Hughes and another v Doncaster Metropolitan Borough Council

Compensation for acquisition of land — Land Compensation Act 1961, rule (4) in section 5 — Appeal by case stated from decision of Lands Tribunal — Court of Appeal divided — Leave given to appeal to House of Lords — Discussion of some fundamental matters affecting compensation for disturbance — Whether rule (4) in section 5 (account not to be taken of increase in value of land due to use contrary to law) applies to compensation for disturbance or other matters not directly based on the value of land (rule (6)) — Ambiguity of the ‘value of land’ — Distinction between the value of land to the owner, which would include the amount of the loss which the owner might suffer as a result of the disturbance of his possession, and the value which the owner could obtain in the open market simply for the sale of his interest — Whether the use of land which was immune from enforcement action in consequence of section 87 of the Town and Country Planning Act 1971 could nevertheless be ‘contrary to law’ In the present case the compulsory acquisition resulted in the closing down of the claimants’ business, that of scrap metal and rag merchants, which had been developing successfully until the acquisition — The crucial factor, which gave rise to the questions raised in these proceedings, was that at no time had planning permission been sought or obtained for the uses of the business or the erection of buildings for it — An important distinction, however, had to be made between the ‘blue land’ and the ‘green land’ (areas identified by their colours on a plan) — The point of the distinction was that the blue land had, because of the date of its unauthorised development, become immune from enforcement proceedings whereas the green land did not enjoy this immunity — The claimants claimed compensation on the basis of the extinguishment of their business — Three questions of law were raised in the case stated but only the first two had to be argued The first question was whether the tribunal erred in law by holding that rule (4) in section 5 of the 1961 Act did not affect a claim for compensation for disturbance or other matters mentioned in rule (6) on the ground that such matters were not part of ‘the value of land’ within the meaning of rule (4) — Dillon LJ, who gave the first judgment but the minority view, held that the tribunal did err in this respect — He considered that rule (4) did apply to the valuation of the claimants’ business for the purpose of compensation as well as to the valuation, in accordance with rule (2), of the land itself — Compensation for disturbance was part of the value of the land to the owner; such compensation and the market value of the land must, on this view, be considered together — Staughton LJ and Mann LJ disagreed — Staughton LJ thought it significant that ‘the value of land’ in rule (2) referred to the open-market value, not the extended value which included compensation for disturbance; and the same was true of the words in rule (6) — One would therefore, on the principle of noscitur a sociis, expect that the words would have the same meaning in rule (4) — Mann LJ considered that rule (6) recognised that disturbance was a thing by itself and not part of the value of land in the sense there used — The majority view was therefore that the answer to the first question was ‘no’, or, to express the matter in positive form, that the Lands Tribunal was correct in holding that rule (4) did not apply to the assessment of compensation for disturbance The second question was whether the tribunal erred in law in holding that uses which are by statute immune from enforcement action under the Town and Country Planning Act 1971 cannot be said to be ‘contrary to law’ within the meaning of rule (4) — Here again Dillon LJ’s view was the minority one — His conclusion was that the effect of the Town and Country Planning Acts of 1968 and 1971 was to proclaim a measure of oblivion for breaches of planning control which took place before the end of 1963 — It would be wrong to regard breaches so far given as still contrary to law — He did not regard the decision in LTSS Print & Supply Services Ltd v Hackney London Borough Council as dealing with the same kind of situation — Staughton and Mann LJJ, on the other hand, considered that the Lands Tribunal had been in error on this question — Apart from the theoretical point, which they did not wish to rely on, that there might be a duty (and therefore a breach of duty) without a sanction, they considered that the decision in the LTSS Print & Supply Services case, dismissed by Dillon LJ as not in point, was in fact relevant and, in Staughton LJ’s view, binding — The majority view on the second question was that the Lands Tribunal was in error in deciding that the uses immune from enforcement action were thereby not contrary to law The appeal was allowed in accordance with the majority view and the order of the Lands Tribunal varied accordingly — However, leave to appeal to the House of Lords was granted The following cases are referred to in this report. Commissioners of Inland Revenue v Glasgow & South-Western Railway Co (1887) 12 App Cas 315 Dreyfus (Louis) & Cie v Parnaso Cia Naviera SA [1959] 1 QB 498; [1959] 2 WLR 405; [1959] 1 All ER 502; [1959] 1 Lloyd’s Rep 125 Horn v Sunderland Corporation [1941] 2 KB 26; [1941] 1 All ER 