Verity, C.J. These are appeals from a judgment of Jibowu, J., whereby he assessed the amount of compensation t9 be paid in respect of certain lands compulsorily acquired by the Government for public purposes.
The land comprises in all 1,074.6 acres situate between Five Cowrie Creek and Victoria Beach in the Colony of Nigeria. The amount of compensation offered by the Government was not acceptable to the claimants and a summons was taken out to determine (a) the persons entitled and (b) the amount of compensation payable for the lands excluding the buildings erected, and the economic crops growing thereon.
The first question was determined by a settlement between the respective claimants and the sole question before the Court was, therefore, the amount of compensation payable by the Government to the first claimant in accordance with the terms of settlement.
The final offer of the Government was £23,611 ; the claimant sought to establish a valuation of £147,240 and the learned Judge assessed the amount at £52,505 19s. 4d. The claimant also sought an award of £6,500, for “loss of income and profits on mangrove trees, etc., for five years “, but the learned Judge made no award under this head, holding that the claim was not proved.
Both the Chief Secretary to Government and the claimant have appealed to 'this Court, the former alleging that the Judge's award is excessive and the latter that it is inadequate. Both appeals were heard together, and although the claimant's appeal was first in order of time and was first argued, it will be convenient to deal first with certain grounds put forward by the Chief Secretary which raise questions of principle as to the method of assessment.
The first of these questions with which I would deal is that raised by ground 2 (c) of the Chief Secretary’s ground of appeal. It is there alleged that the learned Judge misdirected himself in that:- “in assessing the compensation to be paid in respect of the lands referred to as Area Al he failed to take into account the time which would necessarily elapse before the said lands could have been sold off in lots by the owner or owners of the said lands in the ordinary course of the development thereof as a potential building estate.”
The basis of Crown Counsel’s submission in this regard can best be understood I think by reference to paragraph 4 of the report of Mr. Hewett, Assistant Com- missioner of Lands, (Exhibit “K “) :-
“In the valuation of land possessing a prospective building value it is necessary, and I quote from Chapter XII of Modern Methods of Valuation by Lawrence and May published by The Estate Gazette Ltd., 1st Edition 1943, “(1) to determine the best use to which a piece of land or property can be put in the future; (2) to estimate the market value of the land when put to this use; (3) to consider the time which will elapse before the land can be so used; (4) to estimate the cost of carrying out the works required to put the and to the proposed use.”
The principles of valuation so enunciated are novel in so far as their application to the acquisition of land in Nigeria is concerned, in that they introduce a factor j which,- admittedly, has not up to the present time been accepted by the Courts in this country and has only it would appear been put forward once before, and that as recently as 1947 when in the suit between the Chief Secretary and Chief Onikoyi, W.A.C.A. 2572-2nd May, 1947 (unreported) it was rejected by this Court but upon grounds which were expressly stated as not constituting a precedent. The factor to which I refer is that set out at (2) in the paragraph of Mr. Hewett's report, and involves what was termed in the course of argument the principle of “deferment” . It requires a deduction from the market value of the land based upon calculations of the deferred income which would be derivable from the land if sold in lots over a given period. In regard to the land described as Area Al the Assistant Commissioner of Lands estimated that the whole area would be disposed of in ten years, and taking the rate of interest which a purchaser of the land in open market would expect on capital invested in his purchase as 6 per cent, by the use of certain calculations based upon a set of tables known as Parry's Valuation Tables, he arrives at a figure which would reduce the immediate value of these lands from £120 per acre to £73 12s. 0d. It was submitted by Crown Counsel that this system of valuation is accepted by the Courts in England and in support of this submission he sought to cite certain reports appearing in a journal called The Estates Gazette. This Court, however, was unable to accept such reports as authoritative and therefore declined to refer to them, and Counsel was unable to furnish us with any other authority for his submission either by reference to any text-book or report to which we could give recognition.
In my view, therefore, this Court is bound to consider whether or not the system referred to i~ one which falls within the statutory basis upon which lands are to be valued for the purposes of proceedings under the Public Lands Acquisition Ordinance, section 15, that is to say, whether the rules put forward can be applied in order to ascertain” the amount which the land, if sold in the open market by a willing seller, might be expected to realize”. I bear in mind that these words are identical with those used in section 2 of the Acquisition of Land (Assessment of Compensation) Act, 1919, and that if, therefore, the principle contended for by Crown Counsel is in fact recognised by the Courts in England, it must there have been held to fall within the statutory rule of assessment. It is possible that such a principle might have been adopted in England on the ground that a willing seller in open market in that country would have to agree to this principle of “deferment” in order to obtain a purchaser and therefore it could not be expected that the amount realised in the open market would be otherwise than that arrived at in accordance with this principle. In determining this question in Nigeria, however, we have to consider whether or not the application of this principle would obtain in relation to sales in open market in this country. I am of the opinion that an affirmative conclusion could only be reached if there were ; before this Court evidence to show that such a practice has been adopted at some ! time or another in regard to open market sales in Nigeria. There is no such evidence in this case and the existence of any such practice is rather negatived by the fact that at no time have the Courts in this country ever recognised it existence in relation to the assessment of compensation under the Public Lands Acquisition Ordinance since it came into operation thirty-two years ago. In the absence of any such evidence I am not of the opinion that this Court would be justified in applying the principle of deferment in determining what would be the amount expected to be realised if the land were sold in the open market by a willing seller, in Nigeria.
