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Jack-Osimiri, Prof. U. --- "Nature of Native Land Title & compensation for compulsory acquisition" [2006] NZYbkNZJur 13; (2006) 9 Yearbook of New Zealand Jurisprudence 190

Last Updated: 22 April 2015

Nature of Native Land Title & Compensation for Compulsory Acquisition

Prof. U. Jack-Osimiri, G.A. Okpara, Z. Adango, Chima Jack-Osimiri*


This paper examines the conversion of aboriginal peoples’ allodia title to Land in the pre-colonial times into the freehold fee simple estates during the colonial period and into the Right of Occupancy during the post-colonial independence era. It shall concentrate on the legal developments in Nigeria, Tanzania and other African countries with references to New Zealand, Australia and other Australasian jurisdictions in an attempt to evaluate the quantum and adequacy of compensation payable for compulsory acquisition and to suggest reforms.


In the ancient times, titles to land were acquired by the aboriginal people by the earliest original settlement on a virgin land by the patriarch1 ancestral founder through means of cultivation or deforestation2 of virgin vacant forest land not previously owned or occupied by anybody. The second method was that a war- like and stronger community could conquer weaker ones and appropriate their lands and other properties through expansion.3 In most patrilineal communities, the patriarch ancestral founder together with his household developed into families, hamlets, villages, clans, tribes and so on through gradual growth. The allodia titles to land acquired by the patriarchs by the two self-help methods

* LLB (London) LLM (London) BL, FCTI, FSALS, Dean Faculty of Law Rivers State University of Science & Technology, Principal Partner, Osimiri-Osimiri & Co. Solititors, Port Harcourt, Nigeria; G.A. Okpara LLB (RSUST) LLM (Lagos) BL Senior Lecturer/Ag Head of Dept. of Private & Property Law Rivers State University of Science & Technology, Port Harcourt; Z. Adango-LLB (RSUST) LLM (Ife) BL Senior Lecturer/ Ag Head of Dept. Public Law Rivers State University of Science and Technology; Chima Jack-Osimiri B. Tech. (EST.MGT) MSC (CONST. MGT) MBA, ANIVS, ASVA Principal Partner Chi-Osimiri & Co. Estate Surveyors & Valuers. Special thanks and appreciation are due to Professor John Prebble of Victoria University of Wellington whose suggestions led to the choice of this topic and made available NZ research materials. However, the usual disclaimer applies:

- only the authors are responsible for the defects contained herein.

1 Ajala v Awodele (1971) NMLR 127 at 128-129.

2 Fadiri v Adiri (1959) WNLR 189; Kolapa v. Alade (1985) 3 NWLR (pt.12) 532, 562.

3 Mora v Nwalusi (1962) 1 ALL NLR 681,683-684 Supreme Court of Nigeria (SCN).

then passed to successive generations. Nigeria, which was a colony of Great

Britain for 99 years (Treaty of Cession 13 August 1861 to independence of

01 October 1960) and Tanzania, also a British colony for 99 years (imperial Decree 1895 to 1964 ) both inherited laws which had been imported from United kingdom and which transformed the system of land ownership.4

By virtue of treaty of cession, King Dosunmu of Lagos transferred all relevant land to the British monarch. In Attorney General of Southern Nigeria v John Holts Ltd5 the court held that only the radical titles to the land in Nigeria were transferred to the sovereign while the usufructory rights of the aborigines were preserved. The court in Tijani v Secretary of Southern Provinces6 similarly held that the legal effect of the treaty was that lands in the colonies ranked in pari-passu with lands in Britain subject to the use and the occupation or possessory rights of the natives.

Strictly speaking, the allodia title belonging to the natives were transferred to the Crown in this way. The doctrine of freehold tenure emerged, thus making the crown the ultimate owner of all land while the subjects7 were granted land in exchange for the performance of services to the imperial monarch. This type of feudal pyramid of landholding with the crown at the apex, the lords at the intermediate level, and the tenants as the lowest occupiers8 made the monarch the source of all land or paramount title thereto.

In course of time, two categories of estates, freehold and leasehold developed. The second category essentially concerns the relationship between landlord and tenant9 of the present era. The first category of freehold is the fee simple absolute estate of eternity in perpetuity, which is the largest estate theoretically

4 The British colonial administration converted land into Conventional freehold estates-see S. 7 (1) Land Registry Ordinance No. 15 (1923 Tanganyika) repealed by S. 115 (1) Land Registration Ordinance (Tanzania).

5 (1915) AC 599.

6 (1921) 3 NLR 24.

7 Veale v. Brown (1868)1 NZ CA 152; Re Van Enckevort (Bankrupt) (1990) 1 NZ conv. C190 at 589.

8 Alston, Bennion, Slatter, Thomas & Toomey, Guide to New Zealand Land Law 2nd Ed (2000)


9 Pan Asian Co. limited v. National Insurance Corp. of Nigeria (1982) 9 SC 1; Jack-Osimiri,

Modern Law of Land lord & Tenant In Nigeria 2nd Ed (2004) 1-10.

possible in land.10 The next category is the fee tail estate, which could last or continue as long as holder, or any of his children or descendants otherwise called heirs of his own body; lived.11

Consequently, if the owner or holder of the fee tail dies and leaves no heir or he is survived by a brother or relatives, the estate would come to an end and the property would pass to the remainder man next entitled under the terms of the grant or settlement.12 The third category is the life estate which lasts throughout the duration or entire life span of the holder and shall discontinue13 on his death either by reversion14 to the grantor15 or possibly to the remainder man entitled under the terms of the settlement.16 In the case of Biney v. Biney,17 the settler by a deed of settlement conveyed his freehold land with the building thereon to three persons as life tenants thereafter to his four children as remainder men, their heirs and assigns forever. It was held that the intention was to bestow a joint tenancy on the children who are entitled to an estate in fee simple absolutely.18

10 Alli v. Ikusabella (1985) 1 NWLR (pt. 4) 630, 640 (per Karibi-Whyte JSC). In Ghana it is the highest estate/interest which the owner has in land, see Total Oil Product Ltd v. Obeng (1962) 1 GLR 228, 229; Addai v. Bonsu (1961) GLR 273 and the West Indian case Noel V. Noel (1958-59) 1 WILR 300.

