R v Carmarthen District Council, ex parte Blewin Trust Ltd and another

Compulsory purchase — Compulsory purchase order — Proposed general vesting declaration — Judicial review sought by owners with a view to prohibiting acquiring authority from executing declaration — Complaint by owners that, although the authority had the legal power to vest the land in question in themselves by virtue of the Compulsory Purchase (Vesting Declarations) Act 1981, it would be contrary to natural justice and an abuse of power to do so — Possibility of relief in equity but held not justified on the facts The applicants were the owners of the Boar’s Head Hotel in Blue Street, Carmarthen, which had attached to it an area of land used as a car park for the hotel — The actual operation of the hotel had been in the hands of the applicants’ tenants — The proposed vesting declaration, pursuant to the compulsory purchase order, was in respect of 0.53 of an acre, which formed the major part of the applicants’ car park — The applicants objected that the acquisition of this area for public car parking would seriously interfere with the business of the hotel, which required parking facilities for both residents and daily customers — The inspector in his report after the inquiry expressed the view that the parking needs of the hotel could be accommodated within the general scheme of development and on this basis the Secretary of State for Wales confirmed the purchase order — The owners, however, complained that the scheme before the inspector had not in fact been implemented and that, instead, a scheme by a different developer was proposed which would reduce the hotel’s parking facilities to a ‘derisory provision’ — If in that case the vesting order was proceeded with, the owners would be deprived of the opportunity of voicing their objections to what was an entirely different scheme — It should be mentioned here, as it had some weight eventually with the judge, that by the date of the hearing the hotel had been closed for trading The procedure laid down by Parliament for challenging a compulsory purchase order after approval by the Secretary of State was to be found in Part IV of the Acquisition of Land Act 1981 — This provided, by section 23, a time-limit for applications to the court of six weeks from the publication of notice of confirmation of the order, while section 27 excluded any questioning of the order by other legal proceedings — It was submitted by the acquiring authority that the applicants were now mounting a challenge that was wholly outside the statutory scheme — Considerations of natural justice could not arise at this stage; they were satisfied by the inquiry which had taken place into the order itself The difficulty which Nolan J found with the authority’s submission was that it offered no remedy in a case where the development contemplated, when the objections were heard and the order was made, differed from the development intended at the time of the vesting declaration — It seemed strange that no statutory provision existed to consider matters, which might be of substantial importance, arising between the grant of the power to make a vesting declaration and the actual execution of that power — However, the decision of the House of Lords in Simpsons Motor Sales (London) Ltd v Hendon Corporation showed that equity could still afford relief if the circumstances warranted it — The test was whether the action which the acquiring authority proposed to take was ‘against good conscience’ — The applicants in the present case had demonstrated that the proposed action was, in principle, reviewable on grounds of conscience, but they failed on the facts to establish that the authority were acting unconscionably — The judge gave reasons for so holding and dismissed the application accordingly The following case is referred to in this report. Simpsons Motor Sales (London) Ltd v Hendon Corporation [1964] AC 1088; [1963] 2 WLR 1187; [1963] 2 All ER 484; (1963) 62 LGR 1; 14 P&CR 386; [1963] EGD 207; 187 EG 581; [1963] RVR 522, HL This was an application by Blewin Trust Ltd and Felinfoel Brewery Co Ltd, owners of the Boar’s Head Hotel, Blue Street, Carmarthen, for judicial review, seeking an order of prohibition to restrain the respondents, Carmarthen District Council, from executing a general vesting declaration in respect of 0.53 of an acre of land, constituting part of the Boar’s Head Hotel car park. Hedley Marten (instructed by Evans Powell & Co, of Llanelli) appeared on behalf of the applicants; Desmond Keane QC and Hugh Torrance (instructed by Ungoed-Thomas & King, of Carmarthen) represented the respondent council. Giving judgment, NOLAN J said: This is an application by Blewin Trust Ltd and Felinfoel Brewery Co Ltd for judicial review in the form of a prohibition to restrain the respondents from executing a general vesting declaration in respect of 0.53 of an acre of land in Carmarthen. The land forms part of the car park of the Boar’s Head Hotel in Blue Street, Carmarthen, of which Blewin Trust Ltd, to whom I shall refer as the applicants, are the owners. The respondents propose to make a general vesting declaration in pursuance of a compulsory purchase order made by the respondents on May 23 1985 and approved with modifications by the Secretary of State for Wales on August 18 1986. It is not in dispute that the respondents have the power to make the declaration by virtue of section 4 of the Compulsory Purchase (Vesting Declarations) Act 1981. What is contended by the applicants is that in this particular case the proposed exercise of the power would be in breach of the rules of natural justice. It would thus be an improper use of the power or, in other words, an abuse of the power which the court should prohibit. The basis of the contention is simple, but I must approach it by way of the relevant documents. The compulsory purchase order was expressed to be made for the purpose of the ‘development, redevelopment and improvement for commercial purposes of the development of retail stores and30 ancillary car parks’. The Secretary of State appointed an inspector to conduct a public local inquiry into the order under section 13(2) of the Acquisition of Land Act 1981. That inquiry was held on March 18 1986. The inspector delivered his report on April 7 1986. The scheme for development is to be deduced from an application for outline planning permission made by the respondents to themselves as the planning authority on November 16 1983 and approved on April 19 1984. The particulars of the application describe it as ‘siting of retail store and multi-deck car park and improvements to the bus station’ in Blue Street/Friars Park, Carmarthen. In para 18 of his report the inspector refers to it in these terms: Discussions have been held with potential occupiers and developers of the site and from these it is clear that any development must incorporate a substantial number of car parking spaces. The specific requirements of potential occupiers vary, especially in relation to the amount of storage space needed, and therefore it is important to maintain flexibility within the site. It is proposed to develop the site comprehensively with a freestanding store of about 50,000 ft sq (4,645 m sq) providing a net retail area of some 37,000 ft sq (3,437 m sq), a car park incorporating 2 decks over the bus station, surface car parks, and an improved bus station extended to 14 bays . . . The objectors to the order included the applicants. Referring to them in para 2 of his report the inspector says: The grounds of objection in relation to Plot 1 — that is the area owned by the applicants forming part of the Blue Boar car park — were that the hotel would be unable to carry on its normal course of business without the facility of parking for residents and daily customers and that the compulsory acquisition of the land would result in serious injury to the hotel’s business and its possible closure. In para 21 the inspector says: Plot 1 extends to 0.53 acres and consists of the major part of the Boar’s Head Hotel car park. It can easily accommodate about 60 vehicles although, with the demolition of the lock-up garages and if properly laid out, 100 spaces could be achieved . . . In para 22 he says: It is contended that, with regard to the specific objections raised in respect of Plot 1, it is not entirely available for use of the hotel during the working day as the South Wales Electricity Board rents about 50 spaces . . . These car parking facilities are thus not essential to the operations of the hotel and an agreement has been reached with a development agency whereby the land would be released . . . The existence and nature of this agreement contradicts the objections raised. The prospect of reserving spaces, in the order of 50, exclusively for the use of the hotel is envisaged. In para 25 he noted that Mrs Shephard — who together with her husband is the underlessee and who has actually been running the hotel — had agreed to provide information about the hotel facilities and had confirmed that the lock-up garages were rented out and that there was a contract with the South Wales Electricity Board, who parked between 50 and 70 cars on Plot 1. In para 28 the inspector said as part of his conclusions: I am not convinced that the inclusion of Plot 1 within the Order area as part of the redevelopment scheme would adversely affect the operation of the Boar’s Head Hotel. It is currently used for private parking purposes and under the proposed scheme, which accords with the draft District Plan proposals, it would continue to be available for parking. At present access to Plot 1 is difficult and hazardous and most of the parking space is not of direct benefit to hotel clientele during the day nor available at all to large vehicles. (29)  Under the proposed scheme a larger amount of parking spaces would be made available on Plot 1 with safer and more convenient access from the A40. (30)  While the Boar’s Head Hotel has considerable potential for attracting a substantial number of customers, the future car parking requirements of the hotel can be a matter of negotiation and there is ample scope within the redevelopment scheme for all the hotel’s car parking needs to be met especially during the evening and overnight when the proposed parking areas would be less utilised. (31)  I consider, therefore, that Plot 1 forms an essential part of the redevelopment scheme and that its inclusion would achieve considerable benefits both for the operations of the hotel and for the future planning of the area as a whole. In consequence I am satisfied that in relation to Plot 1 the order meets the requirements of the Act under which it was made. The Secretary of State in his decision letter confirms the Order. I think it is only necessary to say that he fully accepted the inspector’s report in relation to plot 1. The agreement which is referred to by the