Arawak Homes Limited v The Attorney General and another

Where a compulsory-acquisition statute prescribes the components of compensation, the court must begin with its text. Earlier common-law authorities remain useful by analogy but cannot displace the statutory scheme. Under the Acquisition of Land Act section 28(a)(i), potential profitability for development is ordinarily reflected in market value. It does not justify a further increment based on the claimant’s business model, absent special circumstances. Loss of earnings under section 28(a)(iii) requires evidence of actual or pending earnings affected by the acquisition. A claim under section 15 should be decided on its proper statutory basis rather than being reopened because of questions concerning a particular appropriation notice.

Arawak claimed compensation under section 15 of the Acquisition of Land Act for three areas of land compulsorily acquired by the Bahamian Government between 1995 and 2001. It claimed market value, additional lost earnings, compensation for 193 lots said to have been used as highway offshoots, and payment of the compensation despite competing title claims.

Adderley J awarded $4,400,310 and directed payment to the Treasurer pending proof of individual claims. The Court of Appeal upheld the award for the first school site, subject to minor adjustments, but set aside the awards for the other acquisitions and remitted them to the Supreme Court. The appeal concerned valuation, the 193-lot claim, title and payment arrangements, and costs.

1. Disposition. The appeal was allowed to the limited extent that the Court of Appeal’s remittal order was varied. Only the matters identified concerning the additional lots and the machinery for holding and distributing compensation were remitted to the Supreme Court. The appeal was otherwise dismissed.
2. Statutory compensation code. Section 28 of the Acquisition of Land Act was relatively prescriptive. Primary attention had to be given to its express components rather than to general formulations developed under the Land Clauses Consolidation Act 1845 or other statutory codes. The concept of “value to the owner”, discussed in Transport for London v Spirerose Ltd [2009] UKHL 44, was reflected in the statutory provisions but could not divert attention from them.
3. Market value and profits. Under section 28(a)(i), potential profitability for development was ordinarily an element of market value. The principle identified in Ryde International plc v London Regional Transport [2004] EWCA Civ 232 applied: profits from developing a building site were not separately compensable where profitability was already reflected in market value. The Board treated reliance on Pastoral Finance Association Ltd v The Minister [1914] AC 1083 with caution because that case pre-dated the statutory code. Arawak had expressly claimed the additional $7,127 per lot under section 28(a)(iii), as loss of actual earnings distinct from market value. The judge was entitled to reject it for want of evidence of existing contracts or pending profits affected at the notice date.
4. Valuation evidence. The judge was entitled to prefer the comparative evidence of Hardy and Newbold, including figures previously advanced on Arawak’s behalf, over Bethell’s higher valuation. There was no estoppel or procedural bar preventing Arawak from presenting contrary evidence, but the judge was not bound to accept it. The valuation of the commercial land disclosed no error of law or principle.
5. Additional lots and appropriation notices. The Court of Appeal erred in treating Arawak’s reliance on the original section 18 notice as necessarily reopening the accepted section 15 claims for the second school site and highway land. Section 15 was not tied to a particular section 18 notice. The 193-lot claim should have been considered on its merits, although it appeared weak because it was late, inadequately pleaded and insufficiently proved. It was remitted for further consideration.
6. Title, payment and costs. Given the case-management agreement that the proceedings were confined to valuation, the trial judge was entitled to proceed without determining title and to arrange for the money to be held pending proof of competing interests. The criticisms of using section 16 had force, but the appropriate procedure, interim payments and interest were left to the local courts. The costs reduction was a discretionary decision which disclosed no error of principle warranting appellate interference.

1. Privy Council: In [2016] UKPC 34, the Board varied the Court of Appeal’s remittal order so that only the additional-lot claim and payment arrangements required further consideration. The appeal was otherwise dismissed.
2. Court of Appeal of the Commonwealth of the Bahamas: On 22 December 2014, it upheld the assessment for the first school site, subject to minor adjustments, but set aside the awards relating to the other acquisitions and remitted them to the Supreme Court.
3. Supreme Court of the Bahamas: Adderley J gave judgment on 14 November 2012, awarding $4,400,310 and directing payment to the Treasurer pending proof of individual claims.