Some landowners who had to forfeit their property for the building of the East-West Arterial Highway more than five years ago are still waiting for their money.
The Cayman Islands government used its powers of compulsory acquisition of private property to build the road, but about 40 per cent of compensation claims have yet to be settled.
Landowners’ representatives said the delays amount to a severe injustice and the process is being prolonged to the government’s advantage. Officials vehemently deny any implication they have behaved improperly, saying more complex cases take more time to resolve and that dragging out claims does not benefit anyone.
“The system is broken,” said Broadhurst LLC attorney Kate McLymont, who is representing landowners who had their property taken for the road that was gazetted 14 November, 2006.
Not only are landowners being deprived of the use of their compensation dollars while they wait for judgments, but interest does not accrue on the compensation amounts, which are determined according to market prices at the time of the gazettal, she said.
“There’s no mechanism for inflation. The longer the government holds on, the less the assessment effectively is,” said Bould Consulting surveyor Michael Treacy, who is also working for landowners.
Ms McLymont and Mr. Treacy said the prospect of a drawn-out and expensive legal battle – with no guarantees of gaining additional funds – also can intimidate landowners into accepting the government’s initial offer, even if they feel they are being cheated.
Officials point out that property prices were generally higher in 2006 than in 2012, and that landowners’ compensation amounts could likely be lower if based on current market values.
“The longer a claim remains unsettled, the longer it remains a liability for government,” said Uche Obi, senior valuation officer for the Lands and Survey Department. “It is not to our advantage for the claim to be drawn out.”
When a road is gazetted, Lands and Survey acts as the agent for the National Roads Authority to negotiate a compensation amount for private property taken to build the road. Landowners cannot fight the compulsory acquisition of their property, though they can argue over the amount of compensation.
“We have never, ever been told to slow down the process,” Mr. Obi said. “To insinuate that we are intentionally delaying is far-fetched.”
He said the government has always provided sufficient funds to pay claims, noting the supplementary budget recently approved by the Finance Committee allocated $800,000 for that purpose.
If a landowner disagrees with the amount of compensation offered by the government, then the matter is sent to the three-member Roads Assessment Committee, comprising a magistrate and two justices of the peace. The Roads Assessment Committee did not meet in 2008 or 2009. It wasn’t until then-Chief Magistrate Margaret Ramsay-Hale was appointed chairwoman that the committee convened again in 2010. During Ms Ramsay-Hale’s tenure from 2010 to 2011, the Roads Assessment Committee heard two claims, both concerning the East-West Arterial. Those claims have been appealed to the Grand Court.
Claim by Boddens
One case, heard during a period of four days in December 2010 and one day in July 2011, concerned the government’s acquisition of some 3.3 acres of land near Hirst Road owned by Harold and Abshire Bodden. The two are represented by Ms McLymont and Mr. Treacy.
The government valued the land taken at $108,000 – but offered zero compensation, arguing the new road sufficiently increased the value of the Boddens’ remaining 23.7 acres of land. However, the Roads Assessment Committee determined the market value of the land taken to be $252,000.
Additionally, the committee’s opinion was the new road diminished the value of the Boddens’ remaining land, and the committee awarded the Boddens nearly $343,000. The government has appealed the committee’s decision to the Grand Court and the parties are now awaiting a court date, which could happen later this year.
Last week, Chief Justice Anthony Smellie issued a preliminary ruling, finding against the claimants on a number of points related to the Grand Court’s authority to rehear facts already presented to the Roads Assessment Committee, and whether the government can withhold payment to the Boddens until after the Grand Court’s decision. However, the Chief Justice did find in favour of the claimants that the government must pay the Boddens nearly $100,000 in accrued legal and expert fees.
Twenty unsettled claims
Lands and Survey, along with the Ministry of District Administration, Lands, Works and Agriculture, which oversees the Lands and Survey Department and the roads authority, responded to the Caymanian Compass’ request for comment with a detailed written response and a sit-down interview.
According to government, the gazetting of the East-West Arterial affected 83 parcels of land. Gazetting means the government’s publishing (under Section 3 of the Roads Law) of its intention to acquire land for the road.
To date, government has received 49 valid compensation claims from landowners affected by the road corridor. Of those, 29 have been settled, for which government has paid about $4.2 million.
The government has also paid about $6,000 for outside legal counsel related to a claim referred to the Grand Court.
“Most of the less complex cases have been settled. The outstanding cases are more complicated and in most cases relate to the concept of ‘betterment’ or severance/injurious affection,” according to government.
Generally, ‘betterment’ refers to the increase in the value of property as a result of access to the new road, and ‘severance/injurious affection’ refers to the decrease in the value of property as a result of the new road.
Out of the 20 outstanding claims, nine have been referred to the Roads Assessment Committee, five have been suspended until the roads authority takes possession of the land, two have been referred to the Grand Court, two are still being negotiated, and in two cases the government has not been able to get in contact with the claimants.
In reference to the nine claims referred to the Roads Assessment Committee, Mr. Obi said four of those claims are for adjoining parcels owned by the same individual, and the government and that claimant are still attempting to negotiate a settlement.
Factors that commonly can hold up claims in the primary negotiations phase include delays in submitting claims for compensation (sometimes one to two years after the gazetting of the road), change of agents representing the landowner, and delays in responding to the government’s letters, Mr. Obi said.
Mr. Obi said if his department and a landowner cannot reach an agreement over the amount of compensation, and the claim is referred to the Roads Assessment Committee, then the timing of the settlement is beyond the purview of the department and the ministry, and is entirely in the hands of the judiciary.
Unless it is patently obvious the department and landowner will not be able to compromise, the department leaves it up to the landowner to determine if and when to apply for a date before the Roads Assessment Committee, Mr. Obi said.
Former committee chairwoman Ms Ramsay-Hale left Cayman in October 2011 to take up a supreme court justice position in the Turks and Caicos Islands.
The Cayman Islands Cabinet appointed Chief Magistrate Nova Hall as chairwoman of the Roads Assessment Committee in February 2012.
As in the Boddens’ claim, cases that make it to the Roads Assessment Committee can take a week or more to hear – a substantial amount of time especially for a committee serving on a volunteer basis. Mr. Obi said more claims are arising as the government gazettes additional new road corridors. He also said claims are tending to become more complex because those roads are opening up inland property and also that landowners are seeking legal representation earlier in the process.
The Lands and Survey Department keeps an archive of Roads Assessment Committee decisions on its website, dating back to 1984. From then until 2007, the Roads Assessment Committee issued only 12 decisions.
With 20 related outstanding claims, the East-West Arterial is not the only major cause of compulsory acquisition claims. Mr. Obi said the other big one is the Esterley Tibbetts Highway, the last phase of which was completed in late 2009.
That project is to be extended as part of the ForCayman Investment Alliance between the Dart Group and government.
While Mr. Obi and other officials fully defend their actions taken under the law, they don’t attest to the perfection of the current law itself.
Mr. Obi said the department has identified the pertinent section of the Roads Law as a candidate for possible review by the Human Rights Commission, in light of the impending Bill of Rights, which comes into effect in November 2012.