Fletcher Estates (Harlescott) Ltd and another v Secretary of State for the Environment and another

Compulsory purchase — Compensation — Certificate of appropriate alternative development — Section 17 of the Land Compensation Act 1961 — Relevant date for determining planning policies On January 30 1986 the second respondent, the Secretary of State for Transport, made a proposal to acquire two parcels of land owned by the first and second applicants for the construction of a bypass. The proposal to acquire was a proposal within the meaning of section 22(2) of the Land Compensation Act 1961. The date of entry for both parcels of land was January 5 1990. In 1992 the applicants applied for certificates of appropriate alternative development under section 17 of the 1961 Act. In May 1993 the local planning authority issued certificates for residential and industrial development. Following an appeal under section 18 by the Secretary of State for Transport, the Secretary of State for the Environment allowed the appeal and substituted negative certificates in each case, adopting the date of entry as the relevant date for the application of current and reasonably foreseeable planning policies. The applicants contended, inter alia, that the relevant date is the date under section 22(2)(a) of the 1961 Act when the proposal to acquire was made and the Secretary of State for the Environment was wrong in not discounting the effect of the proposal to acquire the land before the date of the proposal to acquire, namely January 30 1986. Held: The decisions were quashed. Jelson Ltd v Minister of Housing and Local Government [1970] 1 QB 243 is binding authority; the relevant date for the purposes of considering the application of current and reasonably foreseeable planning policies is the date of the proposal to acquire, namely January 30 1986. On the relevant date, policy would have supported the grant of planning permission for residential development if it had not been proposed for acquisition for construction of the bypass. The Secretary of State for the Environment was in error in failing to discount the effect of the proposal to acquire the land before the date of the proposed acquisition. He was not required to take the policies and facts on the relevant date as if the scheme had been cancelled on that date; he was required to assume the scheme had never been conceived at all. The following cases are referred to in this report. Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223; [1947] 2 All ER 680; (1947) 45 LGR 635, CA Fox v Secretary of State for the Environment (1991) 62 P&CR 459; [1991] 2 EGLR 13; [1991] 40 EG 116; [1991] RVR 171 Grampian Regional Council v Secretary of State for Scotland [1983] 1 WLR 1340; [1983] 3 All ER 673; (1983) 47 P&CR 540; 23 RVR 263; [1984] 2 EGLR 175; [1984] EGD 1073; 271 EG 625, HL Jelson Ltd v Blaby District Council [1977] 1 WLR 1020; [1978] 1 All ER 548; (1977) 75 LGR 624; 34 P&CR 77; [1977] 2 EGLR 14; [1977] EGD 309; 243 EG 47; [1977] JPL 579, CA Jelson Ltd v Minister of Housing and Local Government; George Wimpey & Co v Minister of Housing and Local Government [1970] 1 QB 243; [1969] 3 WLR 282; [1969] 3 All ER 147; (1969) 67 LGR 543; 20 P&CR 663, CA Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565, PC Prest v Secretary of State for Wales (1982) 81 LGR 193; [1983] 1 EGLR 17; [1983] EGD 282; 266 EG 527, CA Robert Hitchins Builders Ltd v Secretary of State for the Environment (1978) 37 P&CR 140; [1978] 2 EGLR 125; [1978] EGD 945; 248 EG 689; [1978] JPL 824 Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014; [1976] 3 WLR 641; [1976] 3 All ER 665; (1976) 75 LGR 190, CA and HL These were applications by Fletcher Estates (Harlescott) Ltd and the executors of JV Longmore under section 21 of the Land Compensation Act 1961 to quash the decisions of the first respondent, the Secretary of State for the Environment, who allowed appeals by the second respondent, the Secretary of State for Transport, against certificates of appropriate alternative development issued by the local planning authority. Robin Purchas QC and Timothy Comyn (instructed by Manby & Steward, of Telford) appeared for the applicants, Fletcher Estates (Harlescott) Ltd and the executors of JV Longmore; Jeremy Sullivan QC and Rabinder Singh (instructed by the Treasury Solicitor) represented the first respondent, the Secretary of State for the Environment; the second respondent, the Secretary of State for Transport, did not appear and was not represented. Giving judgment, DYSON J said: There are before me two applications under section 21 of the Land Compensation Act 1961 (the 1961 Act) to quash decisions of the first respondent made under section 18 of the 1961 Act, whereby he allowed appeals by the second respondent against certificates of appropriate alternative development in respect of two parcels of land at Sundorne, Shrewsbury. The land, which I will refer to as ‘the Longmore land’ and ‘the Fletcher land’ was proposed for compulsory purchase by the second respondent for the purpose of constructing the A49 Shrewsbury bypass. The date of the proposal to acquire as defined under section 22(2) of the 1961 Act was January 30 1986. The date of entry in each case was July 5 1990. On October 19 1992 (in respect of the Fletcher land) and December 4 1992 (in respect of the Longmore land) the applicants applied for certificates of appropriate alternative development under section 17. The local authority issued certificates on May 8 1993 for residential and industrial development (in the case of the Longmore land) and residential development (in the case of the Fletcher land). The second respondent appealed against the certificates under section 18. By his decision letter dated July 4 1996 the first respondent allowed the appeals substituting negative certificates in each case under section 17(4)(b) of the 1961 Act. 8 Legislative framework The principal relevant provisions of the 1961 Act in the form in which it was at the time that is material for the purposes of these applications were as follows: 17. Certification of appropriate alternative development (1) Where an interest in land is proposed to be acquired by an authority possessing compulsory purchase powers, and that land or part thereof does not consist or form part of — (a) an area defined in the development plan as an area of comprehensive development, or (b) an area shown in the development plan as an area allocated primarily for a use which is of a residential, commercial or industrial character, or for a range of two or more uses any of which is of such a character, then, subject to subsection (2) of this section, either of the parties directly concerned may apply to the local planning authority for a certificate under this section … (3) An application for a certificate under this section — (a) shall state whether or not there are, in the applicant’s opinion, any classes of development which, either immediately or at a future time, would be appropriate for the land in question if it were not proposed to be acquired by any authority possessing compulsory purchase powers and, if so, shall specify the classes of development and the times at which they