Rudolph Ramirez v The Attorney General
| Jurisdiction | Belize |
| Judge | Farnese, J. |
| Judgment Date | 02 January 2024 |
| Court | Supreme Court (Belize) |
| Year | 2024 |
| Docket Number | CLAIM No. CV 712 of 2021 |
CLAIM No. CV 712 of 2021
IN THE SENIOR COURTS OF BELIZE
IN THE HIGH COURT OF BELIZE
William A. Lindo for the claimants
Samantha Matute, Asst. Sol. Gen. and Jhawn Graham for the defendants
The Minister of Natural Resources (MNR) admits to breaching an agreement for sale of land to Mr. Rudolph Ramirez and agrees to pay compensation in the form of damages representing the market value on 13 th April 2023 of 14.76 acres of land being a portion of Cats Caye situated approximately 8 miles Southeast of Riversdale, Stann Creek District, Belize. When the parties could not agree to the appointment of a joint expert to provide the court with a market valuation of the land, the court appointed two experts – Mr. Sheldon Mahung and Mr. Hallet Moody. Mr. Mahung was proposed by the claimants and Mr. Moody was proposed by the defendants. Each expert submitted an expert report, responded in writing to questions posed by the parties, and were cross-examined.
Mr. Moody valued the property at BZ$5,018,000. Mr. Mahung valued the property at BZ$8,900,000. How each defined the highest and best use of the property and the comparable properties used are the primary reasons for the difference in values. Mr. Moody says the property's highest and best use is “residential, eco-tourism and related activities.” Mr. Mahung believes “commercial” is the highest and best use.
For the reasons provided below, I have determined that the market value of the property in 2019 was BZ$2,087,938.28. The land is undeveloped. While Cats Caye may be suitable for commercial development, the claimants have not convinced me that there was a real prospect in 2019 that the property would be put to commercial use. I have not been provided with evidence that demonstrates that there was a general demand for commercial development of caye properties that justifies reflecting the potential for commercial use in its market value. Thus, I have accepted Mr. Moody's valuation, but adjusted the quantum to reflect the market value at the date the parties agreed.
The Parties agree that the normal measure of damages for the breach of a contract for the sale of land is the market value of that land at the time the contract was to be completed minus any amount paid as the purchase price. 1 Market value is defined as: 2
the estimated amount for which an asset or liability should exchange 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 parties agreed that the relevant time to assess the market value is on or about the 5 th September 2019.
Each of the experts adopted a sales comparison approach to determining market value although they selected different properties to compare. They also applied a different time adjustment value. Mr. Mahung adjusted the sale prices of properties sold within the last 5 years by 6.5% per annum and by 3.5% per annum for 1 property sold 11 years ago. Mr. Moody adjusted the sale prices by 2.55% per month for all properties. He considered properties sold between 2018 and 2020.
The Parties tried to discredit each expert's report by arguing the expert did not have the sufficient qualifications or experience to perform the evaluation. The process for appointing an expert is outlined in Part 32 of the Supreme Court ( Civil Procedure) Rules, 2005. The parties elected not to submit a joint expert for appointment. Instead, each identified an expert, and they were appointed with the consent of the other party. The purpose of an expert is “to help the court impartially on the matters relevant to his expertise” and to “provide independent assistance to the court by way of objective unbiased opinion.” 3 If a party has reason to question an expert's ability to assist the court, it is incumbent on the party to raise those issues at the time of appointment so as not to waste the court's time and incur expenses by appointing a person who is unqualified or biased. The experts' experience and qualifications were known at the time of their appointment. This is not a situation where new information has come to light after their appointment that raises questions about their ability to assist the court or their impartiality. Therefore, I am satisfied that no circumstances have arisen that justifies revisiting my decision that both experts have the sufficient expertise to assist the court with this matter.
The property, known as Cats Caye, is 14.76 acres and is located 8 miles southeast of Riversdale in the Stann Creek District. It is an undeveloped caye with no utilities or services except for a small pier, which appears from photos to be suitable for a single, small boat to moor. In addition, some fill has been added to 0.5 acres of the caye. According to the statement of claim, Mr. Ramirez
purchased the property in 2008 for $2,870.20 from the MNR. The claim arises because the property was previously sold by the MNR to Paumen's Pleasure Cove Limited's in 2005Mr. Moody compared 3 sales of undeveloped properties that are nearby Cats Caye. The choice to select undeveloped land reflects both the current state of Cats Caye and the fact that Mr. Moody has identified residential and eco-tourism as the property's highest and best use. He noted that the land has limited development potential because in 2022 it was included in the South Water Caye Marine Reserve.
He adjusted the listings to reflect that properties are more valuable when they are closer to developed communities and have services and access. Citing the lack of comparable properties, he used his own experience to adjust the value of the property to reflect these features. He, however, tested the reasonableness of his adjustments against 3 current realty listings of caye property. He demonstrated that his adjusted market values are comparable to current market values reflected in those listings.
In addition to an adjustment for inflation, Mr. Moody decided 2.55% per month was an appropriate time adjustment rate. He tested the reasonableness of this adjustment by identifying 2 sets of comparable properties and comparing the rate of change of their value over time. This analysis showed a rate of change of 1.19% and 4% per month producing a mean of 2.60%. He also cited a news article that referenced property values in coastal areas rose by 2.5% per month.
Mr. Moody's report notes that Paumen's Pleasure Cove Limited's interest in the property has been transferred a few times. The property was sold in 2017 for BZ$217,111.78 per acre, or approximately BZ$3,205,000. Applying a 2.55%-time adjustment, Mr. Moody calculates that today's value of the property is BZ$340,000 per acre or BZ$5,018,400. He did not use thissale in his comparison but asserts that this figure demonstrates that his valuation of the properties' market value is reasonable.
Mr. Mahung selected 9 vacant, caye properties for comparison based on their size, location, and use at acquisition. The comparison properties are presented with no identification number that can be used to verify their precise location, but all the properties are described as being between 5 and 20 miles of Placencia with the name of the caye where they are located given in his report. Mr. Mahung testified that the sales data comes from his personal research and not the MNR database because many persons do not report the true sale price to avoid stamp duties. He says he conducts due diligence to ensure he is using the actual sale amount in his appraisals.
A table of calculations shows that the properties were adjusted by either 3.5% or 6.5% per annum to...
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