relevant to the property and to the existing state of the market expect it to realize under such circumstances. See Inland Revenue v. Clay and Buchanan [1914] 3 K.B 466 where Swinfen Eady L. J. pointed out a value, ascertained by reference to the amount obtainable in an open market shows an intention to include every possible purchaser.

Both persons who gave evidence with regard to the market value of the land gave evidence which was quite similar in relation to commercially viable land in the relevant locality. They used basically the same comparables. Mr. Gardiner for the Minister of Lands and Natural Resources, said that the comparables indicated that $67.00 per square yard was a fair figure for the narrow strip of land acquired. That is portion of Lot 928 of 12' width which commenced at North Front Street of 227 feet in length and formed part of what he termed the front or commercial portion of the Lot. Mr. Lewis for Mr. Aguilar looking at the lot as one site, gave his opinion of a fair figure to be $70.00 per square yard.

Mr. Gardiner's figure of $67.00 was reached after some adjustment was made to base figures actually obtained. He explained adjustment was made because it was recognized that Mr. Aguilar's property was superior to the comparables used and it was therefore necessary to reflect a price it could have obtained in its condition at the relevant time bearing in mind the rules of the Land Acquisition Ordinance. The base figure he used was $56.00 per square yard on the basis of Sales No. 1 and 8 in Table I of the comparables and made a 10% adjustment for superiority of property, 10% adjustment for interest necessary to cover investment more or less a hedge against inflation and 5% adjustment for improvement of the area. A total of 25% adjustment on the $56.00brought him to $70.00 per square yard rather than $67.00

While Mr. Gardiner's figure of $67.00 or $70.00 relates to commercially viable land it is qualified by his repeated reference to land that is front portion. By his answers to counsel for Mr. Aguilar he indicated that the figure was not the value on Mr. Aguilar's land as one unit that was commercially viable. But valuing the lot as a whole he would use the average between $70 and $32 on the basis that the commercially viable portion (i.e. the front portion) would carry a higher value (i.e. $70.00) than the back portion which would carry a value of $32.00. While Mr. Gardiner's evidence at one point suggests that the northern portion of Mr. Aguilar's lot would value less that the southern portion because it was not commercially viable, the main thrust of his evidence is that the northern portion would value less because of its depth from the road and thus a back portion and not a front portion. By his method a front portion would end at 100 feet from the road.

There is support for the approach by which the unit value of a piece of property may be affected by the depth of that property. In the Appraisal of Real Estate (7th Edition) prepared by the Textbook Revision Subcommittee of the American Institute of Real Estate Appraisers at page 130 it is set out "Custom in different communities suggests the unit to be used in estimating land value". --- "units of land value typically follow these rules. 2. As depth increases beyond the typical the value per unit of frontage tends to increase, but the square foot or acreage unit the tends to decrease." In Manual of Land Tax Administration including valuation of urban and rural land and improvements issued by the Department of Economic and Social Affairs of the United Nations 1968 at page 80 "Variations in the depths of parcels of urban land affect their value but the variations in value are not in the same proportion as the variations in depth. This influence of depth upon value is based on the theory that the portion of a parcel lying close to a street is more valuable than the portion further away from the street." It then goes on to refer to formulae developed for the application of depth influence.

