Cyprus Supreme Court rejects betterment deduction, awarding full market value compensation for compulsory land acquisition.

[*65] 1981 Sept. 29

(BOYIADJIS, AG.P.D.C. AND ELIADES, AG.D. J.)

Maria Nicou Vassiliadou and

Another

Claimants,

v.

The Republic of Cyprus,

Acouiring Authority.

(Reference No. 13/79).

Compulsory acquisition - Compensation - Assessment -Principles applicable - pointe Gourde principle (Pointe Gourde Quarrying and Transport Company Ltd. v. Sub-lntendent of Crown Lands (1947) A.C. 565) and section 10(d) of the Compulsory Acquisition of Property Law, 1962 (Law 15/62) not applicable -Betterment - Date at which compensation for is to be assessed - Section 10(f) of Law 15/62.

A. Poetis, for the Claimants.

Gl. HjiPetrou, for the Acquiring Authority.

JUDGMENT

The judgment of the Court was delivered by:-

BOYIADJIS. AG.P.D.C.: In its endeavour to meet the housing needs of the refugees, the victims of the Turkish invasion of 1974, the Republic of Cyprus created what is known as Livadhia Refugee Housing in the outskirts of Livadhia village not far from the town of Larnaca. The required land, being privately owned, was compulsorily acquired in three stages by virtue of three distinct acts of acquisition as follows:-[*66]

(a) Notice of acquisition, Public Instrument No.

909 dated 12.11.1976 followed by an order of acquisition, P.I. 389 dated 13.5.1977, whereby Area “A” of the Housing was created;

(b) notice of acquisition, P.I.798 dated 9.9.1977 followed by an order of acquisition P.I.1095 dated 25.11.1977 whereby Area “B” of the Housing was created;

(c) notice of acquisition P. I.608 dated 9.6.1978 followed by an order of acquisition p.I.1140 dated 20.10.1978 whereby Area “C” of the Housing was created.

After the notice of acquisition for Area “C” of the Refugee Housing was published, but before the order of acquisition related thereto was issued, the Republic decided to expand further the Refugee Housing by creating Area “D” thereof, through the compulsory acquisition of other neighbouring properties including those of the claimants. They evidenced their intention to do so by publishing on 15.9.1978 a fourth notice of acquisition, P.I.979, under section 4 of the Compulsory Acquisition of Property Law, 1962.(Law 15 of 1962). The relevant order of acquisition, P.I.1381, under section 6 of the same Law, was published on 22.12.1978. The Acquiring Authority, the Republic of Cyprus, has acquired thereby a part in the following three properties in which each of the two claimants owns a share.

(i) Plot 233/1 of Sheet/Plan XL/48., of Livadhia village, a field with carob trees, of a total extent of 18 donums and 3 evleks (registered extent 17 donums), covered by registration No. 6449 in the names of claimant No.1 [*67] ⅜ share, claimant No. 2 ⅜ share and a certain Michael Georghiou Krystallis 2/8 share. The part acquired is of an extent of 13 donums.

(ii) Plot 233/6/2 of Sheet/Plan XL/48 of Livadhia village, a field with carob trees, of a total extent of 3 donums and 2 evleks (registered extent 4 donums and 1 evlek), covered by registration No. 5845 in the names of claimant No.1¼ share, claimant No.2 ¼ share and a certain Alis Karrapet Papazian 2/4 share. The extent of the area acquired is 1 donum and 2 evleks.

(iii) Plot 242/2 of Sheet/Plan XL/48 of Livadhia village, a field with carob trees, of a total extent of 3 donums, 1 evlek and 2000 so. feet, covered by registration No. 6682 in the names of claimant No. 1 ¼ share, claimant No. 2 ¼ share and a certain Alis Karrapet Papzian 2/4 share. Area acquired: 2 evleks and 11400 sq. feet.

Dispute having arisen between the claimants and the Acquiring Authority as to the amount of compensation which is by law payable to the former for their interest in the properties acquired, they have filed the present reference under section

9 of the Law for the assessment by the Court of the amount payable.

