Bird and another v Wakefield Metropolitan District Council

Compensation for compulsory acquisition–Application of ‘Pointe Gourde’ principle–Question as to what scheme underlay acquisition–Whether acquiring authority’s own scheme of compulsory purchase for industrial development or much wider county council scheme of reclamation and redevelopment–Lands Tribunal’s finding in favour of wider scheme challenged–Meaning of ‘scheme’ and development of schemes from smaller beginnings–‘Pointe Gourde’ ‘scheme’ need not itself provide for compulsory acquisition as long as it ‘underlies’ the acquisition–No error of law in Lands Tribunal’s finding–Appeal dismissed This was an appeal by John Bird and George Peter Bird from a decision of the Lands Tribunal ((1976) 243 EG 755, 841) relating to the compensation payable by Wakefield Metropolitan District Council for the compulsory acquisition of 29.8 acres of land, of which the appellants were the freeholders, at Normanton. The appeal turned on the finding of the Lands Tribunal as to the scheme which should be taken into account in applying the Pointe Gourde principle that compensation cannot include an increase in value which is entirely due to the scheme underlying the acquisition. William Glover QC and Michael Fitzgerald (instructed by Hyde, Mahon & Pascall, agents for Stephenson & England, of Huddersfield) appeared on behalf of the appellants; Sir Derek Walker-Smith QC MP and Matthew Caswell (instructed by Hickmans, agents for Maurice Smith & Co, of Castleford, West Yorkshire) represented the respondent council. Giving the first judgment at the invitation of Megaw LJ, BROWNE LJ said: This is an appeal by way of case stated from a decision of the Lands Tribunal dated November 23 1976. An appeal to this court from a decision of the Lands Tribunal lies only on a point of law (see Lands Tribunal Act 1949, section 3 (4)). The case relates to the amount of compensation payable to the appellants for the compulsory acquisition by the Normanton Urban District Council (the predecessors of the respondents) of 29.8 acres of land at Normanton, in what used to be the West Riding of Yorkshire, of which the appellants were the freehold owners. The appellants claimed £81,000. The respondents contended for £37,500. The Lands Tribunal awarded £56,000. The question is whether what is called ‘the Pointe Gourde principle,’ [1947] AC 565, applies in this case. It was said in that case by Lord MacDermott, in delivering the advice of the Judicial Committee, at p 572: ‘It is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition.’ The question stated by the Lands Tribunal for our decision is this: ‘The question upon which the decision of the Honourable Court is desired is whether having regard to the facts and documents found and referred to in our said decision we misdirected ourselves in holding that the County Council Scheme 3 was to be regarded as the scheme underlying the said acquisition.’ The compulsory purchase order was made on July 1 1969 and confirmed on June 19 1970. Notice to treat was served on August 7 1970 and notice of entry on February 25 1971. Actual entry was made on April 5 1971. The hearing before the Lands Tribunal took eight days. In their decision, annexed to the case stated, they found the following facts: The subject land lies to the south-west of Pontefract Road and to the south-east of Castleford Road at Normanton in the West Riding of Yorkshire (now the Metropolitan County of West Yorkshire), about 11 miles south of Leeds. There are no buildings or trees on the land, which is triangular in shape, with a gentle slope. There is no road frontage. The purpose of acquiring the order land was stated to be that of ‘securing its development as a whole for industry.’  This proposed industrial development was to be an extension of similar development on abutting land to the north-west. This abutting land, between the reference land and Castleford Road, was already owned by the authority. The decision then sets out the history. In the county development plan a block of 22 1/2 acres of land, lying immediately to the northwest of the reference land, was allocated for industrial development, and in 1966 this allocation was increased to 37 1/2 acres. In or about 1965, the council embarked on an active policy directed to securing such development. The allocated land was entitled ‘the Beckbridge Industrial Estate,’ and industrialists were sought to take up plots. The decision then sets out various difficulties which arose about that estate, and what the council (this being the Normanton Urban District Council) did. They apparently already owned some land in the proposed industrial area. They bought some more land. They did various things to improve the environment and rehabilitate the land, and set about improving the drainage. They published what is described as ‘an attractive glossy booklet called ‘Expand at Normanton.” The decision says that considerable time and effort, and an unspecified amount of money, had been put into making a success of Beckbridge Industrial Estate, but the results were disappointing. The decision then goes on: Then in the middle of 1968 a new factor emerged. As early as May 1966 officers of the council had been having talks with officers of the county council in connection with a policy document ‘A Growth Policy for the North,’ published in February 1966 by the county council as part of the second review of the county development plan. In June 1968 these informal consultations reached a stage of formality. On June 24 1968 the county council’s town and country planning committee resolved that discussions be held with officers of other councils interested in an ‘industrial and reclamation project’ in the Whitwood-Hopetown area. That area included the land with which this appeal is concerned. The