But, as is pointed out in the Appraisal of Real Estate (ibid) page 117, "Depth tables are neither universally applicable nor infaliable. The validity of any depth table as indicating the effect of depth on value is dependent on its applicability to each location, type of use or situation. --- Since real estate is a local product its value is founded on local conditions and usage." The evidence showed that in Belize City commercial land is valued in terms of a dollar amount per square yard and that commercial lots are by usage of about 100 feet in depth. A minority of the Board would have accepted Mr. Gardiner's mode of assessment and valued the land at the average of $70 and $32 i.e. $51 per square yard. While the majority accepted that the depth factor may have an effect on the value of the property, it was not satisfied that taking into account depth influence the value of Mr. Aguilar's property would be the average between $70 and $32. What Mr. Gardiner appeared to have done was to value at one figure a portion which is beyond a certain depth; the comparable used for the latter exercise being a lot of similar depth from the road but not part of one lot with frontage on the road. Neither the authorities referred to nor the evidence put before the Board support valuation of the land concerned in portions. There was no evidence before the Board showing that any of the lots used as comparables were valued in portions to arrive at the market value of the respective lots. For example the sale No. 1 in Table I of the comparable was valued as one unit and that lot went beyond 100 feet from the road. Again an award for the acquisition of land owned by Roger Reid made in 1975 and relied on by Mr. Gardiner rejected the use of an average between two tiers of value when looking at a lot as a whole. What Mr. Gardiner appeared to rely on was the Board's reference, when assessing the market value of a lot, on Ambergris Caye, to the pattern that the further a lot is from the Sea (frontage) of Ambergris Caye, the lower is its market value. That reference is clearly to a lot as one unit with a certain distance from the frontage (Sea) or (as in instant case the road). On the other hand the Board when directing its mind to the market value of a lot on the said Caye with frontage to the sea and a depth of the entire width of the Caye, pointed out that if an imaginary line was drawn North to South through the lot, a separate valuation would result in land East of the line (or near to the sea frontage) being valued at a far higher figure than the land West of it. It went on to say that there might be some merit in that mode of assessment if the lands west of the imaginary line comprised a lot separate and distinct from the lands east of the imaginary line. But when the lot is regarded as a whole being in one ownership amongst other factors it did not consider that any useful purpose would be served by adopting that mode of assessment. It should also be noted that in his own valuation exercise for the Minister, Mr. Gardiner with regard to Mr. Aguilar's land used a depth of 227 feet to designate a front portion of the higher value. This was because he regarded he was valuing up to that depth commercially viable land.

Mr. Lewis arrived at his figure of $70 by also using as a basis sale No. 1 in Table I of the comparables but felt that the figure $56.00 per square yard did not reflect the true market value of Mr. Aguilar's property which was superior to property involved in Sale No. 1 because of its greater depth which is desirable, the access it had to it and it was developed. He therefore also considered sale No. 7 in Table I which also involved property with road frontage in commercial neighbourhood and developed. He concluded that a reasonable selling price for Mr. Aguilar's lot would be somewhere between figures for sale No. 1 ($56) and sale No. 7 ($99). He made it clear that the depth was one of the factors which gave it superiority over the comparable valued at $56.00.

The majority found that for the commercially viable land Mr. Lewis and Mr. Gardiner arrived at a figure of $70.00 albeit by different routes. There was thus good ground for using that figure in valuing the lot as a whole and the majority concluded that the land be assessed at $70.00 per square yard. For the area acquired the compensation should be $69,440.

The Board then considered whether there should be an award for severance or other injurious affection. The said section 19 (a) of the Ordinance by its proviso recognizes that a person from whom land had been compulsorily acquired may be entitled to an award over and above the market value of the land taken. Under this may be an amount for damage sustained by him in respect of other lands held with the lands taken by reason of severance or injurious affection. The Board looked to see whether the acquisition of the land concerned i.e. the cutting off of the land from a larger lot, caused any injury to the remaining land of Mr. Aguilar.

Mr. Aguilar originally owned a Lot measuring about 79' x317', 79' provided frontage on to ordinance North Front Street. On the lot stands the Eden Cinema occupying 61' x 218'. A portion of the lot, 12' width commencing at North Front Street was used as access to the Eastern side of the lot, passage along the Eastern side of the lot, i.e. along the Eastern side of the Cinema and access to the back of the Cinema and Northern portion of the lot. By virtue of the acquisition under consideration, that is, the 12 foot strip just referred to and the Northern portion of the lot measuring 65' x 90', the result is that Mr. Aguilar is left with:- the land on which the Cinema stands land on which there are some water troughs about 3' of space between the troughs and his new Northern boundary, to the East at the Northern-most point about 6' between the Cinema and the Eastern boundary and at the South about 6' between the Cinema and eastern boundary which also accommodates a rampway of about 4' in width. On the area acquired three houses costing about $15,000 each have been built and are now occupied.

