Hughes and another v Doncaster Metropolitan Borough Council

Compensation for acquisition of land — Land Compensation Act 1961, rule (4) in section 5 — Appeal from decision of Court of Appeal — Whether rule (4) in section 5 (account not to be taken of increase in value of land due to use contrary to law) applies to compensation for disturbance — Whether use of land which was immune from enforcement action (having been carried out before 1963) could nevertheless be ‘contrary to law’ within rule (4) — Minority view of Dillon LJ on both questions upheld by the House of Lords In the present case the compulsory acquisition resulted in the closing down of the claimants’ business, that of scrap metal and rag merchants, which had been developing successfully until the acquisition — The crucial factor, which gave rise to the questions raised in these proceedings, was that at no time had planning permission been sought or obtained for the uses of the business — An important distinction, however, had to be made between the ‘blue land’ and the ‘green land’ (areas identified by their colours on a plan) — The point of the distinction was that the blue land had, because of the date of its unauthorised development, become immune from enforcement proceedings, whereas the green land did not enjoy this immunity — The claimants claimed compensation on the basis of the extinguishment of their business — The case raised two questions of importance on which surprising differences of opinion arose The first question was whether rule (4) applied, as the acquiring authority contended, to the assessment of the compensation generally, including any element referable to disturbance, or whether, as the claimants contended, it applied only to the market value of the land acquired — The second question was whether a use of land begun between July 1 1948 and December 31 1963, without planning permission, was, as the authority contended but the claimants disputed, a use which was ‘contrary to law’ under rule (4) notwithstanding that it was an established use immune by statute from enforcement proceedings — The Lands Tribunal (Mr Victor Wellings QC) answered both questions in the claimants’ favour — On appeal by case stated to the Court of Appeal the majority of the court (Staughton and Mann LJJ) affirmed the tribunal’s answer to the first question in favour of the claimants, but answered the second question in favour of the authority, reducing the tribunal’s valuation of the blue land accordingly — Dillon LJ, dissenting on both points, answered the first question in favour of the acquiring authority and the second in favour of the claimants In the House of Lords, Lord Bridge of Harwich, after referring to well-known authorities, such as Horn v Sunderland Corporation, pointed out that, although compensation in respect of the market value of land acquired and compensation for disturbance must in practice be separately assessed, these two elements have been consistently treated as parts of a single whole, together constituting ‘the value of the land’ to the owner — This basic principle was perfectly well known to the draftsman of section 2 of the Acquisition of Land (Assessment of Compensation) Act 1919 (re-enacted in section 5 of the Land Compensation Act 1961) — When he used the phrase ‘the value of the land’ in rule (4) he must have used it in the sense which it would have conveyed to any lawyer familiar with the 1845 code as judicially interpreted, ie as embracing both elements — Dillon LJ had correctly answered the first question in favour of the acquiring authority On the second question, as to whether uses which had been rendered by statute immune from enforcement action could nevertheless be branded as ‘contrary to law’, the majority of the Court of Appeal had felt constrained by the decision in LTSS Print & Supply Services Ltd v Hackney London Borough Council to hold that they could — Here again Dillon LJ’s minority view was vindicated by the House of Lords — The House did not overrule this decision, which may have been correct in its narrow context, but the majority of the Court of Appeal erred in treating it as an authority for holding, in an entirely different context, that an established use could be ‘contrary to law’ for the purpose of rule (4) The result was that the acquiring authority’s appeal and the claimants’ cross-appeal were both allowed — The effect of allowing the cross-appeal was to restore the tribunal’s valuation of the uncovered part of the blue land — The effect of allowing the appeal was that the compensation for disturbance would have to be reassessed on the basis that the claimants were entitled to be compensated for the effect of the acquisition on their business in relation only to the blue land The following cases are referred to in this report. Attorney-General v Smith [1958] 2 QB 173; [1958] 3 WLR 81; [1958] 2 All ER 557; (1958) 56 LGR 295; 9 P&CR 439 Colonial Sugar Refining Co Ltd v Melbourne Harbour Trust Commissioners [1927] AC 343 Commissioners of Inland Revenue v Glasgow & South-Western Railway Co (1887) 12 App Cas 315 Hartnell v Minister of Housing and Local