11 Okesuji v. Lawal (1986) 2 NWLR (pt. 22) 417, aff’d by SCN (1991) 2 NWLR (pt. 170)

66 at 676, where the testatrix devised landed property to her son for life, the remainder to her grand children absolutely. The SCN held the fee simple estate was vested in the grand children and nullified a fraudulent transfer calculated to defeat reversionary interest. See also the West Indies case of Gordon V. Burke (1970) 16 WILR 204 (CA).

12 See supra n 11.

13 Adebajor v. Adebajor (1973) 4 SC 25, 46.

14 In Ebosie v. Phil-Ebosie (I976) 6 UILR (pt. 2) 217, the testator devised his land to his third wife under polygamous marriage. The SCN held a life estate was created. Compare Abodurin v. Adedeji (1976) 3 OYSHC (pt. 1) 267 at 268 where it was held that allotee of family land enjoys a life interest therein.

15 See the West Indian case of Campbell v. Crooks (1960) 2 IWLR 65, 69 where the court held that what was conveyed was a life estate and not a fee simple; the reversion remaining is vested in the settlor.

16 Christian v. Mitchelle-Lee (1969) 13 WILR (CA West Indies).

17 (1974) 1 GLR 318 at 320 (Ghana CA).

18 See also Taylor v. Coming (1941) 7 WACA 21 (Sierra-Leone case) where West African Court of Appeal held that device to A and his children for the term of their natural life was a gift in fee simple estate to all of them.

As we have seen above, the allodia title belonging to the natives/aborigines were converted into the estates of fee simple19 or to a term of years (leaseholds estates)20 by virtue of the colonial rules. These two estates were the only ones that could exist at law. Fee tail was abolished and any conveyance framed or drawn to create any such interest would now pass as fee simple.21

The doctrine of estate is a concept Nigeria inherited from the old English land tenure system, upon becoming a common law jurisdiction, on the first of January 190022 and Tanzania too; pre-1922.23 It is applicable even though its historic basis is absent in Nigeria and notwithstanding the fact that English laws were made applicable subject to local variations or domestic circumstances.24


Nigeria became a republic in 1963 and the Land Use Act was enacted in 1978.25

It is the fundamental property legislation which nationalized all radical title in land in each of Nigeria’s thirty six states. The legal effect is that the radical title and the ultimate management of all land have been removed from individuals and vested in the State Governor, in accordance with the provisions of the Act.26

Similarly under section 3 of the Land Ordinance of Tanzania (Tanganyika),27 the whole land of the main land Tanzania whether occupied or unoccupied was declared public land. All freehold lands were extinguished28 as of the first July 1963, and the ownership of the whole land of Tanzania became public.

19 S.3 (1) (a) (b) Property & Conveyancing Law (PCL) Cap. 100 1959 (Laws of Western

Nigeria (LWN).

20 S. 2 (2) Law of Property 1990 (Kaduna) 1994 (Imo) 1995 (Kwara) 1995 (Sokoto & Zamfara)

1996 (Taraba) 1996 (Bauchi & Gombe) 1998 (Kebbi) 1998 (Kogi), 1999 (Akwa-Ibom)

1998 (Jigawa) 2001 (Abia) etc States of Nigeria.

21 S. 3 (3) PCL 1959, S.2 (3) Law of Property 1990-2001 (36 States of Nigeria).

22 Pre-1900 rules of common law and statute of general application applicable to Nigeria subject as local circumstances could permit, see S.15 High Court Law 1963 (Eastern Nigeria) S.28

High Court law 1962 (Northern Nigeria) and S.3 Law of England. (Application) law Cap.

60 1959 (Western Nigeria).

23 Ordinance 28 (1922) Tanganyika (now Tanzania).

24 See the judicial pronouncement on the need to modify the technical English conveyancing to suit local conditions. See British Bata Shoe Co. Ltd. v. Roura & Foregas Ltd. (1964) GLR 190, SC Ghana (per Adumua-Bossman JSC).

25 S. 1 LUA 1978 now Cap. L5 Laws of Federation of Nigeria (LFN) 2004. See the cases of Nkwocha v. Governor Anambra State of Nigeria (1984) 6 SC 362, 403; Mohammed v. Lang (2001) 3 NWLR (pt. 700) 389 to the effect that Land Use Act nationalized all lands in Nigeria.

26 Nnadi v. Okoro (1998) 1 NWLR (pt. 535) 573, 579-580.

27 Cap. 113 (Laws of Tanzania) 1975.

28 Freehold Titles Conversion Act No. 24 1963.

Individuals could no longer, in a general sense, own land.29 All Government leases30 and any other land interests were converted to a Right of Occupancy. While the Tanzanian Land Act vests the all land in the president for the use and benefit of Tanzanian people, the Nigerian Land Use Act vests all of the land in each state in the Governor of that particular State.

The Governor is not the beneficial owner31 but holds the land in trust and administers the same for the benefit of all Nigerians.32 The former estate owners in fee simple were stripped of absolute33 ownership and demoted to owners of an inferior kind of estate, called a Right of Occupancy.34 This diminished estate in land, Right of Occupancy, can only be alienated with the consent of the State Governor35 in Nigeria, or with the consent of the relevant Minister in Tanzania.36

It is difficult to determine the quality of estate created by the Right of Occupancy. Some writers maintain it is not a lease, but a hybrid form of estate existing between real and personal property.37 In line with this, it is sui generic, and the intention of the legislature in establishing it was to introduce an entirely new interest in land unknown to the law of England.38 Other writers39 are of the view that the effect of a grant of Right of Occupancy by appropriate authority is to create a lease. Many authorities support the view that a Right of Occupancy is in substance a lease, different only in name,40 or at least it is comparable, and resembles or represents a lease.41

29 Gondwe, Z.S. (Dr.) Manual of Transfer of Right of Occupancy in Tanzania (2001) 3-20.

30 Government leaseholds (Conversion of Rights of Occupancy) Act Cap. 44 1969.

31 Savannah Bank Ltd. v. Ajilo (1989) 1 NWLR (pt. 97) 305, 309 (SCN).

32 Abioye v. Yakubu (1991) 1 NWLR (pt. 190) 130, 256 (SCN).

33 Obikoya & Sons Ltd. v. Governor Lagos State (1987) 1 NWLR (pt. 50) 285, 390 (CA);

Adenipekun v. Onigemo (1983) 1 ODSLR 85, 88.

