The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Arawak Homes has won a five-fold increase in the value of land taken by the Government for the Cleveland W. Eneas Primary School, although all other aspects of its multi-million dollar compensation appeal were either rejected or left subject to further court hearings.

Court of Appeal president, Justice Anita Allen, in a verdict backed by her two fellow judges, granted the developer a ‘partial victory’ in its battle with the Government over the latter’s compulsory acquisition of its property in the Pinewood Gardens area.

The acquisitions involved the Cleveland Eneas plot, taken by the Government in 1995, and subsequent land that was taken - under the Acquisition of Land Act - in 1999 to facilitate the construction of the Sadie Curtis Primary School and Charles W. Saunders Highway.

The Act allows the Government to acquire privately-owned real estate for the ‘public good’, then pay appropriate financial compensation to the landholder.

Arawak Homes and successive administrations, though, have been unable to agree a fair price at which the developer should be compensated, sparking a court battle that began in 2004 and has lasted more than a decade.

Then-Supreme Court Justice Neville Adderley, in an October 2012 ruling, found the total value of the properties acquired by the Government from Arawak Homes to be just over $4.4 million.

He also ruled that this sum should be held in an escrow account, and not paid to Arawak Homes until competing title/ownership claims to the land acquired by the Government were resolved.

Outlining the dispute’s origins, Justice Allen said the Government acquired 10.766 acres for Cleveland Eneas Primary School in 1995, and followed this up four years later with another compulsory purchase of 83.414 acres in 1999.

The latter purchase, following talks between the Government and Arawak Homes, was drastically altered in 2001. The land involved was reduced to 29 acres, with 13.236 required for Sadie Curtis Primary School.

The remaining 16 acres were intended for the Charles W. Saunders road corridor.

Unable to reach agreement on what the Government should pay, the two sides headed for court. Arawak Homes argued before the Supreme Court that it was the party that should receive compensation, and that the land should be valued “on a per lot basis” rather than the Government’s preferred method that treated it as a large undivided parcel.

Justice Allen said the two sides had agreed that the only issue between them was the land valuation, and compensation to be paid, while the Acquisition of Land Act did not require the judge to determine who the true owner was.

“In a matter in which title to the land is in question, especially in an unregistered land system, evidence of title is not enough,” Justice Allen said, noting the rival ownership claims to the land acquired by the Government.

As a result, she found that Arawak Homes’ title to the property had not “been clearly established”, and needed to be determined by another Supreme Court judge. For this reason, she rejected Arawak Homes’ claim against the judge’s ‘escrow’ order.

On the valuation question, Arawak Homes argued that James Newbold, whose valuation was used by Justice Adderley, was “not one of the expert witnesses” and his report did not include the lots acquired by the Government.

The developer, again arguing that the wrong valuation method was used, urged the Court of Appeal to use the appraisal report by Wilshire Bethell. It also argued that the Supreme Court refused to compensate it for lost profits on potential lot sales.

The Government, though, countered that Mr Newbold’s report was prepared at Arawak Homes’ request.

Justice Allen found that the Supreme Court determined that only 9.5 acres was acquired for Cleveland Eneas Primary School, as opposed to the 10.766 acres stated in the documents.

While the Government alleged that just 9.35 acres had been used, leaving 1.416 acres unaccounted for, Justice Allen said it had failed to prove why Arawak Homes should not be compensated for the full 10.766 acres.

Suggesting that Justice Adderley’s 9.5 acre calculation was not supported by the evidence to-date, Justice Allen said the two sides had agreed that the land was divided for both commercial and residential use.

Some 6.123 acres was assessed as commercial, with the remaining 4.643 acres - “not the 20 lots assessed by the trial judge” - found to be residential property.

While not faulting Justice Adderley’s acceptance of Mr Newbold’s evidence, Justice Allen said the latter fell into error by treating the entire 10.766 acres as residential property.

Adjusting this to the 4.643 acres deemed residential, Justice Allen said this gave a ‘present value’ of $320,000 or $68,921 per acre.

Allowing for a $5,700 per acre price increase that Arawak Homes said it was willing to accept, the Court of Appeal said this brought the price to $74,621 per acre or $8,565 per lot - above the $8,000 figure worked out by Justice Adderley.

As for the commercial property, Justice Allen dismissed Arawak Homes’ claim that the area was known to be prone to flooding, and said the $69,000 per acre figure it sought from the Government in 1995 should stand.

She ruled that the market value of the property was $342,600 for the residential tract, and $428,697 for the commercial portion. Adding 10 per cent to the market values under the Acquisition of Land Act yielded $376,860 for the residential property, and $471,460 for the commercial side, making for a total of $848,320 - a more than five-fold increase on the $160,000 awarded by the Supreme Court for the Cleveland Eneas parcel.

When it came to Arawak Homes’ loss of profit claim, the Court of Appeal gave the developer little comfort, saying it had not provided arguments to make its case.

As for the Charles W Saunders Highway and Sadie Curtis plots, the Court of Appeal said this matter needed to be remitted to the Supreme Court for further determination, as the 1999 and 2001 Notice of Acquisitions involved “different lots of land”.