072-NLR-NLR-V-22-FRASER-v.-BRITISH-STEAM-NAVIGATION-CO.-LTD.pdf
( 243 )
Present: De Sampayo J. and Schneider A.J.
FRASER v. BRITISH STEAM NAVIGATION CO., LTD.
71—D. C. Colombo., 2,526.
Land Acquisition Ordinance, No, 3 of 1876 — Compensation — Is thepurpose for which land is acquired to be taken into considerationin determining compensation ?
In determining the amount of compensation to be paid to theowner of land acquired by Government under the Land AcquisitionOrdinance, the Government Agent can take into considerationthe purpose for which the land is acquired* The words “ thedamage sustained at the time of awarding compensation” shouldnot be construed as meaning the damage actually suffered at thatpoint of time without reference to the continuing damage,caused by the acquisition. The “ injurious affecting ” must beestimated with reference to the date of the awarding of compensa-tion, and according to the purpose for which the land is proclaimedto be required. The measure of the injuria will differ as thepurpose.
r j^HE facts appear from the judgment.
A. Drieberg and H. H. Bartholomeusz, for the defendant company,appellant.
Sdlicitor-Qeneral (with him Fernando, C,C.)> for plaintiff, re-spondent.
1921
Cur. adv, wit.
( 244 )
1921* ‘January 31,1921, Schneider A.J.—
FraBtr v. Out of an extent of 11 acres 1 rood 24| perches of the land calledStoam^cm- ^khawafcta or Coomaraswamy’s land, the Government acquiredgotten Co., 2 acres l'rood 6*52 perches for a public purpose under the provisions. && of the Land Acquisition Ordinance, 1876. The portion acquiredis that abutting on Korteboam street and Alutmawata road, andshown as lot 8 in the survey plan marked P 1. The plaintiff, onbehalf of the Government, and the defendant company agreed uponthe amount to be paid as compensation for certain buildings andtrees standing upon the portion acquired, but they were unable toagree upon the sum to be paid as the market value of the land andfor the damages sustained by reason of the acquisition injuriouslyaffecting the other portion which was not acquired.
. The plaintiff, therefore, referred the matter to the District Courtof Colombo under the provisions of section 11 of the Ordinance.The plaintiff offered compensation at the rate of Rs. 20,000 peracre as the market value of the land considered as bare undevelopedland, together with another 10 per cent, of that sum in considerationof the compulsory nature of the acquisition under the provisionsof section 38 of the Ordinance. For damages he offered a like10 per cent. The defendant company claimed as the marketvalue of the land at the rate of Rs. 80,000 per acre, and as damagesRs. 50,000*
Section 21 of the Ordinance lays down what matters the Judgeand assessors shall take into consideration in determining theamount of compensation. Applying the provisions of that sectionto this case the Court had to determine two questions:—
What was the market value of the land at the time of awarding
compensation (section 21 first) ?•
What is the damage the defendant-company has sustained
by reason of the acquisition injuriously affecting the other landof the company ?1
t
The Judge and the assessor appointed by the plaintiff awardedcompensation at the rate of Rs. 25,000 per acre for the land andRs. 7,000 as damages. They directed that the defendant companyshould pay the plaintiff’s costs of action. The assessor appointedby the defendant company was of opinion that the market valueof the land should be calculated at Rs. 45,000 per acre. He agreedthat Rs. 7,000 was the sum to be awarded as damages. He was alsoof opinion that each party should bear his own costs.
The defendant company has appealed from the award of theCourt.
There were two methods open for ascertaining the market valueof the land acquired, viz., (1) by inquiring what the land wouldfetch if laid out in the most lucrative and advantageous way inwhich the owner could dispose of it, and (2) by finding out the
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prices at which lands in the vicinity had been sold and purchased, 1921.and, after making the necessary allowances, deducing from suchtransactions the price which the land would probably fetch if a.J.offered for sale to the public. Counsel for the appellant submittedtwo contentions on appeal. He first urged that the land was pre- StSUteminently suited as a site for the erection of workshops and offices Steam Navi-in connection with a marine engineering business, or for the erection g8<^0g,>of buildings for the storage of tea, rubber, and other local produce.
Neither the Judge nor the assessors have valned the land upon thisbasis. The evidence proves clearly that the coal dust emanatingfrom the coal sheds which are in dose proximity to the land renderit unsuitable for use for stores. The coal dust compelled St. Thomas’sCollege, which is much further away from the coal sheds, to abandonits home and to seek a habitation elsewhere. Upon the evidenceadduced it is neither practicable nor possible to ascertain the marketvalue of the land as a site for marble engineering works. Noscheme was put before the Court showing how the land might bedeveloped upon that footing, and what it would fetch or whatprofit it would produce when so developed. As a site for suchengineering works, it is no doubt advantageously situated fromits proximity to the harbour and the docks for repairing ships.