decision then records that on September 23 1968 the town and country planning committee of the county council met; and the minutes are set out in the decision (243 EG at 755). It is not necessary to read the whole of those minutes, but they include some paragraphs which I think I should read. The total area of land to be included in the scheme of reclamation and redevelopment, to be undertaken in co-operation with the Castle-ford Borough and Normanton Urban District Councils, amounted to about 770 acres. Of this total 450 acres comprised abandoned pit yards and spoil heaps, the remaining 320 acres were not derelict. Of the 450 acres of derelict land only about 50 acres could usefully be reclaimed for industrial development, the remainder being recontoured and landscaped to provide a suitable setting for the major industrial areas and materially to improve this section of the motorway corridor. The scheme would provide approximately 370 acres of land for industrial development. The minutes then go on to record that an expenditure of the order of £1,000,000 would be involved. It was recommended: (a)  That subject to a satisfactory grant from Central Fund where appropriate and loan sanction being forthcoming, the West Riding town and country planning committee be authorised to expend a sum of not exceeding £1,093,000 on the acquisition of land in the Whitwood-Hopetown area and works of reclamation thereon. Then it was resolved: (a)  That a meeting with representatives of the Castleford Borough and Normanton Urban District Councils be held to discuss the extent of their participation in the scheme. Those recommendations were approved by the county council on October 16 1968. Meanwhile, between the meeting of the committee and the approval by the county council, there had been a meeting of the policy committee of the Normanton Urban District Council on October 7. The clerk presented a report which is set out in the decision (see p 757) which stated what the council had already done towards the development of what is called ‘their industrial area’ and said that the county council was prepared to support an amendment to the town map to add to the industrial area a further 39 acres, which included the 29.8 acres with which we are concerned; all the land referred to in this report was part of the land referred to in the minutes of the town and country planning committee of the county council of September 23. In August 1969 (that is, after the making of the compulsory purchase order but before its confirmation) the county council published a brochure entitled ‘South Yorkshire Industrial Sites,’ listing 15 sites where large-scale industrial and associated uses would be supported by the county council. One of these areas was ‘the Whitwood-Hopetown site,’ which was referenced ‘No 3’ and, as I have said, included the land with which this appeal is concerned. The tribunal referred to the proposal for17 site 3 as ‘the county council scheme 3,’ or simply as ‘scheme 3.’  Extracts from this brochure are set out in the decision (at p 757). I do not think I need read them in detail. Mr Glover placed considerable stress on paragraph 9, which said this: ‘Negotiations for the acquisition, or leasing, of land should take place with the owners of the land. Details of land ownerships may usually be obtained from the local authority with the exception of’–two sites with which we are not concerned. He relies on that as showing that the scheme did not contemplate the compulsory acquisition of any land for industrial purposes. Under the heading ‘Reclamation,’ in relation to site 3, it is said (p 757): ‘Major works being carried out by West Riding County Council and the district councils within and adjacent to the sites’; and that must clearly refer to the works of reclamation referred to in the minutes of the town and country planning committee. It lists the local authorities, who are Castleford, Normanton and Featherstone Councils. Finally there is a ‘note’ (p 759): A joint development committee has been formed consisting of the West Riding County Council and Normanton Urban District Council with the aim of promoting industrial development on a major part of the site, ie that to the south of the proposed M62 motorway. Inquiries for land within the Normanton Urban District should be made initially to the clerk of that authority. The land with which we are concerned is part of the land referred to in that note, south of the motorway. The tribunal stated the substantive issue to be decided (pp 759 and 841): It is common ground that the value of the reference land falls to be assessed under rule (2) of section 5 of the Land Compensation Act 1961, but that any value thus determined falls to be looked at in the context of the Pointe Gourde principle, which requires that compensation must exclude any increase in value which is entirely due to the scheme underlying the acquisition. The substantive issue between the parties is as to what is ‘the scheme underlying the acquisition’–a phrase for which we will use our abbreviation ‘the scheme.’  For the acquiring authority Sir Derek contends that the scheme is the county council scheme 3. For the claimants, Mr Glover contends that the scheme is simply the compulsory purchase order which authorises the acquisition of the 29.8 acres. The tribunal made the following finding (p 841): With some hesitation we have come to the conclusion that we should accept the contention for the acquiring authority that the county council scheme 3 is to be regarded as the scheme underlying the present acquisition: We have concluded that the scheme constituted a single scheme underlying the acquisition and that earlier schemes referred to by Mr Glover had merged into it, notwithstanding their several and disparate beginnings. Sir Derek Walker-Smith submits that this is a finding of fact. Lord Buckmaster, in giving the advice of the Judicial Committee in Fraser v City of Fraserville [1971] AC 187, said, at p 194, ‘. . . the question of what is the scheme being a question of fact for the arbitrator in each case.’  