Both sides have filed in Court pursuant to Rule 19(3) of the Compensation Assessment Tribunal Rules, 1956, what is commonly described as a valuation report of their respective expert valuer containing all the particulars prescribed by the said Rule. Survey maps are attached [*68] thereto showing inter alia the acquired properties and Areas A,B,C, and D of the Housing. At the hearing “both parties relied only on the evidence of their respective valuers who defended in the witness box their valuation and opinions contained in their said written reports. After the evidence was heard and before the addresses of counsel, acceeding to a request by counsel for the claimants under Rule 20 of the Compensation Assessment Tribunal Rules, 1956, to which counsel for the Acquiring Authority did not object, the Court inspected the acquired properties and the “comparables” referred to in evidence in the presence of both counsel, one valuer of the Acquiring Authority and the father and representative of the claimants.

Mr. Christos Patrikios, the valuer of the claimants, found the market value of all 3 acquired plots at the material date to be £800.- per donum. He also alleged that the claimants have suffered damage as a result of the severance of the part acquired from the remaining plot 233/6/2, which he calculated under s.10(f) of the Law at £320.-. This last head of compensation was later abandoned by the claimants during the hearing.

Mr. Iacovos Zacharia, a valuer 1st grade attached to the Larnaca District Lands Office, who testified as the valuer for the Acquiring Authority, found the market value of the acquired properties at the material date as follows:-

(a) Plot 233/1:- £400.- per donum. He alleged, however, that the value of the remaining property, after severance of the acquired part, of an extent of 5 donums[*69]and 3 evleks was increased by £300.- per donum as a result of the works carried out by the Acouiring Authority and he, therefore, deducted pursuant to section 10(f) of the Law from the amount of £5,200.- representing the total value of the acquired property, as found by him, the sum of £1,725.- representing the total enhancement in the value of the remaining part of the property.

(b) Plot 233/6/2:- £350.- per donum. In the case of the remaining 2 donums of this plot, he found the total enhancement in their value to be £400.- which he deducted from the total value of the acquired property, leaving a balance of only £125.- payable to the owners.

(c) Plot 242/2:- £350.- per donum. Yet, having alleged that the value of the remaining part of the plot having been increased by £200.- per donum, the profit accruing to the owners by such increase exceeds the value of the part acquired and nothing is, therefore, payable to the claimants regarding this plot.

Both valuers based their valuations on the direct comparable method using a number of common “comparable sales” and several different “comparable sales”. The adjustments, however, which they have made led them to different conclusions. Yet, the largest gap in the opinions expressed by the two valuers lies in the philosophy or general approach underlying their respective valuations.

Mr. Zacharia treated the creation of Areas A, B, C and D of the Refugee Housing as one “scheme”. In implementing [*70] its said scheme, he argued, the Acquiring Authority improved the roads and brought electricity and water in the area, thus increasing the value of all the properties in the vicinity which were near Area “A” of the Housing, including the acquired properties of the claimants. To exclude the possibility that the claimants may benefit from such increase he thought or he was advised to make his valuation with reference to the time when the first notice of acquisition was published regarding the properties acquired for the creation of area “A” of the Housing, i.e. on 1 2.11. 1976. He then increased the value found by him by

15 per cent annually until 15.9.1978 when the notice of acquisition regarding the claimants properties was published, the said percentage being the natural, as he described it, annual increase of properties in the area but for the existence and the repercussions of the “scheme” of the Acquiring Authority at that spot.

Learned counsel for the Acquiring Authority defended in his address to the Court the line of thinking and the course followed by Mr. Zacharia. In fact, he went a step further and submitted that subsection (a) of section 10 of the Law has no application in the present case as the market value of the acquired properties had already been increased through the creation of the earlier stages of the Refugee Housing in the neighbourhood by the prescribed date, i.e. 15.9.1978. He relied in support of his argument on the case of Pointe Gourde Quarrying and Transport Company Ltd. v. Sub-Intendent of Crown Lands (1947) A.C.565 and on subsection (d) of section 10 of the Law. [*71]

Mr. Patrikios, on the other hand, ignored completely any increase which might have resulted to the claimants’ properties or any other neighbouring properties from any previous acts of acquisition for the creation of Areas “A”, “B” or “C” of the Refugee Housing at Livadhia and, treating all three plots as one unit ripe for development, he valued the total extent of the parts of the 3 different acquired plots at the same price as at the date of publication of the notice of acquisition relating thereto.