Government [1965] AC 1134; [1965] 2 WLR 474; [1965] 1 All ER 490; (1965) 63 LGR 103; 17 P&CR 57, HL Horn v Sunderland Corporation [1941] 2 KB 26; [1941] 1 All ER 480, CA LTSS Print & Supply Services Ltd v Hackney London Borough Council [1976] QB 663; [1976] 2 WLR 253; [1976] 1 All ER 311; (1975) 74 LGR 210; 31 P&CR 133; 240 EG 711, [1976] 2 EGLR 148, CA M’Ardle v Glasgow Corporation 1972 SC 41 Ricket v Metropolitan Board of Works (1865) 31 LJ (QB) 257 Stebbing v Metropolitan Board of Works (1870) LR 6 QB 37 This was an appeal by Doncaster Metropolitan Borough Council and a cross-appeal by the claimants, Charles Arthur Hughes and Nora Louisa Hughes, from the decision of the Court of Appeal (reported at [1990] 1 EGLR 40; [1990] 26 EG 168) in relation to32 compensation for the compulsory acquisition of the claimants’ freehold land and premises at Black Bank, Doncaster Carr, Doncaster. The Lands Tribunal (Mr Victor Wellings QC) had awarded the claimants compensation of £551, 160, together with surveyors’ fees. Lionel Read QC and Simon Pickles (instructed by Sharpe Pritchard for Mr W R Bugler, director of legal services, Doncaster Metropolitan Borough Council) appeared on behalf of the council; Robert M K Gray QC, Robin Campbell and Neil Calver (instructed by Gregory Rowcliffe & Milners, for Taylor Bracewell, of Doncaster) represented the claimants. In his speech, LORD BRIDGE OF HARWICH said: This appeal raises two questions of law in respect of the compensation payable pursuant to section 5 of the Land Compensation Act 1961 for land acquired by compulsory acquisition. The land in question was acquired by the Doncaster Metropolitan Borough Council (‘the acquiring authority’) from Mr and Mrs Hughes (‘the claimants’) pursuant to a compulsory purchase order made in 1973. Notice to treat was served in January 1976 and the acquiring authority took possession on November 1 1981. The total area of the site acquired was 3.872 acres. The whole site was used by the claimants until the date of acquisition for the purpose of their business as merchants dealing in scrap metal and rags. Part of the site (‘the blue land’) had been used for the same purpose since 1959. The claimants purchased the blue land in 1969 together with the goodwill of the scrap metal and rag merchant’s business carried on there by their predecessors in title. The claimants purchased the remainder of the site (‘the green land’) in 1972 and the use of the green land for the purpose of the business began then. No permission had ever been granted under the Town and Country Planning Acts for the development involved in the material change of use of the blue land and the green land when they were first used for the purpose of the scrap metal and rag merchant’s business in 1959 and 1972 respectively. Thus, when the site was acquired the position under the Town and Country Planning Act 1971 was that the use of the blue land, being a use begun before the end of 1963, was an ‘established use’ as defined by section 94 and was immune from enforcement proceedings under Part V, but the use of the green land remained liable to enforcement proceedings requiring its discontinuance. The two questions of law raised by the appeal depend upon the true construction of the rules for the assessment of compensation in respect of any compulsory acquisition originally enacted by section 2 of the Acquisition of Land (Assessment of Compensation) Act 1919 and now re-enacted, with no material amendment, by section 5 of the consolidating Act of 1961. They provide as follows: (1)   No allowance shall be made on account of the acquisition being compulsory; (2)   The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise; (3)   The special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the special needs of a particular purchaser or the requirements of any authority possessing compulsory purchase powers; (4)   Where the value of the land is increased by reason of the use thereof or of any premises thereon in a manner which could be restrained by any court, or is contrary to law, or is detrimental to the health of the occupants of the premises or to the public health, the amount of that increase shall not be taken into account; (5)   Where the land is, and but for the compulsory acquisition would continue to be, devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, the compensation may, if the Lands Tribunal is satisfied that reinstatement in some other place is bona fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement: (6)   The provisions of rule (2) shall not affect the assessment of compensation for disturbance or any other matter not directly based on the value of land . . .; The first question is whether rule (4) applies, as the acquiring authority contend, to the assessment of compensation generally, including any element referable to disturbance, or whether, as the claimants contend, it applies only to the assessment of the market value of the land acquired and not to the assessment of compensation for disturbance. The second question is whether a use of land begun between July 1 1948 and December 31 1963 without the grant