Court awards higher compensation for land easement than valuers suggested, rejecting injurious affection claim.

[*269] 1979 April 18

(PIKIS,P.D.C.)

IN THE DISTRICT COURT OF FAMAGUSTA SITTING

AT LARNACA

Nicolaos Stavri Pitta and Others,

Claimants,

v.

Republic,

Acquiring Authority.

(Consolidated References Nos. 1/76, 1/77 and 4/78).

Compulsory Acquisition of land - Compensation

- Assessment - Creation of easement (placing water pipes) for implementation of public utility undertaking - Principles governing assessment of compensation same as those relating to land taken away by order of acquisition - Categories of compensation - Injurious affection - Duty of owner of land to mitigate damage - Diverging views of valuers - Power of Court to award compensation likely to do justice notwithstanding opinion of valuers.

Z. Mylonas with E. Samoutas, for the Claimants.

N. Angelides, for the Acquiring Authority.

JUDGMENT

The following judgment was delivered by:-

PIKIS, P.D.C.:- In 1969 notice was given [*270] of the intention of the Acquiring Authority to acquire compulsorily the right to place water pipes under a narrow strip of claimants' lands on the outskirts of Frenaros for a public utility undertaking, the conveyance of drinking water to the town of Famagusta. On 6th March 1970, the acquisition was sanctioned. Notwithstanding the absence of agreement between the parties the matter was not referred to the Court for many years, a delay due in part to the unsettling events of 1974.

What was intended to be acquired by the acquisition was a species of immovable property as defined by section 2 of the Compulsory Acquisition of Property Law, 1962. Hence the owners are entitled to compensation in accordance with the provisions of the aforementioned law. It is manifest from the terms of the acquisition that what was acquired was not merely the right to sink pipes below the surface of the land of the claimants but a more extensive right in the nature of a servitude entitling the Acquiring Authority to maintain and service the pipes in perpetuity. In effect an easement was compulsorily established over the land of the claimants for the benefit of the Acquiring Authority.

The plots affected, subject matter of the three References under consideration, are situate in the same locality and. have many features in common. Consequently their consolidation was warranted by many common questions of fact and identical points of law raised for consideration.

In accordance with the terms of the acquisition order an easement was created over small portions of the land [*271] of a width of 20 feet. The strips of land affected are of the following extent: Reference 1/76, 2,400 square feet; Reference 1/77, 3,900 square feet; and Reference 4/78, 2,500 square feet.

In my experience it is not uncommon for land valuers to express differing views. Yet only rarely does one get as diametrically opposed views as those expressed by the two valuers who presented rival valuations for the claimants and the Acquiring Authority. So we have the expert for the Acquiring Authority adopting the view that compensation in each case should be in the region of £10 to £15 whereas, according to the expert for the claimants, such compensation should be measured in thousands of pounds. They have proceeded upon different premises in making their valuation. However each valuer relies on the same data for the valuation of the subject properties in the three References under consideration.

Mr. Iacovos Zacharia, a valuer in the Lands Department who made the valuation for the Acquiring Authority, valued the loss to the claimants resulting from the acquisition on the basis that the land affected was, at the material time, the date of notification, agricultural land and therefore its value should be ascertained by reference to the sale price of comparable agricultural lands in the area. The witness insisted, at the trial,that notwithstanding the existence of some old houses along the road boundary, not far from the properties affected, the area had an essentially rural character, a character it retained until recently when the village began to expand in that direction. He purports to [*272] ascertain the market value of the land at the material time by reference to the sale of two agricultural properties situate in the vicinity of the subject property that materialized one before the relevant date and the second some time later. A third sale of agricultural property concluded years later does indicate that values of agricultural lands remained fairly constant over the years. No doubt if one accepts the thesis of this expert that the subject properties were agricultural lands with but a remote potential for development into built up estates his valuation rests on fairly sound foundations accepting, as I do, that the properties cited for comparison, comparables 1 and 2, gave a fair reflection of the value of agricultural land in the area where the subject properties were situate.

The differences of opinion between the two experts do not merely go to the character of the land but also extend to another important area, whether the land not subject to this easement was, in consequence of the acquisition, injuriously affected causing additional loss thereby to the owners. Mr. Zacharia expressed the view that the remaining property of the claimants was in no way injuriously affected by the acquisition and argued that claimants should not be allowed any additional compensation on that score. Of course no suggestion has been made that the agricultural potential of the remaining land was prejudicially affected by the acquisition or for that matter its value as agricultural land. The case for the claimants, resting on the opinion of Mr. Pantelides, is that the development potential of the [*273] land for built up development was injuriously affected, a position hotly disputed by the Acquiring Authority. Mr. Zacharias prepared a plan (exh. 1) showing a notional division of the land into building sites in support of his evidence that the owner suffered no prejudice regarding the development of their remaining land by the acquisition in question. We say "notional" because, as the witness emphasized, even today it is not legally possible to divide to two of the plots affected into building sites, the plots in Reference 4/78 and 1/77 He explained that in relation to these two plots that have no direct access to the main road a licence may be secured for the building of a number of houses but not their division into building sites.