34 SS. 1, 2, 5, 6, 34 and 36 LUA 1978; Otti v. Attorney General Plateau State (1985) HCNLR

787 Aff’d (1986) 3 CA (pt. 2) 235, 340.

35 SS. 21 & 22 LUA 1978; Nitel PLC v. Rockonoh Property Co. Ltd (1995) 2 NWLR (Pt. 378)


36 SS. 11 (1) (7) Land Ordinance.

37 Omotola, J.A. (Prof.) Essays on land Use Act (1984) 24; James, R.W. (Prof.) Nigerian Land Use Policy & Principles (1987) 87-108:, Umezulike, I.A. (Prof. & Hon. Justice) Mortgage of Right of Occupancy (1987) 3 PLJ 22, 23.

38 Premchand Nathu Ltd v. Land officer (1963) EALR 941, (1963) 2 WLR (1963) AC 177

Privy Council interpreting SS. 34 etc Land Ordinance Cap. 113, Tanzania.

39 Elias, T.O. (Prof. & Hon. (CJN) Nigerian land law & customs (1962) 284; Onwuamegbu; M.O. Dr. & Hon. Justice Nigerian Law of Landlord & Tenant (1966) 216.

40 Majiyagbe v. Attorney General of Northern Nigeria (1957) NNLR 159, 163.

41 Director of lands & Mines Tanganyika v. Sohan (1952) 1 TLR 362; Henvicksdorf v. Dodd

(1960) EALR 327, 333 (Tanzanian cases).

The view that a Right of Occupancy is a form of ‘head-lease’ peculiar to Nigeria and Tanzania (having identity of its own) is at least tenable, especially when a certificate of occupancy (C.O.) has been issued to the holder, as the C.O. creates a term of years or a lease for a number of years stated.42 This is because by virtue of the Land Use Act 1978, and the Certificate of Occupancy issuable thereunder, only a holding for a term of years can be created.43 What is more, the greatest legal estate which can now exist; which a person of full age can hold in land located anywhere in Nigeria or Tanzania is a term of years.44

In Nittin Coffee Estates Ltd v. United Engineering Works Ltd45 the Tanzanian Court of Appeal held that a Right of Occupancy is something in the nature of a lease and a holder of the Right of Occupancy occupies the same position as of a sort of lessee, it is for a fixed term and is held under certain conditions, i.e. no disposition of said right without the consent of the superior landlord. This line of judicial reasoning is further confirmed in the case of Savannah Bank Ltd v. Ajilo46 where the Supreme Court of Nigeria held:

While the interest vested in the Governor is unstated in the Act, the interest a Nigerian, can lawfully acquire is scaled down to Right of Occupancy. In terms known to land, the quantum of a Right of Occupancy remains unclear. To the extent that it can only be granted for a specific term under S.8 Land Use Act, it has the semblance of a lease. Also to the extent that a holder has the sole right to and absolute possession of all the improvement on the land during the term, a holder does not enjoy more rights than a lessee under the common law. When S.34 (2) Land Use Act converted the interest held by the owner to a mere Right of Occupancy, the Act reduced him to the position of a tenant subject to the control of the state through the Governor. As a tenant he is bound by the implied and express terms of the tenancy.47

With the apparent abolition of the fee simple estate, and since no other estate other than Right of Occupancy can exist, leasehold is therefore the obvious term to describe the estate capable of existing. The interest of the lessee is not exactly the same as that of a holder of Right of Occupancy as the latter enjoys a larger interest than the former; although both enjoy a common denominator, which is a term of years.48

42 Chiroma v. Suwa (1986) 1 NWLR (pt.19) 751, 756 (CA).

43 Adeniran v. Dahuwa (1980) 416 CCHCJ 209, 214; Otti v. Attorney General Plateau State


44 See supra ns 41 & 42.

45 (1988) TLR 203, 211.

46 Ibid, 309.

47 Per Karibi-Whyte JSC, 328 (emphasis added).

48 Osho v. Foreign Finance Corp. (1991) 4 NWLR (pt. 184) 157, 167 & 192 (SCN); Abioye v. Yakubu (1991) 5 NWLR (pt.190) 130, 155 (SCN).


The main aim of nationalization of all lands through the Land Use Act 1978 was to foster the state policy of imposing administrative controls over all the land and to ensure a prudent and transparent system of land holding. The national land policy was intended to enhance secured land tenure, encourage optimal use of land resources and to facilitate broad based social and economic developments without an unregulated market risking upsetting or endangering the ecological balance of the environment.49 The object was to streamline and to make acquisition of land less cumbersome.50 In Nigeria, the major aims of vesting title in Governors were to remove the legacy of bitter controversies and conflicts over land, simplify ownership and management, and to help Government facilitate planning, zoning programmes and to assist the citizens irrespective of social status to acquire land and for self and family use.51 It was specifically designed to eradicate land speculation and to facilitate judicious and economically productive use of lands.52 The land reform introduced was necessary to ensure agricultural lands were productive for the benefit of the economy, to guarantee all citizens access to land53 and to the mechanization of agriculture54 and to balance the practical need to attract foreign investment with some security of land tenure.55

v. iSSUe OF cOmpenSatiOn FOr cOmpULSOry Land acQUiSitiOn

Compulsory acquisition of land as opposed to private bargaining is to prevent private selfishness, i.e. holdouts, from standing in the way of public improvement.56 Private rights must give way to the overriding public interest; otherwise land owners will be in a position to hold up schemes beneficial to the community, therefore the element of public interest can justify compulsory acquisition.57 In Nigeria, where land held under Right of Occupancy is acquired compulsorily by the Government, payment of compensation to the owners of

49 National land policy, Ministry of Lands, Housing & Urban Development, Dar-es Salam, Tanzania.

50 James, R.W. (Prof.) Land Tenure & Policy in Tanzania (1971) 11-31; Fimbo, G.M. (Prof.)

Land Law in Tanzania (1992) 1-19.