Mr. Poetis, for the claimants submitted that reference to “scheme underlying the acquisition” in the Pointe Gourde case (supra) can only mean a scheme evidenced by one acquisition and not by separate successive acquisitions.

It becomes, therefore, pertinent before dealing further with the case to examine the nature and application of what has become known as the Pointe Gourde Principle. The facts in that case .were these: His Majesty’s Government in the United Kingdom had agreed with the United States to lease to the United States land required for the establish ment of a naval base in the island of Trinidad which was then a British colony. Pursuant to the agreement just mentioned the Crown acquired certain lands at Pointe Gourde in that island, in the exercise of its compulsory powers, which belonged to the appellants. Those powers and the relevant provisions for the assessment of compensation were to be found in the Land Acquisition Ordinance, 1941, which substantially copied the corresponding English Act, namely the Acquisition of Land (Assessment of Compensation) Act, 1919 (9 & 10 Geo. 5, c.57). [*72]

On part of the lands so acquired the appellants had quarried and sold stone and lime for many years before the acquisition. The United states had special need of a large quantity of stone for the construction of the naval base and the proximity of the quarry land to the base under construction made that land specially suited to the United 3tates special needs. The tribunal who heard the appellants’ claim for compensation awarded an amount of $ 86,000 to cover inter alia the value of the quarry as a going concern, on which there was no dispute. The dispute and the subsequent proceedings by way of case stated to the Supreme Court of Trinidad and Tobago and from there to the Judicial Committee of the Privy Council related exclusively to an additional award of $ 15,000 allowed by the tribunal for “special adaptability” of the quarry land. This additional award related not to the special suitability or adaptability of the land for the purposes of quarrying, which existed before acquisition and which was adequately taken into account in the award of $ 86,000, but to the special adaptability which the quarry land possessed after acquisition, in that its proximity to the naval base under construction made it specially suited to the special needs of the United States. The tribunal had considered it likely that those needs would have increased the quarry profits had the undertaking remained in the hands of the appellants and the sum of $ 15,000 was evidently awarded as the measure of the loss of that element of prospective extra profit. [*73]

Before the tribunal the point for determination, namely whether or not that $ 15,000 item was allowable in law as part of the compensation payable to the appellants, was regarded as involving the construction of sub-s.2 of section 11 of the Ordinance of 1941 which read:-

“(2) The special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the special needs of a particular purchaser or the requirements of the Government or the Government of the United Kingdom or any department of either of such Governments or any local or public authority”.

We pause here to state by way of parenthesis that the words of sub-s.(d) of section 10 of our Compulsory Acquisition of Property Law, 1962, are substantially the same with those of sub-s.2 of s.11 of the Trinidad Land Acquisition Ordinance, 19M, set out hereinabove.

The tribunal held that the words of the sub-section did not exclude the item under consideration and stated the question for the Full Court thus:- “Whether sub-s.2 of s.11 of the Land Acquisition Ordinance, 1941, applies to the circumstances of this case so as to prevent the special adaptability of the plaintiff’s land to meet the special needs of the United States being taken into account”.[*74]The Pull Court answered that question in the affirmative and disallowed the award of $15,000. The Trinidad Pull Court held inter alia that “although a value as a quarry had admittedly been created prior to the acquisition, that value was increased by the fact that a base was. being established in the vicinity for which a large quantity of stone in a readily accessible situation was required. In other words, the value was enhanced by the scheme of the party acquiring the land, and that is not a factor for which additional compensation may be awarded”.

The judgment of their Lordships in the Privy Council was delivered by Lord Mac Dermott who said that the award of $15,000 can only be related to the additional value which it gave to the quarry land, and advised His Majesty to dismiss the appeal. He remarked, however, that the question of law submitted was, unfortunately, formulated too narrowly to raise the real issue. He then laid down the principle applicable in the following words:-

“It is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition. As it was put by Eve J. in South Eastern Ry. Co. v. London County Council (1915) 2 Ch.252, 258: ‘Increase in value consequent on the execution of the undertaking for or in connection with which the purchase is made must be disregarded’“. [*75]

The principle goes back to Fraser v. City of Fraserville (1917) A.C.187 in which the Privy Council held at p.194: “…the value to be ascertained is the value to the seller of the property in its actual condition at the time of expropriation with all its existing advantages and with all its possibilities, excluding any advantage due to the carrying out of the scheme for which the property is compulsorily acquired”.