would be so appropriate; (b) shall state the applicant’s grounds for holding that opinion; and (c) shall be accompanied by a statement specifying the date on which a copy of the application has been or will be served on the other party directly concerned. (4) Where an application is made to the local planning authority for a certificate under this section in respect of an interest in land, the local planning authority shall, not earlier than 21 days after the date specified in the statement mentioned in paragraph (c) of subsection (3) of this section, issue to the applicant a certificate stating either of the following to be the opinion of the local planning authority regarding the grant of planning permission in respect of the land in question, if it were not proposed to be acquired by an authority possessing compulsory purchase powers, that is to say — (a) that planning permission for the development of one or more classes specified in the certificate (whether specified in the application or not) would have been granted; or (b) that planning permission would not have been granted for any development other than the development (if any) which is proposed to be carried out by the authority by whom the interest is proposed to be acquired… (7) In determining, for the purposes of the issue of a certificate under this section, whether planning permission for any particular class of development would have been granted in respect of any land, the local planning authority shall not treat development of that class as development for which planning permission would have been refused by reason only that it would have involved development of the land in question (or of that land together with other land) otherwise than in accordance with the provisions of the development plan relating thereto… 18(2) On any appeal under this section against a certificate the Minister shall consider the matters to which the certificate relates as if the application for a certificate under section 17 of this Act had been made to him in the first instance, and shall either confirm the certificate, or vary it, or cancel it and issue a different certificate in its place, as he may consider appropriate … 22(2) For the purposes of section 17 and 18 of this Act, an interest in land shall be taken to be an interest proposed to be acquired by an authority possessing compulsory purchase powers in the following (but no other) circumstances, that is to say — (a) where, for the purpose of a compulsory acquisition by that authority of land consisting of or including land in which that interest subsists, a notice required to be published or served in connection with that acquisition, either by an Act or by any Standing Order of either House of Parliament relating to petitions for private bills, has been published or served in accordance with that Act or Order; or (b) where a notice requiring the purchase of that interest has been served under any enactment, and in accordance with that enactment that authority are to be deemed to have served a notice to treat in respect of that interest; or (c) where an offer in writing has been made by or on behalf of that authority to negotiate for the purchase of that interest. Issues 1. Was the first respondent correct in adopting July 6 1990 (the date of entry) as the relevant date for the purposes of considering the application of current and reasonably foreseeable planning policies? 2. In his application of section 17 of the 1961 Act, was the first respondent correct in not discounting the effect of the proposal to acquire the land before the date of the proposal to acquire, namely January 30 1986? 3. In rejecting the inspector’s conclusion at para 14.13 of his report, did the first respondent err in relying upon the fact that the route immediately to the east of the bypass (the alternative route) had not been subject to a highway inquiry? 4. Further or alternatively, did the first respondent err in failing to give the applicants the opportunity to provide evidence or otherwise deal with the question of comparative costs and engineering evidence; alternatively, was the decision in that respect in breach of natural justice? 5. Further or alternatively, were adequate reasons given by the first respondent for his conclusions at para 17 of the decision letter? The first two issues raise questions of some general importance. It will be seen that issues 3 to 5 involve a consideration of the details of the inspector’s report and the decision letter. I shall set out the relevant passages in those documents when I come to deal with those issues. First issue I shall refer to the relevant date for the purposes of considering the application of current and reasonably foreseeable planning policies as ‘the relevant date’. For the applicants it is submitted that the relevant date was January 30 1986, the date of the proposal to acquire as defined by section 22(2)(a) of the 1961 Act. For the first respondent it is submitted that the relevant date was the date of entry. It is common ground that the Court of Appeal decision of Jelson Ltd v Minister of Housing and Local Government [1970] 1 QB 243 obliged the first respondent to treat the section 22(2)(a) date as the relevant date for the purposes of determining the physical state of the land. In my view, the language of section 17 when read literally does not provide the answer to the question raised by this issue. Section 17(1) merely provides that it is a prerequisite of an application for a certificate of appropriate alternative development that one of the events referred to in section 22(2) has occurred. The phrase ‘immediately or at a future time’ in section 17(3)(a) does not point to one date rather than another. Nor does the language of section 17(4) provide the answer: note the words ‘would have been granted’ and ‘would not have been granted’. It is clear that the purpose of certificates issued under section 17 is that they should be an aid to the assessment of compensation: see, eg per Lord Bridge in Grampian Regional Council v Secretary of State for Scotland (1983) 47 P&CR 540*, at p574. It assists in the process of assessment because the parties or, in default of agreement, the Lands Tribunal, need to know what assumptions to make as to planning permission in determining the price to be paid by the acquiring authority. It is also well established that the date for assessment of compensation is the date of entry or the date of the hearing, whichever is the earlier. *Editor’s note: Also reported at [1984] 2 EGLR 175 Accordingly, if the matter were free from authority, then in view of the purpose of section 17 certificates, like Sir Douglas Frank QC in Robert Hitchins Builders Ltd v Secretary of State for the Environment (1978) 37 P&CR 140*, I would have been inclined to decide that the relevant date in this case was the date of entry. The question is whether there is binding authority that requires me to hold that the relevant date is the section 22(2)(a) date. For the applicants it is submitted that Jelson is such binding authority, and that the approach in Jelson is also consistent with Grampian. On behalf of the first respondent it is submitted that I should