The Board accepted the view that Mr. Aguilar is left practically with the area of land on which the Cinema stands. Mr. Gardiner for the Minister of Natural Resources expressed the view that this state of land in which it is left to Mr. Aguilar is not affected by the acquisition. He was of opinion that Mr. Aguilar is left with adequate space. He didn't contemplate that any prospective buyer would be put off by the absence of room for expansion, nor did he think that the cutting off of the portion which formed a 12' access made the remaining land less valuable. He was satisfied that the erection of the low income houses on the portion acquired would not detract from the value of the remaining land nor affect the user of it. Mr. Lewis for the claimant was of the opinion that the value of the land left to Mr. Aguilar will have depreciated having regard to the acquisition and the use to which the acquired land has been put. As he saw it, Mr. Aguilar will be restricted in any development by the building regulations made under Belize City Building Ordinance 1962. Further the low income houses placed on the portion acquired will affect the remaining land because any prospective purchaser of it, would look at the housing in the acquired portion. Mr. Aguilar himself gave evidence that since the acquisition, he has had three prospective purchasers of the remaining land. Two were considering use of it for business purposes. He thought that no sale was made because of insufficient land surrounding the building now used as cinema, no fencing, and the presence of the low income housing. He also stated that people have misused his water tanks sometimes as a swimming pool and sometimes for throwing garbage or other stuff in. The ramp to the cinema and the 12' access have become a base for gambling and smoking of marijuana.

It appeared to the Board that Mr. Aguilar is left with the area of land he had been using at the time for commercial purposes. It concluded that Mr. Aguilar can continue to use the land remaining to him for such a purpose and can renovate, update and continue to use for such a purpose. In Belize City numerous properties with little or no space beyond the boundary renovate, update and improve. The Board did not accept that the housing on the acquired portion of land will prevent or hinder continued use of the remaining land for commercial purposes. It was the Board's view that the value of the land remaining has not depreciated in value since the acquisition. This is borne out by the evidence that the remaining land is accepted by a commercial bank as security for a loan to its owner amounting $114,000. Even if the point was reached where the remaining land was providing security for an amount which was equal to the value of the land itself, a value of $114,000 for the remaining land is no depreciation in its value.

While the Board accepted that Mr. Aguilar suffers nuisance by damage to windows of the cinema, the ramp of the cinema being used for gambling and smoking of marijuana and the water tanks being used for swimming etc., it did not think that this nuisance would not have been suffered without the acquisition both of the 12' strip to the East and the trapezoid area to the North. Mr. Aguilar is and will be unable to control his remaining property and thus the above nuisance as effectively as he could have previously. In addition the Board considered that Mr. Aguilar has lost the amenity for his cinema of being 12 feet from his neighbours on the East and 90' on the North, of being able to use the East side of his cinema to get to the Northern side of it to the exclusion of all others. He appears to have been put to inconvenience and given an additional burden in respect of his remaining land which ought to be taken into account. We did not feel that the compensation for this damage was already accounted for in the fixing of the taken land according to its potential use as a commercial site. We assessed the amount to be awarded under this head as $10,000.

As indicated by Mr. Gardiner in evidence before the Board $2,000 is an amount agreed upon for a wall which was at the Eastern boundary of the land and that amount is also added.

In view of the amount awarded and the amount which the documentation prepared for the Board in accordance with section 13 of the Ordinance indicates Mr. Aguilar would have accepted as compensation, the Board orders that the authorized officer pay Mr. Aguilar his costs to be taxed. He is also to have interest on the amount at 6% from 27th September 1980.