51 Tobi, N. (Prof. & JSC) Land Use Act, 25 years (2003)1-10.

52 See Zambian land policy-Kaunda, K.D. Towards complete Independence (1969) 36-42.

53 James, R.W. (Prof.) ‘Land Reform proposals In Zambia’ (1971) 2 East African Law Review


54 Mulimbwa, A.C, ‘Land policy and Economic Development in Zambia’ (1998) 30 Zambia

Law Journal pp. 79, 82-83.

55 Kaunda, Moses ‘Ownership of Property Rights in Land’ (1989-1992) vols. 21-22 Zambia

Law Journal. 61, 66-67.

56 Metropolitan Board of Works v. Mecarthy (1874) 31 LT 182, 184 (per Lord O’Hagan).

57 Nwanganga v. Governor Imo State of Nigeria (1989) 4 NWLR (pt. 92) 350.

acquired land58 is predicated on the assumption that those being paid are the owners and occupiers of the land.59 Where a person’s title to land, i.e. Right of Occupancy is revoked, it shall be only for a public purpose, the public interest and a public benefit, and payment of compensation is governed60 by sections 28 and 41 Land Use Act 1978.

Under Section 28 Land Use Act 1978, the Governor can revoke the Right of Occupancy for a public purpose or for an overriding public interest,61 with notices published in the official gazette and personally served on the persons affected. Public purpose must be connected with the public good, general utility, the welfare of the community and not to serve the commercial interests of a company or privileged few.62

Revokation of Right of Occupancy for the purpose of the expansion of a cattle market of a local Government was adjudged to satisfy the overriding public purpose contemplated by the Land Use Act 1978.63 In the era of privatization and commercialization of 1990’s, the revocation of Right of Occupancy for re-granting to the multinational corporations and foreign investors to boost economic development, create employment, and induce agricultural industrialization, etc., definitely qualified as being for a public purpose and the overriding public interest.64 Pursuant to this the Federal Government of Nigeria (FGN) granted Right of Occupancy to hectares of land to immigrating farmers who were displaced by the Zimbabwean Land Resettlement policy. To mechanize Nigerian agriculture the Zimbabwean farmers were resettled in the Kwara and Nasarawa States of Nigeria they and their households were granted automatic Nigerian citizenship. The grant of Right of Occupancy to them qualified as a public purpose within the Land Use Act 78, under the rubric of attracting investors and stimulating industrialization. A public purpose or the public interest is synonymous with the element of public benefit,65 without necessarily the entire country deriving the largest proportion of that benefit.

58 Ononuju v. Attorney General Anambra State of Nigeria (1998) 11 NWLR (pt. 537) 328.

59 Tobi, N. (Prof. & JSC), supra n 51 at 13.

60 Agundo v. Gberbo (1999) 9 NWLR (pt. 617) 71; Upper Benue Rivers Basin Development

Authority v. Aika (1998) 1 NWLR (pt. 537) 328.

61 SS. 6 (3), 28 (4) & 51 (1) Land Use Act 1978 and SS. 3 (1) (g) 10 (1) Land Ordinance Tanzania-Right of Occupancy can be revoked on good Cause & public interest, see Patman Garment Industries Ltd. v. Tanzania Manufacturer Ltd. (1981) TLR 308, 310.

62 Chief Commissioner Eastern Provinces v. Ononye (1944) 17 NLR 142; Ereku v. Governor

Mid-Western Nigeria (1974) 10 SC 59 at 67-68.

63 Sokoto Local Government v. Amale (2001) 8 NWLR (pt. 714) 224, 229 (CA).

64 See SS. 1, 5,10-22 Privatization and Commercialization Act 1999.

65 Section 75, Kenya Constitution.

The public benefit criterion is satisfied if land is redistributed66 and the actual benefit goes prima facie only to a few people67 and it is immaterial whether and unnecessary that everyone participates directly.68

The owner of a Right of Occupancy to land subsequently expropriated for a public purpose is entitled to adequate and prompt payment in compensation.69

The affected owner has a right of access to the appropriate courts or tribunal for determination of his interest in the property and of the amount of compensation.70 What constitutes adequate compensation is not statutorily defined but it is understood to cover remuneration or satisfaction for injury71 or damage of every description.72



By virtue of Section 28 of the Land Use Act 1978 only the holder of Right of Occupancy (whose interest in land has been revoked by the Governor for public purpose under Section 28 and no other person) is entitled to compensation for the value of the Right of Occupancy in the land at the date of revocation, for the unexhausted improvements. Under Section 29, it appears that the holder of an empty, vacant, or bare holding,73 without improvements or development in the form of buildings, walls, or structures etc, of any sort,74 has no right to receive compensation on revocation of their Right of Occupancy as such land has no commercial value. The rationale is that compensation is not payable unless there are improvements which have not been totally exhausted by the holder at the date of revocation of the Right of Occupancy.75 Consequently, it follows

66 See Ona v. Otenda (2000) 5 NWLR (pt. 656) 244, 256 where land compulsorily acquired

to build new Federal Capital territory (FCT) Abuja for Nigeria satisfied public purpose.

67 Onalo, P.L, Land law & Conveyancing In Kenya (1986) 57-61.

68 People of Puerto Rico v. Eastern Sugar Association (1973) 156 2d F316.

69 S. 44 (1) (a) 1999 Nigerian Constitution. Now Cap. C. 23 (LFN) 2004. See also S. 75

Kenya Constitution 1972 which provides that the property compulsorily acquired for public development or public utility entitles the owner to prompt payment of full compensation.

70 S. 44 (1) (b) 1999 Nigerian Constitution. See Article 18, Zambia Constitution 1975 for guaranteed protection against deprivation of property and prohibited compulsory acquisition except on the ground of public purpose and payment of adequate compensation promptly.

71 Zango v. Governor Kano State of Nigeria (1986) 2 NWLR (pt 22) 409, 410.

72 Australian case Netungaloo Property Ltd v. Commonwealth (1948) 75 CLR 495, 571.

73 James, RW (Prof.), Land Use Policy & Principles in Nigeria (1987) 18; Adeoye, F.O. ‘Use of Right of Occupancy as Security-A caveat’ (1998) 2 GRBPL (No. 3) 18-22.

74 Jack-Osimiri, U, ‘Award of compensation to Holders of undeveloped plots under Land Use

Act; case for Reform’ (1991) Vol. 2 (No. 7) Justice Journal 29-34.