inspector was the agreement between the applicants and the proposed developers, which had been made on October 21 1985. The proposed developers were called CCL. In para 1 of the agreement CCL’s appointment was defined as: The appointment of CCL by Carmarthen District Council as the developer to carry out the development upon the site. Para 1.14 referred to the car-park works to be carried out either on Blewin land or on the CCL land or partly the one and partly the other to provide not less than 50 car-parking spaces. The agreement was expressed to be dependent on a number of conditions of which the first is CCL obtaining appointment in the terms of the definition in para 1. That is the appointment as to the developer to carry out the development on the site upon terms satisfactory in all respects to CCL. I note in passing that this condition was not satisfied and in the event nothing came of the agreement: it simply lapsed. However, the position as matters stood in August 1986 was as contemplated by the inspector in his report. For the subsequent history of events I turn to the second affidavit filed by Mr Morgan, the chief executive of the respondent council. In para 2(g) he says, having spoken of the period after the public local inquiry: In the meantime the Council were proceeding to attempt to find developers for the town centre site and several had shown interest in undertaking this development. (h)  In July 1986 a joint presentation was made to the Council by two interested development companies, namely: CCL Limited and Alfred Walker plc. Negotiations then proceeded with these two companies on the basis that there would be two adjoining developments being undertaken not necessarily contemporaneously. (i)  After much negotiation and detailed drafting on 4th September, 1987 a contract was signed between the Council, CCL Limited and Tesco Stores Limited for the development of part of the site including only part of the Boars Head land. This still left the second stage of the development outstanding which would include the remaining part of the Boars Head land. (j)  By this time Alfred Walker plc had in fact dropped out because of a shift in the Company’s trading philosophy away from retailing and towards the leisure industry. Their place was taken by a Company called Vanson Limited who then entered into negotiations with the Council for the development of the remainder of the site together with the development of some privately owned land at Lammas Street Carmarthen. (k)  By this time it had already become obvious that the second stage of development would be more extensive than originally envisaged and would consequently reduce the level of parking provision. (m)  To my personal knowledge through the last seven months if not longer Vanson have attempted to negotiate with the Applicants in order to come to a mutual agreement in relation to the Boar’s Head land. This has not proved to be possible. (o)  All attempts at negotiation proved to be abortive and hence the Council on the 19th of May, 1989 published and served of its intention to proceed with the making of a General Vesting Declaration. Mr Lewis, the chief executive of both Blewin Trust Ltd and Felinfoel Brewery Co Ltd, in para 8 of his second affidavit says: The redevelopment scheme before the Inspector did not proceed. In its place is now proposed a totally different scheme by another developer, Vanson Limited. Under the Vanson Scheme there will be spaces for 6/7 cars parked on Plot 1 and spaces for 13-14 motor cars some 100 metres away from the Hotel and at the rear of Lammas Street on land known as the ‘Bakery Land’ . . . This is the reality of the 20 car park spaces which the Council consider to be a ‘sufficient number to allow the Hotel to be used efficiently and effectively’ . . . As appears from paragraph 4 above with this derisory provision the Hotel’s business would never survive. In para 4 he said: A Hotel the size of the Boar’s Head requires its own private car park to attract customers. Without such a private car park its business would wither. Up to the time of the making of the 1985 Compulsory Purchase Order it had parking facilities consisting of 14 lock up garages and at least 50 open air car park spaces. If the 14 lock up garages were to be demolished some 100 spaces could be achieved all situated immediately at the rear of the Hotel. This is the amount of car park facility desirable for a Hotel of this size. 50 spaces would be the absolute minimum below which the business would fail. These spaces must be immediately adjacent to the Hotel. Mr Marten, representing the applicants, explained — in this connection — the finding by the inspector relating to the use of car-park spaces by the South Wales Electricity Board on the basis that this was something which should never have happened and that it was one of a number of bones of contention between the applicants and Mr and Mrs Shephard. Thus the renting by the board of some 50 of the 64 or so available spaces was not something of which the applicants had approved or would approve in any way. Although this is not specifically dealt with in affidavit evidence, I naturally accept it and Mr Keane, for the respondents, would not wish me to do otherwise. 