Hoveringham Gravels Ltd v Chiltern District Council
(Before Lord Justice STEPHENSON, Lord Justice ROSKILL and Lord Justice WALLER)
Appeal from Lands Tribunal raising matters of importance–Compensation for compulsory acquisition of “back land”–Certificate of appropriate alternative development in respect of total area of front land and back land not applicable to determine compensation for back land only–Claim under section 7 of Compulsory Purchase Act 1965 not competent for alleged severance loss to back land itself, but section 7 applicable to owners’ loss due to the retained land (the front land) being rendered less valuable–Pointe Gourde principle not applicable in view of existence of two schemes–Case remitted to Lands Tribunal to assess section 7 loss–Leave to appeal to House of Lords
This was an
appeal by Hoveringham Gravels Ltd from a decision of the Lands Tribunal on the
amount of compensation payable by Chiltern District Council (formerly Chesham
UDC) in respect of the compulsory purchase of 1.81 acres of land (the
“back land”) south-east of Chesham, Bucks, part of a larger area the
remainder of which (the “front land,” which was not the subject of
the present proceedings) had been acquired by the Bucks County Council. The
facts are fully set out in the judgment of the court which was prepared and
read by Roskill LJ. Waller LJ, although agreeing with the judgment, was not
present in court when it was read. The decision of the Lands Tribunal (Sir
Douglas Frank QC and J R Laird FRICS) was reported at (1976) 237 EG 811, [1976]
1 EGLR 185.
Iain Glidewell
QC and D M W Barnes (instructed by Bird & Bird, agents for Rollit, Farrell
& Bladon, of Hull) appeared for the appellants, Hoveringham Gravels Ltd;
William Glover QC and M B Horton (instructed by Wray, Smith & Co, agents
for Blaser, Mills & Lewis, of Chesham) represented the respondents.
Appeal from Lands Tribunal raising matters of importance–Compensation for compulsory acquisition of "back land"–Certificate of appropriate alternative development in respect of total area of front land and back land not applicable to determine compensation for back land only–Claim under section 7 of Compulsory Purchase Act 1965 not competent for alleged severance loss to back land itself, but section 7 applicable to owners’ loss due to the retained land (the front land) being rendered less valuable–Pointe Gourde principle not applicable in view of existence of two schemes–Case remitted to Lands Tribunal to assess section 7 loss–Leave to appeal to House of Lords
This was an
appeal by Hoveringham Gravels Ltd from a decision of the Lands Tribunal on the
amount of compensation payable by Chiltern District Council (formerly Chesham
UDC) in respect of the compulsory purchase of 1.81 acres of land (the
"back land") south-east of Chesham, Bucks, part of a larger area the
remainder of which (the "front land," which was not the subject of
the present proceedings) had been acquired by the Bucks County Council. The
facts are fully set out in the judgment of the court which was prepared and
read by Roskill LJ. Waller LJ, although agreeing with the judgment, was not
present in court when it was read. The decision of the Lands Tribunal (Sir
Douglas Frank QC and J R Laird FRICS) was reported at (1976) 237 EG 811, [1976]
1 EGLR 185.
Iain Glidewell
QC and D M W Barnes (instructed by Bird & Bird, agents for Rollit, Farrell
& Bladon, of Hull) appeared for the appellants, Hoveringham Gravels Ltd;
William Glover QC and M B Horton (instructed by Wray, Smith & Co, agents
for Blaser, Mills & Lewis, of Chesham) represented the respondents.
ROSKILL LJ,
reading the judgment of the court, at the invitation of Stephenson LJ, said:
This appeal by way of case stated by the Lands Tribunal dated August 2 1976
arises from their decision dated December 18 1975 and is yet another step in
the secular struggle between the appellants, Hoveringham Gravels Ltd, and the
respondents, Chiltern District Council (formerly Chesham Urban District
Council) as to the quantum of compensation to be paid by the latter to the
former in respect of the compulsory purchase by the latter of 1.81 acres, part
of a larger area of 2.462 acres of land situate about 1 mile south-east of
Chesham in Buckinghamshire. We shall refer to the 1.81 acres as the "back
land," the balance of the area (0.652-acre) as the "front
land"–in these respects following the Lands Tribunal’s definitions. We
will refer to the entirety of the area as "the whole area."