75 S. 29 (1) (2) Land Use Act 1978.

from this argument that the Governor is not obliged to pay compensation or provide resettlement/alternative accommodation in lieu of the compulsorily acquired land.

It has been emphasized that the Land Use Act 1978 neither disposed anybody of his land76 nor did it ever deprive owners of their (use) interests in land.77

In fact it is only the radical title in respect of all the land in the State that has been transferred to and vested in the State Governor in trust for all Nigerians.78

By virtue of sections1 and 2 Land Use Act 197879 the Governor is a mere trustee or Administrator80 of all the Land within that state, never a beneficial owner.81

Policy matters are left for the Minister of Lands in Tanzania,82 or the commissioner for land in the particular state of Nigeria, while the daily administrative and managerial matters are left to the Directors of Lands and Land Allocation and Advisory Committee.83 Generally, the characteristics of the land tenure under which the former land owners now hold (despite not being the ultimate owner any more) remain substantially the same.84 In spite of the vesting of the absolute ownership of the land on the Governor or President, the land owners still retain possessory title85 as occupiers86 vested with usufruct.87

76 Ogunleye v. Oni (1990) 5 NWLR (pt. 152) 745.

77 Ladejobi v. Shodipo (1989) 1 NWLR (pt. 99) 596, 599; Oke v. Salami (1987) 4 NWLR (pt.

63) 1.

78 Dzungwe v. Gbishe (1985) 2 NWLR (pt. 8) 528; Odenipekun v. Onigemo (1983) 1 ODSLR

85, 88; Nkwocha v. Governor Anambra State supra n 25; Savannah Bank Ltd v. Ajolo supra n 32.

79 See also the equivalent S. S.4 land ordinance and SS. 3 (1) (a), 4 (1) land Act 1999 which provide that the President of Tanzania is vested with public land as a trustee for and on behalf of all citizens of Tanzania.

80 Fayose v. Bello (1983) 2 ODSLR 44.

81 Savannah Bank Ltd. v. Ajilo supra n 32.

82 SS. 11 (1) (7), 14 (1) (2) (3) Land Use Act 1999 (Tanzania).

83 SS. 3 and 4 Land Use Act 1978 (Nigeria), SS. 1, 5, 8-16 Land Use Regulations, (Lagos and other States of Nigeria).

84 Ogunola v. Aiyekola (1990) 4 NWLR (pt. 146) 632.

85 Makanjuola v. Balogun (1989) 3 NWLR (pt. 108) 192, 195, SS. 5, 6, 34 and 36 Land Use

Act 1978.

86 S. 2 Land Ordinance holder or occupier of Right of Occupancy is a person entitled to an estate in land: to use and enjoy the fruits therein, see Mateyo v. Mateyo (1987) TLR 111,


87 Usufruct is the right to use, occupation, enjoy the property, utility, advantage accruable without altering the substance, see Tanzanian land policy (above) and village land Act 1999 for customary right to use which means the same thing as usufruct under Land Act 1999 (Tanzanian).

It is necessary at this stage to evaluate the adequacy of the statutory provisions governing the assessment and award of compensation under Land Use Act

1978. A careful investigation of the acquisition of land for public purposes and appraisal of the principles enunciated prior to1978, demonstrate that the Land Use Act 1978 is unfair to holders of undeveloped lands, as to compensation in the event of revocation of Right of Occupancy under S.28. What is more, the criteria for assessment of compensation are grossly inadequate. The criteria are enumerated under section 29 (4) (a) (b) (c) of the Land Use Act 1978, which provides that the valuation must be based on the amount of yearly rent paid by the occupier, the replacement costs of building installations or reclamation works etc, less any depreciation, and value of the crops or economically productive trees on the land. This means that the owners of undeveloped plots or without any crops or economically productive trees planted are excluded from receiving compensation. What is more, the value of the crops, economically productive trees, and buildings alone without some compensation for the site’s intrinsic value may not represent the actual value of the land, which, speculation aside, does appreciate over a given period.88

The value placed on land by Section 29 of the Land Use Act 1978 can hardly be considered adequate in this respect. It can not be denied that every land possesses some intrinsic and some prospective use value: e.g., as fertile agricultural land, as building/residential/commercial use, as industrial or storage use and site value either presently or in future. These ought to be adequately compensated in the interest of fairness, equity and justice, as the intention of the Land Use Act is not to deprive or dispossess unimproved owners of their land – their source of livelihood or subsistence. The exclusion of site value and the assessment of compensation for compulsory acquisition based entirely on unexhausted improvement without considering the value of the land itself, on which the improvements stand, is alien to our law and traditions89 at least prior to 1978. In Lewis v. Colonial Secretary90 the issue for determination was the compensation payable for unoccupied and yet utilized land. The Court was prepared to award compensation had the beneficial user of the land been proved. The most fatal piece of evidence was that the land was barren and failure of the claimant to prove any specific benefit or advantage derived from the land. Also in Commissioner of Lands v. Adeleye91 the Court based compensation both on the value of the land itself (site value) and the building erected thereon.

88 Land appreciates as the most valuable asset, see Chairman Lagos State Development & Property Corporation(LSDPC) v. Ottun (1973) 3 CCHCJ 255 at 256 per Bakare J.

89 Salako v. Salako, infra n 96.

90 (1881 - 1911) 1 NLR 11, 14.

91 (1938) 14 NLR 109.

Arguably, since the Right of Occupancy embraces the right to use, farm, subsist and exploit the land, therefore any deprivation of these rights/utilities without payment of compensation principally because of lack of physical improvements thereon would be unfair. Logically, assessment of compensation under the criteria laid down by section 29 Land Use Act 1978 appear grossly inadequate and needs drastic overhauling in order to sufficiently recognize and compensate for the loss of the above undisputed current utility and future interests derived from or placed on the land for which Right to Occupancy has been revoked.

This is a constitutional right for non-deprivation of right to property or any immovable or interest therein without prompt payment of due compensation.92

It is guaranteed by section 44(1) 1999 Constitution, which provides:

No movable property or any interest in an immovable property shall be taken

... compulsorily and no right over or interest in such property shall be acquired compulsorily except ... without prompt payment of compensation thereof. ...

