Chairman Lagos Executive Development and Anor v. Chief Ayo Williams and Ors (1963)
LawGlobal-Hub Lead Judgment Report
This appeal is from the judgement of Coker, J., on the summons taken out by the appellant to determine three questions: (the 2nd question is irrelevant now): namely:-
1. Amount of compensation payable to 1st and 3rd claimants in respect of properties known as Nos. 67/69 Victoria Street, Lagos, which properties were acquired by the Lagos Executive Development Board under and by virtue of the Lagos Central Planning Scheme, 1951.
3. Whether any compensation is payable for the cost of removal and injury to goodwill in respect of the trade business and profession alleged being carried on by 1st and 2nd claimants on the premises of Nos. 67169 Victoria Street, Lagos, and if any the assessment of such compensation.
The judgement under appeal is, on the 1st question, that:-
“the amount of compensation should be, #15,500 in full settlement of all claims made by the 1st claimant and on the 3rd question the judgement is:
“(a) that the 2nd claimant is not entitled to any claims in respect of her premises by virtue of her husband’s holding of that property and the compensation payable to her husband is in my view inclusive of all amenities, rights, benefits, and advantages appurtenant to the holding.
(b) With these claims by the 1st claimant I take the view that compensation already adjudged due to him includes as he himself intended in his letter exhibit M all rights, benefits and advantages to which he was entitled by virtue of his holding.”
In his notice of appeal the Chairman, L.E.D.B., complains in effect that the learned judge erred in law in awarding #15,000 as a figure including compensation for goodwill, and misdirected himself on assessment in saying that:
“In such a state of things any amount fixed by the Court as payable to a claimant must be arbitrary assessment”:
for the judge has to go by the provisions of section 54 of the Town Planning Ordinance in making his valuation, and in this case the 1st respondent had not given any evidence to show that the amount awarded was a fair market value for the property at the time material to the valuation.
The respondents gave notice that they would contend that the award should be varied to 55 per square yard as against the High Court award of 34 per square yard, on this ground:
“That the learned trial judge misdirected himself when he found that the t respondent was bound by his prior acceptance of the 34 per square yard rate of assessment when in fact the said purported letter of acceptance relied upon by the trial judge was written and titled without prejudice.”
Chief Okorodudu, on the respondents behalf, concedes that the compensation should not include goodwill etc., but be confined to the fair market value at the time material to the valuation of the premises. Thus the net question is whether the L.E.D.B. is right in saying it should be at 34 per square yard, which works out at #11,424 for 336 square yards, or whether the respondents are right in claiming that it should be at 55 per square yard, which was the figure paid to Nassars for some vacant land at 21 Victoria Street.
The learned judge was not satisfied with the reasons given by Mr. Abbey, a witness for the L.E.D.B., for paying Nassars at 55, which he describes as a “fabulous amount”, and goes on to say:,”It seems to me that very strong reasons must be shown by the Board to disentitle other persons from receiving the same or similar amounts in respect of their holdings in the same locality.”
With respect, the strongest of reasons is in section 54 of the Lagos Town Planning Ordinance (now to be called Act) which (so far as relevant here) provides that:- “Whenever the compensation requires to be assessed the court shall (a) base its estimate of the value of such lands or interests upon the fair market value, as estimated at the time when the scheme was published” etc.
The fair market value is the price which a willing seller would have accepted from a willing buyer at the material time. If the L.E.D.B. paid more in one case, that is no reason why it should repeat its mistake; and so far as the court is concerned, it has a duty to make its award on an estimate of the fair market value.
When the property taken is a house or premises, a recognised method of estimating the market value is by capitalising the rent, subject to certain deductions: see section 54 (3). Victoria Street (re-named Nnamdi Azikiwe) is a commercial street; it is being developed or re-developed. If the buildings are to be pulled down for redevelopment, there is the cost of demolition to bear in mind, which reduces the value of the land as mere ground to build on: the site value becomes more important.
When one considers site value, the location, the frontage, and the access, besides the size of the site, are factors of importance. If there is a side street, even if it is not a street of importance, it enables the owner to provide access to lorries bringing in goods, or if the back is used for a dwelling, to provide access to it in the side street. If the site is an island, that again is even better. If the frontage is long, there can be a show window by the entrance, or there can be two shop entrances. No. 21 Victoria Street (to give it the name it went by in the summons) for which Nassars were paid 55 per square yard, was a bare site with a retire frontage to Ajishomo Street.
No. 65 Victoria Street which is next door to 67/69 the premises in the present case is on a comer, with a retire frontage to Apate mata Street, and a much larger area than No. 67/69, and it has a longer frontage on Victoria Street about 43 feet against about 26 as appears from the plan in evidence. The compensation for No. 65 was paid at 35 per square yard.
No. 63 Victoria Street was paid for on the basis of 33 per square yard for site value, or redevelopment value, as Mr. Abbey called it. No. 35, an island site, was paid for on a rental basis, which worked higher. No. 71 was paid for on that basis; it worked out at 30 per square yard plus 600 for the building; or, at any rate, that was how the amount paid was split.
In the case of No. 67/69 there was oscillation between valuing on the basis of an estimated rent and valuing on the basis of bare site. Ultimately the L.E.D.B. decided on offering the redevelopment value of 34 per square yard. There is no question on behalf of the 1st respondent that the rental basis would have been better for him: what he wants is the 55 per square yard paid to Nassars for No. 21.
Within my experience it is almost always a case of the owner asking too much rather than the valuer giving too little. Agreed values in similar cases afford a reasonably good guide for assessment of compensation. There may of course be some mistake of basis or principle, but none is suggested here.
The L.E.D.B. has made out a strong case for 34 per square yard, the 1st respondent none for claiming 55 or for having more than 34. Mr Abbey confessed that had he known at the beginning that No.67/69 was not owned by one person as one property, his valuation would have been less. In effect he confessed to offering more than he should have done, but the L.E.D.B. has apparently felt in honour bound to stand by the #11,424 which Mr Abbey offered in his letter of 25th August, 1959, to the 1st respondent.
In his answer he wrote
“I presume that the fresh offer of #11,424 covers land and buildings and that my other ex gratia claims will still have to go before the Court. In order to save time and energy, I am prepared to compromise the whole issue for an amount of #15,500.”
The learned trial judge awarded that amount as the 1st respondent had agreed to it but without saying why he thought it was the fair market value, and the concluding passage to which I referred earlier in this judgment shows that the award was intended to include compensation for goodwill etc.-what the 1st respondent described as ex-gratia claims; which his learned counsel admits was a mistake. The award will be rectified.
The 2nd respondent is not concerned in this compensation. Learned counsel for the 3rd respondent did not add to the argument for the 1st respondent as her interest was tied up with him. In regard to costs, the L.E.D.B. is entitled to its costs of appeal and to deduct them from the compensation awarded; as regards those below, the fair course in this case is to let the parties pay their respective costs.
I propose making this order: The appeal of the Chairman, Lagos Executive Development Board from the judgment in the Lagos High Court Suit No. 306/1960, dated 20th June, 1961, is allowed; the award of compensation for No. 67/69, Victoria Street, is reduced to eleven thousand four hundred and twenty four pounds (‘#11 ,424), from which the Chairman may deduct seventy guineas as costs of appeal; in regard to the costs in the court below, each and every party shall bear his or her own costs.