31 To bring matters up to date further I should go to para 8 of Mr Morgan’s second affidavit. In that paragraph he refers to a compulsory purchase order made recently by the Land Authority for Wales and covering the Boar’s Head land, as specified in the previous order, together with an additional small area over and above it. He says: 8. It is a matter of concern to the Council that Boars Head land is vested in the Council as quickly as possible in order to secure its position with regard to the Land Authority’s attempt to acquire the same. There is fundamentally no great difference between the Council and the Land Authority in that both statutory bodies wish to make this land available for development. Nevertheless the Council is first in time and feels that it would be in a stronger position if the land was vested in it. It after all enjoys the benefit of a confirmed Compulsory Purchase Order and is in its view entitled to make a General Vesting Declaration. 9. A Local Public Enquiry is to be held at Carmarthen on the 28th of June, 1989 into objections received to the Land Authority for Wales’ Compulsory Purchase Order. The Council has made certain Statutory Objections . . . I understand that other objections have been received from the applicants and also from Tesco Stores Limited. Also shown to me now is a true copy of the Land Authority’s reasons for making the order . . . 10. I was born at Carmarthen and went to school in the town. I have consequently walked past and from time to time visited the Boars Head Hotel for very many years. I can recall that in the early sixties it was a typical old fashioned coaching Inn. It is a listed building in a prominent position in one of the main trading streets of the town to which it contributes a great deal of character. Unfortunately, it seems to me that the Hotel has deteriorated since that time and this deterioration has been very rapid indeed over the last few years culminating now in the fact that it is at present closed for trading. That affidavit, sworn on June 16th was the first indication of the fact that the hotel had actually been closed. Mr Lewis in his second affidavit, dated June 19, says in para 3: . . . The Applicants are presently experiencing difficulty with the Underlessees of the Hotel being Mr and Mrs Shepherd who appear to have ceased trading, but this is a temporary difficulty which will be resolved by litigation already proceeding between the parties and have no bearing whatsoever on the issues before the Court in these present proceedings. In the last paragraph of his second affidavit Mr Lewis summarises the case for the applicants. Having said that the endeavour of the council to secure its position with regard to the Land Authority for Wales is itself a questionable use of its power, he goes on: But a more fundamental principle is at stake. (Where as here) a Local Authority becomes vested with power to acquire land as a result of a Compulsory Purchase Order made and confirmed on the basis of disclosed and specific reasoning which itself is based on specific facts and proposals, I submit that a party whose property interests thereby become liable to be acquired has a legitimate expectation that such power will not be exercised if the basis of such reasoning has wholly or substantially gone. The vesting of a power is one thing, its exercise is quite another. The Council remains by virtue of the initial making of the 1985 Order vested with power to acquire plot 1. But to exercise that power . . . would deprive the Applicants of a legitimate expectation of being entitled to object to what as indicated in paragraph 8 above, is, as far as they are (concerned), a totally different scheme. This scheme is the subject of the 1988 Order to which the Applicants will, provided no General Vesting Declaration is made in the meantime, have the normal and proper right and opportunity to object to at the Public Inquiry to be held on the 28th June, 1989. To deprive them of that right and opportunity would constitute a denial of natural justice. In response to these submissions, Mr Keane took me through the normal process for the compulsory acquisition of land, dwelling in particular on the provision made by Parliament for inquiries and objections at the stage when the compulsory purchase order has been made but not confirmed. He drew my attention to sections 23 to 25 of the Acquisition of Land Act 1981, which lay down the procedure by which a compulsory order once made is to be challenged after the Secretary of State has approved it. The High Court has certain powers to entertain a challenge provided that an application is made to it within six weeks of the publication of the intention to confirm the order. Section 25 of that Act provides so far as relevant: . . . a compulsory purchase order . . . — subject to the provision I have noted — shall not . . . be questioned in any legal proceedings whatsoever. Here, says Mr Keane, is an attempt by the applicants to mount at the eleventh hour what is in substance an attack upon the compulsory purchase order, since the right to make a general vesting declaration is directly derived from it. Such a challenge is wholly outside the scope of the scheme laid down by Parliament. Considerations of natural justice cannot arise at this stage. The requirements of natural justice are satisfied by the inquiry into the order itself. The difficulty which I find with that submission is that the statutory scheme thus set out makes no provision for the case where the development contemplated at the time when the compulsory purchase order and the objections to it are made is different from the development contemplated at the time of the