In Wilson v Liverpool Corporation [1971] 1 WLR 302, Widgery LJ (as he then was) said, at p 310, ‘The extent of the scheme is a matter of fact in every case, as is shown by the decision in Fraser v City of Fraserville . . . to which Lord Denning MR has referred. It is for the tribunal of fact to consider just what activities–past, present or future–are properly to be regarded as the scheme within the meaning of this proposition.’  I understood Mr Glover to accept that that is a finding of fact, and that he could only upset it if he could show (a) that the tribunal had misdirected itself; or (b) that there was no evidence to support it; or (c) that the finding was so unreasonable that no reasonable tribunal could have made it–that is, that it was perverse. Mr Glover’s submission is summarised in ground (1) of the appellants’ notice of appeal: ‘The Lands Tribunal held that the county council scheme 3 was to be regarded as the scheme underlying the said acquisition. The appellants contend that there were a number of ‘schemes’ which were to be carried out: the said scheme 3 being prepared for a different purpose and by a different authority could not underlie the acquisition within the rule of Pointe Gourde . . . .’  He submits that the scheme underlying the acquisition was not scheme 3 but the district council’s own scheme for compulsory purchase for industrial development, which had started before scheme 3 came into existence. He says that, as scheme 3 was a scheme by an authority other than the acquiring authority, it was not capable of being the scheme underlying the acquisition. It did not provide for the compulsory acquisition of any land for industrial development. It was merely an expression of planning policy. I cannot accept this last suggestion. The scheme went far beyond planning policy and involved the spending of over £1m by the county council on the acquisition and rehabilitation of land in connection with the scheme. The tribunal cited the decision in Wilson v Liverpool Corporation, to which I have already referred. In that case Lord Denning MR said at p 309: A scheme is a progressive thing. It starts vague and known to few. It becomes more precise and better known as time goes on. Eventually it becomes precise and definite, and known to all. Correspondingly, its impact has a progressive effect on values. At first it has little effect because it is so vague and uncertain. As it becomes more precise and better known, so its impact increases until it has an important effect. It is this increase, whether big or small, which is to be disregarded at the time when the value is to be assessed. Widgery LJ (as he then was) said at p 310: Whenever land is to be compulsorily acquired, this must be in consequence of some scheme or undertaking or project. Unless there is some scheme or undertaking or project, compulsory powers of acquisition will not arise at all, and it would, I think, be a great mistake if we tended to focus our attention on the word ‘scheme’ as though it had some magic of its own. It is merely synonymous with the other words to which I have referred, and the purpose of the so-called Pointe Gourde rule is to prevent the acquisition of the land being at a price which is inflated by the very project or scheme which gives rise to the acquisition. Then there follows the short passage which I have already quoted on the point that it is a question of fact. Then Widgery LJ went on: The scheme will always exist in some shape or form by the time the notice to treat is served. It must, indeed, be in some shape or form at the confirmation of the compulsory purchase order itself, and then, as Lord Denning MR says, it may develop almost from day to day, and the ultimate question for the valuer is to decide to what extent the dead-ripe value of the land on the day upon which the valuation is to be made has been increased by reason of the existence of the scheme. Those passages from Lord Denning and Widgery LJ were cited by Sir John Pennycuick in delivering the leading judgment in this court in Birmingham City District Council v Morris & Jacombs Ltd (1976) 240 EG 539, [1976] 2 EGLR 143. Sir John also said this: ‘There has been some discussion as to what is meant by ‘a scheme’ in this connection. A scheme means, I think, no more than a project on the part of the authority concerned to acquire land, and of course to acquire it for some purpose for which it was authorised so to acquire it.’ Mr Glover says that the Wilson case was concerned with a different problem from the present case–the development of a single scheme and not whether there was one scheme or two schemes. This is true, but I think the same principle applies to both problems. I have already read the vital finding of the tribunal and I need not read it again. I understand that to be a finding, that although scheme 3 had originally in form been a scheme by an authority different from the acquiring authority, which also had a scheme of its own, scheme 3 had, by what the tribunal calls ‘merger,’ though possibly that is not the right word, become a scheme to which the acquiring authority was a party and not a scheme by a different authority. I do not think it matters in this case which of the suggested dates one takes as the relevant date, because on the facts I think this ‘merger’ had happened before the earliest suggested date, the making of the compulsory purchase order on July 1 1969. I can see no ground for saying that the tribunal misdirected itself in making this finding of fact or the finding that scheme 3 was the