480, CA Jubb v Hull Dock Co (1846) 9 QB 443 M’Ardle v Glasgow Corporation 1972 SC 41 LTSS Print & Supply Services Ltd v Hackney London Borough Council [1976] QB 663; [1976] 2 WLR 253; [1976] 1 All ER 311; (1975) 74 LGR 210; 31 P&CR 133; 240 EG 711, [1976] 2 EGLR 148, CA Munton v Greater London Council [1976] 1 WLR 649; [1976] 2 All ER 815; sub nom Munton v Newham London Borough Council (1976) 32 P&CR 269; 74 LGR 416; [1976] EGD 469; 239 EG 43, [1976] 2 EGLR 5, CA Ricket v Metropolitan Board of Works (1865) 31 LJ (QB) 257 Stebbing v Metropolitan Board of Works (1870) LR 6 QB 37 Tooth & Co v Tillyer (1956) 95 CLR 605; [1956] ALR 891 Venables v Department of Agriculture for Scotland 1932 SC 573 This was an appeal by case stated by which Doncaster Metropolitan Borough Council challenged a decision of the Lands Tribunal, V G Wellings QC, in regard to the compensation payable to claimants (the present respondents), Charles Arthur Hughes and41 Nora Louisa Hughes, for the compulsory acquisition of land at Black Bank, Doncaster Carr, Doncaster. Lionel Read QC, Simon Pickles and Peter Harrison (instructed by Sharpe Pritchard, agents for Mr W R Bugler, Doncaster Metropolitan Borough Council) appeared on behalf of the appellant authority; R M K Gray QC and Robin Campbell (instructed by Taylor Bracewell, of Doncaster) represented the respondent claimants. In a dissenting judgment, DILLON LJ said: This is an appeal from a decision of the Lands Tribunal given on November 16 1987 on a reference by the respondents to the appeal (‘the claimants’) to determine the amount of compensation payable by the appellants, the Doncaster Metropolitan Borough Council (‘the acquiring authority’), for the compulsory acquisition of certain lands and premises owned and occupied by the claimants. The appeal therefore takes the form of a case stated by the member of the Lands Tribunal raising questions of law for the decision of this court. There are three questions put in the case, but in the event only the first two have been argued. The lands and premises in question are at Black Bank, Doncaster Carr, Doncaster, and they were compulsorily acquired under a compulsory purchase order made in 1973 by the former Doncaster Borough Council. Notice to treat was served by the acquiring authority on January 23 1976 and possession was taken on November 1 1981. The lands and premises in question — the reference land — have been identified by reference to a plan on which part is coloured blue and part is coloured green. These parts have been referred to as ‘the blue land’ and ‘the green land’ and for the purposes of this appeal it is unnecessary to identify them further. The claimants purchased the blue land from a Mr Brough under a conveyance of September 30 1969, and they purchased the adjoining green land under a conveyance of October 26 1972. At the time of the 1969 conveyance they also acquired from Mr Brough the goodwill of the business of scrap metal merchants and rag merchants carried on on the blue land under the name of William Brough & Sons and certain plant fixtures and fittings. That business had been commenced by Mr Brough on the blue land in or about 1959. The business was continued and developed by the claimants after their 1969 purchase and was extended on to the green land after the 1972 purchase. The business was highly successful; the decision of the Lands Tribunal records that its turnover in the three years prior to 1981 was regularly nearly £2m and in 1981 was £2,830, 803. As a result of the compulsory purchase, the business, as carried on on the reference land, ie the blue and green lands, had to be closed down, as it was not possible, despite protracted search, to find an appropriate alternative site. The claimants claim to be compensated for the closing down of that business. The crucial factor, which gives rise to the questions on this appeal, is that at no time was planning permission sought or obtained by Mr Brough or by the claimants for the change of use of the blue land or of the green land to use for the purposes of the business which I have mentioned, or for the erection on these lands of warehouses or other buildings used for the purposes of that business. The distinction between the blue land and the green land lies in the dates when the development took place, whether by change of use or by erection of buildings. There was a dwelling-house erected on the blue land in 1930 and another dwelling-house erected on the reference land in 1936; nothing turns on these. The unauthorised development of the blue land began in or about 1959 in the time of Mr Brough and was completed sufficiently long ago to have been immune from enforcement action under the Town and Country Planning Acts for the time being in force at all times relevant to the compulsory purchase of the blue land by the acquiring authority. By contrast, the development of the green land took place later and was not so immune. Full details are set out in the decision of the Lands Tribunal and it is unnecessary to set them out in this judgment, which is concerned only with the questions of law raised by the Lands Tribunal. The compensation to be paid by the acquiring authority to the claimants for the compulsory acquisition of the reference land falls to be assessed in accordance with the rules set out in section 5 of the Land Compensation Act 1961, which provides as follows: 5.