18
Though the
areas of land are small, the areas of conflict between the parties are large,
and some of the questions to which this appeal gives rise are of general
importance, both to local authorities and to landowners. We think it right to
emphasise at the outset of this judgment that although we are concerned in this
appeal only with the dispute between the appellants and the respondents, for
the case stated arises only from the decision in that dispute, there were
before the Lands Tribunal two references, the present and a reference of a
dispute between the appellants and the Buckinghamshire County Council
(hereinafter called "the county council") in respect of the
compensation to be paid by the latter to the former in respect of the
compulsory purchase by them of front land. The award of £21,915 by the Lands Tribunal
to the appellants against the county council–Bundle A, pp 20/21–has not been
the subject of appeal by either party by way of case stated. It is the award
against the respondents of £13,750 in respect of the back land which alone is
challenged. We leave on one side for the moment the fact that that figure is
admitted by both parties to be on any view wrong and must be increased to
£21,250, even if the decision of the Lands Tribunal be otherwise upheld on that
part of the appellants’ claim. This error appears to have arisen from an
unfortunate misunderstanding by the Lands Tribunal of an agreement made on one
point during the hearing. We will return to this matter towards the end of the
judgment.
The central
difficulty in this appeal arises from the fact that although the original
proposal some nine years ago was for the compulsory acquisition by the
respondents’ predecessors of the whole area as a public open space, a proposal
which led to the appellants applying for and obtaining a certificate of appropriate
alternative development of the whole area pursuant to section 17 of the Land
Compensation Act 1961 on June 15 1970, that proposal was not carried into
fruition. In due course different proposals were put forward which ultimately
involved not the whole area as such, but the front and the back land as
separate entities. Applications for planning permission to develop the whole
area were finally rejected on June 29 1972 (Bundle B, pp 49/50), principally
because a proposal by the county council to widen Latimer Road, Chesham, would
involve the use of what became the front land for that purpose, as a result of
which the remainder–the back land–would become inadequate both in area and in
access facilities for the proposed development envisaged by the certificate of
June 15 1970. The proposal for road widening was first mooted by the county
council towards the end of 1971 and had been fully canvassed at an inquiry held
in March 1972.
It was as a
result of this decision on June 29 1972 that on the next day, June 30 1972, the
appellants served on the respondents a notice requiring them to purchase the
whole area. A copy of that notice which was served in pursuance of section 180
of the Town and Country Planning Act 1971, is not with our papers, but its
terms can be sufficiently deduced from those of the respondents’ counternotice,
objecting to compliance with that notice, dated September 18 1972 (Bundle B, pp
67/68). This counternotice was served pursuant to section 181(1)(c) of the 1971
Act. The respondents’ reasons for the counternotice are set out in paragraph
(4)(i) to (vi) of the document and are repeated at pp 811, 813 of the decision.
We need not set them out in full. Suffice it to say that the respondents relied
on the fact that the refusal of planning permission on June 29 1972 had been
because of the county council’s road-widening scheme, the cost of which would
fall on the county council–that it would be wrong to impose upon the local
ratepayers the burden of acquiring the whole area until final improvements
regarding that road-widening scheme had been decided upon and that the
respondents would not, apart from the possibility of obtaining other financial
assistance towards the purchase of the land as a public open space, contemplate
proceeding with the original scheme because of the burden which the existence
of the June 15 1970 section 17 certificate would cast upon them in the event of
compulsory purchase by them.
This purchase
notice was referred to the Secretary of State who, in accordance with his statutory
duty under section 182 of the Town and Country Planning Act 1971, gave notice
of his proposed action on November 7 1972 (Bundle B, pp 77/78). After
considering certain submissions which are summarised at p 813 of the decision
and the report of an inspector at yet another inquiry which had been held on
February 7 1973, on March 13 1973 (Bundle B, pp 80-82) he expressed himself as
satisfied that the conditions specified in section 180(1)(a) and (c) were
fulfilled. He confirmed the purchase notice subject to the modification that
the county council should be substituted as the purchasing authority in respect
of the front land, as it now became, the respondents being the purchasing
authority of the remainder (the back land), both authorities being deemed to
have served their respective notices to treat on that day, that is March 13
1973.