scheme underlying the acquisition. It is true that scheme 3 did not provide for the compulsory acquisition18 of any land for industrial development. But I do not think it necessary for the scheme to provide for the acquisition; it is enough that it ‘underlies’ the acquisition. In my view there was ample evidence to support these findings. I can see no ground on which this court could interfere with them. Mr Glover accepts that if the scheme underlying the acquisition was scheme 3 there is no dispute in this court about the tribunal’s decision as to the effect on the value. I would dismiss the appeal. Agreeing SHAW LJ said: It seems to me that while the compulsory purchase order provided an essential constituent in the ultimate scheme, and was a necessary element of it, it was not per se the scheme underlying the acquisition in the sense that what was envisaged at the time as the eventual development was necessarily or even probably a scheme comprising only the Normanton land. At any rate there was evidence to justify the finding of the tribunal. Although they seem to have entertained some doubt about the matter, the assertion that their decision was unsupported by the evidence before them is not a tenable one. If this be the position, as in my judgment it is, there is no basis for the argument that the tribunal erred in law. I also, therefore, would dismiss the appeal. Also agreeing, MEGAW LJ said: The question what is the scheme is a question for the arbitrator in each case. That statement of the law, by Lord Buckmaster in delivering the advice of the Judicial Committee in Fraser v City of Fraserville [1917] AC 187, at p 194, is not open to doubt. The tribunal in this case has found as a fact that the relevant scheme is the county council scheme No 3. That finding of fact could be challenged in this court only on the basis that the finding of fact was itself founded on an error of law. The alternative grounds put forward in support of the appeal — that there was no evidence to support the tribunal’s finding of fact, and that the decision of fact was perverse — cannot possibly succeed, if there is no material error of law. Browne LJ has read the ground of appeal set out in the appellants’ notice of appeal. That ground was amplified by counsel for the appellants in argument before us. It was said that the Normanton Urban District Council’s compulsory purchase order made on July 1 1969 was an order carrying out that council’s policy of acquiring land for the use of the urban district. The proposal involved was full and complete in itself. This was the relevant scheme, and the only relevant scheme. Therefore scheme 3 of the county council was not relevant. In any case it was not a scheme for the acquisition of land for industrial purposes. It was no more than a policy for the planning of the area. It was purely a planning document. It did not provide for the compulsory acquisition of the land by anyone. The tribunal, it is said, erred in law, if scheme 3 could not in law be a relevant scheme underlying the acquisition, on the Pointe Gourde principle. The tribunal had erred in law in excluding from the amount of compensation enhancement of value attributable to scheme 3. I regard these propositions as being founded on too narrow a concept of the word ‘scheme’ in relation to the facts of this case as found by the tribunal. As is emphasised in the judgment of Widgery LJ in Wilson v Liverpool Corporation [1971] 1 WLR 302, at p 310, the word ‘scheme’ is not to be treated as though it had ‘some magic of its own,’ some specialised and artificial meaning. The recommendations of the county council’s planning officer were adopted by the county council’s town and country planning committee on September 23 1968. Those proposals referred to ‘the scheme of reclamation and redevelopment, to be undertaken in co-operation with the Castleford Borough and Normanton Urban District Councils. . . . The scheme would provide approximately 370 acres of land for industrial development.’  Those 370 acres included the land with which the Lands Tribunal were concerned in this case. The county council’s decision included a resolution that ‘. . . . a meeting with representatives of the Castleford Borough and Normanton Urban District Councils be held to discuss the extent of their participation in the scheme.’  I see no reason to doubt that the Lands Tribunal were entitled, on the material before them, to find, or properly to assume, that such a meeting took place and that the resulting participation produced as one of its results the co-operation which is referred to in the ‘note’ at the end of the reference to scheme 3 in the brochure published by the county council in August 1969. That note reads: ‘A Joint Development Committee has been formed consisting of the West Riding County Council and Normanton Urban District Council with the aim of promoting industrial development on a major part of the site, ie that to the south of the proposed M62 motorway.’  This ‘major part of the site’ includes the land now in question. I have no doubt that the tribunal were entitled to hold on the material before them that the relevant scheme, although not then fully developed, was in existence at the date of the making of the compulsory purchase order. It may well be, though it is unnecessary to express any view on the point, that a later date would have sufficed. In Wilson v Liverpool Corporation Widgery LJ referred to the date of the confirmation of the compulsory purchase order as being the relevant date. In those circumstances it appears to me to be unrealistic to suggest that the Lands Tribunal were not entitled in law to reach the conclusion of fact at which they did arrive. I agree entirely with the reasons given by my brethren for dismissing the appeal. The appeal was dismissed with costs.