Wednesday, April 06, 2011

Compulsory Acquisition of Land in the Eastern Caribbean

Compulsory acquisition of land by the government for a public purpose is an ancient public right. In common law countries its legal basis lies shrouded in the feudal concept of the ultimate right of ownership of all land by the Crown. When William Duke of Normandy defeated King Harold in 1066 he acquired all the land of England by right of conquest. He parceled it out to his noblemen, and he could take it back when they displeased him. He did not even need the excuse of a public purpose. Though the feudal system disintegrated over the succeeding one thousand years, the theory that the government could in certain circumstances take away the ownership of private land remained.
In the United States it is called the right of “eminent domain”. In the UK it is more accurately referred to as “compulsory purchase”. In Canada it is with brutal clarity named “expropriation”. In the West Indies we more politely label it “compulsory acquisition”.
The overreaching law in each of our Leeward Islands is the Constitution.  This incorporates the Bill of Rights, or the fundamental rights provisions. Typically, the ownership of private property is protected by one of the fundamental rights sections of the Constitution. This section provides in summary that no right over any property of any description shall be compulsorily acquired by government except under a law which prescribes how compensation is to be paid and which requires the prompt payment of such compensation.
Over the years a large body of law has built up as the courts of the West Indies have dealt with complaints against confiscatory acts of governments. So, compulsory membership in a sugar workers' union with the employer being obliged to deduct union dues has been held offensive to this section. Deductions from a civil servant's monthly salary in order to compulsorily refund what the government deemed an overpayment has been declared unlawful. And, then there have been the hundreds of land acquisition cases.
Confiscation, expropriation or acquisition of land in the West Indies is governed by the law that is now generally known as the Land Acquisition Act. It is a law that, like so much of our statute law and common law, we inherited from the British. Its modern form goes back to the Land Clauses Consolidation Act of 1845 and the succeeding British Acts of Parliament. The requirement for immediate cash payment on expropriation of land is an ancient one. It dates back to Chapter 28 of the Magna Carta of 1297. This Act still remains on the statute books of England and Wales, though in our countries it has been replaced by the Bill of Rights provisions of our Constitutions.
The Land Acquisition Act of St Kitts-Nevis and Anguilla, with which I am more familiar, was enacted in 1958. It provides for the familiar English structure of a Judge or senior barrister appointed by the Governor to chair a three-person Board of Assessment. The other two members are appointed by the Governor one on the recommendation of the government and the other of the person aggrieved. The parties lead evidence, including their respective valuations, and the Board gives a determination as to the amount of compensation that it deems to be fair. There is a right of appeal, where the Chairman is a judge, to the Court of Appeal, and then to the Privy Council in London. Where the Chairman is a Barrister, appeal typically lies to the High Court, then to the Court of Appeal, and then to the Privy Council.
There can be delays in securing compensation. These delays can occur all along the process. Some are the fault of a dilatory claimant, others are the fault of an impecunious government, and yet others are the fault of the system. If anybody knows of a swift way to extract money from government, please let us all know.
Immediately a compulsory acquisition occurs, negotiations for compensation between the government and the land owners begin, if they have not begun already.  The negotiations may be stopped by the claimant filing an interlocutory application challenging some part of the acquisition. It may be alleged that government acted in bad faith. Or, it may be claimed that the acquisition is not needed for a public purpose. Such an application has the effect of stalling the assessment process. No negotiations can proceed in good faith between government and the claimant when the claimant has one or more interlocutory applications challenging the basis of the acquisition pending before the court. The court does not always have the power to force the interlocutory applications to a conclusion. Sometimes, these interlocutory applications have gone to the High Court, the Court of Appeal, and then to the Privy Council. Years may pass before the Governor is permitted to appoint the Board of Assessment and for the Board to begin sitting.
Once there are no court filings blocking the commencement of negotiations, these can begin. More delay can occur at this stage. It is not unusual for government and the claimants to spend years negotiating back and forth before one of them gets frustrated and applies to the Governor to appoint a Board of Assessment to get on with it. I have known claimants to engage in years of negotiations with government before everyone gives up and agrees to the appointment of a Board of Assessment to deal with the issues.
Once established, some Boards of Assessment move swiftly to a conclusion, others take years to get anywhere. The causes of delay at the level of the Board are without limit. The Chairman may be dilatory in fixing hearings. The assessor appointed by the claimant or the government may be elderly and become unavailable for sittings. One assessor may be resident out of the State or Territory and travel may pose problems. The parties may ask for adjournments to secure better valuation evidence. Some Boards of Assessment conclude their hearings in a year, others take a decade or more. Needless to say, if it is the claimant who is dithering, government is not to be expected to agitate to bring closer the date when it will have to pay the necessary compensation. If it is the Chairman or the government assessor who is dithering, a good lawyer can take steps to bring the dithering to an end.
Once an award is made, either of the parties may appeal to the High Court, the Court of Appeal and up to the Privy Council. These appeals may take years to be concluded. In the end a binding award for a particular amount of compensation to be paid is made. It is not appropriate for government to make payments of compensation once an appeal is pending. If the award of the Board of Assessment were to be overturned by the court after government had started paying out on the award, government would be faced with the accusation that it had made unauthorised payments out of public funds.