In Viscount Camrose and Another v. Basingstoke Corporation (1966) 3 All E.R.161, C.A. and more recently in Wilson v. Liverpool City Council (1971) 1 All E.R.628, C.A. it was held that the Pointe Gourde principle applies to cases under the Land Compensation Act 1961. In the latter case the purpose of the principle was stated to be “to prevent the acquisition of the land being at a price which is inflated by the very project or scheme which gives rise to the acquisition”.

Reference should finally be made to Rugby Joint Water Board v. Foottit (1972) 1 All E.R.1057, H.L. where Lord.Pearson cited with approval the following passage from the judgment of Fletcher Moulton, L.J. in Re Lucas and Chesterfield Gas and Water Board (1909) 1 K.B.16, at 29, 30: “The principles upon which compensation is assessed when land is taken under compulsory powers are well settled. The owner receives for the lands 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 [*76] 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 recognised 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 Lands as they stood before the scheme was authorised by which they are put to public use”. Lord Pearson then referred to

several other authorities illustrating the application of the Pointe Gourde principle and made this remark at p.1062: “It was at one stage

of the argument described as a ‘common law principle’, but I do not think it can be that, because compulsory acquisition and compensation for it are entirely creations of statute. The Pointe Gourde principle in my opinion involves an interpretation of the word ‘value’ in those statutory provisions which require the compensation for compulsory acquisition to include the value of the lands taken. Examples of such provisions are s.63 of the Lands Clauses Consolidation Act 1845, s.5(2) of the Land Compensation Act 1961 and s.7 of the Compulsory Purchase Act 1965”.

The next question to be considered is what constitutes the “scheme” in the context of the Pointe Gourde principle.

In Wilson v. Liverpool City Council (supra) it was argued that the Pointe Gourde principle applies only when the scheme is precise and definite and is made known to all the world. Dealing with this argument Lord Denning M.R. said at p.634:- “I do not accept counsel’s submission. [*77] A scheme is a progressive thing. It starts vague and known to few. It becomes more precise and better known as time goes on. Eventually it becomes precise and definite and known to all. Correspondingly, its impact has a progressive effect on values. At first it has little effect because it is so vague and uncertain. As it becomes more precise and better known, so its impact increases until it has an important effect. It is this increase, whether big or small, which is to be disregarded as at the time when the value is to be assessed”.

Widgery L.J. had this to add at p.635:-

“I agree. Whenever land is to be compulsorily acquired, this must be in consequence of some scheme or undertaking or project. Unless there is some scheme or undertaking or project compulsory powers of acquisition will not arise at all, and it would I think be a great mistake if we tended to focus our attention on the word ‘scheme’ as though it had some magic of its own. It is merely synonymous with the other words to which I have referred, and the purpose of the so-called Pointe Gourde rule is to prevent the acquisition of the land being at a price which is inflated by the very project or scheme which gives rise to the acquisition. The extent of the scheme is a matter of fact in every case, as is shown by the decision of Fraser v. City of Fraserville [*78] (1917) A.C.187 at 194 to which Lord Denning M.R. has referred. It is for the tribunal of fact to consider just what activities - past, present or future - are properly to be regarded as the scheme within the meaning of this proposition. The scheme will always exist in some shape or form by the time the notice to treat is served. It must, indeed, be in some shape or form at the confirmation of the compulsory purchase order itself, and then, as Lord Denning M.R. says, it may develop almost from day to day, and the ultimate question for the valuer is to decide to what extent the dead ripe value of the land on the day on which the valuation is to be made has been increased by reason of the existence of the scheme. We were invited by junior counsel for the claimant to lay down rules and regulations governing the assessment of this element, but this in my judgment would be entirely wrong. It is essentially the duty of the valuer, using his skill, to decide what part of the open market dead ripe value of land is fairly to be regarded as having been contributed by the scheme. It is entirely a matter for the valuer, not a question for this Court at all, and I too would dismiss this appeal”.