Arguably, a Right of Occupancy whether bare and undeveloped, or already developed, is an interest in land and any deprivation of use owing to revocation/acquisition of that right must be adequately compensated. The general principle is that compensation must be adequate, i.e., the open market value93 which if the Right of Occupancy to land is sold in the open market by a willing seller, the amount he might be expected to realize.94 In support of this assertion is section 15(b) Public Lands Acquisition Act95 which provides that in estimating the compensation payable for any land, or estate or interest therein, compulsorily acquired, the proper value is the amount on the open market which a willing seller might be expected to realize.

92 Nkwocha v. Governor Anambra State, supra n 25; Aina & Co., Ltd. v. Commissioner of Lands & Housing (Oyo State) (1983) 3 FNLR 113 (per Fakayode C.J.); LS.D.P.C. v. Foreign Finance Corporation (1987) 1 NWLR (Pt. 50) 413.

93 Anglican Diocese of Nigeria v. Attorney-General Anambra State (1979) ANSLR 64 , 65; Iguh J., Esi v. Warri Divisional Town Planning Authority (1973) 11 S.C 235; Nzekwe v. Attorney-General of East Central State (infra); Commissioner for Lands v. Aneke (infra).

94 Commissioner of Lands v. Adeleye (1938) 14 NLR 109, 110 (per Lloyd J.); see also Chairman

LS.D.P.C. v. Ottun, supra n 88.

95 Cap.167 (LFN 1958) and Section 15(b) Public Lands Acquisition Law Cap. 105 (Eastern Nigeria) (1963). See also Section 54(1)(a) Lagos Town Planning Act Cap.95 (LFN 1958) which provides that whenever compensation is payable in respect of any land or interests in lands taken compulsorily “... the Court shall base the value ... upon fair market value estimated at the time when the scheme was published and due regard being had to the nature and condition of the property and probable duration of the building thereof.”

It was on this basis that, in Salako v. Salako,96 George, J. held that compensation paid by mutual agreement between the owners of acquired land and the acquiring authorities based on comparative formula used in paying other owners of adjoining land cannot be an open market value because there was no way of knowing how this agreement was reached. Obviously it may not be what a willing seller could realize in an open market because it was based on a private contract.

Furthermore, in the light of the principle that nobody should be dispossessed of his property which was lawfully acquired or inherited, without payment of just compensation,97 the criteria enumerated under section 29 of the Land Use Act 1978, can hardly be considered adequate. In Zango v. Governor Kaduna State,98 the Supreme Court held that ‘compensation’ in the sense in which it is used in the Land Use Act 1978 covers remuneration or satisfaction of injury or damage of every description. Logically, compensation can hardly be adequate and just unless all the losses sustained by the holder of the Right of Occupancy on its revocation:- deprivation of the present and prospective utility of the land as to its agricultural, building, commercial, residential, or industrial etc. uses are completely made good to him or her, in the form of receiving a payment equivalent to the pecuniary detriment or compulsory sacrifice.99 The use of this basis in the estimation of compensation had received recognition in our law. In Nzekwu v. Attorney-General East Central State,100 the Supreme Court held that in the assessment or estimation of compensation in land compulsorily acquired, both the open market value of the land and the value of the houses erected thereon are valid criteria for the award, plus capitalization of twenty-one years’ purchase. The Law Lords took into account leases granted both on the land and the adjoining lands, rents payable and, despite the fact that there was no reliable evidence as regards to the price paid in the neighbourhood in the past for land of similar quality and in similar position, reliance was additionally placed on the rent-value of comparable properties to set the value of compensation.

From the above, fairness, economic considerations, and decisions of courts show that vacant or undeveloped plots owners ought to be compensated in the event of the revocation of their Right to Occupancy, in spite of lack of improvements thereon. Section 29 of the Land Use Act 1978 therefore should be amended or possibly overhauled fundamentally in order to reflect this. It is

96 (1973) 9 CCHCJ 5, 8.

97 Ogunleye v. Oni, supra n 76 at 750.

98 (1986) 2 NWLR (Pt. 22) 409 (1986) 9 SC 11.

99 Horn v. Sunderland Corporation (1941) 2 KB 26, 40 (per Scott L.J).

100 (1972) 2 ECSLR (Pt. 1) 323 at 332-3; (1973) 3 UILR 397; (1972) 1 All NLR (Pt. 2) 106; (1975) 5 SC 224, 342-3.

submitted that there should be no uncertainty that disturbances of the surface right to use, interference with future possibilities of development, commercial or business prospects and potentials traceable, ascribable or referable to the holder’s of Right of Occupancy ought to be compensated. This would not be a rare or unique incident in our legal system.


In Tijani v. Secretary Southern Provinces101 the compensation payable was based on the disturbances of usufructuary right of the Communities owners of the land whose radical title was vested in the British Monarch. Similarly, Section

35(1) Land Tenure Law 1962102 recognises the payment of compensation for disturbances, inconveniences and potentials value of the land.103 In Makeri v. Kafinto104 the Court of Appeal based compensation for compulsory acquisition not only on unexhausted improvements on land, but also for inconveniences caused by the disturbances of acquisition/expropriation and compensation was further paid to the person farming the land at the relevant time. The Land Use Act 1978 should be amended in this direction. In Maja v. Chief Secretary of the Government,105 the Court sympathized with, and accepted as a good proposition of law, the argument that an award of compensation should take into account: the development possibilities and the business prospects of the land compulsorily acquired, but rejected it as inapplicable in the case at hand because of lack of evidence that there was any future potential or value of the site as a salt manufacturing factory. But in Nzekwu,106 the Supreme Court appeared to have overruled Maja as it ordered compensation to be paid for site value, i.e. the loss of building prospects of the land compulsorily acquired.

From the foregoing discussion, it is clear that bare or vacant land which is the subject matter of a Right of Occupancy, despite the absence of erected physical unexhausted improvement thereon, could be suitably utilised for one or varieties of purposes. Logically, other methods by which the land can be effectively utilized and its potential or eligibility for future development should be taken into account in the assessment and duly compensated in order for compensation to be truly adequate. All the rights enjoyable or derivable from the land, e.g. in case of swampy land; natural vegetation and advantages of

101 (1914-1922) 3 NLR 24.