–Compensation in respect of any compulsory acquisition shall be assessed in accordance with the following rules: (1)   No allowance shall be made on account of the acquisition being compulsory: (2)   The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise: (3)   The special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the special needs of a particular purchaser or the requirements of any authority possessing compulsory purchase powers: (4)   Where the value of the land is increased by reason of the use thereof or of any premises thereon in a manner which could be restrained by any court, or is contrary to law, or is detrimental to the health of the occupants of the premises or to the public health, the amount of that increase shall not be taken into account: (5)   Where land is, and but for the compulsory acquisition would continue to be, devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, the compensation may, if the Lands Tribunal is satisfied that reinstatement in some other place is bona fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement: (6)   The provisions of rule (2) shall not affect the assessment of compensation for disturbance or any other matter not directly based on the value of land: and the following provisions of this Part of this Act shall have effect with respect to the assessment. This section repeats provisions formerly contained in, and first introduced as, section 2 of the Acquisition of Land (Assessment of Compensation) Act 1919. The 1919 Act was preceded by the report of a committee, presided over by Mr Leslie Scott KC MP, appointed by the Prime Minister of the day in July 1917: to consider and report upon the defects in the existing system of law and practice involved in the acquisition and valuation of land for public purposes, and to recommend any changes that may be desirable in the public interest. In the course of the argument on this appeal we were invited by counsel for the claimants to look at the recommendations of the Scott Committee in this report. We did so, de bene esse; but as we found nothing in the recommendations or in the report itself which was relevant to the questions which are before us, we found it unnecessary to rule on their admissibility, which was disputed. That there was nothing relevant in the report was not surprising, since at the time the Scott Committee reported and the 1919 Act was passed there was no town and country planning law. The first question put to this court in the case stated by the Lands Tribunal is whether the member of the tribunal erred in law in holding that rule (4) in section 5 of the Land Compensation Act 1961 did not invalidate the claimants’ claims for compensation for disturbance or other matters under rule (6) of the said section because compensation for disturbance or such matters as aforesaid was not part of ‘the value of the land’ within the meaning of the said rule (4). The view of the member was that as a matter of construction rule (4) applied only to ‘the value of the land’ as land to be assessed under rule (2). Consequently the respondents were entitled under rule (6) to compensation for the business they had lost by way of compensation for disturbance — in effect a separate heading — whether or not that business had been carried on ‘contrary to law’ on the blue land or the green land. In considering this question it is, in my judgment, important to keep in mind that in the leading case of Horn v Sunderland Corporation [1941] 2 KB 26 the majority of the court firmly rejected the argument that under the Act of 1919, which as I have said was the statutory predecessor of section 5 and was in the same terms, the value of the land and compensation for disturbance must be considered as two distinct matters (so to speak in watertight compartments) in respect of each of which the landowner was entitled as a matter of law to have a sum awarded for compensation and that the question whether compensation for disturbance should be awarded could not in any way be affected by the nature and amount of the sum arrived at in respect of the value of the land. In Horn’s case Sir Wilfrid Greene MR said at p 34, in words that are equally applicable to section 5 of the 1961 Act: Now r 6 does not confer a right to claim compensation. It merely leaves unaffected the right which the owner would before the Act of 1919 have had in a proper case to claim that the compensation to be paid for the land should be increased on the ground that he had been disturbed. That is in line with the opinion of Lord Alness in Venables v Department of Agriculture for Scotland 1932 SC 573 at p 579 (cited42 with agreement by Scott LJ in Horn’s case at p 41) that rule (6) ‘confers no new rights although it manifestly purports to save existing rights’. In truth there has never been any statutory provision which has in express terms conferred a right to compensation for disturbance on an owner whose land has been compulsorily acquired from him. The conception of compensation for disturbance has come in by judge-made law by way of interpretation of the statutory obligation to pay compensation for taking the land: see the judgment of Erle CJ in Ricket v Metropolitan Board of Works (1865) 31 LJ (QB) 257 at p 261 and the earlier case of Jubb v Hull Dock Co (1846) 9 QB 443 there cited. The obligation to pay compensation for taking the land arose for many years under the Lands Clauses Consolidation Act 1845. The statutory authority is now section 7 of the Compulsory Purchase Act 1965, which provides that: 7.