The tribunal in the above case, whose reasoning and award was upheld, had found that by the time of the notice to[*79]treat a purchaser would have known enough about the scheme of the compensating authority to have been able to allow for its effect in deciding what price he would pay for the subject land,

“Scheme” when used in the authorities in this branch of the law, extends to matters arising before, though connected with, the compulsory purchase. What the scheme consists of is a question of fact: Per Lord Simon in Rugby Joint Water Board v, Foottit (supra).

It seems that recent authorities disclose a tendency to expand the interpretation of what is meant by the “scheme” beyond the limits and extent of the compulsory purchase order under which the property is to be acquired, so as to embrace an entire project even though such a project may be covered by more than one compulsory orders, though such matters antecedent to the compulsory purchase must be sufficiently connected with it. The question, however, remains always one of fact depending on the circumstances of each case.

Applying the above principles to the facts of the case under consideration as put in evidence before us, our first remark is that there is no direct evidence as to the existence of any scheme or project of the Acquiring Authority. We only have the successive publications of four different acts of acquisition referring to properties in four neighbouring areas for the creation of the Livadhia Refugee Housing. We do not know whether there is in existence since 1976, when the first notice of acquisition was published, [*80] any scheme to create within 2 or more years 3 or 4 or 5 areas or phases in the Housing. We do not

think that until the subject notice of acquisition was published on 15.9.1978 any prospective purchaser of the claimants’ lands which have been

acquired, knew anything about any government‘s project regarding these lands. Nor does the evidence reveal to what direction, if at all, the existing housing will be expanded according to the government’s scheme. What we may conclude from the successive acts of acquisition set out hereinabove, is that so soon as the financial resources are made available, the Government decides to expropriate more lands for the housing of more refugees. The evidence in this case falls short of establishing the existence of an adopted and existing scheme affecting claimants’ properties as distinct from a mere intention or contemplation in the mind of the person or persons responsible for executing the government’s policy regarding where and when the housing needs of refugees would be met by establishing new refugee housings or expanding existing ones.

The absence of any adopted scheme is further evidenced by the fact that the remaining part of claimants’ plot 233/6/2 has been the subject of a new notice of acquisition for the same purpose. Whilst this was being done, the Acquiring Authority in their valuation submitted in respect of the present acquisition, was alleging betterment or enhancement in the value of the remaining plot 233/6/2 after the subject acquisition, which should be deducted from the value of the acquired part. No suggestion has been [*81] made and there is no evidence to warrant such a suggestion that on 15.9.1978 when the relevant notice of acquisition was published the Acquiring Authority had a plan in existence to acquire the remaining plot 233/6/2, or that the claimants or any purported purchasers of the remaining plot 233/6/2 ought to have known or even to have suspected that such remaining plot would have been acquired by the Acquiring Authority on 18.1.80 in furtherance of its existing scheme or at all.

With regard to sub-s.(d) of section 10 of the law on which counsel for the Acquiring Authority also relies, the evidence does not show that the lands acquired have any special adaptability or suitability for any purpose to which they could be applied only in pursuance of statutory powers, or for which there is no market apart for the needs of a particular purchaser or the requirements of the Acquiring Authority. The question in such cases which is one of fact for the

tribunal is whether there is possible market for the land, and in determining that the statutory purchase is not to be

considered. To exclude the element of adaptability it is necessary to show that there is no reasonable possibility of the land coming into the market. The value of the possibility, if it exists, is a question entirely for the

tribunal. This aspect of the law has been expanded in Countess Ossalinsky v. Corporation of Manchester(1879) unreported, and in Re Arbitration Between Gough and the Aspatria, Silloth and

District Joint Water Board (1904) 1 K.B. 417, C.A. [*82]

It follows from the analysis of the law and the findings we have made hereinbefore that there is no room in the circumstances of the present case for the application of either the Pointe Gourde principle or the provisions of section 10(d) of the Law. The argument of. the counsel for the Acquiring Authority in this respect, therefore, fails and the basis underlying the valuation made by the valuer for the Acquiring Authority is wrong to the extend that it is based on the assumption that there was at the material time a scheme of the expropriating authority which has enhanced the value of the land acquired. The compensation payable to the claimants is to be assessed in accordance with the principles

laid down in section 10 of Law 15 of 1962 about which Hadjianastassiou J. in D.J. Demades & Sons Ltd, v. The Republic of Cyprus (1977) 1 C.L.R.189, at p.198 “says

that it introduces the one principle that permeates all aspects of statutory compensation which is the need to ensure equivalence between the loss to the claimants and the compensation to be awarded. This principle which has been judicially formulated has one aim only behind it,

which is that at the foot of statutory compensation lies the need to make a just equation of loss and compensation”.