general vesting declaration. The latter may be made by virtue of section 4 of the Compulsory Purchase Act 1965 at any time within three years of the publication of the intention to confirm the order. In the present case those three years will expire in October next. Mr Keane meets that observation by saying that of course it is possible and indeed almost inevitable that changes will occur during the period, which may be as much as three years, between the confirmation of the order and the execution of a general vesting declaration. But Parliament has made no provision for a review of the order during that period and the court should be slow to step in and provide for a review where Parliament has not chosen to do so. It does seem to me extraordinary that the inquiry into objections which the Secretary of State is bound to make should be regarded as conclusive without any statutory right to bring up matters which may substantially enhance the validity of the objections and which occur between the granting of the power to make a vesting declaration and the execution of that power. But that is the law. It rests, I suppose, upon the need for finality in planning inquiries. Until 1965 the period between the confirming of the order and the acquisition of the land could be as long as 10 years. Presumably one of the reasons why it was shortened in 1965 was to limit the scope for changes in circumstances before the landowner could be deprived of his land pursuant to the order. Be that as it may, so far as the general background is concerned, it seems to me that out of the many cases that were quoted to me one — and one only — lays down the principle by which I should decide this case. That is the decision of the House of Lords in Simpsons Motor Sales (London) Ltd v Hendon Corporation [1964] AC 1088. In that case an acquiring authority had exercised powers under the Housing Act 1936 to make a compulsory purchase order, duly confirmed by the minister, for the acquisition for the purpose of providing housing accommodation of half an acre of land occupied by the appellant company for their business of dealing in motor cars. In 1952, the same year as that in which the order was made, a notice to treat was served on the owner of the site. In August 1954 provisional compensation was agreed at £1,400. By July 1956 the acquiring authority had abandoned the original plan for the owner’s site and were considering the acquisition of a much larger area to include that site. In 1957 the acquiring authority resolved that the acquisition of the larger area would not be possible in the foreseeable future and in August 1958 informed the Central Land Board, though not the owner, that at the present time they did not intend to proceed with the acquisition of the site. In October of that year the acquiring authority instructed the town clerk to acquire the site for the agreed sum of £1,400, subject to the appellant company’s being allowed to remain in possession. The appellant then purchased the site and sought a declaration that the notice to treat and notice of entry were no longer effective because of the change in circumstances between the time when the order was made and the time when the notice to treat was sought to be pursued, that change in circumstances including a considerable rise in land values. Buckley J at first instance granted the relief sought. The matter went to the Court of Appeal, where the decision was reversed, and to the House of Lords, where the decision of the Court of Appeal was upheld. There is, I think, only one part of the speech of Lord Evershed, with which the remainder of their lordships agreed, which I need to quote. That comes at pp 1126 and 1127 in which he considers the question of alleged equitable right which the applicants (the appellants in that case) had put in the forefront of the case. Lord Evershed said of the case: It was indeed upon this ground that Buckley J decided in Simpsons’ favour. In reaching his conclusion he asked himself the question of whether the Minister would have confirmed a compulsory purchase order in terms similar to that originally put before him in 1952 had it been submitted by the corporation in 1959; and it was the view of the learned judge that he would not. With all respect to the learned judge I agree with the Court of Appeal that such a test ought not to be used in determining whether Simpsons are entitled to the equity which they claim. The compulsory purchase order of 1952 became finally effective and not subject to challenge and I cannot therefore think that an equity arises to have it, in effect, set aside on the ground that a similar32 compulsory purchase order might not have been confirmed by the Minister seven years later. However, as the Court of Appeal said, the learned judge did not really found his judgment on this factor but on the general change of circumstances. He went on: I should, I hope, be the last to suggest that the proper application and, where necessary, extension of equitable principles in the present day and age, when so much human activity is governed and controlled by legislation, should be restricted and I have in mind the picturesque language once used by Harman LJ when he said that he thought that equity was not presumed to be of an age past childbearing. But on reflection I have been unable to accept Mr Megarry’s argument. To accept it would appear to me to involve considerations of this kind and no more; that Simpsons had