CO129-474 - Governor Sir Stubbs - 1922 [1-4] — Page 328

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that such a,

licence might at some time have been obtained if

This principle is not new as

the land had not been resumed.

it is in force under the Lands Clauses Consolidation Acts in England, and it seems only reasonable that the community should not have to pay for a mere possibility of this kind which the

claimant could never have enforced.

3.

The reason for the amendment of Ordinance No. 14 of 1921 on this point is that that Ordinance laid down as a general rule that the basis of compensation should be the market value of the land, and it appears to be the case that speculators, in the case of agricultural land for instance, are often prepared to pay more than the value of the land for agricultural purposes in the hope

The that they may be allowed to convert it into building land. claimant in such a case would no doubt argue that the speculator's price formed or was evidence of a market price above the real

value of the land as agricultural land.

This position is all

the more likely to arise in a district which is about to be de- veloped by the Government for building purposes, and if the above argument were to prevail the result would be that the community would have to pay a very much increased price for the land, al- though this increased price was based solely on the mere possibil- ity of conversion which the Government have absolute discretion

to refuse.

The effect would be to make development more ex-

pensive and to raise the rents on the developed property, and it might even have the effect of checking development altogether in

a particular district.

4.

The intention of this Ordinance therefore, is to provide that the rule of taking the market price as the basis of compensation is to be subject to the further rule that no compensation is to be given in respect of such mere probabilities.