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Wanda Investment &amp Development Ltd v Allan, Minister for Lands &amp Physical Planning [2022] PGNC 28; N9464 (2 March 2022)

N9464

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 825 OF 2018 (CC1)

BETWEEN

WANDA INVESTMENT & DEVELOPMENT LIMITED

Plaintiff

AND

HON. BENNY ALLAN, Minister for Lands & Physical Planning)

First Defendant

AND

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Second Defendant

Waigani: Tamade AJ

2022: 1^st and 2^nd March

LAND LAW – claim on compensation for compulsory acquisition of land – principles of law on compulsory acquisition of land - discussion of -when determining the amount of compensation to be paid, regard shall be had to the value of the land as at the date of acquisition – section 23 Land Act - Plaintiff is entitled to compensation in the sum valued by the Valuer General at the time of acquisition by the State and the costs of improvements when it was valued – orders granted to plaintiff as sought – s12(1) Land Act 1996,

Cases Cited:

The following cases are cited and or considered in the judgment:

Baleen No 28 Ltd v Hon Benny Allan (2019) SC1868
Minister for Lands v Frame [1980] PNGLR 433
Re Ratavul Land (1939) No 206 (PNG unreported judgment)

Counsel:

Mr Ian Shepherd, for the Plaintiff

No appearance by the Defendants.

2^nd March, 2022

1. TAMADE AJ: Plaintiff obtained a default judgment against the Defendants on 21 July 2021. This is the hearing on assessment of damages which is unopposed as the Defendants have made no appearance.

2. Plaintiff is claiming compensation for part of its land in the State Lease described as Allotment 6, Section 108, Boroko, National Capital District which contained 0.8620 hectares of land. Part of the land of 0.145 ha was compulsory acquired by the State on 26 May 2014 pursuant to section 12(1) of the Land Act by publication in the National Gazette. The land acquired was part of the construction of the public road being the Erima Flyover Road Project.

3. Plaintiff wrote to the Secretary for the Department of Lands and the Minister for Lands for compensation pursuant to sections 14 and 21 of the Land Act and as there was no response, Plaintiff’s claim is deemed to be accepted under section 21(4) of the Land Act.

4. Plaintiff, therefore, brings this claim for compensation under section 30(2) of the Land Act.

5. Plaintiff has met the requirements of section 5 of the Claims By and Against the State Act by giving the required notice to the State.

6. The subject portion of land acquired was valued by the Valuer-General on 8 May 2014 at a value of K2 340 000. The Valuer-General has confirmed that the valuation of the land is the same as when the land was compulsorily acquired on 26 May 2014.

7. Section 23 of the Land Act therefore states that:

23. GENERAL PRINCIPLES.

(1) In the determination of the amount of compensation payable in respect of land acquired by compulsory process under this Act, regard shall be had to–

(a) the value of the land at the date of acquisition; and
(b) the damage (if any) caused by the severance of the land from other land in which the claimant had an interest at the date of acquisition; and
(c) the enhancement or depreciation in value of the interest of the claimant, at the date of acquisition, in other land adjoining or severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.

(2) In determining the value of land acquired under this Act, regard shall not be had to any increase in the value of the land arising from the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.

(3) Where the value of the interest of the claimant in other land adjoining the land acquired is enhanced or depreciated by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, the enhancement or depreciation shall be set off against, or added to, as the case requires, the amount of the compensation otherwise payable to the claimant.

8. The Supreme Court case of Baleen No 28 Ltd v Hon Benny Allan (2019) SC1868 states that pursuant to section 23 of the Land Act, when determining the amount of compensation to be paid, regard shall be had to the value of the land as at the date of acquisition.

9. I accept the principles of law as to compensation submitted by the Plaintiff in the case of Minister for Lands v Frame [1980] PNGLR 433 and adopt the points of law submitted by counsel for the Plaintiff as follows:

“Justice Pratt at page 485 applied the common law Court’s interpretation of the word ‘compensation’ in the judgement of Dixon J in Nelungaloo Proprietary Ltd v The Commonwealth & Ors (1947) 75 C.L.R 495 at p.571.30:

“compensation” is a very well understood expression...It is to place in the hands of the owner expropriated the full money equivalent of the thing of which he had been deprived.