indeed substantial points upon which they had argued for the view that the notice to treat had ceased to be effective but that such substantial points had not in the end been quite substantial enough: and that therefore as a kind of consolatory award Simpsons should be granted under the guise or heading of equitable relief the result which they had on Mr Megarry’s other grounds failed to obtain. Put alternatively, and briefly, it seems to me that it would amount to no more than saying that in all the circumstances it would be perhaps rather hard luck for Simpsons now to have to part with their North Road site at prices which no longer represented modern prices. It would, in my opinion, be no more than palm tree justice. I cannot think that this can suffice for the establishment and enforcement of an equity. If such an equitable right is to be found then it must, as I conceive, be based upon the view that to permit the corporation to continue to enforce their rights under the original compulsory purchase order must in some real sense be against good conscience. In order to achieve such a result it seems to me that it would be necessary to show one or both of the following: that there had been on the part of the corporation something of the nature of bad faith, some misconduct, some abuse of their powers: that there had been on the part of Simpsons some alteration of their position — something must have been done or not have been done by them upon the faith and in the belief that there would be a speedy acquisition of the North Road site: in other words, that they had in some sense been put into an unfair position because of the long period which had elapsed since the service of the notice to treat. My Lords, I can find no sign of either of the considerations which I have attempted to state. Here, Mr Marten, for the applicants, does not suggest bad faith on the part of the respondents. He does suggest that they are proposing to do something against good conscience, which he says is really another way of putting his broad natural justice or fairness approach. He makes the points that in the Simpsons case the situation was, so to speak, weaker for the applicants than in the present case because Simpsons had never objected to the compulsory purchase order as such and, further, there had been no public local inquiry into the matter. The absence of a public inquiry was referred to by Lord Evershed at p 1119 of the report in these terms: Although, as I have earlier observed, it was the actual intention of the corporation in 1952 to use the North Road site for the purpose of erecting flats thereon, the terms of the compulsory purchase order (and of the notice to treat) clearly do not, in my opinion, limit the use of the North Road site when acquired to such a use. Had there been a public inquiry, it might possibly have been otherwise. The relevance of that, submits Mr Marten, is that here, no doubt, the terms of the compulsory purchase order were wide enough to comprehend the Vanson’s development now being considered: but that is really beside the point when one considers that the public local inquiry had not been apprised of that and could not have known of it. With all of this I agree, but the test remains whether what the council proposes to do is against good conscience. It is on this point that the applicants fail to persuade me. The situation has of course changed substantially since the time of the public local inquiry. The inspector was contemplating the hotel operating, so far as he knew, adequately — there appears to be no evidence before him to the opposite effect — with the use of no more than about 14 car-park spaces. It is perfectly true that the objection by the applicants was put specifically on the car-park spaces and was set aside by him because he felt that aspect of the matter was wholly covered by the then prospective agreement with CCL. That is not the case any more, but there have been other changes as well. The inspector was not contemplating a case where the hotel was out of business. It is wrong for me to try to put myself in the inspector’s place and ask what he would have reported had he known that. That is made clear by Lord Evershed. I simply observe that had that been the test, it would have made me wonder whether he would necessarily have made the report that he did. He might well have said that the objection had no force at all; certainly less force than he gave it. The question remains whether the hotel being, as it is now shown to be, out of business I should make an order which would prevent the council from exercising its right. Having considered the arguments on both sides, I conclude that the applicants’ case in law is well founded to the extent that the proposed action of the council can be reviewed on grounds of conscience. It has been argued with exceptional ability and force by Mr Marten. But at the end of the day, as I have indicated, I do not think that the council are acting unconscionably or that the interest of the applicants, which of course will be reflected in the compensation to which they will be entitled, should be allowed to prevail over the interest of the others affected by the development so as to preserve for the applicants the desire which they undoubtedly have to get the hotel back into operation. For these reasons this application cannot succeed. The application was dismissed with costs, except the costs of the initial application for leave.