–In assessing the compensation to be paid by the acquiring authority under this Act regard shall be had not only to the value of the land to be purchased by the acquiring authority, but also to the damage, if any, to be sustained by the owner of the land by reason of the severing of the land purchased from the other land of the owner, or otherwise injuriously affecting that other land by the exercise of the powers conferred by this or the special Act. (See also section 10 of the 1965 Act.) Compensation for disturbance comes in, where appropriate, as part of the value to the owner of the land to be purchased by the acquiring authority. The owner is to be compensated for property compulsorily taken from him to the extent of his loss, which is the value of that property to him: see per Cockburn CJ in Stebbing v Metropolitan Board of Works (1870) LR 6 QB 37 at p 42. Where land is compulsorily acquired, therefore, compensation for disturbance, if payable, and the market value of the land as land have to be considered together. This is underlined by the decision in M’Ardle v Glasgow Corporation 1972 SC 41. That was concerned with the Scottish equivalent of section 14 of the 1961 Act. Section 14(1) provides that: 14.–(1) For the purpose of assessing compensation in respect of any compulsory acquisition, such one or more of the assumptions mentioned in sections 15 and 16 of this Act as are applicable to the relevant land or any part thereof shall be made in ascertaining the value of the relevant interest. (My emphasis.) The relevant interest is the interest being compulsorily acquired in the relevant land. In M’Ardle’s case it was held that a statutory assumption that a certain planning permission would be granted in respect of the relevant land applied not merely to the assessment of the market value of the relevant land under rule (2) but also to the assessment, for the purposes of compensation for disturbance, of the value of the business carried on by the owner on the relevant land. The Lord President, Lord Clyde, said at pp 47-48: But the fact is that nowhere in this series of statutory provisions since 1845 is a disturbance claim treated as something separate and distinct from the rest of the claim. It is an element in the total computation of the compensation. The distinction which the acquiring authority seek to make between a disturbance claim and a claim for the value of the land is thus a false distinction. The present is the converse case in the sense that rule (4) in section 5 of the 1961 Act is concerned to reduce, rather than increase, the compensation payable to the owner. But there is a clear parallel between the opening words of section 5: Compensation in respect of any compulsory acquisition shall be assessed in accordance with the following rules: . . . and the opening words of section 14: For the purpose of assessing compensation in respect of any compulsory acquisition . . . The approach of the courts to the conception of compensation for disturbance must be the same whether increase or reduction in the compensation for compulsory acquisition of the relevant interest is in question. Therefore, in my judgment, rule (4) in section 5 is applicable to the valuation, for purposes of compensation for disturbance, of the business carried on by the claimants on the relevant land, and to the goodwill of that business, as well as to the valuation in accordance with rule (2) of the land itself. The member of the tribunal erred, in my judgment, in holding otherwise. I turn to question 2 in the case stated, which asks whether the member erred in law in holding that uses which by statute are immune from enforcement action under the Town and Country Planning Act 1971 cannot be said to be ‘contrary to law’ within the meaning of the said rule (4). The full reference in rule (4) is to use of the land or premises thereon ‘in a manner which could be restrained by any court, or is contrary to law, or is detrimental to the health of the occupants of the premises or to the public health’. The same wording appeared in rule (4) in the Act of 1919. It is accepted by the claimants in the present case in relation to the green land that their use of the green land for the purposes of their business was use in a manner which could have been restrained by the court or was contrary to law, since no planning permission for change of use of the green land was ever sought, and, as the change of use occurred after the end of 1963, there was never any immunity from enforcement action. Moreover, the rag warehouse building on the green land, built without planning permission, was begun only in late 1977 and completed only in 1978: see p 5 of the decision. So far as the blue land is concerned, however, the finding of the Lands Tribunal, which is not now challenged, is that it is probable that all activities on the blue land and in the buildings on it (including the erection of buildings erected without planning permission) were immune from enforcement action. An earlier comment in the decision suggests that this was conceded by Mr Lionel Read QC for the acquiring authority during the hearing before the tribunal. In view of the wording of section 87 of the Town and Country Planning Act 1971, this finding imports that