Court rejects absolute prohibition claim, awarding compensation based on agricultural value reduction.

[*506] 1973 November 16

(PIKIS, AG. P.D.C., HADJITSANGARIS, S.D.J.)

IN THE DISTRICT COURT OP LIMASSOL

The Republic of Cyprus,

Acquisitioning Authority,

and

Michael Ioannou Charalambous,

Claimant,

(Reference Mo. 15/72).

Antiquities Law, Cap. 31 - Construction of section 8(l) of the Law.

Construction of Statutes - Antiquities Law, Cap. 31 - Construction of s. 8(l).

J. Potamitis, for the Acquiring Authority.

Chr. Mavrellis, for the Claimant.

JUDGMENT

The judgment of the Court was delivered by:-

PIKIS, AG. P.D.C.: On 15th August, 1963,[*507 a part of the land of the claimant, described in the valuation reports, was compulsorily acquired for the construction of the new Limassol/Nicosia main road. The Order was preceded by a notification published in the Gazette on 15th May, 1963, making known the intention of the Acquiring Authority to expropriate compulsorily the land in question. It took years before the parties referred the matter to the Court, which they eventually did on 19th October, 1972.

The parties were able to agree on alternative valuations, depending on the construction placed on the provisions of ε. 8(l) - Cap. 31· The pertinent question is whether s. 8(1) introduces an absolute prohibition, forbidding ipso facto the ejection of buildings on land ineluded in the second schedule of Cap. 31. If the answer to the above is in the negative, then we are asked to determine a second question, namely, does the presence of antiquities in the subsoil of the property acquired, coupled with the intention of the Director of Antiquities to forbid the erection of any buildings on the subject property, albeit not yet manifested in any administrative act, extinguish in Law the building potential of the land, and reduces claimant’s right to compensation?

The two alternative valuations are:

(a) £795, if we reject the submissions of the Acquiring Authority and find that s. 8(1) imposes no absolute prohibition to build, [*508] as well as rule against the Acquiring Authorityon their alternative submission that the as yet officially undeclared inclinations of the Director of Antiquities as to a possible future course of action, leave the matter unaffected.

(b) £53-900 mils, if we accept that the only possible use of the land was an agricultural one.

It has been argued, on behalf of the Acquiring Authority, that no prudent purchaser would, in the light of the restrictions to which the property was subject, be tempted to make an offer for the land on the basis of its building potential, the contention being that he would ’ be driven away by the likely difficulties he would encounter in developing the land.

We feel that Mr. Potamitis overlooks that both the notional seller as well as the notional purchaser, envisaged by the legislator, are credited with proper and sufficient knowledge of market conditions to enable them to make an informed decision and ignores the important presumption, that everybody knows the law. A willing seller, as well as a prospective purchaser are credited with knowledge of the prevalent market conditions and may derive information for the purpose, from an expert valuer, the seller willing to sell only provided a fair price is offered, being at liberty to refrain from parting with his land in the absence of a reasonable offer. What we must do is to forecast, admittedly in retrospect, the price that wes likely [* 509] to induce an enlightened seller to sell his property. (See I.R.C. v. Clay (1914 and 1915), All E.R., reprint - 882 - I.R. Comrs. v. Crossman (1936) 1 All E.R. , 762 (H.L.)-).

What must be stressed is that the inquiry is designed to ascertain the reactions of a willing seller and not to scrutinize the likely inhibitions of a purchaser.

In consequence, what we must seek to find out is the price at which the vendor, properly acquainted with market conditions and sufficiently advised as to his legal rights, would demand before parting with his property. A willing seller, credited with such information, would come to know the following, in the light of the admitted facts:-

(a) His land would fetch £1,000 per donum if situated outside schedule 'B'.

(b) It would fetch £800 per donum if his land was covered by the provisions of schedule 'B', but such provisions did not introduce an absolute prohibition to building.

(c) If his land was subject to an absolute prohibition because of its inclusion in schedule 'E', its value would be in accordance with the valuation of the Acquiring Authority, i.e. land suitable for agricultural purposes only.