But the effect of the evidence is obvious, that there is no demandfor land to be used for such a purpose either at the present timeor within a reasonable time in the future. Mr. Hutson’s evidenceestablishes that there is no room for a new firm to enter into pro-fitable competition with the three firms which are already establishedin their several plaoes of business, and there is no evidence that theydesire or contemplate removal elsewhere. The only inquiry forthis land for the purpose of a marine engineering business was thatmade by Mr? Hutson in 1912 and 1917, at a time when his firm wasfaced with the contingency of being driven out of their place ofbusiness, and was anxiously looking about for some other suitableland. His firm is now securely settled in its present place undera lease extending beyond the next fifty years. The fact that Mr.
Hutson might have then paid at the rate of Hs. 60,000 per acre forthis land is of no value, because he was the only possible purchaser,and his necessity has ceased to exist.
It seems to me, therefore, that it is neither desirable nor practicableto estimate the market value of the land upon the footing submittedby the appellant’s counsel.
The course adopted by the learned Judge and both the assessorsfor determining the market value appears to me to be consistentwith the evidence, and to be the most reasonable in the circumstances.
They considered that the best use to which the land could be putwould be for the building of small tenements for the class oflabourers which is employed in and about the harbour, and of smallhouses for boutiques arid residences for persons of very small means.
( 246 )
1921.
SdBNBIDBB
A.J.
Fraser v.BritishSteam Navi,gotten Co.,Ltd.
The evidence is clear that the part ol the town in which the landis situated, although deemed fashionable for. the residence of thewealthier class of the population over thirty years ago, has beenalmost entirely abandoned for the purpose of such residence. Counselfor the appellant accordingly submitted, as his second contentionon this part of his case, that, assuming that the right test for ascer-taining the market value had been adopted by the Judge and assessor,their conclusion is in error, as the sale purchase transactions they hadproceeded upon were not the appropriate ones. He argued thatMr. Hutson’s evidence should be taken as proving that the marketvalue of the land was more than Rs. 60,000 per acre, that the pricepaid for Seyadu’s land should have been adopted as a good test ofvalue, that the Government should be deemed to have valued the landupon which the Mutwal Mills or Hutson’s Works stand at Rs. 60,000per acre for the bare land, that the price paid for St. Thomas’sCollege either by the oil company or by the Government was nota fair test, nor the prices at which the several other lands in thevicinity had changed hands. All these arguments were addressedto the lower Court also.
Since the argument in appeal I have re-read the whole of theproceedings in the case. I have been struck with'the care withwhich the learned Judge of the lower Court had in his judgmententered into the several sales of lands in the vicinity, of whichevidence had been produced, and the reasons given by him for hisconclusion that the market value of the land is Rs. 25,000 per acre.I agree with the reasons given by him. . It would serve no usefulpurpose for me to examine the several transactions in detail. Hehas awarded Rs. 5,000 per acre more than the price at which theGovernment appraisers had valued the land. If he has erred, itappears to me that he has inclined on the side of generosity towardsthe defendant company. I have not been convinced of an error inhis reasoning, nor have I been convinced that the assessor appointedby the defendant company has shown good reason for his con-clusion that the land should be valued at Rs. 45,000 per acre.. Iwould, therefore, uphold the finding that the market value of theland is Rs. 25,000 per acre. The plaintiff had allowed 10 per cent,on the market value of the land as compensation in considerationof the compulsory nature of the acquisition. This 10 per cent,the Court has not awarded. In my opinion there is no reason fordepriving the defendant company of this addition to the actualmarket value. I would, therefore, direct that this 10 per cent,should be added to the sum awarded by the Court as the marketvalue of the portion of land which has been acquired.
I will now proceed to consider what sum should be awardedas damages. These damages are awarded under the provision insection “ 21, thirdly.” The appropriate words are “ the damage(if any) sustained by the person interested &t the time of awarding
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compensation, by reason of the acquisition injuriously affectinghis other property, movable or immovable, in any other maimer(that is than by severance), or his earnings.” On this point theprovision in section “ 22, fourthly,” must not be lost sight of. Itis to the effect that the Judge and assessors shall not take intoconsideration in determining compensation “ any damage which,after the time of awarding compensation, is likely to be caused byor in consequence of the use to which the land acquired will be put.”
