September 17, 2021

Assessment Committee fails to give reasons for award in land value dispute

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valuationsIn a dispute over the value of a piece land under a compulsory purchase order the Judge said there was not enough evidence provided for him to make a decision.

Justice Alex Henderson had the Hearing on March 25/26 2014 and gave his decision on June 3 2014.

The dispute commenced after the Cayman Islands National Roads Authority (NRA) recommended to the Cayman Islands Governor to construct a road over a portion of land owned by Abshire and Harold Bodden.

The Boddens made a claim to the Roads Assessment Committee (RAC) for compensation. In its decision of September 29th, 2011the RAC awarded $342,886.15 to the Boddens.

The NRA appealed this decision and the case heard before Justice Henderson was restricted to an inquiry into whether the RAC “has erred in a matter of law”. This was due to an earlier decision of the Court of Appeal over the matter.

The date of HE The Governor’s declaration was November 14th, 2006. On that day Abshire and Harold Bodden were the registered owners, as tenants in common, of a parcel of land referred to as “Property A”. The two men were brothers. Harold Bodden (alone) was the registered owner of an adjacent parcel, “Property B”. These two parcels were undeveloped and covered with grass and other vegetation. Harold Bodden was also the owner of a third parcel of land, which was adjacent to both Property A and Property B and that contained a house.

The Governor had announced the intention to acquire about 3.31acres from Property A and 0.01acres from Property B to use for a new road. The announcement gave rise to an immediate right in Abshire and Harold Bodden to compensation for any “net loss” each man may have suffered.

An attempt to agree upon compensation with respect to Property A was not successful, although a compromise was reached in the case of Property B. Abshire and Harold Bodden applied to the RAC to set their compensation for Property A; they elected to have a one-stage assessment that would proceed to assess full and final compensation upon the assumption that the road would be built as intended.

Property A was zoned Low Density Residential. The Bodden’s said that its market value must be assessed on the assumption that planning permission would have been granted for a residential sub-division development if requested. The NRA argued that such a request would have been denied because Property A had no appropriate road access and was landlocked. It also had no registered easement giving it access to a highway.

However, the Boddens said that Property A enjoyed at least two prescriptive easements, which could have been registered without difficulty and thus a purchaser would have received planning permission. The NRA argued that the requirements for a prescriptive easement had not been satisfied in either case.

The Judge said the RAC’s task was, in part, to establish the market value of Property A on the day the Governor declared his intention. That question depended to a considerable degree upon whether a prospective purchaser would have expected to receive planning permission for a sub-division. The primary factual issue with which the RAC had to grapple was a hypothetical question: if, on the day before the Declared Day the Claimants had sold the land and the purchaser had applied for planning approval for a sub-division development, is it reasonable to conclude that it would have been granted? The answer appeared to depend upon whether Property A enjoyed a prescriptive easement giving it access to Hirst Road of the sort needed for a sub-division and, in particular, whether such an easement would have been recognized by the Registrar of Lands.

The House Lot, owned by Harold Bodden, connects Property A to Hirst Road. The Boddens said Property A enjoyed “a 30-foot vehicular prescriptive easement” over the House Lot which provided access to Hirst Road. They also noted that Property B enjoyed a registered 30-foot vehicular easement over the House Lot and alleged that Property A had a 30-foot vehicular prescriptive easement over Property B which connected with the registered easement. A question of major importance to the RAC’s Decision was whether the evidence established the existence of one or both of these prescriptive easements.

Heather Bodden, niece of Abshire Bodden and daughter of Harold Bodden [now deceased] gave evidence that as “long as I can remember we accessed property A from Hirst Road by walking or driving across the House Lot or across Property B. I am now 54 years old so I can confirm that this access has been enjoyed unimpeded for my entire life.

“As far as I am aware there was never any formal agreement that Property A was allowed to access Hirst Road over the House Lot or over Property B, it was just the way it was as the land is in common ownership. It is all family land and so there was never any need to enter into an agreement, gain consent to use the access or to register an easement, any such suggestion is ridiculous in the circumstances as the land is in common ownership and so the House Lot, Property A and Property B were all treated as being the same parcel of property.”