any breach of planning control in respect of the blue land by making an unauthorised change of use must have taken place before the end of 1963. The erection of buildings on the blue land also took place more than four years before the notice to treat of 1976, let alone the taking of possession by the acquiring authority in 1981. The law as to enforcement notices to enforce planning control as it had stood in the Town and Country Planning Act 1947 and section 45 of the Town and Country Planning Act 1962 was deliberately changed by Parliament in 1968. The new law then introduced is set out in section 15 of the 1968 Act and is reproduced in, for present purposes, the same terms in section 87 of the current 1971 Act. The object of the change was to remove (save in the very limited instance specified in subhead (c) of subsection (3) of section 87) the provisions of the earlier law under which enforcement proceedings could not be brought in respect of a breach of planning control by an unauthorised change of use if more than four years had elapsed from the date of the breach. But as a corollary Parliament recognised, as I read the Acts, the legitimacy of acts done by way of change of use in breach of planning control before the end of 1963; there was an act of oblivion in respect of breaches of planning control before that date. That covers the blue land, and it would be quite wrong, in my judgment, at any time after the 1968 Act came into force, to regard the use of the blue land as a use which is ‘contrary to law’ for the purposes of rule (4) in section 5 of the 1961 Act. Indeed it would be monstrous if the acquiring authority could avoid paying compensation for the disturbance, by closing down, of the business carried on by the claimants on the blue land when that business, in so far as carried on on the blue land, could have legitimately been sold by the claimants to any other purchaser of the blue land. Mr Read QC submits for the acquiring authority that we are constrained to reach the opposite conclusion on this question by the decision of this court in LTSS Print & Supply Services Ltd v Hackney London Borough Council [1976] QB 663. He says that the claimants’ use of the blue land was ‘contrary to law’ up to the time of the compulsory purchase because planning permission for the change of use had never been obtained and, if there had been no compulsory purchase, would have remained ‘contrary to law’ (even though not susceptible of enforcement procedure) for so long as the business was carried on by the claimants or any successor in title of the claimants or until some Act of Parliament was passed to cure the situation. In my judgment the situation has been sufficiently and effectively cured by the two Acts of Parliament which have been passed, the Town and Country Planning Acts of 1968 and 1971. It is unnecessary to ask for more. The decision of the court in the LTSS case does not, in my judgment, bind us in the present case, because that court did not consider, and possibly did not have any occasion to consider, the change in the law effected by the 1968 Act. Moreover, as Mr Gray QC for the claimants has pointed out, the LTSS case was concerned with a different section, section 23(9) of the 1971 Act and a different43 phrase, ‘the purpose for which (in accordance with the provisions of this Part of this Act) it could lawfully have been used if that development had not been carried out’. The Part of the Act referred to, Part III, does not include section 87, which is in Part IV. Section 23(9) of the 1971 Act had, so far as I can see, no antecedent in the 1968 Act, but is derived from section 24(4) of the 1947 Act and section 13(9) of the 1962 Act. Accordingly, I would for my part hold, in answer to question 2 of the case stated, that the learned member did not err on this question. Question 3 of the case stated we do not have to answer. Expressing the majority view, STAUGHTON LJ said: It is established law, and not in dispute, that the seller under a compulsory purchase order is entitled to one sum as the price or compensation, made up (where appropriate) of two elements: the value of the land taken and diminution in the value of other land through severance or injurious affection. That was the law enacted by the Lands Clauses Consolidation Act 1845 and by the Compulsory Purchase Act 1965, section 7. Equally, it is established law and not in dispute that the value of the land taken, for this purpose, is its value to the seller. Circumstances which are in some degree personal to the seller can and should be taken into account in calculating that value. The most obvious example, and that with which this case is concerned, is the fact that the seller carries on a business on the land, which he will have to move to other premises if he can find any that are suitable. There will be removal expenses; and if he can find no other suitable premises, the business will be wholly extinguished. Such expenses or loss can, in general, be recovered as part of the value of the land, being described as compensation for disturbance. I shall call that the extended value, adopting the jargon of today. It is to be contrasted with open-market value — that which the seller could obtain if he sold the land alone. The open-market value will not take account of circumstances which are personal to the seller and of no benefit to the purchaser. Section 