Negotiations
followed for the assessment of compensation, but the respondents claimed that
the June 15 1970 certificate had no application to the assessment of compensation
for the back land. On December 18 1973 the appellants applied for further
section 17 certificates for the front land and the back land without prejudice
to their contention as to the applicability of the June 15 1970 certificate to
the back land. On December 20 1973 the appellants referred their claim for
compensation for the back land to the Lands Tribunal, but no similar reference
in respect of the front land was made until August 5 1974. On February 21 1974
(Bundle B, p 104) the county council issued a section 17 certificate in respect
of the front land for residential development at a density not exceeding six
houses to the acre. Condition 4 of this certificate is important: "The
development hereby permitted shall be carried out comprehensively with the land
at the rear of the site shown hatched black on the plan forming part of the
application." On November 8 1974 a
further section 17 certificate was issued in respect of the back land. It was
common ground that this latter certificate was out of time for the purposes of
section 17. It contained no parallel condition such as condition 4 of the
former certificate, but it did contain a requirement as to access by means of a
private drive, which would of course have traversed the front land.
The main argument
before the Lands Tribunal and initially before us turned upon the extent to
which, in the light of the history we have outlined, the appellants were still
entitled to rely upon the certificate of June 15 1970 as stating the
assumptions by reference to which the valuation of the back land had to be made
in the instant reference. If a valuation of the whole area made upon the basis
of that certificate produced a figure of what we will call £Z, then the
appellants’ entitlement to compensation should not, it was said, be adversely
affected by the fact that the Secretary of State’s confirmation of the purchase
notice introduced the additional requirement of two acquiring authorities
instead of one, one for the back land, namely the respondents, and the other
for the front land, namely the county council. If £Z were the proper value of
the whole area and £X the value of the back land and £Y the value of the front
land, then £X plus £Y could not be less than £Z. Since £Y had been fixed by the
Lands Tribunal as the value of the front land at £21,915 (decision, p 815) and
there was no appeal either by the appellants or by the county council from that
determination, the proper value (£X) of the back land would not be less than £Z
minus £21,915. Yet the Lands Tribunal had only awarded £13,750 as the value of
the back land. The total of these two figures was far less than £Z would be had
£Z been quantified solely upon the assumptions made19
in the June 15 1970 certificate and this argument was not affected in principle
by the fact that it was conceded that on any view the figure of £13,750 must be
increased to £21,250. The revised total was still vastly less than £Z would
have been on the assumptions in question.
The Lands
Tribunal rejected this argument, holding that the June 15 1970 certificate,
though still extant at the date of the hearing, had become irrelevant in the
changed circumstances and that the front land and the back land must each be
valued separately without regard to what the position would have been had the
scheme envisaged when the June 15 1970 certificate was issued come to fruition
(decision, p 815). Questions (a) and (b) in paragraph 4 of the special case
were directed to securing the decision of this court upon this issue. Though
expressed as two separate questions, the first of which the Lands Tribunal
answered in favour of the appellants and the second adversely to them, both
leading counsel agreed in argument before us that it was difficult to justify
treating the two questions as separate, the essential question being whether
the appellants were entitled to insist upon the valuation of the back land
being carried out upon the basis of the assumptions made in the June 15 1970
certificate, notwithstanding that that certificate related to the whole area
and–on this branch of the argument–the Lands Tribunal and this court were
concerned only with the valuation of the back land.
We think the
right approach to this question is first to ask ourselves: What is the subject
matter to be valued? The answer to that
question must, we think, be "the back land." It is to be recalled that section 22(1) of
the 1961 Act defines "the parties directly concerned" in relation to
an interest in land as "the person entitled to the interest" and
"the authority by whom it is proposed to be acquired," while section
39(2) defines, inter alia, "the relevant interest" as
"the interest acquired in pursuance of [a notice to treat]." It seems to us clear that Part III of the
1961 Act, which includes section 17 under which the right to a certificate of
appropriate alternative development arises, envisages an assessment of
compensation by reference to, and only to, the interest in the land to be
acquired and as between the persons entitled to that interest on the one hand
and the acquiring authority on the other. Other land of the landowner which
might have been compulsorily acquired in other circumstances but which was not
so acquired in the event seems to us to be irrelevant, when the question to be
asked and answered is–what is the subject matter to be valued? The answer in the present case must be
"the back land" and nothing else. We accordingly reject Mr
Glidewell’s contention that in the present case the interest in land means the
appellant’s interest in the whole area.