Compensation prima facie means recompense for loss, when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. As the object is to find the money equivalent for the loss or, in other words, pecuniary value to the owner contained in the asset, it can not be less than the money value into which he might have converted his property had the law not deprived him of it.”

Justice Kapi (as he then was) in the same case applied the common law principles in assessing compensation at page 425 as follows;

“The principles upon which compensation is assessed when land is taken under compulsory powers are well settled, the owner receives the land he gives up their equivalent, i.e, that which they were worth to him in money. His property is therefore not diminished in amount, but to that extent it is compulsorily changed in form. But the equivalent is estimated on the value to him, and not on the value to the purchaser, and hence it has from the first been recognized as an absolute rule that this value is to be estimated as it stood before the grant of the compulsory powers. The owner is only to receive compensation based upon the market value of his land as they stood before the scheme was authorized by which they are put to public uses. Subject to that, he is entitled to be paid the full price for his land and every element of value which they posses must taken into consideration in as far as they increase the value to him.

10. I also adopt the law in the Plaintiff’s submissions in the case of Re Ratavul Land (1939) No 206 (PNG unreported judgement), where:

”FB Philips CJ (as he then was) sitting as an Arbitrator in the Assessment of Compensation Court stated that the compensation depended on the nature and circumstances of the land. His Honour adopted the common law principles governing the assessment compensation in R v Brown (1986) LR QB 630 at 631 as follows;

‘...in assessing the amount to which the landowner is entitled, a jury must consider the real value of the land and take into account not only the present purpose to which the land is applied, but also any other beneficial purpose to which in the course of events at no remote period it may be applied, just as an owner might do if he were bargaining with a purchaser in the market.”

His Honour went further to adopt what the Court held in Spencer v Commonwealth of Australia (1907) 5 CLR 418 regarding value of land as follows;

“the test of value of land is to be determined...by inquiring ‘what would a man desiring to buy land have to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?’..the question is, what is the highest sum a purchaser would give, because we must assume the owner would be willing to take the best he can get. The best he can get in those circumstances is the test of what he loses, and it is his loss which must be replaced.”

11. A claimant is therefore entitled to recover for loss of his property equal to the value of his property at the time of acquisition by the State and on the market value.

12 I am satisfied that the Plaintiff is entitled to compensation in the sum valued by the Valuer General at the time of acquisition by the State and the costs of improvements when it was valued.

13. As to the interest component on the judgment sum, section 47 of the Land Act states that:

47. INTEREST ON COMPENSATION.

(1) Subject to this Division, an amount of compensation payable in respect of an acquisition by compulsory process under this Act (other than an amount payable to a mortgagee on which interest is payable under Section 39) bears interest at the rate of 3% per annum from the date of acquisition of the land to–

(a) the date on which payment is made to the claimant; or
(b) where the amount is deposited in the National Court in accordance with Section 45, to the date on which the amount is so deposited.

(2) Where the amount of compensation determined by the National Court does not exceed an amount offered by the Minister, interest is payable only to the date on which the offer of the Minister was received by the claimant.

(3) Where compensation is determined, or ordered to be paid, by the National Court, interest continues to be payable under this Section and not otherwise.

14. I adopt the reasoning in Baleen No 28 Ltd v Hon Benny Allan (2019) SC1868 as to interest on the judgment sum and grant interest at 3 % pursuant to section 47 of the Land Act from date of acquisition to date of judgment and a further 2 % pursuant to section 4 and 6 of the Judicial Proceedings (Interest on Debts and Damages) Act (Chapter 52) from date of judgment until paid.

15. I, therefore, make the following orders:

1. Judgment is entered for Plaintiff in the sum of K2 340 000
2. Interest is awarded at 3 % per annum on the judgment debt from 26 May 2014 being the date of acquisition (pursuant to section 47 of the Land Act) in the sum of K544 059.73
3. Interest is also awarded at a rate of 2 % on the sum of K2 340 000 from the date of judgment to the date of payment pursuant to the Judicial Proceedings (Interest on Debts and Damages) Act.
4. The Defendants shall meet the Plaintiff’s costs on a party/party basis of the proceedings.
   

Orders accordingly.

Ashurst PNG: Lawyers for the Plaintiffs