2 of the Acquisition of Land (Assessment of Compensation) Act 1919 effected a change in the method of assessment previously adopted under the Lands Clauses Act. It provided by rule (2): The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise: Together with rule (1) (which I need not quote), this abolished the old practice whereby some allowance was made in calculating the value for the fact that the seller was not willing but unwilling. Thenceforth, so far as the land itself was concerned, compensation was to be the open-market value. But the concept of extended value was preserved by rule (6): The provisions of rule (2) shall not affect the assessment of compensation for disturbance or any other matter not directly based on the value of land. ‘The value of land’ in that rule evidently has the same meaning as that given to ‘the value of land’ in rule (2), namely the open-market value. Between those rules in section 2 of the 1919 Act there occurred rule (4). All the rules were re-enacted in section 5 of the Land Compensation Act 1961, and rule (4) reads: Where the value of the land is increased by reason of the use thereof or of any premises thereon in a manner which could be restrained by any court, or is contrary to law, or is detrimental to the health of the occupants of the premises or to the public health, the amount of that increase shall not be taken into account. The first question in this case is whether ‘the value of the land’ in rule (4) refers to the open-market value or to the extended value, which includes both the open-market value and also compensation for disturbance and anything else preserved by rule (6). Mr Read for the council argues that an owner should not recover compensation for loss of a business which was carried on contrary to law, any more than he should recover an increase in the open-market value of the land resulting from such an activity. He gave as an example a disorderly house, which might well be suited to the area where the land was and difficult to re-establish elsewhere. Another example might be a house occupied by a dealer in drugs, which is well placed and suitable to supply the needs of the neighbourhood without detection. There are four possible answers to this apparent anomaly. First, as a matter of valuation it is doubtful whether the precarious nature of an illegal business would allow any significant sum to be assessed as compensation. Second, the danger of pleading and proving an illegal business would deter the owner from making a claim. Third, I do not suppose that such a claim would succeed, quite apart from the rules in section 5; it would fail for illegality at common law. Fourth, if there is an anomaly in this aspect of rule (4), it is not the only respect in which the rule produces a strange result, as appears from consideration of the second question in this appeal. The mischief at which rule (4) was primarily directed is revealed by the second report of the Scott Committee on the acquisition and valuation of land for public purposes. It was the use of land for overcrowded or insanitary housing. Certainly Parliament cannot in 1919 be thought to have had in mind breach of planning control. Nor was any mention made of the use of premises by burglars, forgers or receivers of stolen goods, or those engaged in similar activities. So I turn to consider the wording of section 5 without any presumption that rule (4) was or was not intended to exclude compensation for disturbance in the case of an activity contrary to law. We have been referred to a number of cases decided in England or Scotland. These provide valuable guidance to a novice in this field as to the general law before section 2 of the 1919 Act was enacted. But I can find nothing at all in them which helps in resolving the present problem. They were all dealing with other and different questions. What seems to me significant is that ‘the value of land’ in rule (2) of section 5 of the 1961 Act is there defined, in effect, as the open-market value; and in rule (6) the same words manifestly refer to the open-market value, as I have already said. I would therefore expect the words ‘the value of the land’ in rule (4) to have the same meaning, and not to refer to the extended value, if only by virtue of the maxim that a thing is known by its neighbours (compare the judgment of Diplock J in Louis Dreyfus et Cie v Parnaso Cia Naviera SA [1959] 1 QB 498 at p 515, reversed on other grounds [1960] 2 QB 49. Mr Read says that a distinction is to be drawn by reason of the additional definite article (‘the’) in those words as they occur in rule (4). I find this too small a peg on which to hang the suggested distinction. I therefore conclude, in agreement with the Lands Tribunal, that rule (4) deals only with the open-market value and is not concerned with disturbance. Support for that conclusion is, in my judgment, to be derived from the fact that rule (4) excludes any increase in value by reason of use in a manner which is detrimental to the health of the occupants or to the public health, as well as an increase due to use in a manner which is contrary to law. If the rule applies to compensation for disturbance, this may have strange consequences. A seller of cigarettes, or even a manufacturer, does (I suppose) carry on an activity which is detrimental to the public health or at any rate to the health of those who consume his