The compensation is to be assessed in the first place with reference to the market value of the claimants’ interest in the lands acquired as is provided in section 10(a) of the Law which reads: [*83]

”10(a) The value of the property shall .... be taken to be the amount which the property, if sold in the open market on the date of the publication of the relative notice of acquisition by a willing seller, might be expected to realise”.

The value to be ascertained is the value to the vendor, not its value to the purchaser. In fixing the value to the vendor all restrictions imposed on the user and enjoyment of the land in his hands are to be taken into account, but the possibility of such restrictions being modified or removed for his benefit is not to be overlooked. The value to be ascertained is the price to be paid for the land with all its potentialities and with all the use made of it by the vendor:- Re South Eastern Ry. Co. and London County Council’s Contract (1915) 2 Ch. 252.

With the above principles in mind we shall turn to consider the main characteristics, the location, capabilities and restrictions of the acquired properties.

Plot 233/1 is a rather large piece of land, about 18 donums in extent abutting an earth road. Each of the claimants owns a ⅜ undivided share therein, whereas the remaining 2/8 share is owned by a third person, namely Michael Georghiou Krystallis.

To the southeast of plot 233/1 and adjacent thereto, there is plot 242/2, a much smaller piece of land [*84] of an extent of just over 3 donums. This plot has no road access. The ½ share in this plot belongs to a fourth person, namely Alis Karapet Papazian, the two claimants sharing the remaining half, i.e. ¼ share each.

To the north of plot 233/1 and adjacent thereto there is plot 233/6/2 about 3½ donums in extend, which is also without any road access. Each of the claimants owns therein ¼ share, the remaining ½ share again belonging to the aforesaid Alis Karapet Papazian.

All three plots are located on almost even ground, in the outskirts of Livadhia village, not far from the western municipal limits line of Larnaca town and to the south of Areas A and B of the Livadhia Refugee Housing, though not abutting thereon.

Until the time the properties were expropriated they were used as agricultural lands. They are described as fields with carob trees. They were outside the water supply of Livadhia village and without electricity supply. They continued to lack water and electricity despite the creation in their neighbourhood of Areas A, B and C of the Refugee Housing. This state of affairs is still true regarding the parts of the properties which remained to the owners after the acquisition.

On 26.6.1978, i.e. about 12 weeks before the publication of the relevant notice of

acquisition, the two claimants together with Michael Georghiou Krystallis and [*85] Alis Karapet Papazian submitted a joint application to

the District Officer for a permit for the division of plots 233/1 , 242/2 and 233/6/2 into 47 building sites. On 13.6.1979 the District Officer informed the owners that their application could not be examined further at present because of the lack of the necessary quality and quantity of water and also because parts of the said plots were the subject of compulsory acquisition. They were also informed that their application could be reconsidered regarding the remaining parts of their plots if and when there is enough water supply. The owners’ application and the District Officer’s letter have been produced as Exhibit 4.

There is no indication even until the hearing of this reference that there exists adequate supply of water for the division of the remaining part of the lands into building sites. In view of mainly the lack of water supply both at the time the relevant order of acquisition was published and until today, none of the three plots could or can be used for building development, something that could increase considerably their value compared to that which they could fetch if they could only be used as agricultural land. On the totality of the evidence before us on this aspect of the case, we find that at the time of the expropriation the acquired lands were agricultural lands with very remote prospects of being turned into building lands in the foreseeable future. We do not accept in this respect the opinion of the expert for the claimants that there were no problems for the change of the use of the lands in the near future from agricultural into building lands. [*86]