follow Hitchins and distinguish Jelson. *Editor’s note: Also reported at [1978] 2 EGLR 125 9 I start with Jelson. The facts briefly were these. In 1951 a county development plan showed a proposed ring road round Leicester. The land on either side of the proposed road was shown as allocated primarily for residential purposes. The owners built large housing estates adjoining the proposed ring road, leaving a narrow strip of land for the proposed road. In 1962 the proposed ring road was abandoned. The owners applied for planning permission to develop the site of the proposed road for residential purposes. Permission was refused because of the existing housing estates. The owners served notices requiring purchase of their land. The minister confirmed the purchase notices and directed that the local authority were to be deemed to have served notice to treat on September 28 1965. The owners applied for certificates under section 17(4)(a) of the 1961 Act of appropriate alternative residential development. On appeals, the minister confirmed the ‘nil certificates’ under section 17(4)(b). I should interject before going further that it is important to distinguish between the two questions that are reflected in issues 1 and 2 in the present case. The questions are related, but distinct. The first question is: what is the appropriate date at which the relevant facts (the physical state of the land and the present and future planning policies affecting it) are to be considered, in order to determine the classes of development (if any) for which planning permission would at that date have been granted? The second question is: what assumptions have to be made and what facts taken into account in deciding for what classes of development (if any) planning permission would have been granted at that date? For this distinction, see Lord Dunpark in Grampian at p548. In Jelson the applicants argued that the question whether planning permission might reasonably have been expected to be granted should be decided without regard to any particular time (at some time before there was any proposal for a ring road), and not at the section 22(2)(b) date. The Court of Appeal decided, as a matter of construction of section 17(4) and 22(2), that the relevant date was the section 22(2) date. Lord Denning MR said that the crucial word in section 17(4) and 22(2) was ‘proposed’. At p251A, he said: that definition shows that the word ‘proposed’ refers to the proposal contained in an actual or deemed notice to treat or in an offer to purchase. That gives a good clue to the date of the proposal. It is the date of the actual or deemed notice to treat or of the offer to purchase, as the case may be. In the light of that definition, section 17(4) means that the planning authority must form an opinion as to what planning permission might reasonably have been expected to be granted at the date of the actual notice to treat, or the deemed notice to treat, or the offer to purchase, as the case may be. The reference to ‘actual notice to treat’ is in error for a notice of compulsory purchase, but it is clear from p250H that Lord Denning was intending to treat the relevant date for all three cases mentioned in section 22(2) as the same. Sachs LJ agreed with Lord Denning’s construction ‘without enthusiasm’, and Phillimore LJ agreed in the result both on the construction point and on wider grounds to which I shall come when I turn to issue 2. On the face of it, there can be no doubt that Jelson decides the first issue in favour of the applicants: the relevant date is the section 22(2)(a) date. The next case to consider is Hitchins. That was a section 22(2)(c) case. The local authority offered to purchase a site owned by the applicants for the purpose of a school extension. The applicants applied to the local planning authority for a certificate under section 17, specifying residential development as the development for which planning permission might have been expected to have been granted if it were not proposed to be acquired compulsorily. The local planning authority issued a certificate stating that planning permission might reasonably have been expected to be granted for only an open form of development. The Secretary of State confirmed the certificate. He took the view that the relevant date was the section 22(2) date. The applicants argued that the relevant date should have been the date of his decision. Sir Douglas Frank QC quashed the decision holding that the relevant date was the date of the decision. Of Jelson, he said, at p149: Now, it seems to me to follow that what the Court of Appeal decided was that the land was to be taken in its existing state at whichever of the three specified dates applied. What the Court of Appeal did not decide was whether it was necessary that the Secretary of State should have regard only to the planning policies operative on the date specified and not, as he had contended, also to any policies extant at the time of making his decision. For that reason Jelson’s case appears to me to be distinguishable. It seems to me having regard to the scheme of the Act and ratio decidendi of Browne J (with which the Court of Appeal agreed), that the application of the planning policies should as nearly as possible coincide with the date of the assessment of compensation. Thus, I think, on the true analysis of Jelson’s case, the land and the area in which it is situated must be taken rebus sic stantibus as it was on the appropriate date as I have specified, but subject to that rule, the Secretary of State should deal with the matter in the same way as he deals with a planning appeal, ie he should take into account his then current planning policies. The next relevant authority is Grampian. That, too, was a section 22(2)(c) case. The education authority by agreement acquired two parcels of land from the second respondent for sites for schools. The agreement provided that the second respondent should receive the same compensation as if the land had been compulsorily acquired. The second respondent applied to the local planning authority for a certificate under the provision in the equivalent Scottish legislation that corresponds with section 17 of the 1961 Act. Certificates were issued stating that planning permission would not have been granted for any development other than that proposed by the education authority, ie for schools. On appeal, the Secretary of State certified that planning permission would have been granted in respect of the land for residential development. On appeal, the Second Division of the Inner House of Court of Session (Lord Avonside dissenting) affirmed the Secretary of State’s decision. Much of the speeches both in the Court of Session and the House of Lords was concerned with the second issue which arises in the present case. The appellants also contended, however, that the relevant date by reference to which the application for a certificate should be determined was the date of the application or the date when the public local inquiry began. In other words, they were contending neither for the section 22(2) date nor the date of entry. The dates of the two offers to purchase were December 15 1976 