product. But I cannot believe that he should receive no compensation for disturbance if his business is wholly extinguished by a compulsory purchase order. On the other hand I see no great hardship if he is deprived of the increase (if any) in the open-market value of his premises caused by the activity which he carried on there. The width of the provision as to activities detrimental to health militates somewhat against the view that rule (4) is also dealing with compensation for disturbance. I would answer the first question in the case stated ‘no’. The second question is whether the use of the blue land was contrary to law within rule (4), seeing that it had existed since 1963 and was immune from enforcement action under section 87 of the Town and Country Planning Act 1971. Indeed it was an established use within section 94. Counsel wisely refrained from entering into any general discussion as to the meaning of law and whether there can be a law with no sanction. Salmond on Jurisprudence (12th ed, p 35) takes the view that: The idea of sanctions, though central to that of law, is not logically essential. Dias on Jurisprudence (5th ed, p 236), with a wealth of examples, is more forthright: Sanction is no test of legal duty. By contrast, Dixon CJ in Tooth & Co Ltd v Tillyer [1956] 95 CLR 605 at p 618* considered that a liability which could not be enforced was a ‘metaphysical unreality’. *Editor’s note: A case in the High Court of Australia; also reported at [1957] CLY 1603. 44 Mr and Mrs Hughes were free to continue the existing use of the blue land without any interference by way of enforcement notice or any other restraint or penalty. A purchaser from them would enjoy the same liberty until the crack of doom. How then can it be right that, in the event of compulsory purchase, they should be deprived of any increase in the open-market value of the blue land by reason of that established use?  That would seem to be confiscation, expropriation without adequate compensation or perilously close to it; and Mr Read was prepared to concede that a statute is not to be construed to have that effect unless it says so in plain terms. Nevertheless, I, for my part, feel bound to conclude that the use of the blue land was still contrary to law, by reason of the decision of this court in LTSS Print & Supply Services Ltd v Hackney London Borough Council [1976] QB 663. The question here was whether a use of premises was one for which they ‘could lawfully have been used’ in accordance with the provisions of Part III of the 1971 Act, under section 23(9). The relevant use had commenced without planning permission, but before 1963, and had continued until the events which caused the question to arise. It, too, had therefore become immune from enforcement proceedings or any other sanction. Nevertheless, the court unanimously held that it was not a use for which the premises could lawfully have been used. One argument put forward by Mr Woolf for the Secretary of State was that, as section 87 did not occur in Part III of the Act, the words in section 23(9) as to lawful use must be construed without reference to the enforcement procedure or to the circumstances in which it was no longer available. If that had been the only ground of the court’s decision, I would not hold that we are bound to follow it in the present case. But in my judgment it was not the only, or even the principal, ground. Lawton LJ (at p 677) relied on it to fortify a conclusion he had already reached; Goff LJ (at p 680) gave it as his ‘second reason’. It is less easy to detect its priority in the judgment of Cairns LJ; but he, too, was evidently prepared to decide the case on more general grounds. He said (at p 672): If a state of affairs or an activity has been initiated by infringing statutory provisions, then I do not consider that it can ever be said to be lawful in accordance with the provisions unless something has supervened to make it lawful. Mere immunity from process does not make it lawful. I regret that I cannot detect any relevant distinction, for present purposes, between the words ‘could lawfully have been used’ in section 23(9) of the 1971 Act and use in a manner which is not ‘contrary to law’ in the 1961 Act. In my judgment we are bound to hold that the use of the blue land was contrary to law. I would answer the second question in the case stated ‘yes’. Agreeing with Staughton LJ, MANN LJ said: This appeal raises two questions. The second of those questions arises contingent upon the answer to the first. That first is whether rule (4) of the rules for assessment of compensation applies to a disturbance claim. If the answer be ‘no’ then it may still be necessary to determine whether the use of either ‘the’ (emphasis from the statute) blue land or the green land was ‘contrary to law’ because of the absence of planning permission. Upon the first question there is no authority. We were referred to a number of cases where it is suggested that disturbance is part of ‘the value of the land’. The most direct is Commissioners of Inland Revenue v Glasgow & South-Western Railway Co (1887) 12 App Cas 315, where at p 320 Lord Halsbury said in regard to section 48 of the Lands Clauses Consolidation (Scotland) Act 1845: The two things, and the only two things, which are within the ambit and contemplation of the statute, are the value of the lands and such damages as may arise