Interpretation of s. 8(1). Cap. 31

In a recent decision of the Pull District

Court of Limassol (Reference 6/63), the Pull Court, as at present [*510] composed, had occasion to advert to the implications of s. 8(1),

Cap. 31, earmark its ambit and analyse its provisions.

Section 8(1) confers a discretion on the Director of Antiquities to take steps that are deemed necessary to preserve the architectural character of properties designators ancient monuments. The presence of this power limits the Use to which land may be put and amounts to a limitation in the sense of Article 23*3 of the Constitution.

In discerning the existence of a limitation, it is instructive to bear in mind what has been said by

Triantafyllides, P., in Nicosia Tecalemit Co. and Another v. The Municipality of Nicosia (1971) 9 J.S.C., p.1208. At p.

1211; the learned President says (at Nos. 5-15):-

“If the applicants choose to seek compensation under the provisions of Article 23.3, it would then be the first task of the appropriate Court, a civil Court, to decide whether or not the declaration of Arnaldas Street as a street for one-way traffic, amounts, in the circumstances of the particular case and on a proper construction of Article 23.3, to restrictions or limitations of a nature envisaged by the constitutional provision in question.”

The two sides were able to agree that the classification of the subject property as an ’ancient monument' was a source of limitation of its use, but disagreed as to the extent of the limitation.[*511]

In the case of Michael v. The Improvement Board of Dhali and Another (1969) 3 J.S.C. , p. 307, Triantafyllides, J., as he then was, concerned himself with the interpretation of s. 8(1) and concluded that land listed under schedule 'B' - Cap. 31, can be developed as a building site, subject to the observation of reasonable conditions, that may be imposed by the Director for the preservation of antiquities. The tenor of the judgment is that the power of the Director to act as an overseer of the development of ancient monuments does not, ipso facto, introduce a building prohibition but is limited to taking of reasonable practical steps, as and when occasion arises, to ensure that no damage is done to antiquities.

In Michael's case, at p. 410 (letters C-F), the learned judge says:-

“But in the light of the letter and spirit of the relevant provisions of Part II of the Constitution (regarding fundamental rights and liberties) the absolute prohibition of any building operations should be resorted to, nowadays under section 8(l), only when absolutely necessary in view of the circumstances of a particular case, and not by way of general policy; and before deciding to prohibit building completely, on a specific site, respondent 2 should satisfy himself that nothing short of that, such as the imposition of appropriate terms, will meet the needs of the particular situation.” [512]

It has been argued by Mr. Potamitis that the decision in Lordos’s case, unreported (case stated 128), given before Independence, supports the view that very serious restrictions flow from the fact of classification of property as an ’ancient monument’. In Michael’s case, the above decision was distinguished on the ground that in the light of the factual background of the case, unlike the facts in Lordos’s case, like the present case, building operations would not alter the architectural character of the site and the interest of the Director of Antiquities, to save antiquities lying below, from destruction, could be properly safeguarded by the giving of appropriate directions on the spot. Elsewhere in the judgment in Michael's case, the question is canvassed of how the Director could lawfully exercise the discretion conferred on him by s.8(l) - Cap. 31:

“In my opinion, all that respondent 2 could have lawfully done, in this case, was to impose such terms, under section 8(1), as would ensure that any digging to be done in applicant's property, would be done only under the supervision of his Department, and would be suspended or discontinued, as it might prove to be necessary in furtherance of the objects of the relevant legislation: respondent 2 might decide to acquire the property in question compulsorily, as it appears to be envisaged in the aforementioned minute of respondent 2”. [*513]

In Lordos’ s case the Supreme Court accepted the proposition that s. 8(1) - Cap. 31, does not introduce anything in the nature of an absolute prohibition to build, but merely confers a discretion on the Director of Antiquities to impose certain restrictions on

buildings that are deemed appropriate to preserve antiquities. In that case, a building permit had already been refused and

therefore the fate of the property as land ripe for building development had already been sealed in an irrevocable manner, something that had direct repercussions on the value of the land. The Court was not there concerned to determine in ab stractum the repercussions on the value of the land with no surface antiquities, and no surface architectural character as such, flowing from its classification as an ’ancient monument'. Lordos's case was decided before Independence and the construction placed on s. 8(1) - Cap. 31, could not have been influenced by fundamental provisions of the Constitution, which, in the absence of express words, make it incumbent on the Court to interpret provisions inveigling private rights of ownership in a restrictive manner.