Assuming there is no challenge to the amount of the award, government is expected by the Constitution and by the relevant Act to make full and prompt compensation to the claimant. This does not always happen, especially when the claims on public funds are many but the sources of funding are limited. Over the years, governments have tried a number of devices to get out of paying full and prompt compensation. Twenty-year bonds were offered in one case. It is now accepted that the only form of compensation that is expected is payment in cash. The question arises, how is this accepted view to be enforced when it does not translate into the expected cold, hard cash.
For many years, it was thought[1] that West Indian courts, like the courts in England, were prohibited from making mandatory injunctions for payment of compensation by the Crown punishable with imprisonment. The theory was that a Minister of Government represented the Queen, and the Queen and her representatives could not be imprisoned by her own courts. Such feudal remnants of our compulsory acquisition law were put to rest by the judgment of the Privy Council in the Jennifer Gairy case[2]. It is now clear[3] that in the West Indies an award of an amount of compensation can be enforced by an order for the imprisonment of the most recalcitrant Minister of Finance who fails to pay the assessed amount of compensation out of the public treasury.
APPENDIX: The Jennifer Gairy Case
All those of you with an interest in the West Indies will all remember Erick Gairy, the eccentric Prime Minister of Grenada. He had been overthrown by the Marxist government of Maurice Bishop in 1979, while he was attending the United Nations General Assembly addressing the assembled dignitaries on the importance of the UFO[4] phenomenon. The Bishop government passed a People's Law confiscating what it deemed to be Gairy's ill-gotten assets. A few years later, in 1983, the bombing of the US marine base in Lebanon took place at the same time as the murder of Bishop and his followers by a more extreme faction of the Marxist government of Grenada. The risk posed to US medical students gave President Reagan the excuse he needed not to send more US troops into that violent morass that was Lebanese politics, and Operation Urgent Fury brought an end to the Marxist government of Grenada.
By then Eric Gairy had died. His daughter Jennifer was the Administrator of his Estate. She brought an action before the High Court in Grenada for the return of the properties that the previous Marxist Government had expropriated and for compensation for their unlawful confiscation. The government did not oppose her claim and an order was made for their return and for an assessment to be made of the amount of compensation. The properties were returned and an award of compensation was duly made by the court-appointed arbitrator. The parties returned to court and a judgment in excess of EC$3.5 million with interest at the rate of 6% was entered. The Judge's final order, made with the consent of the Grenadian Solicitor General, was that the Minister of Finance be directed to issue a warrant for the prompt payment out of the consolidated fund of the amounts of compensation.
That was when the delay began. The Grenadian Attorney-General appealed against this consent order. His ground was that the order was contrary to law because the Minister of Finance could not be directed as he had been. The point was not fully argued since the appellant conceded that the mandatory order should not have been made. The parties agreed to amend the order merely to require prompt payment of the amounts due. Three years later, most of the compensation not having been paid, Jennifer Gairy issued a contempt motion in the proceedings. The court issued an order of Mandamus compelling the Minister to make prompt payment of the balance. After a series of hearings the Prime Minister and Minister of Finance swore and filed an affidavit in the proceedings deposing that the Government simply could not afford to pay a lump sum of the amount owing. The High Court in Grenada concluded that the mandatory order against a Minister of the Crown, enforceable by contempt or other coercive proceedings, would be an order against the Crown, and the court had no jurisdiction to make such an order.
Jennifer Gairy appealed to the Court of Appeal, but the Court dismissed her appeal. She appealed to the Privy Council complaining that seven years had passed since an amount of compensation had been ordered to be paid to her father's estate, but that the greater part of it was still outstanding. The courts below had failed to enforce her judgment based, she submitted, on outdated concepts of the immunity of government from coercive orders by a court. The figure due to be paid at the date of her Privy Council hearing amounted to some $2.8 million. The Privy Council rejected the arguments of the Attorney-General and accepted all of Jennifer Gairy's submissions. It ordered the Minister of Finance to take all steps necessary to procure that the outstanding payment be made forthwith. It affirmed that an order for mandamus could issue to enforce a judgment for payment of compensation in a compulsory acquisition case. If necessary, she could apply to a judge of the High Court in Grenada to obtain the appropriate order. By this decision the Privy Council established the principle that the enforcement provisions of our West Indian Constitutions confer unlimited jurisdiction on the court to fashion remedies to secure the enforcement of the fundamental rights and freedoms provisions of the Constitution.
The consequence of this Privy Council decision in the Jennifer Gairy case is that it is now accepted that the courts of the West Indies are empowered by the Constitution and the legislature to ensure compliance with judicial orders for the payment of compensation money by the State. All that is needed is the will of the victim of an act of expropriation to take his or her claim promptly to court, and the skill of the litigant's attorney to fashion a suitable claim for enforcement of any award of compensation.
A Presentation to the Offshore Alert Conference in Miami on April 6 2011 made at the invitation of David Marchant of Offshore Alert

[1]    See for example Jaundoo v Attorney-General of Guyana [1971] AC 972.
[2]    Jennifer Gairy v Attorney-General of Grenada, PC 29/2000 (Unreported).
[3]    See Appendix.