She also said any suggestion that Harold Bodden would have required payment if the easement had been registered was “simply preposterous. I can confirm with absolute certainty that there is no way my father would have required payment from Abshire for registration of the easement or to seal the access way that had always been used by them and their family. These properties are all family land.”

The RAC heard evidence from various parties including Heather Bodden.

The written decision from the RAC began by identifying the existence of a prescriptive easement as “the primary issue for resolution”. The Decision then summarized the evidence of Heather Bodden and mentioned photographs tendered by the Boddens that showed track marks running from Property A across Property B to the registered easement. The Decision concludes:

“The Committee was satisfied on all the evidence that there was a prescriptive easement benefitting Property A and that the parcel was not landlocked as alleged by the [NRA].”

The Judge said, “The essential legal elements of a prescriptive easement are not mentioned. The Decision does not specify whether Property B or the House Lot (or both) is the servient tenement. There is no finding as to the approximate width of the easement or the route it takes. There is no discussion about the impact of a change in the use of Property A from agricultural land to a residential subdivision. The Decision says nothing about the impact of the characteristics of the easement upon the likelihood of a grant of planning permission. The sentence quoted above constitutes the entirety of the RAC’s Decision about the easement. After addressing some other issues, which are not material to this appeal, the Decision awards $342,886 in compensation to the Claimants.”

“The evidence of Heather Bodden,” Justice Henderson said, “would provide the RAC with a reasonable basis for concluding that there was continuous enjoyment for at least 20 years. There is no suggestion in the evidence that the owner and possessor of the servient tenement, which in the case of both the House Lot and Property B was Harold Bodden, ever gave his consent in writing. Consequently, it was reasonable for the RAC to conclude that these statutory preconditions were satisfied.

“The NRA says that Property A, the supposed dominant tenement, and Property Band the House Lot (the putative servient tenements) all had a common ownership and a common possessor. If so, that would prevent any prescriptive easement because a prescriptive easement is notionally a grant and it is meaningless to speak of a grant to oneself.”

The Judge quoted some case law on the subject and then said:

“The short answer to this, however, is that neither the possession nor the ownership was entirely common. The dominant tenement was held by Abshire and Harold Bodden as tenants in common while the servient tenements were held by Harold Bodden alone. This particular circumstance is not covered by authority. I see no reason in logic or in law why an owner of land cannot make a notional grant to himself and to another person jointly. Abshire Bodden acquires something of real and substantial value if Property A is accorded an easement over an adjacent parcel. The fact that the “grant” is meaningless from the viewpoint of Abshire’s co-owner Harold when considered in isolation from Abshire’s position is no answer.

“To obtain planning permission, a developer needs an access road (or two), which meets certain specific criteria: such a road must be at least 30 feet wide, must follow a relatively straight path, and cannot pass too close to an existing residence. The evidence of Mr. Sanderson [Assistant Director of Planning in the Department of Planning] establishes these points. Since prescriptive easements impose a burden upon the owner of the servient tenement, who must tolerate some activity upon his own land, they are subject to limitations appearing from the manner in which the right of way was used historically.

More case law was read by the Judge before concluding:

“The RAC’s conclusion that a prescriptive easement had been proved cannot properly be understood and assessed unless the potential limiting factors suggested by the evidence have been addressed.

“Heather Bodden’s evidence mentions “driving” across Property Band the House Lot from Property A; this could provide a reasonable basis for a finding by the RAC of an easement of 15 or so feet in width- enough to accommodate one truck. There is, however, nothing in her evidence which suggests the continuous usage of a route wide enough (i.e., 30 feet or so) to allow two vehicles to pass easily. The basis upon which the RAC concluded that the prescriptive easement was of sufficient width is not revealed.

“Heather Bodden’s evidence failed to specify a particular route or routes by which persons on Property A would travel across Property B or the House Lot to reach Hirst Road. What route did the RAC have in mind for the prescriptive easement? How close does it pass to the house? Does it include any right-angle bends? These are material considerations to the question of whether a purchaser of Property A could have obtained sub-division planning permission. The Decision is silent on these questions.

