Dr. Akinola Maja V. Chief Secretary To The Government (1948)

LawGlobal Hub Judgment Report – West African Court of Appeal

Compulsory Acquisition of land—Factors to be taken into account in assessingcompensation—Public Lands Acquisition Ordinance, section 15Comparisanwith English legislation—Whether ” disturbance ” should be taken in accountin assessing compensation.

The principles whereon compensation for land acquired under the Public Lands Acquisition Ordinance should be assessed are laid down in section 15 of that Ordinance and no account should be taken of ” disturbance “, or for a claimant’s outlay in the past or for interference with his plans for the future in regard to the land acquired.

Case referred ^–Co:

(1) Horn v. Sunderland Corporation (1941), 1 A.E.R. 480; (1941), 2 K.B. 26; 110 L.J.K.B. 353; 165 L.T. 298; 1Q5 J.P. 227; 57 T.L.R. 404; 85 Sol. Jo. 212. Appeal from the Supreme Court of Nigeria.

Thomas, Williams and Davies for Appellant (claimant below).

Bate, Crown Counsel, for Respondent (respondent below).

The following judgment was delivered:

Lewey, J.A. This matter came before Mr. Justice Baker last year for an assessment of the amount of compensation to be paid by Government in respect of their acquisition from Dr. Akinola Maja of certain buildings, salt pans and other structures situate at Victoria Beach. In respect of that acquisition Dr. Maja claimed a sum of £10,000.

The learned Judge, after hearing evidence, assessed the compensation payable to Dr. Maja at £800, and thereupon Dr. Maja, being dissatisfied with that award, obtained leave to appeal to this Court.

The buildings and saltpans which were acquired from the appellant had been erected by him and his late partner as a salt works for carrying out a process for making of salt out of sea water. It is not disputed that the salt works ceased to operate in the month of June, 1943, after being in production for only a very few months, and that this short experience proved to the appellant and his partner that they could not carry on their business profitably with the plant, machinery and equipment which were in use. The appellant himself, in his evidence, admitted that the total takings of the works during their brief working existence amounted to £26. It is also common ground that in May, 1944, when the notice of intended acquisition was issued, the works were still closed down, and had, in fact, never been re-opened since June, 1943. The Government valuers who inspected the works in July, 1944, gave evidence that they found them

ssmadionl, ant taat, they tormeet The orimion that they were derelict from the point of view of any possibility of re-opening them, or selling theia, as a salt works business. The appellant, however, when he went into the box, repudiated the suggestion that the undertaking had been abandoned, and gave evidence of his intention to re-open the business in the future with new and more suitable machinery and equipment. In proof of this, he pointed out that he was actually in England with a view to making the necessary purchases at the time when the acquisition notice was issued in .May, 1944.

On these facts, the appellant claims that he is entitled to be re-imbursed for

all the capital he has laid out on the salt project and on establishing the works. He further submits that consideration ought to be given to the potentialities of the business since, so far from its having come to an end by June. 1943, it was merely in a state of suspension until such time as the admitted failure of the past could be converted into a successful and profitable enterprise by the employment of fresh capital and the installation of new and better plant. The appellant therefore claims to be compensated by Government not only for his past expenditure, but for the disappointment of his hopes for the future in that the acquisition had made it impossible for him to develop what he alleges were the potentialities of the business in accordance with the plans which he had in mind.

In considering these claims it is necessary to remember the opinion of the Government’s advisers, which was, as already stated, that the factory was not only non-productive, but was in a derelict condition and in consequence had no market value as a salt works. Because of that opinion they felt it their duty to arrive at a valuation which took account only of the worth of the various erections from the point of view of their value as building material, since they were of the opinion that no purchaser would be likely to buy them except for the purpose of demolishing them and of realising what he could from a sale of the material. On that basis, the Government offered the appellant a sum of £440 by way of compensation for his property and his interest therein, valued at the date when the notice of intention to acquire was served.

On this appeal, the evidence as to the facts of the case, and the basis of the appellant’s claim have to be considered in the light of the relevant statute which, in Nigeria, is the Public Lands Acquisition Ordinance. The principles governing the assessment of compensation are more particularly set out in section 15 of that Ordinance

This Court has listened to able arguments by Counsel for the appellant and the Crown respectively as to the various aspects of the appellant’s claim and as to their merits, having regard to the provisions of the Nigerian Ordinance. More particularly it was strongly argued before us on behalf of the appellant that section 15 of the Ordinance should be read as providing for compensation for ” disturbance “, and that the learned Judge in the Court below was wrong in holding otherwise. In support of that argument it was sought to draw an analogy between section 15 of the Nigerian Ordinance when read with the provisions of the Lands Clauses Consolidation Act of 1845, and section 2 (6) of the Acquisition of Land (Assessment of Compensation) Act, 1919, in so far as it can be said to preserve rights conferred by the 1845 Act. We were also referred, in this connection, to certain passages in the judgments in the case of Horn v. Sunderland Corporation (1).

Dealing first with that contention, we have come to the conclusion that we cannot accept it. Section 15 of the Nigerian Ordinance contains no reference to ” disturbance “, and nothing which corresponds with section 2 (6) of the English Act of 1919. It appears to us, therefore, that there is no good foundation for the argument that the Nigerian Law must be construed as having the same effect as the present English law in providing for compensation for ” disturbance “. It follows therefore, in our view, that the learned Judge was quite right in excluding the element of ” disturbance ” from his consideration.

Generally, with regard to the appellant’s claim, it seems to us that the provisions of section 15 of the Ordinance are abundantly clear and that the principles of compensation there set out—more especially section 15 (b) and the first proviso to the section—necessarily exclude those parts of the appellant’s claim which relate to the reimbursement of his outlay in the past and to compensation for interference with his plans for the future of his business. Section 15 (b) lays down an exact standard of valuation of a claimant’s interest; namely, the amount which a sale in the open market by a willing seller might be expected to realise,

while the first proviso requires the value to be assessed as at the time of the notice of intention to acquire and without any regard to possible future improvements or works. That seems to us to be fatal to the contentions of the appellant, and once these aspects of the matter are ruled out, it would appear that the basis of assessment adopted by the Government valuers is in accordance with the principles laid down in the Ordinance.

It is admitted that the salt works had been non-productive and had been closed down as a going concern for some time before the date of the acquisition notice. The valuers were, therefore, entitled to consider, as at that date, whether the works could be valued as a factory or business, or on some other basis. They considered—and we think rightly—that they were not concerned with ” disturbance “, with past expenditure or with future possibilities, and they were of opinion that there was no special virtue in the particular spot chosen for the enterprise and that any other site along the coast would have been just as good—or just as bad.

They knew, moreover, that the undertaking, during its brief existence, had met with little commercial success. It was with these considerations in mind that they reached the conclusion that the only possible basis of assessment was the value of the structures as building material to be sold after their demolition.

The learned Judge upon the law and the facts accepted that basis of valuation, but added a sum of £360 to the amount of £440 which had been offered to the appellant by Government in consequence of their adviser’s valuation.

It is difficult not to feel a measure of sympathy with the appellant in the circumstances in which he is placed. But this Court can have regard only to the statutory rules for the assessment of compensation laid down in the Ordinance and can act on no other principle. That was also the position of the learned Judge, whose award was, in the circumstances, not ungenerous, and whose findings of law and fact seem to us to afford no reasonable ground for criticism.

For the reasons given, the appeal fails and the Order of the Court below is affirmed.

Appeal dismissed.