and January 13 1977. The date of entry in each case was December 20 1976. On the facts of that case, it made no difference to the result whether the relevant date was the section 22(2) date or the date of entry: this immateriality was pointed out by Lord Dunpark, at p556. There is no doubt, in my judgment, that both Lord Dunpark and Lord McDonald held that the relevant date was the section 22(2) date: see pp557, 559 and 565. But that decision must be viewed in the light of the issue that arose in the case. There was no argument as to whether the relevant date should have been the date of entry, because on the facts the distinction between the section 22(2) date and the date of entry was immaterial. At p559, Lord Dunpark said: In my opinion the 1975 amendment was not intended to, and did not, substitute the date of the application, or any other subsequent date, for the dates fixed by section 30(2), or, if the date of entry now be the relevant date, for that date. Accordingly, the reporter and the Secretary of State applied the relevant dates for section 25(4) certificates. (Emphasis supplied.) The words emphasised show clearly that Lord Dunpark was not deciding as between the section 22(2) date (the equivalent of section 30(2) in the Scottish legislation) and the date of entry. Lord Dunpark did, however, appear to approve of Hitchins: see top of p556. He also said, lower down the same page: If one is looking, as in my opinion one should be looking, for a date at which all relevant facts have to be considered by the grantor of a section 25(4) certificate, the nearer that date to the date of entry the greater the assistance which the certificate will give to the Lands Tribunal in assessing the open market value of the land. He mentioned Jelson, and said, at p557: 10 The point of distinction which Sir Douglas Frank made in the Hitchins case is not applicable to the present case. We are not here concerned with any change in planning policy. The point in this case is whether the Secretary of State ought to have granted a (4)(b) certificate because these schools had to be built on these sites. Mr Robin Purchas QC and Mr Jeremy Sullivan QC both rely on Lord Dunpark’s judgment, but for different purposes. Mr Purchas relies on it (as well as on the judgment of Lord McDonald) for the clear statement that the relevant date was the section 22(2) date, pointing out that, although Jelson was mentioned, there was no criticism of it. Mr Sullivan relies on it for the endorsement of Hitchins and the way in which Sir Douglas Frank distinguished Jelson by reference to the question of changes in planning policies. I should refer at this stage to the speech of Lord Bridge, because he dealt briefly, and obiter, with the question of relevant date at pp573 and 574. He agreed with Lord Dunpark’s reasons for rejecting the date of application as the relevant date, but did not discuss Jelson, Hitchins or the choice between the section 22(2) date and the date of entry. I have referred at some length to Grampian, but for the reasons that I have mentioned I consider that the judgment of Lord Dunpark is of limited value in helping to resolve the issue before me. Finally in this review of authorities, I should refer to Fox v Secretary of State for the Environment (1991) 62 P&CR 459*, a decision of Roch J. The facts there, were that in 1977 the applicants were refused planning permission to build houses on land that they owned on the ground that there was a sufficient supply of housing land. In 1980 the local authority decided that the land should be used for recreational purposes. In 1981 a second application for planning permission for residential development was refused on the ground that there was an adequate supply of housing land. In 1985 the local development plan was adopted which provided that the applicant’s land would be open space. In March 1987 the local authority made an offer to purchase. In September 1987 a third application for planning permission for residential development was refused. In March 1988 the local authority issued a certificate under section 17(4) stating that planning permission would not be granted for any development on the applicants’ land other than for recreational and similar usage. There was an appeal to the Secretary of State, who ruled that he had to consider the state of the appeal land at the time of the written offer to purchase, but that he had to have regard to the relevant planning policies current and reasonably forseeable at the date when he came to consider the appeal, namely October 1989, when housing was no longer in short supply. He took that date because there had been no entry by then. The Secretary of State issued a new certificate of appropriate alternative development for private open space or private open recreational use. On appeal by the landowners, Roch J held that the Secretary of State should have considered the relevant policies current and reasonably foreseeable at the section 22(2) date, and not at the date of the hearing. The Secretary of State had followed Hitchins and adopted the ‘split approach’ of considering the physical state of the land as at the section 22(2) date, but the relevant policies as at the later date. The Secretary of State has adopted the same approach in the present case. Roch J declined to follow Hitchins. He held (at p472) that the proper interpretation of the 1961 Act supported the section 22(2) date, although it seems to me that the conclusion that he reached on this point was based largely on the Grampian case which, for the reasons which I have already stated, I think should be viewed with caution on this point. *Editor’s note: Also reported at [1991] 2 EGLR 13 The conclusion that I have reached is that the Secretary of State ought to have treated the section 22(2) date as the relevant date because I think that Jelson obliges me so to decide. In my judgment, it is at least part of the ratio of Jelson that the section 22(2) date is the date at which all relevant facts are to be considered in order to determine the classes of development for which planning permission would then have been granted. The Court of Appeal decided the question that was before it as a matter of statutory interpretation. I can see no warrant in the statute for interpreting the relevant date as one date for considering some of the relevant facts (ie the physical state of the land), and another date for considering other relevant facts (ie the relevant and future planning policies). I do not believe that the language of the statute permits such a distinction to be drawn. Nor can I see any rational basis for drawing such a distinction. Mr Sullivan did not suggest that there was one. Surely, both the physical state of the land and the planning policies are relevant to the hypothetical question of what planning permission would have been granted, absent the proposal for compulsory acquisition. It is tempting to interpret the statute in such a way as would give effect to the overriding purpose of section 17 certificates as it was explained in Grampian, both in the Court of Session and in the House of Lords: greater assistance in the assessing of compensation would be provided