Dear Editor,
I would be grateful if you could permit the publication of this letter as a response to a letter written by Mr Christopher Ram under the heading ‘Proposed amendment to the acquisition of lands acts should be withdrawn forthwith’ that was published in the Stabroek News on the 28th November 2024.
Before addressing the specific issues raised by Mr Ram, it is apposite to note that the proposed amendment to the Acquisition of Land for Public Purposes Act brings the law in Guyana to parity with other Commonwealth jurisdictions. For this reason alone, the proposed amendment modernizes the law in Guyana. The proposed amendment addresses two issues – obtaining possession of the acquired property before compensation is fully determined and the making an advance payment of 80% of the market value of the acquired property in exchange for possession before compensation is fully determined. These provisions cure a lacuna in the law and benefit the public and national interests.
Mr Ram would know that the determination of adequate compensation payable to a property holder whose property was acquired by the State is a lengthy, drawn-out process. It is contrary to the public and national interest for the State to sit idly by and await a determination of compensation before carrying on and completing significant transformational projects. This situation is aptly exemplified by the construction of the new Demerara River Bridge, which, when completed, will not only alleviate the traffic nightmare faced every day by thousands of persons from the West and East Bank of Demerara and Essequibo but will also open up those areas to significant economic activities.
In the completed court cases filed by the State against property holders whose properties fall within the alignment of the New Demerara River Bridge, the property holders relied upon valuations for their properties by an expert that was twice or thrice the value of the Government’s witness. At the end of the proceedings, the trial judge rejected the evidence of the property holder’s expert as lacking credibility as that expert sought to assign values of properties that were in entirely different localities to that of the property holders. In fact, that expert didn’t even use comparable sales to determine his values, and he admitted under cross-examination that the transactions he referred to in his evidence were mere offers and not actual sales.
These completed cases exemplify why the amendment is justly required. A property holder should not be permitted to unreasonably and without just cause prevent projects constructed in the public’s interest by withholding possession until lengthy, drawn-out court proceedings are completed. With the amendment to the Acquisition of Land for Public Purposes Act, Guyana will be on par with the U.K. and our CARICOM neighbours, Trinidad and Tobago, Jamaica, Belize and other commonwealth countries, in permitting the State to take possession where it is urgently needed by making an advance payment to the property holder and binding itself to pay the balance of monies due to the property holder after compensation is determined by a court.
Issues raised by Mr Ram
In his letter, Mr Ram contends that the current legislation, the Acquisition of Land for Public Purposes Act, is rooted in the misconception that market value represents fair compensation, and he also advocates for an amendment to the Act to include an additional award of no less than 25% of the market value of the acquired property as compensation for the forced nature of compulsory acquisition.
What Mr Ram may have missed is that the principle underlying the entirety of the law of compensation is the principle of equivalence; that is, the property owner who has been deprived of his property in the public’s interest is entitled to compensation equivalent to the true and actual loss suffered by that person and should be no more or no less than that amount. This principle was endorsed by the Caribbean Court of Justice in Belmopan Land Development Corporation Ltd v the Attorney General of Belize [2022] CCJ 1 AJ (BZ) [65]. In this regard, the law of compulsory acquisition is similar to the law of tort; a financial equivalent of the loss suffered by the injured party is the gold standard in determining fair, just and adequate compensation.
This fundamental principle underlying the law of compensation leads me to disagree with Mr Ram that a property owner should receive, in addition to the actual loss that he has suffered, an additional award of a premium of no less than 25% of the market value of the property as compensation for the forced nature of the compulsory acquisition. Suppose a property owner were to receive an additional award of no less than 25% of the property’s market value as compensation. In that case, that property owner will not be receiving a sum equivalent to his actual loss, but he will be receiving a sum beyond fair, just and adequate compensation; that property owner will be unduly enriched at the expense of the citizens of Guyana. For this reason, early Law Reform Commissions in the United Kingdom recommended the removal of an additional compensation award for simply taking the property. Consequently, the existing legislation complies with our Constitution for the payment of adequate compensation.
My second disagreement with Mr Ram is with his view that the current legislation is rooted in the misconception that market value without more represents fair compensation. In my view, the payment of the market value of an acquired property to the property holder is the primary method of compensating a person whose property has been acquired, and without more, represents fair and adequate compensation. Market value is the estimated amount for which an asset or liability should be exchanged on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.
The use of market value in our existing legislation calls for an objective assessment in determining value and is not subjective based on the whims and fancies of the property owner as to the worth he ascribes to his property based on, for example, his attachment to the property. A subjective assessment could lead to a property owner asking for and receiving exorbitant sums because of his feelings for the property. For this reason, paying market value to the property holder is the most effective and objective way of compensating a property holder. Consequently, the payment of market value by itself sufficiently and adequately compensates the property holder and safeguards the public’s interest and the State’s largess. There is, therefore, no need for any other method of determining adequate compensation.
A third critique of Mr Ram is in relation to the existing method of a judicial determination of adequate compensation. Mr Ram advocates for a board of assessors. Determining adequate compensation as prescribed by the Constitution of Guyana requires the application of legal principles to expert evidence given by persons qualified to assess market value. In the recently completed matters before the court, the Government of Guyana had presented evidence from its expert, and the property owners presented evidence from their expert who told the court that his view was that the properties are valued twice or thrice the value of the Government’s expert.
Determining adequate compensation prescribed by the Constitution requires applying legal principles, listening to and examining expert evidence, including, but not limited to, considering the expert’s credibility and whether the expert correctly used and applied the established international parameters for assessing market value. A Judge who is not only independent and unbiased but trained to interpret and apply legal principles is best suited for this task. It is the judge’s suitability for this task that allowed the court to completely reject the evidence of the property owner’s expert in the completed court cases surrounding the New Demerara Harbour Bridge when Mr David Patterson ascribed values for properties that were entirely in a different locality to the properties that were compulsorily acquired.
For the aforesaid reasons, Mr Ram’s assertion that the amendment to the Acquisition of Land for Public Purposes Act should be withdrawn and that the principal legislation should be completely overhauled should be rejected. The amendment cures a lacuna in the law, and the existing legislation complies with the Constitution of Guyana and provides an objective manner of determining compensation.
Yours faithfully,
Rajendra Jaigobin
