Court orders State to pay K6.48mil

National

THE Waigani Supreme Court has quashed a decision by the National Court on an erred assessment by a trial judge and has ordered the State to pay K6.48m in land compensation.
Justice Colin Makail made the orders on Friday on behalf of a three-men Supreme Court bench consisting himself, Justice Royale Thompson and Justice Danajo Koeget.
The appellant, Baleen No 28 Ltd, had appealed a National Court decision (April 17) on assessment of damages and interest against two respondents – being Benny Allan, (then) Minister for Lands and Physical Planning, and the State.
In Jan 6 2015, the State had acquired land from Baleen No 28 Ltd.
Baleen Ltd had produced a valuation at the date of acquisition (Jan 6, 2015) between K8.3m and K10.1m with a final estimate of K8.9m.
The State produced a valuation on March 24, 2017 at K8.9m with a final estimate of K5.6m.
However, the trial judge rejected both valuations, stating that parties were not prepared at the date of acquisition therefore did not comply with s. 23 (1) (a) of the Land Act (value at acquisition date).
The court held that the trial judge would have rejected the State’s valuation since it was made only on May 2017 and not the acquisition date.
“The trial judge made estimates by using the annual rental figure on the State lease, therefore misapprehending the figures in the state lease,” the judgement said.
“Annual rent of K203,300 was to be paid for the first 10 years of the state lease, and then reassessed on the basis of a reappraised valuation, made every 10 years.
“The trial judge proceeded on a mistaken basis that K203,000 was the unimproved value of the land, when in fact it was only five percent of the unimproved value.
“This meant that the unimproved value of the land was K4.066m when the state lease was issued in Aug 2012. The trial judge erred in using K203,300 instead of K4.066m for the unimproved value of the land as a basis for calculations.”
The court held that the final value to be made payable as compensation to Baleen Ltd was K6.48m.
“We consider it appropriate to take the average of the 2012 value of the land for the purposes of rates (K4.066m) and the final estimate by the market value given by appellant’s valuer (K8.9m) to arrive at a figure of K6.48m as the value of the land at the date of acquisition.”
The sum will be paid together with a three per cent interest per annum to the date of judgement a including the appellant’s legal costs.

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