It is an admitted fact that the Director of Antiquities is minded to forbid the erection of any sort of building on the subject property.

In the first place, this is an irrelevant consideration because no such decision has as yet been officially taken, neither have the parties had an opportunity to challenge the decision. On the other hand, if such a limitation is imposed, verging on deprivation, there is nothing in [*514] s. 8(1) preventing the owners from seeking compensation before a Civil Court for the imposition of such a serious limitation.

What s. 8(1) achieves is to confer certain powers on the Director of Antiquities, designed to enable him to subject building development of lands listed under schedule 'B', to certain restrictions with a view to preserving antiquities but does not confer on him power to forbid the use of land for building purposes. The presence of such a power does not amount to a prohibition to build, neither does it preclude the owner from claiming compensation for a restriction or limitation that the owner may suffer if the Director, in the exercise of such a power, forbids the erection of any buildings thereon.

In s. 8(1) conferred power on the Director to introduce restrictions materially affecting the economic value of the land, without the payment of compensation, then such a restriction would be patently unconstitutional, as infringing the provisions of Article 23.3 of the Constitution.

Our considered view is that whereas s. 8(l) - Cap. 31 confers certain powers on the Director of Antiquities respecting the manner in which buildings may be erected on lands, listed under schedule 'B’ - Cap. 31, this power in no way takes away the owner's right to build, but merely subjects building development to certain limitations which, though adversely affecting the value of the land, in no way prohibit its use for building purposes. [*515]

We may observe, although the matter does not arise for determination, that the classification as such of the land as an ancient monument and its inclusion in shedule 'B', constitutes a limitation of its use in the sense of Article 23.3 of the Constitution, and depending on the facts of each ease, may give rise to a claim for compensation, if such a limitation decreases the economic value of the property. In the instant case, the classification was made before Independence, in 1935, and the presence of the limitation cannot confer a right to compensation or be otherwise challenged before the Court (see Holy See of Kitium v. Municipal Council. Limassol. 1 R.S.C.C. 15).

In the case of Kittou v. The Republic (1971) 8 J.S.C., p. 1045, it was found, in the light of the facts of the case, that the classification of the property as an 'ancient monument' reduced its value by a margin of 15 per cent, whereas in the present case it is agreed that the reduction that should be made is 20 per cent.

One last argument of Mr. Potamitis has been that antiquities are the property of the Republic of Cyprus end in consequence the owner, so to say, should have unfettered access to his property. Attractive though this argument may be, it ignores that buildings primarily occupy the surface of the land and the space above it. An analogy with mineral wealth would demonstrate that for gaining this access one must pay very dearly for it, twice the value of the land. It would be far fetched to suggest that the all [*516] pervasive right of the Government to underground water, mineral and antiquities, would give them such sweeping powers to displace, without compensation, private rights of ownership.

The very wording of Article 23·1 of the Constitution suggests that the right of the individual to own land co-exists with the right of the Government to the above specified resources. The word 'reserved' indicates that the right of the individual to own, occupy and enjoy his land, does not take away Government's right to underground resources and suggests at the same time that the two rights may be enjoyed, the. one parallel to the other. If the argument of Mr. Potamitis was sound, if we understood him well, the Government would have an unqualified right to forbid the use of land for building purposes, without the payment of any compensation in all cases where water was to be found below the surface of the land. This could not be so.

In the result, we award the claimant £795 plus 41/2 per cent agreed interest from 15th August, 1963, till final payment.

Upon payment of the compensation to the claimant, subject to any deductions permitted under the Law, the subject property will vest in the Acquiring Authority. Further, we award the claimant £75 advocate's fees and £30 valuation fees.

We also approve, by way of remuneration, that the advocate of the Acquiring Authority does receive £75 costs.

Order accordingly.