Under this head of damages the Judge and both the assessorsawarded Bs. 7,000 as compensation, on the ground that the remain-ing land had depreciated in value by reason of the fact that the newroad when constructed was much higher than the land at itsnorthern end, whereas before the acquisition access to the road couldbe readily obtained at that point, as the land was on the same levelas the road. The Judge and the assessors make, the same comment,that the defendant company failed to prove that the damagesuffered was to be assessed at Bs. 50,000, the sum claimed by thecompany. The only direct evidence on the point is that of theGovernment appraisers of the land, who say that they allowed a10 per cent, on the market value of the portion acquired fordamages for the depreciation of the rest of the land. I agree withthe Judge and assessors that the only evidence of damage is thedepreciation in value of the rest of the land by reason of a smallportion of it not having ready access to the yoad because of thedifference in elevation between the land and the road at the nothemend. The learned counsel for the defendant company urged onemain argument on this part of his case. He argued that the damageshould be estimated without taking into consideration the purposefor which the land was acquired, and that, therefore, the damageshould be assessed upon the footing that as a result of the acquisitionthe rest of the land was cut off from any access to the high road.In support of this argument he cited two cases, viz., The Queen v.Brown1 and Cowper Essex v. Acton Loan Board? In my opinionneither of these cases help him. The decision of The Queen v.Brown1 turned upon the fact that the result of the acquisitionwas to sever the rest of the land from all access to a highway, andthat the fact the Justices had the power to order accommodationworks should not make any difference as to the principle uponwhich the damage caused by the severance should be assessed.The facts of the present case are different. In the view I takeboth of the facts and the law, as I shall presently proceed to indicate,the rest of the land has not been deprived of access to the publichighway at the point of time with reference to which the damageshould be assessed.
In regard to the other case, the reasons why it is not applicableto the present case are given in the case of The Collector of Diriagepore
1 (1867) L. S. 2 Q. B.* 630.* (MM) 14 A. C. 153.
1921.
SCHNEODBB
A.J.
Fraser v.BritishSteam Navigation Co^Ltd.
( 248 )
1921.
Sohkbider
A.J.
Fritter v.BritishSteam Navi-gation Co.,Ltd.
v. Oirja Nath Boy,1 in which it has been fully considered. In theoase of The Collector of Dinageporev. Girja Nath Boy1 the inter-pretation of a clause of section 23 of the Indian Land AcquisitionAct (1 of 1889) was considered. The language of that clause isidentical with the language of section " 21, thirdly,” of our Ordi-nance. It was there held that the word “ acquisition ” must be takento mean, not only the actual taking of the land, but also the purposefor which the land is taken. The reasoning for that holding isentirely applicable to the interpretation of our Ordinance. OurOrdinance requires the Government Agent to take into considerationthe matters mentioned in section 21 in determining the amount ofcompensation. If he is not to take into consideration the purposefor which the land is acquired, it is difficult to see how he is to deter-mine the amount of compensation with reference to many of thematters which he is bound to consider under that section. Thewords ‘ ‘ the damage sustained at the time of awarding compensation ’ ’should not be construed as meaning the damage actually sufferedat that point of time without reference to the continuing damagecaused by the acquisition. The “injurious affecting” must beestimated with reference to the date of the awarding of compensa-tion, and according to the purpose for which the land is proclaimedto be required.
The measure of the injuria will differ as the purpose. If thenotification be that the land is required for a sewage depot, thedamage would necessarily be greater than where it is notified thatthe land is being acquired for some other less objectionable purpose,suoh as the deviation of a road. Moreover, the evidence in thiscase is that, not only the Government appraisers, but even thedefendant company, were aware at the time negotiations wereproceeding for the determination of the compensation that theland was required for the deviation of the then existing high road.The precise location and elevation of the new road just as they areat the present day after the completion of the work were shown tothe agent of the defendant company from the plans and drawingsfor the new road. The defendant company as well as the Govern-ment appraisers assessed the damage to the rest of the land uponthe assumption that the new road would be according to those plansand drawings. The Judge and the assessors visited the scene beforemaking their award. By that date the new road had been actuallyconstructed. They were, therefore, in a position to see for them-selves to what extent access to the road had been, in fact, impededwith regard to the rest of the land. It is while in possession ofthis knowledge they assessed the damage. No argument whichwas urged has convinced me of any reason for not acceptingtheir assessment of the damages. I would, therefore, accept thatassessment.
* {1897) 25 Cat. 246.
1921.
' In regard to the older as t6 -costs, I do not think that the Courtshould have ordered the defendant company to pay the plaintiff’scosts. Seotion 30 (2) of the Ordinance directs that when theamount awarded exceeds the amount tendered by the GovernmentAgent, the costs shall ordfianly be paid by the Government Agent,unless the Court shall be of opinion that the olaim of the personwho has contested the award was so extravagant that some de-duction from his ooBts should be made, or that he should pay apart of the Government Agent’s costs. In the lower Court thedefendant company was awarded 25 per cent, more than theGovernment Agent had offered for the land, but, on the other hand,the defendant company made an extravagant olaim. In theoiroumstanees, I think the more equitable order would be to directthat the defendant company should pay half the costs of the plain*tiff in the lower Court, and also the whole of the plaintiff’s oostsin this Court. The award appealed from is to be amended in termsof this judgment.
De Sampayo J.—I agree.
SOHNTBHJEE
A.J.
Fraser v.BritishSteam Navi-gation Oo.,Ltd..
Varied.