We have already made our remarks on the valuation made by the valuer for the Acquiring Authority. Regarding the valuation made by Mr. Patrikios for the claimants we would repeat that he based his valuation on the assumption that all three plots constituted one unit ripe for development and thus found the market value per donum of all plots, with or without road access, at £800.-. He based this assumption on the fact that shortly before the acquisition the owners had submitted to the District Officer the application - Exhibit 4. We think that this was wrong resulting to an unfair increase in the value of the acquired properties especially those without road access. The application - Exhibit 4 shows, of course, that at some time the several co-owners had reached an agreement to divide all the properties into 47 building sites if permission were granted by the District Officer. Such permission, however, was refused and one of the major obstacles, the lack of water still persisting, the granting of such permission was and still is impossible. The joint application - Exhibit 4 for the particular use of the lands suggested therein having failed, there is nothing left but only a probability that the different co-owners in the several plots might agree to any other joint use or disposal of their properties in a way equalling the per donum value of the lands without road access with the higher value of the land-plot 233/1 - which had a road access. The three plots of land should be valued, therefore, separately and an additional allowance to be made in respect of the plots without road access for the possibility [*87] of being used or disposed in the future as one unit with plot 233/1. Furthermore, the considerable difference in the size of plot 233/1 on the one hand and the size of the other two smaller plots on the other hand, makes it necessary that they should he compared with “comparable sales” of analogous in size lands, and thus avoid inherent risks in comparing properties dissimilar in size or character.

There are two pieces of land referred to in evidence whose size is nearer to plot 233/1 than all the other “comparables”. They are these:-

(a) Plots 240/1 and 242/1 , a field with trees, 28 donums and 3

evleks in extent relied upon by the Acquiring Authority. The ⅜ share in this filed was sold on 1.5.1975 for £1,250.-,

i.e. £116.- per donum. We do not think that it may usefully be compared with plot 233/1 because it was sold at a time that there was no demand for properties due to the fear and uncertainty created by the Turkish invasion. Conditions were different and had greatly improved by March, 1978, when the relevant notice of acquisition was published. Also the intervening establishment of the Refugee Housing in the area with the resulting improvement of the road conditions must have operated so as to increase demand and values of properties in the vicinity.

(b) Plots 248/1 and 248/2, a field with trees, 11 donums in extent, sold on 10.3.1978 for £800.- per donum. It is relied upon by both valuers. It is the one best susceptible of comparison with plot 233/1 subject to some [*88] necessary adjustments. The valuer for the claimants alleged that it possessed more remote potentials of development than plot 233/1. We disagree with him. It is abutting the boundary line of the Municipal limits of Larnaca and was bought by the owner of an adjacent plot within the Municipal limits. Unlike the acquired properties this property has since 1979 been included within the water supply of Livadhia and this fact evidences the better prospects for development which it possessed compared to those of the claimants’ lands. It was sold only 6 months prior to the publication of the relevant notice of acquisition. It is situated at a level lower than that of the acquired plots.

Making all necessary adjustments to meet the difference in certain characteristics between plots 248/1 and 248/2 on the one hand and claimants’ plot 233/1 on the other hand, as set out hereinabove, we find the per donum value of the latter plot to be £700.- at the material date of the publication of the relevant notice of acquisition. This figure tallies with the one given by the valuer for the Acquiring Authority in the witness box as representing the market value of this plot at the aforesaid time if the enhacement in its value brought about by the previously built Refugee Housing, were to be taken into account.

The area expropriated being 13 donums, we fix the market value thereof at £9,100.- and the value of the ⅜ share of each claimant therein at £3,412.500 mils.

Regarding plots 233/6/2 and 242/2 the nearest from the point of view of size and location plots cited as comparables [*88] are plots 178, and 174/1 relied upon by both valuers. Yet, major adjustments have to be made reflecting the better characteristics of these plots, the main being their road access, compared with the claimants’ lands. Plot 178, a field 4 donums and 3 evleks in extent, was sold 3 months after the prescribed date at £737.- per donum. Plot 174/1, a field 2 donums in extent was sold on 29.3.1979 at £950.- per donum.

The valuer for the claimants stated in crossexamination that if he were to value plots 233/6/2 and 242/2 independently of plot 231/1 he would have valued them at £550.- and not £800.- per donum. The valuer for the Acquiring Authority said in evidence that the value of plots 233/6/2 and 242/2 including betterment attributable to the previously built Refugee Housing, which he thought himself bound or entitled to disregard, was at the material time £550.- per donum.

We would add on this figure reached by both valuers an additional sum of £50.- per donum to compensate the owners for the existing possibility to develop or dispose of these plots together with plot 233/1 where they also had a share, following a probable new agreement between themselves as they have done in the past by Exhibit 4.