The second of the questions raised by Crown Counsel is set out in ground 2 (b), and relates to an alleged misdirection of the learned Judge in that:- “in the assessment of compensation to be paid in respect of the lands referred to as Area. Al on the basis of the purchase price paid in respect of land in the vicinity sold off in lots, he directed himself that the provisions of the Land Development (Provision for Roads) Ordinance (whereby provision is made for the reservation of Land for roads where land is sold off in lots) Were not to be taken into account.”
In the first place the record does not disclose that it was ever represented to the learned Judge that the provisions of the Ordinance had been applied (as prescribed by section 1 thereof) to the area in dispute. I have assured myself, however, that the provisions of the Ordinance were so applied by an Order-in- Council dated the 2nd January, 1.934, as amended by an Order-in-Council dated 26th May, 1936. Strictly speaking, I think that there should have been evidence to show that the area in question lies within “the boundaries of the township and Urban District of Lagos” but this defect in the evidence may, perhaps, be considered to be cured by reference to the Order-in-Council dated the 7th March, 1938, and made under the provisions of section 3 of the Township Ordinance (which was in force at the date of the acquisition), and I am prepared to assume, therefore, that the lands in question lie within an area to which the Land Development (Provision for Roads) Ordinance applies. This Ordinance requires that, where an owner intends to sell off his land in lots, he shall submit a plan to the Surveyor-General who may require him to make certain reservations for roads, and further that where the area so reserved does not exceed one-sixth of the total area the owner shall not be entitled to compensation in respect of the road reservation. I find it difficult to see how it can be argued that in the present case the provisions of this Ordinance apply either to the area referred to as A1 or to any of the land acquired from the present claimant the subject of these proceedings.
There is no evidence that prior to the acquisition the claimant had any intention of selling oft any part of the land acquired in lots. Crown Counsel referred however, to section 2 (2) of the Ordinance which provides that an intention to sell in lots shall be presumed from the sale of one lot, and argued that because the claimant had prior to the acquisition sold several lots of land situate upon an area adjacent to Area At therefore he must be deemed to have begun selling the whole area, including A1, in lots. If the claimant had made no scheme for the sale of any particular part of his holding in lots and had merely sold one or more lots of land to which area At is adjacent then it might have been held that by virtue of section 2 (2) he must be deemed to pave begun selling off the whole area. But it must be borne in mind that in regard to the particular area which had been sold in lots by the claimant he had made a specific lay-out as appears from the plan Exhibit “Q”, that prior to the acquisition he had sold all the lots comprised in the lay-out, and had sold no lots outside that area. In these circum- stances I do not think that this Court should have recourse to section 2 (2) of the Ordinance so that we may deem the claimant to have begun selling in lots any land beyond the limits of that shown in his ..lay-out ..none of which lies within the land now acquired by the Government. I am of the opinion, therefore, that the learned Judge was right in holding that the provisions of the, Land Development (Provision for Roads) Ordinance were not applicable to the present proceedings.
In furtherance of his argument upon the grounds of appeal to which I have referred Crown Counsel submitted that if neither “deferment” nor “road reservation” is to be taken into account then the basis of valuation of the lands acquired should not be as building land but as agricultural land. Whatever else might be the appropriate basis for valuation it appears to be clear from the evidence that this land could not be valued as agricultural land. Not only is there no evidence that it has ever been used as such, but it also appears from the report of the Senior Agricultural Officer (Exhibit “K”) that it is unsuitable for agriculture or farming purposes. The whole of the evidence indeed is related to the value of the land for building purposes ,whatever may be the values placed upon it. by the parties to these proceedings. Nor am I able to agree with Crown Counsel that the rejection of certain principles which -are applicable, if at all, solely to the selling of building land in lots necessarily involves the conclusion that the land is not to be valued for building purposes, for there are obviously other methods of utilising building land besides the creation of a building estate and the sale thereof in lots. It is, moreover, to building land that the sole evidence before the Court is addressed on the question of value and it is upon the market value of the land as such that the valuation by both parties is based, as, it would appear, have similar valuations in other proceedings under the Public Lands Acquisition Ordinance been based in the past. I am unable to agree that, in such circumstances, it is open to the Chief Secretary now to contend that an entirely different basis of valuation should be adopted, merely upon the ground that certain deductions from the ascertained market value of the land as building land are not allowed.
Blackall, P. I concur. Lewey, I.A. I concur.
Appeal by Yesufu Abiodun and others dismissed.
Appeal by the Chief Secretary allowed, to the extent of reduction of the compensation awarded by the Supreme Court.