Mr Glover
rightly stressed that the entitlement to compensation for compulsory
acquisition is statutory, as is the measure of that compensation. One has
therefore to examine the relevant statutory provisions to determine what the
entitlement is and how the compensation is to be assessed. Section 5(2) of the
1961 Act provides that "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." The statutory precursor of this subsection
was considered by this court in Horn v Sunderland Corporation
[1941] 2 KB 26. It is sufficient for present purposes to refer to–it is not
necessary to quote at length–the well-known passage in the judgment of Scott LJ
at pp 48 and 49 in which he explains what he calls "the rule of market
value" and reiterates what he calls "the principle of equivalence
which is at the root of statutory compensation, the principle that the owner
shall be paid neither less nor more than his loss." Relying on this passage, the appellants claim
that under the Lands Tribunal’s decision they will receive much less than their
true loss because that loss is the value of the whole area which they have, in
the events which have occurred, been prevented from developing in accordance
with the June 15 1970 certificate. Therefore their loss in relation to the back
land is the proportionate part–proportionate as to area–of their loss in
relation to the whole area. This argument presupposes that the Lands Tribunal
should have valued the back land by reference to and only to the June 15 1970
certificate. Mr Glidewell urged that that certificate once issued remained in
being for all time, or, if not for all time, at least up to and including the
time when the Lands Tribunal made their decision. It attached to the land, as
it were, in rem, and whether or not the proposals involving different
acquisitions by one or more different acquiring authorities ultimately emerged,
that certificate alone remained the relevant document by which the market value
of the back land had to be assessed under section 5(2).
One is of
course involved in a highly artificial field. Section 17 of the 1961 Act, with
its provisions for certification of appropriate alternative development,
involves that the land in question is to be deemed to have planning permission,
which ex hypothesi in reality it would never have obtained because of
the proposals for compulsory purchase. But we think it is carrying
artificiality too far to say that a section 17 certificate granted in respect
of a whole area must forever after be applied for the purpose of valuing any
part of that area, whatever the circumstances in which the valuation of that
part falls subsequently to be made. We think that that conclusion is reinforced
by the fact that in the instant case there were two subsequent section 17
certificates, one for the front land and one for the back. We do not follow the
logic of an argument which involves wholly ignoring those latter certificates,
even though the appellants obtained them without prejudice to their main
contention–issued after the purchase notice had been confirmed and looking only
at the earlier section 17 certificate issued in wholly different circumstances
which subsequent events had overtaken.
The appellants
relied upon a decision of Winn J, as he then was, in Lucas (F)
& Sons Ltd v Dorking and Horley Rural District Council (1966) 17
P & CR 111. But there the partial development proposed was held to be
comprised within the planning permission originally granted. This decision was
subsequently treated by the Divisional Court in Pilkington v The
Secretary of State for the Environment [1974] 1 All ER 283 (rightly, if we
may respectfully say so) as "a rather exceptional case." In Pilkington’s case it was held that
where one of a number of grants of planning permission had been implemented, it
was not thereafter permissible for the landowner to implement another grant of
planning permission which was inconsistent with the permission already implemented.
We respectfully agree with and adopt the reasoning in the judgment of Lord
Widgery CJ at p 289. By parity of reasoning, when one is dealing with a deemed
planning permission we think it is impossible logically to hold that the
valuation of the back land, in relation to which a later specific section 17
certificate has been issued, must be determined by reference to, and only to, a
previous section 17 certificate issued in relation to the whole area and a
different proposed compulsory acquisition. The Lands Tribunal expressed their
conclusion at p 815 of the decision thus: "a permission for the
comprehensive development of an area does not permit piecemeal development not
forming part of a scheme for the whole area." This passage was criticised as inconsistent
with a previous passage on p 814 reading thus: "We find nothing in the
statutes nor in the June 1970 certificate to support the proposition that the
certificate is only good for the acquisition for which it was granted." We do not think there is any inconsistency
between these two passages if each is read in its proper context. The latter
passage is clearly intended to be directed to the position in the instant case.
In the result, we reject this part of the appellants’ submissions–that is that
the whole area should be valued20
and the resultant valuation apportioned between the front land and the back
land in proportion to their respective acreages–and we reach the same
conclusion as did the Lands Tribunal as to the inapplicability of the June 15
1970 certificate.