Applying the above per donum value we find the market value at the material time of the part expropriated as follows:- [*90]

(i) Plot 233/6/2. Area acquired: 1 donum and 2 evleks at £600.- per donum: £900.-. The ¼ share of each claimant being worth £225.-,

(ii)Plot 242/2. Area acquired: 2 evleks and 14OO sq. feet at £600.- per donum: £360.-. The ¼ share of each claimant being worth £90.-.

Betterment.

This aspect of the case is governed by sub-s.(f) of section 10 of the Law which provides that:-

“In the case of property of which a part only is acquired under this Law, account shall be taken of the increase or decrease, if any, in the value of other property held by the owner together with the part so acquired, which will occur by reason of the acquisition”.

In Demades v. The Republic (supra) it was held that the increase, if any, in the value of the remaining property resulting from the acquisition crystallises by the date the compensation is to be assessed.

It is clear from the very wording of sub-s.(f) of s.10 that it applies only to cases, like the present one, where only part of the owner’s property is being acquired. It is, furthermore, equally clear that the increase which is to be taken account of must be an increase in the value of the other or the remaining property left to the owner and must occur by reason of the subject-matter acquisition. [*91] It is clearly distinct from the Pointe Gourde principle which operates so as to exclude any increase in the value of the property actually acquired where such increase occurs by reason of the “scheme” underlying the acquisition.

The valuer for the Acquiring Authority deals with the issue of betterment in para.10 of his valuation report at p.3. It is therein alleged that the increase in the value of the remaining plots after the acquisition occurred by reason of the improvement of the roads and of the water and electricity that has been brought in the vicinity. These works, carried out by the Acquiring Authority, have resulted, no doubt, to some increase in the value of all properties in the neighbourhood. But, was this the result of the acquisition whereby the part acquired was severed from the remaining part of the lands? The answer is in the negative. The Valuer for the Acquiring Authority made it clear in answer to a question put to him during his examination in chief that the betterment had occurred by reason of the works already carried previously with regard to the Refugee Housing. The witness stated that until the date of the notice of acquisition there already had occurred an increase of £300.- in the per donum value of plot 233/1 and an increase of £200.- in the per donum value of plots 233/6/2 and 242/2. This was due mainly, if not exclusively, to the first act of acquisition in 1976 as a result of which Area “A” of the Refugee Housing was created. He thus found the per donum value of plot 233/1 to be at the time of the acquisition £700.- per donum including the betterment and the per donum value of plots [*92] 233/6/2 and 242/2 £550.-. There is no evidence that, as a result of the acquisition initiated on 15.9.78, there has occurred any further increase until today in the value of the remaining plots after severance thereof from the acquired parts. In the absence of any evidence for any gain resulting to the owners from any increase in the value of the claimants’ plots after severance there from of the acquired parts, occurring by reason of the acquisition until today, the provisions of section 10(f) of the Law have no application and nothing, therefore, ought to have been deducted from the market value of the parts of the owners’ lands actually acquired, under the head of’ betterment.

For the reasons stated hereinabove we assess the total compensation payable to each of the two claimants in respect of their share in the part of plots 233/1 , 233/6/2 and 242/2 compulsorily acquired and more fully described in the present notice of reference, at £3,727.500 mils. This is an amount which is more than double the amount suggested in the valuation of the Acquiring Authority. In the

circumstances, of this case and on the authorities of Republic v. Savvides and Others (1975) 1 C.L.R.12, and Misirlizade v. Municipality of Nicosia (1976) 1 C.L.R.413,

the claimants are also entitled to additional compensation by way of interest under s.10(1) of the Law to be calculated at the rate of 7% per annum from 22.12.1978 when the acquisition was sanctioned and until payment. [*93]

The claimants are also entitled to their costs on the amount recovered as well as to the reasonable remuneration of their valuer and we make an order accordingly. The above to be assessed by the Registrar, if not agreed upon between counsel, and be then approved by the Court.

Upon payment to the claimants of the aforesaid compensation, less any deductions permitted by law, the ownership of the claimants in the acquired three plots to vest with the Acquiring Authority free of any incumbrances.

Judgment for £3, 727.500 mils payable to each claimant with costs.