if the relevant date was nearer to the date when compensation falls to be assessed. Sir Douglas Frank did not seek to justify his distinguishing of Jelson by reference to any statutory words which supported the split approach. He sought to limit Jelson to the factual situation that arose in that case. In my judgment, he was wrong to do so. In saying this, I recognise that in Grampian Lord Dunpark appeared to endorse the distinction drawn by Sir Douglas Frank. It was, however, immaterial in Grampian to decide between the section 22(2) date and the date of entry, and was therefore unnecessary to decide whether Sir Douglas Frank was right in distinguishing Jelson in the way that he sought to do. I conclude, therefore, that the first defendant should have adopted the section 22(2)(a) date as the relevant date, and I resolve the first issue in favour of the applicants. Second issue The relevant factual background as found by the inspector and accepted by the first respondent is as follows. The bypass was originally proposed as part of the 1952 town map. A protected route was defined across the Longmore land and the Fletcher land in November 1970. Between 1963 and 1971 planning permission was refused on six occasions for residential development of the Fletcher land because of the bypass proposal. In 1973 the county council adopted the Sundorne Advisory Plan for land to the west of the bypass route. The Shropshire County Structure Plan 1980 required urgent identification of additional housing land. In the local plan 1985 residential land was identified at the Moveage, notwithstanding objections. At the section 18 inquiry, the borough council and the applicants contended that the proposal for acquisition should be discounted as a whole, including its effect on policies and decisions before the relevant date. They contended that, but for that effect, the land would have been released under the Sundorne Advisory Plan and/or the local plan. In 1981 there was a shortfall in the five-year housing supply. Thus, on the relevant date, policy would have supported the grant of planning permission for residential development of the land if it had not been proposed for acquisition for construction of the bypass. In other words, the policies and facts applicable at the relevant date should have been viewed as if the bypass scheme had never been conceived at all. On the other hand, the second respondent contended that the first respondent and the inspector were required to take the policies and facts on the relevant date as if the scheme had been cancelled on that date, and not as if the scheme had never been conceived at all. Thus, policies would be as they in fact were on the relevant date, including policies in the development plan that opposed the release of further land for housing. Both the inspector and the first respondent accepted the submission of the second respondent as to the correct approach. At first sight, the language of sections 17(3) and (4) and 22(2) might appear to support the first respondent’s approach. It is precisely the same approach as that which was characterised as ‘literalistic’ by Lord Bridge in Grampian. The argument is that what has to be ignored in answering the hypothetical question raised by an application under 11 section 17 is the immediately preceding event, which has resulted in the applicant’s interest in land becoming one which ‘is proposed to be acquired by an authority possessing compulsory purchase powers’ under section 17(1), in this case the publishing of a notice of compulsory purchase. While that notice must be ignored, so runs the argument, facts and policies resulting from the underlying scheme which culminated in the publishing of the notice should not be ignored. Arguing for this approach, Mr Sullivan submits as follows. (i) The language supports it. The crucial words in sections 17(3) and (4) are ‘if it were not proposed to be acquired’. The applicants’ construction involves construing those words as if they read ‘if it had never been proposed to be acquired’. Moreover, the emphatic language of section 22(2), with its use of the words ‘in the following (but no other) circumstances’, should be contrasted with section 9 of the 1961 Act, which provides that: No account shall be taken of any depreciation of value of the relevant interest which is attributable to the fact that … an indication has been given that the relevant land is, or is likely, to be acquired by an authority possessing compulsory purchase powers. (ii) Accordingly, parliament has decided to restrict the relevant assumptions made and facts taken into account to those applicable at the relevant date. You look at the position as it would be, absent the section 22(2) event, and are not concerned with any aspect of the earlier history which has contributed to that position. (iii) There is nothing irrational in such an approach. Indeed, it avoids the uncertainties that were referred to by Phillimore LJ in Jelson. (iv) Nor does it create injustice. Although the grant of a positive certificate under section 17(4)(a) is conclusive (see section 15(5)) the grant of a negative certificate is not conclusive against a landowner. Section 14 of the 1961 Act defines the assumptions as to planning permission that are to be made in assessing compensation. Subsection (3) provides: but in determining whether planning permission or any development could in any particular circumstances reasonably have been expected to be granted in respect of any land, regard shall be had to any contrary opinion expressed in relation to that land in any certificate issued under Part III of this Act. Thus, if adoption of the first respondent’s approach leads to a negative certificate, it will still be open to a landowner whose interest has been acquired compulsorily to adduce evidence before the Lands Tribunal as to the proper assessment of compensation on ordinary Pointe Gourde [1947] AC 565 principles and/or on the basis of sections 6 and 9 of the 1961 Act. Jelson is a case in point. In that case a negative certificate was issued under section 17(4). The owners took the case to the Lands Tribunal. Section 9 of the 1961 Act was applied and, in awarding compensation, the tribunal disregarded the reduction in the value of the land caused by the ‘indication’ of the scheme, which had been abandoned by the relevant date. (v) In any event, Jelson is binding authority and obliges me to hold that the first respondent’s approach was correct. The submissions of Mr Purchas may be summarised as follows: (i) Parts II and III of the 1961 Act are interdependent: see per Lord Bridge in Grampian at p567. Note, for example, that areas of comprehensive development and primary allocation are excluded under section 17(1), since they are specifically provided for section 16(2) and (4); note too that the effect of certificates under section 17(4)(a) and (b) is provided for in section 14(3) and 15(5) respectively. (ii) The discounting required by section 17(4) should be done in the same way as it is done by the Lands Tribunal when assessing compensation. It is well established that in applying section 6(1) and/or 9 of the 1961 Act, and/or the rule in Pointe