We confess
that we have reached this conclusion with some regret and we share the view of
the Lands Tribunal (p 815) that this is a very difficult case. The change of
plan and the introduction of two acquiring authorities in place of one was not
of the appellants’ making and it seems inherently unjust that the basis of
valuation of the whole area should differ according to an administrative
decision which would seem to have been dictated by considerations of attempting
to secure a more equitable distribution of the burden of paying compensation
between the two acquiring authorities rather than for any other reason. It is
difficult to see why such a decision should be allowed to alter the appellants’
rights, and we cannot think that this consequence of his action can have been
in the mind of the Secretary of State when he took the decision that there
should be two acquiring authorities and not one. If our conclusion on this part
of the case be right, no doubt this is a matter which will be borne in mind in
any further case when a similar position may arise. But it seems to us, as it
did to the Lands Tribunal, that the language of the statute compels an
assumption of separate sales and purchases of the front land and of the back
land. If that be right, then we find it difficult to justify in logic the
application of the June 15 1970 certificate and the ignoring of the two later
separate certificates, even though the application of the former would be
likely to produce a financially more favourable result for the appellants on
the question of valuation.
Mr Glover
sought to meet the argument based upon the apparent injustice of the result for
which he contended, which we have felt obliged on this part of the case to
accept, by urging that if in the result £X plus £Y did not equal £Z, that was
due to the fact that the appellants had wrongly formulated their claim against
the county council in respect of the front land, and in consequence had
received a smaller sum of compensation for that compulsory acquisition than
they should have done. He contended that the appellants had not advanced a
proper additional claim against the county council in respect of the
acquisition of the front land by reason of damage which, he argued, they as
owners of the front land might have claimed they had suffered by reason of the
severance of the back land from the front land. They had, he contended, thus
ignored or overlooked the provisions of section 7 of the Compulsory Purchase
Act 1965. We shall have to consider the true construction of the section
hereafter.
The Lands
Tribunal’s determination against the county council will be found at pp 815,
817 of their decision and we have already pointed out that this determination
is not the subject of any appeal to this court. The Lands Tribunal was
obviously troubled at the figure awarded and inferentially thought it was too
high. But it appears to have been awarded on the basis of the county valuer’s
unchallenged evidence, taking a basis of valuation which the Lands Tribunal
thought to be wrong. Since there is no appeal in that reference and the county
council is not a party to the present proceedings in this court, we think that
in all the circumstances it would not be right to draw any inference one way or
the other from the award made and we are not prepared to accept as established that
the figure awarded against the county council might have been higher had the
claim been otherwise or differently advanced.
As an
alternative to his main argument, Mr Glidewell relied upon section 7 of the
1965 Act to increase the appellants’ entitlement to compensation for the
compulsory acquisition of the back land beyond that to which the appellants
would be entitled in accordance with section 5(2) of the 1961 Act. The
argument, if we followed it correctly, was that the severance of the whole area
into the front land and the back land in principle could affect and in this
case did affect both the land acquired, that is to say the back land, and
"the other land of the owner" (the front land). Emphasis was placed
on the words "damage (if any) 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 the other land." It was argued that section 7 enabled
severance loss to the back land to be additionally recovered as well as the
market value of the back land. With all respect to the ingenuity of the
argument (which seems not to have been advanced before the Lands Tribunal–there
is certainly no reference to it in their decision), we think that it breaks
down as a matter of the construction of the section. In construing the words
"by reason of the severing of the land purchased," the later words
"or otherwise injuriously affecting the other land" cannot be
ignored. It seems to us clear that the section on its true construction is
envisaging an additional head of compensation for the owner of the land taken
by reason of other retained land of his being less valuable to him through that
retained land being severed from or otherwise injuriously affected by the
compulsory acquisition of the land taken. We arrive at that conclusion solely
as a matter of the construction of the section, but we think that consideration
of the earlier legislation and Scott LJ’s judgment in Horn v Sunderland
Corporation, which was concerned with that earlier legislation, supports
our view. Section 7 is the legislative successor of section 63 of the Lands
Clauses Consolidation Act 1845 (as amended). Its text and that of section 49 of
the same Act will be found discussed at pp 44 and 45 of Scott LJ’s judgment. It
is true that the former section 63 and the present section 7 are not quite
textually identical, but we cannot believe that section 7, when enacted in
1965, was intended to effect so drastic a change in the law as would be
involved if we were to accept this part of Mr Glidewell’s argument.