Now the Valuation for the Claimants. Mr. Pantelides valued the loss to the claimants on the assumption that the land was, at all times, ripe for development into building sites and that the establishment of a servitude over the claimants’ land, apart from making it impossible to utilize directly the land affected for building purposes, it injuriously affected the development of each plot in its entirety. In order to ascertain the extent of the loss he made a notional division of the land into building sites and then attempted to discern the loss by reference to sales of building sites situate near the centre of the village that materialized in the years 1976 to 1977. It is manifest that Mr. Pantelides moved far away from the realities of the material date because, as he mentioned, injurious affection must be quantified as at the date of trial. In Demades & Sons Ltd. [*274] v. The Republic (1977) 4 J.S.C., the Supreme Court upheld the proposition adopted by the trial Court that consequential matters of

compensation not directly relating to the value of the land acquired such as betterment and injurious affection should

he valued as at the date of trial. They were fortified, in their view, by a study of the history of compulsory acquisition laws and procedures in England wherefrom our scheme originated (Cap.226). (See Birmingham Corporation v. West Mid. Baptist (1969) 3 All E.R. 172; Myers v. Milton Keynes Development Corporation (1974) 2 All E.R. 1096). The main complaint of Mr. Pantelides is that some of the building sites into which the subject properties might be divided in accordance with a plan he prepared will, because of the creation of this easement, be fraught with a number of disadvantages reducing their value. Mr. Zacharias, as we have already mentioned, has other views on the matter that he articulated by the preparation of an alternative division of the land into building sites. Now Mr. Pantelides criticizes the division made by Mr. Zacharia on the ground that some of the building sites, despite the fact that they are above minimum extent, they will be small, a matter of significance because agricultural holdings necessitate large spaces. He has cited nothing to support this view whereas Mr. Zacharia did point out that the comparables cited by Mr. Pantelides did not support his assumptions.

Principles of Compensation for the Compulsory Establishment of an Easement or the Creation of a Servitude.

I have not been referred to any Cyprus authority [*275] offering guidance for the determination of the compensation payable to the owner of land over which an easement is created for the implementation of a public utility undertaking. In principle the same considerations that bear with the Court in valuing the compensation payable to the owner of land taken away by an order of acquisition should equally bear with the Court in valuing the loss suffered by the owner of the servient tenement. And equality of loss and compensation is at the root of statutory compensation. The principle of equality is virtually one of universal application for its proper application is a safeguard for the protection of property rights. (See Monongahela Navigation Co v.United States

(1893) 148 U.S.312-Horn v. Sanderland Corporation (1941) 1 All E.R. 480 - Commissioner

of Limassol v. Kirzis, 24 C.L.R. 198 - Yiannis Anastassi Moti and Another v. Republic of Cyprus (1968) 1 C.L.R. 102 - Ragby Joint Water Board v. Footitt

(1972) 1 All E.R. 1057 - Republic v. Mantovani (1976) 4 J.S.C. 593 - Misirlizade v. Municipality of Nicosia (1976) 12 J.S.C. 1767).

Compensation for the compulsory acquisition of land can be divided into three categories:-

(a) The value of the land compulsorily acquired. Here compensation is determined by reference to the price of the land taken at the time of publication of the notice to acquire. (See s. 10(a), Law 15/62). In my judgment the loss suffered by the owner because of the creation of an easement over a plot of land must, as in the case of severance, be valued as at the date of the notification to acquire. In both cases [*276] property rights are taken away and ought to be valued in accordance with the principle set out in s. 10(a).

(b) Compensation for Injurious Affection. Where, because of the acquisition, the owner of the land suffers damage additional to the loss resulting from the taking away of his property owing to resulting damage to other property proximate to the land taken away than the owner is entitled to additional compensation in accordance with the principles set out in section 10ot and s. 10£ of Law 15/62. Here the owner may point to any loss crystallizing by the date of trial. Injurious affection may be a concomitant of the establishment of a servitude over a piece of land in the same way that injurious affection may result from the severance of a portion of the land. I can see no distinction in principle between the two cases and I believe none is envisaged by the law.

(c) Residual Loss. In addition to the above two categories of compensation there is jurisdiction to award compensation for residual loss not encompassed in either of the above two categories (section 10λ).

Findings

I have examined the facts before me with very great care, more so as I was truly puzzled by the diverging views of the valuers. The impression I gathered is that Mr. Pantelides totally ignored the realities at the time of the acquisition. At the time of notification the area where the subject properties were situate had a predominantly rural character and find that the agricultural use of the [*277] land was the principal element that shaped prices of land in the area. The comparables cited by Mr, Zacharia certainly give an indication. of the value of land in the area; however such indications as were derived, ought to have been adjusted to reflect the realities of the subject properties which had, on the whole, a better potential owing to their proximity to the road. In matters of compulsory acquisition wide powers are vested in the Court to award compensation likely to do justice in the case notwithstanding the opinion or conclusions of the valuers. (See Rashid Ali and Another v. Vassiliko (1971) 1 C.L.R. 146). In my judgment justice will be done if we raise the valuation of the expert of the Acquiring Authority regarding the value of the loss to the owner at the time of notification by 50 per cent.

I cannot uphold the claim for injurious affection for, in my judgment, none has been proved. The approach of Mr. Pantelides is arbitrary and I rather gained the impression it was intended to inflate the claim of the owners to whatever extent is possible. There is a general duty to mitigate damage, also imposed on the owner of land compulsorily acquired. He must endeavour to minimize his loss and injurious affection will not be held proved unless injury to the remaining property is unavoidable. As Mr. Zacharias has demonstrated convincingly such damage was avoidable and therefore the claim for damages for injurious affection must be dismissed.[*278]

In the light of the foregoing the compensation payable to each claimant is determined as follows:-

Reference No.1/76: £ 15

Reference No. 1/77: £21

Reference No.4/78: £15

In addition the Acquiring Authority are adjudged to pay interest on the above sums at the rate of 7 per cent per annum from the date of the order of acquisition. (See R. v. Savvides

(1975) 1 C.L.R. 12; Theori and Another v. The Republic (1976) 4 J.S.C. 666). Further, the Acquiring Authority shall pay costs to be determined by the Registrar and approved by the Court on the scale of the sums recovered.

Judgment and order for costs as above.