Gourde, one not only ignores the scheme underlying the acquisition, but also considers what would have happened in the ‘no scheme world’. (iii) There is nothing unduly speculative or uncertain about the process. It is a necessary and regular part of the evaluation carried out by the Lands Tribunal and valuers. (iv) The first respondent’s approach does create injustice. It does not fully discount the scheme and compels the landowner to raise the discounting issue again before the Lands Tribunal, with the disadvantage of having a negative certificate. That this is a real disadvantage, notwithstanding the language of section 14(3), was a point made by Lord Bridge in Grampian, at p568. (v) Jelson is distinguishable. First, that case concerned a purchase notice. Acquisition pursuant to a purchase notice is triggered by the owner of the land requiring acquisition of his land. There is accordingly no ‘scheme’ underlying the acquisition. Second, in Jelson the road scheme had been abandoned in 1962, some three years before the purchase notice was served. The argument before the court did not seek to rely on the application of Pointe Gourde or sections 6 and/or 9 of the 1961 Act. Rather, it was submitted that the question of whether or not planning permission might have been expected to be granted should be judged at any time back to 1952 when the road was first proposed. The court approached that question as a matter of statutory construction. It is true that Phillimore LJ at p255A–E dismissed the appeals ‘both as a matter of construction and on wider grounds’. The wider grounds (ie ‘hopelessly uncertain exercise’) did not, however, form part of the ratio of the other two judgments. In my judgment, Mr Purchas is right and largely for the reasons that he has submitted. It seems to me that Mr Sullivan’s argument is the same, mutatis mutandis, as that which was rejected in Grampian. Lord Bridge dealt with it at p569: sections 16, 25 and 30 of the Land Compensation (Scotland) Act 1963 correspond exactly with sections 9, 17 and 22 of the 1961 Act. He said: If it were right to confine attention to section 25(3) and (4) and section 30(2) alone, this literalistic argument might have some appeal. If, however, one considers the wider statutory context and the function of certificates of appropriate alternative development in the scheme of the Act as a whole, it becomes clear that the argument is untenable First, the argument flies in the face of section 16 of the Act which provides: No account shall be taken of any depreciation of the value of the relevant interest which is attributable to the fact that (whether by way of designation, allocation or other particulars contained in the current development plan, or by any other means) an indication has been given that the relevant land is, or is likely, to be acquired by an authority possessing compulsory purchase powers. As Lord Dunpark succinctly puts it ‘it seems to me to follow from the fact that the value of the land is not to be affected by the prospect of compulsory acquisition, that its value is not to be affected by the development proposed by the acquiring authority. One cannot discount the one without the other’. Next I refer to section 25(7) which provides: In determining, for the purposes of the issue of a certificate under this section, whether planning permission for any particular class of development would have been granted in respect of any land, the planning authority shall not treat development of that class as development for which planning permission would have been refused by reason only that it would have involved development of the land in question (or of that land together with other land) otherwise than in accordance with the provisions of the development plan relating thereto. The primary purpose of this provision, in my view, is to obviate the possibility that where, as in the usual case, urban land is allocated in the development plan for a necessary public purpose for which it will in due course need to be acquired, that provision of the plan can be relied on to deny the landowner a positive certificate. If the planning need to use land for a public purpose, which underlies a proposed compulsory acquisition, is not a sufficient ground to withold a positive certificate where that need is recognised and provided for in the development plan, I do not see how the underlying planning need can ever be such a sufficient ground. But the overriding consideration which impels me to reject the argument for the appellants is that it would, in my opinion, if accepted, defeat the essential purpose of the procedure for obtaining certificates of appropriate alternative development, as part of the overall scheme of the Act to secure the payment of fair compensation to landowners who are compulsorily expropriated, or, expressed more specifically, to ensure that, when urban land, otherwise available for some form of urban building development, is acquired for a necessary public purpose, the compensation will reflect its urban development value. Assuming, as I do, that every compulsory purchase of land can be justified by reference to the public purpose for which the land is required, to allow reliance on that public requirement to determine the 12 question raised by an application under section 25 would lead to the issue of a negative certificate in every case. Counsel for the appellants, recognising that this conclusion would be fatal to his argument, sought to avoid it by contending that the applicant for a positive certificate would succeed if, but only if, he could show that, at the date of his application, there were one or more alternative sites available which could equally well or perhaps better be used to meet the public need for which his own land was proposed to be taken. I unhesitatingly reject this contention. An application for a certificate of appropriate alternative development presupposes that the land to which it relates is in fact to be acquired by an authority possessing compulsory purchase powers and a certificate issued will only be of significance if the acquisition proceeds to completion. The availability of alternative sites is very relevant at the stage when a proposed compulsory acquisition is being resisted. But once that it has been decided that site A, rather than site B or site C, is to be acquired, the fact that site B or site C might have been chosen instead can have no conceivable relevance in determining the fair basis of compensation which the acquiring authority ought to pay the owner of site A. In my view, that reasoning is as fatal to Mr Sullivan’s submissions as it was to the arguments advanced by the appellants in Grampian. I turn, therefore, to consider the argument that Jelson obliges me to hold that the first respondent’s approach was correct. I start by observing that if Jelson is not distinguishable, it is strange that no comment was made about it in relation to this issue in Grampian. If it is not distinguishable, Jelson and Grampian cannot both be right on this issue. Yet although Jelson was cited in Grampian, it was only referred to in relation to the relevant date point (our first issue) at p556 (Lord Dunpark) and