Mr Glidewell
also complained of the 50 per cent discount upon the compensation awarded
(Lands Tribunal’s decision, p 817) for the risk of planning permission not
being granted and "more particularly for the difficulties of
access." He said that one did not
know what discount had been allowed under each head and also urged that there
was more than "a strong possibility" that planning permission would
have been granted. This type of assessment seems to us to be entirely a matter
for the Lands Tribunal and it would be wrong, even if we thought they had
proceeded upon a wrong basis of the assessment of the market value of the back
land, to send the decision back for reconsideration of a matter of this kind.
As we do not think the Lands Tribunal erred in this respect, we find it
unnecessary to discuss this matter further.
We now turn to
consider the third question which arises from the special case, namely, whether
upon the construction we have adopted of section 7 of the 1965 Act, the Lands
Tribunal ought to have awarded the appellants some additional sum as part of
their claim for the compulsory acquisition of the back land for the damage (if
any) the appellants have sustained as owners of the retained land (the front
land). We find it strange that the extremely difficult problems to which this
part of the case gives rise find so little mention in the decision. Though both
learned counsel assured us that this point had been canvassed, it seems from
the tenor of the decision as a whole that the weight of the argument on both
sides before the Lands Tribunal must have been directed to the question with
which we have already dealt rather than to the possibility of an additional
claim under section 7.
Section 7 is
obliquely referred to at p 814 of the decision, where the Lands Tribunal set
out one part of Mr Glidewell’s argument: "If treated as two acquisitions,
he said, the fair21
thing to do is to value as a whole; otherwise it would be necessary to make
provision for acquiring access and for awarding compensation for severance
and injurious affection." We
have italicised those last few words. They are our italics. The Lands Tribunal
rejected the main contention, but we cannot find that this possible alternative
argument is anywhere dealt with, thus depriving us of the benefit of the views
of this most expert tribunal which we would have greatly valued on a matter on
which authority seems strangely lacking. We must, we think, proceed on the
basis that they intended to reject this alternative argument, but that argument
is clearly open to the appellants in this court in view of the terms of the
special case.
Mr Glidewell
argued that section 7 applied both to the front and to the back land and that
the front land had lost part of its value by being severed from the back land
which had the benefit of the 1974 certificate. Mr Glover expressly accepted
that if the appellants could show damage to "the other land," ie the
front land, by the respondents’ compulsory acquisition of the back land, they
were entitled to recover as a separate head of claim damage caused to the
appellants by the severance of the back land from the front. But he stressed
that the relevant words of section 7 were "by reason of the severing of
the land purchased from the other land of the owner" and not "by
reason of the purchase of the land" compulsorily acquired. Mr Glover
further expressly conceded that the front land was "other land" of
the owner for the purposes of section 7. He did not seek to argue that there
could be no relevant severance merely because of two simultaneous or virtually
simultaneous compulsory acquisitions. But he said that by the time of the
hearing there had been no damage to the appellants by reason of the severance
of the back land from the front land. Any damage they had suffered arose not
from the severance but from the use of the front land for the purposes of road
widening.
It is, we
think, important to consider exactly what the section requires a landowner to
establish before he can make good a severance claim under section 7. The
section, as we think, has nothing to do with the diminution in the value of the
back land because of its severance from the front land. It is concerned with a
case where the landowner can show damage by reason of the severance of the land
taken from other retained land of his. We are in this case concerned not with
realities. We are dealing with what, in relation to planning permission, is to
be deemed to have been granted, whether upon terms or otherwise. In 1970 the
whole area is to be deemed to have had (subject to certain conditions) planning
permission as set out in the June 15 1970 certificate. This of course would
result in the whole area possessing a substantial value for residential
purposes as envisaged in that certificate. The use of the whole area for
residential purposes was prevented by the respondents who, however, did not go
on with the open space scheme because of the resultant burden of cost arising
from the issue of the June 15 1970 certificate.
We do not see
why, when the back land was severed from the front land, the appellants as
owners of the front land did not suffer damage by reason of the front land then
being deprived of its own share of its notional residential value for
development under the June 15 1970 certificate. The February 21 1974
certificate made the alternative development therein envisaged conditional upon
it being carried out comprehensively with the land at the rear of the site;
that is to say, the back land. This deemed permission, one would have thought,
must have involved the front land possessing a lesser value than it had
previously possessed when it had the benefit of the June 15 1970 certificate
applicable to the whole area. Mr Glover sought to meet this argument by saying
that the damage, however it be quantified, was not suffered by the severance of
the back land from the front, but from the compulsory acquisition of the front
land for road widening purposes. The requisite element of causation between
severance and damage was not therefore, he argued, established.