102 Cap. 59 (Northern Nigeria).

103 See also Section 114 Land Clauses Consolidation Act 1845, Section 2(2) Acquisition of Land (Assessment of Compensation) Act 1919 and compulsory purchase Act 1965 (English statutes not applicable to Nigeria).

104 (1990) 7 NWLR (Pt.163) 411 at 415 & 420 decided under section 35(1) Land Tenure similar effect.

105 (1948) 12 WACA 392, aff’d by the Privy Council in (1952) 12 WACA 395.

106 Supra n 100.

proximity to sea breezes etc., ought to be taken into account. In Commissioner for Lands v. Daniel,107 the West African Court of Appeal based compensation payable to owner whose property was acquired for public purposes both on the land itself and the buildings erected thereon. In order to promote fairness, adequacy of compensation and to ensure that nobody is deprived of any right derivable from his land whether developed or not, we suggest the inclusion of the following factors as the basis for valuation:

1. The amount of compensation should take account of not only the physical/ visible improvements on the land in form of buildings, installations and economic trees, crops planted or growing thereon as stipulated under Section 29 of the Land Use Act 1978 but also the vacant undeveloped land108 which has the future prospect of use/utility109

2. Loss of present and future profits/income accruing from the land.

3. The sellable site value - the possibility of the vacant undeveloped or unimproved land being sold off in plots by the holder and its development as a potential agricultural, housing, industrial etc. estates.

The inclusion of these proposals as criteria in the assessment of compensation would no doubt enhance fairness as it can hardly be denied that all lands whether developed or undeveloped possess some degree of utility110 which ought to be compensated.

Equally advocated is the assessment of compensation by independent estate surveyors/surveyors as it would ensure impartiality and adequacy. The onus would be on the holder of the acquired/ revoked land to prove that he is entitled to more than what the acquiring/revoking Government Authority would offer as compensation.111 This is because the assessment by an appropriate Officer under Section 29(4) Land Use Act 1978 may not produce fair result since the Officer is a civil servant employed by the Governor - the interested/acquiring authority. The danger is that the appropriate officer would give a favourably tailored under-assessment or possibly a gross under valuation to please his master, the Governor112 undermining the pecuniary interests of the holder. In

107 (1936-1937) 3 WACA 125, 127 (per Lloyd Ag. C.J).

108 Commissioner of Lands v. Adeleye, supra n 94; Chairman LS.D.P.C. v. Ottun, supra n 88;

and Tijani v. Secretary Southern Province, supra n 101; Salako v. Salako, supra n 96.

109 Nzekwu v. Attorney-General, supra n 100; Commissioner for Land v. Aneke, infra n 117.

110 See Commissioner for Lands v. Aneke, infra n 117.

111 Salako v. Salako, supra n 96 at 9 (per George J.) in Commissioner of Lands v. Aneke, infra n 117.

112 See Commissioner for Lands v. Aneke, infra n 117, where the Government valuer deliberately under assessed the value of the property, which the Court rejected to the valuation carried out by an independent Surveyor which the Court accepted as thorough and realistic.

the same vein, making the Land Use and Allocation Committee rather than the Law Court the final arbiter of disputes arising around the quantum or amount of compensation due under Section 30 Land Use Act 1978 is criticised here as unjustifiable and a call is made for reform. Land Use Allocation Committee members are agents of the Government and the rules of natural justice/fundamental Rights enshrined in our Constitution would be breached if they were given arbitrary power to assess any amount of compensation desired. Government and agents would be judges in their own cause and therefore fairness and impartiality may not be guaranteed. One suggestion is the adoption of a specialized land court along the lines of the Maori Land Court in New Zealand.

It is suggested that the treatise; Modern Method of Valuation,113 which provides the use of four criteria in the valuation of land possessing prospective building value, be adopted in the proposed reform. They are as follows:

Firstly, we determine the best use/value to which the land or the property can be put into in future. This is the principle of Deferment. It means the estimation of the market value of the land when put into the best use in the future and deduction based on the calculations of the deferred income which would be derivable from the land if sold out in plots over a given period. In Abiodun v. Chief Secretary of Government114 their Lordships conceded this principle as a fair method of assessment of compensation applicable in England but nevertheless rejected its application in Nigeria because of the lack of previous reliable precedents. Verity C.J. Observed that:

There is no evidence of its practice in Nigeria, Courts never recognized its existence in the assessment of compensation under Public Land Acquisition Act.115

In spite of the above, the Supreme Court had given recognition to this principle in Nzekwu v. Attorney-General, which seems to have impliedly negated or overruled the West Africa Court of Appeal and Privy Council’s judgment in Abiodun’s case.

Secondly, we should also estimate the market value of the land when put into this best future use.116 Thirdly, we should consider again the time, which will elapse before the land can be so used i.e. the time of ripeness of the land for development. Finally, we should further estimate the costs of carrying out

113 Lawrence & May, 1st Ed. (1943).

114 (1949) 12 WACA 525 at 527 Aff’d. Ca. WACA 530.

115 Ibid.

116 The principle or basis rejected by Anya J. in Commissioner For Lands v. Aneke, infra n 117, and Maja & Abiodun cases.

works required to mature the land or to put it into the proposed best use. These modern methods of valuation were endorsed partly in Commissioner of Lands v. Aneke117 here the issues for determination was the adequacy of compensation for land compulsorily acquired by the Government for the settlement of the civil war disabled persons.

The Government relied on the valuation report of its officer to offer compensation of N24,000 as payment of capital value of the land, crops, economic trees thereon as the Government valuation officer regarded the land as exclusively agricultural with no present building potentialities whilst the three other independent valuers called by the owners testified that it is “accommodation land” presently ripe both for agricultural and building purposes. The Court held fair and adequate compensation is the capital valuation based on the present potentialities of the land as accommodation land possessing agricultural and building qualities. Emphasis was placed on open market value at the date of acquisition and not the future. Anya J., considered the factors to be included in the assessment as the data of comparative land transactions in the neighbourhood, residential value, surveyor’s expert evidence that the agricultural uses would in few years disappear and that the land would completely become building land, the building activities in the vicinity, existence of schools, churches, tenants occupying other lands, the presence of buildings constructed with asbestos roofing representing the standard for average Nigerians in the neighbourhood, presence of electric poles confirming building potentialities without which NEPA could not have extended the electricity supply to the area, the land is connected to the urban towns with motorable earth road and other landlords have building of their own with tenants living therein. His Lordship however differentiated Aneke’s case, which is based on present potentialities of the land as agricultural, accommodation/building qualities, from Maja’s case, which also involved the principle of deferment, i.e. estimation of the market value when the land is put to best use in future. This distinction would have been unnecessary had Nzekwu’s case been referred to. It would appear the slow pace of Law Reporting in the later 1970’s and early 1980’s made it impossible, as perhaps it may not yet have been reported then.