at p564 (Lord McDonald). I have not found it easy to discern whether Jelson is a second issue decision. Mr Purchas submits that it is not. The arguments seem to me to have been directed both to the relevant date point (p247C–G) and to the second issue point (p247B–C, G–H). I have come to the conclusion that it cannot be regarded as a decision confined to the relevant date point: see per Lord Denning at p251C–D, Sachs LJ at p252B–F, p254B–E, and Phillimore LJ at p255C–E. Nevertheless, Jelson can and, in my view, should be distinguished for the reasons advanced by Mr Purchas. As Lord Dunpark put it in Grampian, ‘the value of land is not to be affected by the development proposed by the acquiring authority’ (p553). If, at the relevant date, the acquiring authority no longer propose to carry out the development, then the question of discounting the effect of that development does not arise. In Grampian the acquiring authority did propose to develop the land for use as schools at the relevant date. The issue was whether the fact that the land had been earmarked for such use before the relevant date meant that this proposed use did not fall to be discounted. The House of Lords decided that it did fall to be discounted. In Jelson, however, by the relevant date the acquiring authority had abandoned their proposal to develop the strip of land as a road. The Court of Appeal decided that the planning authority were required to look at the position at the relevant date and certify under section 17(4) in the circumstances then existing. As the later Jelson litigation demonstrated (Jelson Ltd v Blaby District Council [1977] 1 WLR 1020) that did not prevent the applicants from claiming compensation under section 9 of the 1961 Act for the reduction in value of the land caused by the ‘indication’ of the road during the years preceding its abandonment in 1962. I should add for completeness that Roch J followed Grampian in relation to the second issue, and said, at p477: It is now clearly established that not only the proposal by the public authority to acquire the land compulsorily must be ignored but also the planning policies which underly such a proposal. The provision which requires the proposal of the authority possessing compulsory purchase powers to be disregarded is section 17(4) itself. He did not refer to Jelson in relation to this issue. Fox was a case in which at the relevant date the acquiring authority still proposed to develop the land for the purposes for which they had made a written offer to purchase, thereby bringing section 22(2)(c) into play. I conclude, therefore, that the first respondent was in error in failing to discount the effect of the proposal to acquire the land before the date of the proposed acquisition. Third issue Three alternative bypass routes were the subject of evidence and submissions before the inspector: the route which has been built over the appeal land (the preferred route); an alternative route, which ran for part of its length along the line of the preferred route and for its remaining length close to but to the east of the line of the preferred route (the alternative route); and OR4, a route which ran roughly parallel to the preferred route, but substantially further to the east. At the inquiry, the applicants put forward the case that, in the absence of the preferred route, the probable alternative route for the bypass would have been OR4, and that the alternative route was a possible, but less probable, alternative to OR4. The second respondent’s case was that it was uncertain whether there would be an alternative bypass or what route it would have taken. At the public highway inquiry held in 1984, OR4 had been rejected in favour of the preferred route. The second respondent submitted to the inspector at the section 18 inquiry that, in the absence of the preferred route, all other options would need to be evaluated. The inspector concluded that there would have been a bypass, and that in the absence of the preferred route the alternative route would have been adopted. He set out at paras 14.10 and 14.11 of his report the evidence which led him to this conclusion. He then went on to decide that (whichever date was taken to be the relevant date) residential development would not have been appropriate on the appeal land on the basis of OR4, but that it would have been appropriate on the basis of the alternative route. The first respondent agreed with the inspector that, in the absence of the preferred route, an alternative bypass would have been built, but concluded that the ‘facts and other evidence lead to a different conclusion as the most likely alignment of such a road’: para 15. At para 17, he said: The view is taken that the evidence of the 1984 inquiry is a very strong argument in favour of the conclusion that, if the acquisition scheme had not been built on the appeal sites, the most likely alignment would have been OR4. A conclusion that some other route would have been chosen could only reasonably be reached if there were stronger evidence in favour of another option. In this connection the appeal Inspector concludes — in paragraph 14.11 of the report — that there was such a possibility, namely a route immediately to the east of the actual route but to the west of OR4; and that this was the alternative route that would have been selected. However it is noted that, unlike the actual route and OR4, this is not a costed route that has been considered in depth by engineers and it has not been subject to the rigorous scrutiny of a highway inquiry. For this reason, whilst such an alternative may have had the benefits ascribed to it in paragraph 14.11 of the report, it has been given less weight than OR4 and the Inspector’s conclusion is not accepted in this respect. Instead, the view is taken that a by-pass would have been provided on route OR4 if the appeal sites had not been compulsorily acquired. This would have been the position at both the Fox and Hitchins dates. Mr Purchas submits that there was no reason to suppose that the overall costs or engineering implications of the alternative route would materially differ from those of the preferred route. Moreover, the considerations taken into account by the first respondent, namely that the alternative route had not been costed, considered in depth by engineers or been the subject of a highway inquiry, were immaterial. Accordingly, the first respondent had regard to immaterial considerations and/or reached a conclusion that was perverse. I cannot accept these submissions. As Mr Sullivan points out, the first respondent concluded that the evidence at the 1984 highway inquiry was ‘a very strong argument’ in favour of OR4. That was a conclusion that he was entitled to reach. As the applicants had themselves emphasised at the section 18 inquiry, the report of the inspector to the highway inquiry had concluded that the choice between the preferred route and OR4 was ‘closely balanced’. In view of this, it was reasonable for the first respondent to decide that he could opt for an alternative to OR4 only if there was evidence to oust OR4 as the runner-up to the preferred route. He considered this in the fourth and fifth