“One can imagine that the agricultural use to which Property A has been put over the years might have resulted in the passage of vehicles over the alleged easement on a handful of occasions per day. If, as the Claimants have suggested, a sub-division containing about 50 residences were to be constructed on Property A, one could expect the number of vehicle passages to increase dramatically. It is then necessary to consider whether this would amount to a “radical change in the character” or a “change in the identity” of the dominant tenement, a change, which would preclude the existence of an easement of the sort needed for a sub-division. For example,in McAdams Homes Ltd. v. Robinson eta/. [2004] EWCA Civ 214 (CA}, the Court of Appeal affirmed a decision that a change in the use of the dominant tenement from a bakery to a pair of houses (resulting in an increased use of drainage which was the subject of an easement) was such a radical change. Since this radical change in character was accompanied by a “substantial increase in the burden” on the servient tenement, the right to enjoy the easement was suspended or lost (ibid., para. 49 to 51). Does the notional increase in the intensity of use of Property A make recognition of the prescriptive easement by the Registrar of lands less likely? The Decision does not speak to this question.

In making his decision the Grand Court Justice said:

“The Schedule (ins. 7(1)) requires the RAC to deliver its decision in writing. Section

8(1)(b) of the Schedule contemplates a review by this Court of the important questions of law which the RAC was obliged to address, an exercise which is rendered impossible if the Decision fails to expose the reasoning behind its conclusions.

“The Cayman Islands Constitution Order 2009 contains, under the heading “lawful administrative action” in section 19, a right to reasons:

19. (1) All decisions and acts of public officials must be lawful, rational, proportionate and procedurally fair.

(2)       Every person whose interests have been adversely affected by such a decision or act has the right to request and be given written reasons for that decision or act.

“The constitutional guarantee and the right of appeal on a question of law mean that a decision of the RAC must meet certain minimal standards. It is not enough to simply state a result; on the principle issues, the parties are entitled to know the reasoning and the primary findings of fact, which led the RAC to its conclusion.”

A case law was quoted from and ended “A reasons challenge will only succeed if the party aggrieved can satisfy the court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision.”

The Judge then decided:

“Regrettably, the abbreviated nature of the Decision renders impossible any review by me of the implicit finding that the requisite elements of a prescriptive easement had been established. The Decision presents no legal analysis at all; it simply states a conclusion. Moreover, it contains no findings of fact which would enable this Court to determine that the RAC’s conclusion about a prescriptive easement was within the realm of reasonableness.

“The failure of a tribunal to provide adequate reasons for a decision is itself a question of law. Although the NRA has not set out this ground in its Notice of Appeal I am satisfied that consideration of the adequacy of the reasons on the appeal does not take the Claimants [Boddens] by surprise. They have no doubt anticipated much of what has been said during argument and have not suggested they are prejudiced by the attack upon the adequacy of the reasons. I will grant leave to the NRA to amend its Notice of Appeal to include this ground. My order is that the Decision is set aside as inadequate and the claim for compensation is remitted to the RAC for a new hearing and a fresh decision.

Each of the parties will be permitted to adduce such additional evidence and make such additional argument at the new hearing as may appear to be necessary. In particular, the Claimants intend to argue that the market value of the land taken must reflect the fact that a purchaser of Property A on the Declared Day would know that he obtains at the same time an implied easement over the House Lot. That may result from necessity (an “easement of necessity”), from the intended use (an “easement of intended use”), or from the rule in Wheeldon v. Burrows (1879) 12 Ch. D. 31(CA); see generally, Megarry and Wade, The Law of Reo/ Property, 8th edition, 2012, pp. 1286 ff. Knowing that an easement is implied, a purchaser would of course be willing to pay a higher price. The degree of increase in the market value will depend upon any perceived difficulties in having the easement registered and, most importantly, upon the perceived likelihood of planning permission being granted. The Claimants are at liberty to advance this contention even though it was not put forward (at least not clearly) at the initial hearing. The NRA is at liberty to present its own argument that the availability of an implied easement is never relevant in the context of a compulsory acquisition because the special characteristics of a notional vendor cannot be considered.”

The parties were advised to speak to costs if they were unable to agree.

IMAGE: www.rostons.co.uk

 

 

 

 

 

 

 

 

 

 

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