We think that
in the ultimate analysis of the problem the question does become one of
causation, and indeed we did not understand Mr Glover seriously to dispute
this. It is no doubt true that in one sense severance only takes place upon
completion following compulsory acquisition, but we cannot think that the
answer to this question can depend upon the accident, which compulsory sale is
in fact, first completed. If it be the fact that the front land upon severance
becomes less valuable to the appellants as owners of the front land, so that
they suffer damage because it cannot be developed as part of the whole area
together with the back land which is being compulsorily acquired, we do not see
why that damage is not suffered by the appellants by reason of the severance of
the back land from the front land. The basic philosophy of the statutes is to
give the appellants compensation for the loss they have suffered, no more, no
less, and that loss seems to us to be required to be calculated by reference to
the value of the back land itself, which is compulsorily acquired, to which has
to be added the damage, if any, suffered by the appellants as owners of the
front land in consequence of the back land being severed from the front land.
We see no reason to put too narrow a construction on section 7 so as to deny
the appellants compensation for this extra loss if, viewing the matter broadly,
that extra loss can fairly be said to have been caused by severance or indeed
in a case where severance, though not the sole cause of that extra loss, is a
substantial cause.
We have
therefore reached the conclusion that the Lands Tribunal has, with all respect,
erred in failing to quantify this extra loss and add it to the correct figure
for the market value of the back land itself. Reluctant as we are to
contemplate that this protracted dispute should be still further prolonged, in
these circumstances we see no alternative but to remit the decision to the
Lands Tribunal for further consideration in this respect. The question of the
quantum of such extra loss will have to be determined in the light of what we
have said in this judgment. If there had been an appeal in the cases of both
the front land and the back land, we would have expected the value of the front
land plus the severance claim, and the value of the back land plus the
severance claim, to approximate to the value of the whole area, ascertained by
reference to the June 15 1970 certificate.
Mr Glidewell
also argued that, upon the footing that the two compulsory acquisitions were
all one scheme, the application of the Pointe Gourde principle required
the Lands Tribunal to ignore any appreciation or depreciation due to the scheme
itself. In the light of the decided cases and of section 9 of the 1961 Act, to
none of which is it necessary to refer in detail, there can be no doubt as to
the principle. It is as to the possible application of the principle that
problems may arise. Mr Glover argued that since the Lands Tribunal had found as
a fact that there were two schemes, there was no room for the application of
the principle. Mr Glidewell argued that on the facts as found there was one
scheme to be carried out with two acquiring authorities and it was open to us
to review the finding of the Lands Tribunal that there were two schemes, since
that finding was founded upon a view of the facts which became erroneous in
point of law in the light of the evidence. We think that the Lands Tribunal’s
finding was one which on the evidence that tribunal was entitled to make, and
indeed we would probably, were the matter open to us to consider as one of
fact, have reached the same conclusion as did the tribunal. Accordingly, the
elaborate arguments to which we listened regarding the possible application of
the Pointe Gourde principle require no further consideration in this
judgment.
It only
remains to mention the error which the Lands Tribunal made regarding the figure
of £13,750, and the value per acre by which that figure was reached. The matter
is22
dealt with in correspondence in exhibit GEWS to the affidavit from the
appellants’ solicitors. It being now common ground that there was a
misunderstanding and that the figure of £13,750 should be increased to £21,250,
we answer question (4)(f) accordingly. By agreement, the correct figure will be
treated as substituted for the figure of £13,750 in the decision and we need
say no more on this point. In the result, while we uphold the Lands Tribunal’s
amended decision as to £21,250 (as it must be treated to be), we remit that
decision for further consideration and determination of the correct figure, if
any, to be added thereto in respect of the appellants’ section 7 claim in the
light of what we have said earlier in this judgment.
Case remitted to the Lands Tribunal to determine,
after hearing evidence and argument, the quantum of compensation payable under
section 7 of the Compulsory Purchase Act 1965 for the extra loss suffered by
the appellants as owners of the front land in consequence of the severance of
the back land from the front land. No order for the costs of the appeal. Leave
to both parties to appeal to the House of Lords if so advised.