It is necessary to use the medium of this article to call upon our Honourable Law makers to make the necessary amendments in the interest of fairness and the spirit of adequacy of compensation and non-deprivation. These cases decided under compulsory Land Acquisition would provide illuminating

117 (1973) 3 ECSLR (Pt.1) 207, 210-21g.

basis for the reform of Section 29 of the Land Use Act 1978 and assessment of compensation thereon. Further, the following is suggested as a vital and indispensable guide for the proposed reforms:

A) Compensation Method

This entails the collection of land transactions in the neighbourhood.118 To determine entitlement to compensation the quantum payable, consideration should be made to surrounding lands within the area or vicinity. In Salako v. Salako,119 the Court adopted the formula used in paying owners of adjoining properties after accepting expert evidence regarding the state of affairs in the vicinity at the date of acquisition. George J. differentiated and adopted certain figures or amounts in respect of properties categorized as shops/commercial, industrial, residential and slum areas. Based on this, His Lordship awarded compensation for reversionary site value i.e. the value of the site without building on it. Similarly in Chairman L.S.D.P.C. v. Ottun (above) the quantum awarded by Court for compulsory acquisition was minimal because the property in question was situate at residential slum area of central Lagos where the street was un-tarred and not motorable.

B) Residual Method

This is used for the developed land. By this method, the remaining useful or economic life span of the existing building/unexhausted improvements, and the quality of the structural value are assessed. In Salako v. Salako the Court also applied this principle and based compensation on a useful span of life of the property for 13 years and rent accruing for the capitalized period. In Chairman L.S.D.P.C. v. Ottun (above) the estimated structural and economic life of the property was also assessed at 13 years at the date of acquisition.

C) Investment Method

This is the method of valuation based on the value of the site with building and without building when properly invested for a given period. In Chairman L.D.P.C. v. Ottun (above) applying this method, Bakare, J. held that the value of land appreciates and if the life span of the property had been assessed to be

13 years, the value of the land upon fair market value would have been higher at the time of the publication of the scheme of acquisition. His Lordship was

118 Commissioner for Lands v. Aneke, supra n 117; Nzekwu v. Attorney-General, supra n 52.

119 (1973) 9 CCHCJ 5,7-9 per George J.

inclined to consider and assess the capital value based on 13 years life span. In Nzekwu v. Attorney-General120 the Supreme Court awarded compensation based on capitalization of 21 years purchase.


In conclusion, it is submitted that the reforms should take account of the above. We equally subscribe the adoption of the present potentialities and future expectations - “deferment” as the best criteria as they would promote equity and fairness. It is submitted that for compensation to be adequate, deprivation of right of use of the land by the holder presently and in future must be accounted for and made good by the Government - the revoking/ acquiring agency. This is because compensation can hardly be considered adequate unless and until all the present and future rights derivable/enjoyable over the land compulsorily acquired or revoked are paid in full. Any attempt to deprive the holder of undeveloped land would negative the very essence of the fundamental Right to property guaranteed by Section 44, 1999 Constitution. In apparent or obvious recognition of this principle of fairness in assessing and awarding compensation, Sections 6(a), 6(d)2 & 13(b) Land Use Regulations

1979 (Anambra State)121 were enacted containing the implied covenants and conditions on the part of the holder of Agricultural, grazing etc. Certificate of Occupancy to pay compensation to the inhabitants of the land, which is the subject of the Certificate of Occupancy as may be fixed or assessed by the Governor or his authorized agent for disturbances to the inhabitants in their use or occupation of the land.

This is a sensible approach as in cut-throat capitalist society like ours, it is unjust to deprive owners of undeveloped land of it without payment of due compensation. What is more, it is a matter of common knowledge that most plots owners acquired their titles to Right of Occupancy as vacant land from original vendors/landlords by virtue of sale, conveyance and other form of dispositions after the payment of sufficient consideration.122 before ever they would develop same after seeking the necessary consent or approval of the Governor/Local Governor respectively.123 Apart from paying the agreed price for the vacant/undeveloped land, the purchaser/holder of the Right of Occupancy incurred other expenses e.g. payment of land surveyor’s

120 Supra n 52.

121 ANSLN No. 38 made by the Governor pursuant to powers conferred by Sections 3 and 49

Land Use Act 1978. See also same Regulation ANSLN No. 38 (1979).

122 Based on the personal experience of the author in his real property and conveyancing practice.

123 Sections 21 and 22 Land Use Act 1978; Savannah Bank Ltd. v. Ajilo (1989) 1 NWLR (pt.

97) 305.

architectural/building engineers, estate Agents’ professional fees, solicitor’s fees for preparation of the deed of conveyance/perfection of the legal documents etc. which no doubt increase the cost/value of the land in spite of the obvious lack or absence of developments thereon.

The third stage, where the purchaser/holder improves the land by erecting building/structure thereon further increases the value of the land, which is the subject matter of Right of Occupancy hitherto classified as vacant/undeveloped. It is submitted that the first stage:- the purchase of land/performance of customary rites, second stage of payment of services charges to professionals engaged to facilitate the acquisition, perfection and transfer of title ought to be compensated in the interest of fairness. It is further submitted that the deliberate attempt by section 29 of the Land Use Act 1978 to compensate only the third stage i.e. erection of structures to the exclusion of first and second stages appears to be an unjustifiable deprivation. This would negate the very essence of the Land Use Act which was never intended deprive anybody of their beneficial interests and rights in land despite making the Governor a Trustee or Administrator, as opposed to beneficial owner, of all lands in the state. The necessary amendment should take into consideration that the value of vacant or unimproved land naturally and appropriately appreciates, rather than depreciates in course of time, in spite of lack of physical improvement, and that this real appreciation is not the same as the spiraling effects of speculation that the Land Use Act 1978 was intended to address.

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