to other lands held therein by reason of the particular land which is taken being taken from them. Observations were also made in a Scottish context in 1932 and 1972. Thus Venables v Department of Agriculture for Scotland 1932 SC 573 at p 581: Finally, I would advert to a valuable passage in the opinion of Lord Kinnear in Lanarkshire and Dumbartonshire Railway Co. His Lordship there says: ‘It is a well-settled rule in the construction of the Lands Clauses Act that when lands have been taken in the exercise of powers of compulsory purchase, the owner or occupier, as the case may be, is entitled not only to the market value of his interest but to full compensation for all the loss which he may sustain by being deprived of his land’. If that be sound — and the language is quite general, and the authority of its author unimpeachable — cadit quaestio. M’Ardle v Glasgow Corporation 1972 SC 41 at p 47: But their contention is that no such assumption falls to be made in assessing the compensation payable under rule (6) in assessing the claim in respect of disturbance. This contention in our view is ill founded. Had any such distinction been intended between the compensation for the land taken on the one hand and the compensation for disturbance on the other, then there was no need for the legislature to refer in section 22(1) to ‘the value of the relevant interest’. It would have been enough to refer only to ‘the value of the relevant land’. But the fact is that nowhere in this series of statutory provisions since 1845 is a disturbance claim treated as something separate and distinct from the rest of the claim. It is an element in the total computation of the compensation. The distinction which the acquiring authority seek to make between a disturbance claim and a claim for the value of the land is thus a false distinction. They are both elements in the value of the relevant interest within the meaning of that phrase in this series of Acts of Parliament. Observations have also been made in England. Thus Munton v Greater London Council [1976] 2 All ER 815 at p 819c: Since those Acts, the practice always has been for the compensation for disturbance to be assessed separately from the value of the land. That is as it should be. The value of the land can be assessed while the owner is still in occupation. The compensation for disturbance cannot properly be assessed until he goes out. It is only then that he can tell how much it has cost him to move, such as to get extra premises or to move his furniture. The practice is warranted by two cases in this court: Harvey v Crawley Development Corporation and Minister of Transport v Lee. None of the English cases was directed to the instant problem. Compensation for disturbance was a subject created by the judges in the middle of the 19th century. The subject is now unassailable but it has never been the subject of Parliamentary authority. Is it to be treated (so as to be caught by rule (4)) as part of the value of the land?  In my judgment it is not. The value of the land does not include disturbance of the owner. Rule (6) seems to me to recognise that disturbance is a thing apart and is no part of the value of the land. No purchaser in the open market would pay for disturbance. Let it be supposed that I am wrong and that rule (4) is applicable. I think there can be scant doubt but that the blue land was immune from enforcement action but that the green land was not (see Town and Country Planning Act 1971, section 87). A use is contrary to planning control whether the local planning authority decide to exercise their discretionary powers to take enforcement action or not. In my judgment, a use does not cease to be contrary to law because the planning authority have not served an enforcement notice. The use is a use without the requisite planning permission. I find some support for my view from a different context in LTSS Print & Supply Services Ltd v Hackney London Borough Council [1976] QB 633, where at p 672 Cairns LJ said: If a state of affairs or an activity has been initiated by infringing statutory provisions, then I do not consider that it can ever be said to be lawful in accordance with the provisions unless something has supervened to make it lawful. Mere immunity from process does not make it lawful. And at p 676 Lawton LJ observed: Under section 23(1) of that Act, if the local planning authority had thought expedient to do so, it could, within four years of such development beginning, have served on both the owner and occupier an enforcement notice. This would have been the first step to starting enforcement proceedings. This provision granted immunity from proceedings after the end of four years. It did not make lawful that which had started as an unlawful development. I would dismiss this appeal by answering question 1 posed by the tribunal as ‘no’. If question 2 arises, I would answer it ‘yes’ with the possible consequence as it would seem (see p 15 of the decision) that there may have to be an adjustment to the acreage rate for the blue land in the sum of £7,500. I find it unnecessary to entertain question 3. The appeal was allowed and the Lands Tribunal’s order varied. Respondents were awarded four-fifths of their costs of the appeal. Appellants were granted leave to appeal on question 1. Respondents were granted leave to appeal on question 2 if appellants appeal on question 1.