Land adjoining a harbour at Vizagapatam which at that time was malarial was to be valued for compulsory purchase. The land contained a spring of clean water. The only potential purchaser of the special adaptability of the land as a water supply was the harbour authority. The High Court valued the land as partly waste and partly cultivated.
Held: The appeal was allowed. The market value of land subject to compulsory purchase should include such extra value as might be paid for the facility to collect fresh water which was generated by a spring on the land but which was presently going to waste. The value to be ascertained is not the price a ‘driven’ buyer would pay to an unwilling seller. Nor should the price be enhanced by the fact that compulsory powers have been obtained for carrying into effect a particular scheme for the profitable use of the subject land’s potentiality. The valuation must always be made as though no such powers had been obtained. But the possibility that the acquiring authority, as a willing buyer in a friendly negotiation, might be willing to pay more for land with its potentiality than without was not to be disregarded. That would not be to allow the existence of the scheme to enhance the value of the land: ‘even where the only possible purchaser of the land’s potentiality is the authority that has obtained the compulsory powers, the arbitrator in awarding compensation must ascertain to the best of his ability the price that would be paid by a willing purchaser to a willing vendor of the land with its potentiality in the same way that he would ascertain it in a case where there are several possible purchasers.’ The seller should not be regarded as disinclined to sell, nor should the buyer be regarded as under any urgent necessity to buy. ‘It must, of course, be conceded that the existence of the scheme must not be allowed to enhance the price, if by ‘scheme’ is meant the fact that compulsory powers of acquisition have been obtained for the purpose of carrying into effect a particular scheme for the profitable use of the potentiality. The valuation must always be made as though no such power had been acquired, and the only use that can be made of the scheme is as evidence that the acquiring authority can properly be regarded as possible purchasers.’
Judges:
Lord Romer, Lord MacMillan, Sir George Rankin
Citations:
[1939] AC 302, [1939] UKPC 15, [1939] 2 All ER 317
Links:
Jurisdiction:
Commonwealth
Citing:
Disapproved in part – In re Lucas and Chesterfield Gas and Water Board CA 1909
Land suitable for construction of a reservoir was the subject of a compulsory purchase for that purpose. The circumstances made it very unlikely that anyone other than the Water Board would have wanted, or been able, to construct the reservoir and . .
Cited by:
Cited – Waters and others v Welsh Development Agency HL 29-Apr-2004
Land was to be compulsorily purchased. A large development required the land to be used to create a nature reserve. The question was how and if at all the value of the overall scheme should be considered when assessing the compensation for this . .
Applied – Lambe v Secretary of State for War CA 1955
The acquiring authority was a sitting tenant and the compulsory purchase order related to the freehold reversion.
Held: Rule 3 was inapplicable. The marriage value which a reversion has for a sitting tenant does not clothe the land with a . .
Cited – Star Energy Weald Basin Ltd and Another v Bocardo Sa SC 28-Jul-2010
The defendant had obtained a licence to extract oil from its land. In order to do so it had to drill out and deep under the Bocardo’s land. No damage at all was caused to B’s land at or near the surface. B claimed in trespass for damages. It now . .
Cited – Multi-Link Leisure Developments Ltd v Lanarkshire Council SC 17-Nov-2010
The parties disputed the effect of an option clause in a lease, and particularly whether, when fixing the price, potential for development was to be included. The clause required the ‘full market value’ to be paid. The tenant appealed.
Held: . .
Cited – Loveridge v London Borough of Lambeth SC 3-Dec-2014
The Council had granted a weekly secure tenancy of the premises to the appellant. The Court considered the calculation of damages awarded for an unlawful eviction of a residential tenant.
Held: Section 28(1)(a) requires the basis of the . .
Lists of cited by and citing cases may be incomplete.
Land, Damages
Updated: 10 June 2022; Ref: scu.196506