sentences of para 17 of the decision letter and concluded that there was insufficient evidence to displace OR4. It should be 13 remembered that he was not acting as a reviewing authority of the inspector’s decision, but deciding the issue de novo as if at first instance: see section 18(2) of the 1961 Act. He had regard to the benefits of the alternative route ascribed to it by the inspector at para 14.11 of his report, but concluded that they were insufficient to outweigh the fact that, unlike the preferred route and OR4, the alternative route had not been costed or considered in depth by engineers, and not been subject to the rigorous scrutiny of a highway inquiry. Matters of weight were for the first respondent. In my judgment, given the fact that the choice between the preferred route and OR4 had been regarded as finely balanced at the highway inquiry, it was entirely reasonable that the first respondent should have regarded the factors to which he made reference as decisive. I reject the submission that he had regard to immaterial considerations and/or that he reached a perverse conclusion. I cannot leave this issue without commenting that it is ironic that the applicants should now be characterising in this way the first respondent’s adoption of the very submissions that they sought to persuade the inspector to accept. Fourth issue This issue arises out of para 17 of the first respondent’s decision letter. The absence of costings of the alternative route and the paucity of the engineering evidence relating to it were not raised by or on behalf of the first respondent either before, during or after the close of the inquiry. For the applicants, it is submitted that if the first respondent considered that the evidence was inadequate, and that such inadequacy was material (as it proved to be), he should have: (i) obtained the relevant evidence for himself; and/or (ii) given the applicants the opportunity of dealing with the point. In support of (i), the applicants rely on Prest v Secretary of State for Wales (1982) 81 LGR 193*. The argument in (ii) is a complaint that there was a breach of the rules of natural justice. *Editor’s note: Also reported at [1983] 1 EGLR 17 Prest was a compulsory purchase case. The water authority wanted to make a new sewage works on land owned by the applicants, and issued a compulsory purchase order in respect of the land. The applicants offered alternative sites. At the public inquiry, no evidence was given as to the costs of acquiring the land for the site. The inspector’s report recommended to the Secretary of State that the compulsory purchase order be confirmed on the basis that the construction cost was likely to be greater at the applicants’ alternative sites than at the compulsory purchase order site. The applicants wrote to the Secretary of State before he gave his decision, pointing out that the material question of the relative land costs of the sites had not been considered. They asked for the inquiry to be reopened. The Secretary of State confirmed the compulsory purchase order on the basis of the comparative construction costs of the two sites, and without considering the relevant land costs. The Court of Appeal quashed the decision applying the well established principle of public law that a decision maker must ‘call his own attention to the matters to which he is bound to consider’: see Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, at p229. The same point was made by Lord Diplock in Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014, at p1065: or put more compendiously, the question for the court is, did the Secretary of State ask himself the right question and take reasonable steps to acquaint himself with the relevant information to enable him to answer it correctly? It is not difficult to see why in Prest it was considered that reasonable steps did require the Secretary of State to acquaint himself with the information as to the relative values of the competing sites. He had been specifically asked to consider this issue, and the Court of Appeal decided that he could not properly decide whether to confirm the compulsory purchase order without this information. I cannot accept that in the present case the first respondent acted unreasonably or unfairly in reaching his decision without information as to the cost and without a detailed engineering appraisal of the alternative route. In judging whether the first respondent acted reasonably and fairly, I consider the following factors are material: (i) He accepted the applicants’ case in respect of OR4. This feature alone makes this case very different from Prest. No party to the section 18 inquiry argued as its primary case that the alternative route would have been chosen in the absence of the preferred route. The applicants had put forward a detailed and cogent case in support of OR4. The first respondent accepted it. The applicants would not be complaining about that if the inspector and the first respondent had not rejected their case as to the housing implications of OR4. (ii) The applicants had the opportunity to adduce evidence as to the costs and engineering aspects of the alternative route, but chose not to do so because they were advocating OR4. The first respondent did not act unreasonably or unfairly in not himself seeking such evidence and in not giving the applicants a further opportunity to adduce it. (iii) Unlike in Prest, the first respondent was not asked by the applicants to seek such evidence or that they be given an opportunity themselves to adduce it. (iv) Finally, although it would presumably have been possible to cost the alternative route and obtain a detailed engineering appraisal of it, the alternative route would still not have been subject to the ‘rigorous scrutiny of a highway inquiry’, and to that extent, in the eyes of the first respondent, it was bound to be and to remain at a disadvantage as compared with OR4. I conclude, therefore, that Prest is distinguishable, and that the first respondent did not fail to take reasonable steps to acquaint himself with the relevant information so as to enable him to answer the question correctly. For the same reasons, he did not act in breach of the rules of natural justice. Fifth issue For the applicants it is submitted that no adequate reasons were given for the conclusions in para 17 of the first respondent’s decision letter. It is said that the applicants are prejudiced in being left in substantial doubt whether the decision was taken within the powers conferred on the first respondent by the 1961 Act. Mr Purchas did not develop this submission and I can deal with it quite shortly. In my view, the reasons given in para 17 are perfectly clear. Mr Purchas subjected the paragraph to a detailed analysis, which formed the basis of his submissions in relation to the third issue. The fact that it was susceptible to such an analysis provides support for my view that the reasons were both intelligible and clear. I reject this reasons challenge. Conclusion Accordingly, I decide the first two issues in the applicants’ favour, and the remaining issues in favour of the first respondent. In the result, the decisions must be quashed.