of planning permission under the Town and Country Planning Acts is, as the acquiring authority contend but the claimants dispute, a use which is ‘contrary to law’ within the meaning of rule (4) notwithstanding that it is an established use which is immune from enforcement proceedings. The question of the amount of compensation to which the claimants were entitled was referred to the Lands Tribunal pursuant to the Act of 1961 and determined by Mr Victor Wellings QC. He answered both questions of law in the claimants’ favour. Holding that rule (4) did not apply to compensation for disturbance, he included in his assessment a sum of £300,000 as compensation for loss of the goodwill of the scrap metal and rag merchant’s business as carried on over the whole site. Holding that the business use of the blue land was not contrary to law, he valued the uncovered part of the blue land, one acre in extent, at £17,500 as reflecting the business use. It was, however, common ground that the business use of the green land, being liable to enforcement proceedings, fell within rule (4). Mr Wellings accordingly disregarded the enhancement in value which the business use attracted to the uncovered part of the green land. On this basis he valued the green land at £10,000 per acre. The total compensation, including the value of buildings and certain other items not relevant to the appeal, he determined in the sum of £551,160. The acquiring authority appealed to the Court of Appeal by case stated. The majority of the court (Staughton and Mann LJJ) [1990] 1 WLR 845* affirmed Mr Wellings’ answer to the first question of law in favour of the claimants and accordingly dismissed the appeal in relation to the award of compensation for disturbance, but answered the second question of law in favour of the acquiring authority and accordingly allowed the appeal to the extent of reducing the valuation of the blue land from £17,500 to £10,000 to exclude the enhancement attributable to the business use, which they held to be contrary to law. Dillon LJ dissented on both points. He answered the first question of law in favour of the acquiring authority and the second in favour of the claimants. By leave of the Court of Appeal the acquiring authority now appeal and the claimants cross-appeal to your lordships’ House. *Editor’s note: Also reported at [1990] 1 EGLR 40. It is well-settled law that whatever compensation is payable to an owner on compulsory acquisition of his land in respect of disturbance is an element in assessing the value of the land to him, not a distinct and independent head of compensation. This is because, under section 63 of the Lands Clauses Consolidation Act 1845 (8 Vict c 18), the substance of which is now re-enacted by section 7 of the consolidating Compulsory Purchase Act 1965, ‘the value of the land to be purchased by the acquiring authority’ is the only head of compensation under which compensation for disturbance is capable of being accommodated. The other heads of compensation for which the section provides, severance and injurious affection, relate only to the depreciatory effect of the acquisition on other land retained by the owner. Judicial interpretation of the Act of 1845 held that the value of the land meant its value to the owner, not its value to the acquiring authority: Stebbing v Metropolitan Board of Works (1870) LR 6 QB 37. This value was to be assessed as including all the loss which the owner suffered in consequence of being dispossessed: Ricket v Metropolitan Railway Co (1865) 34 LJQB 257. In Commissioners of Inland Revenue v Glasgow & South-Western Railway Co (1887) 12 App Cas 315 a jury had assessed compensation payable to a landowner under the parallel provisions of the Lands Clauses Consolidation (Scotland) Act 1845 in separate sums representing the value of the land and buildings on the one hand and compensation for loss of business on the other. The conveyance on sale attracted ad valorem stamp duty under the Stamp Act 1870 and it was held that the sum allowed as compensation for loss of business was part of the consideration for the sale liable to the duty. Lord Halsbury LC said, at pp 320-321: The two things, and the only two things, which are within the ambit and contemplation of the statute, are the value of the lands and such damages as may arise to other lands held therewith by reason of the particular land which is taken being taken from them. . . . That was alone what the jury in this case had power to assess, because it is admitted that no question arises here upon the other part of the section — no question arises here about any damage from severance. It is admitted, therefore, impliedly, that the only thing which the jury had here to assess was the value of the land. . . . In treating of that value, the value under the circumstances to the person who is compelled to sell (because the statute compels him to do so) may be naturally and properly and justly taken into account; and when such phrases as ‘damages for loss of business’ or ‘compensation for the goodwill’ taken from the person are used in a loose and general sense, they are not inaccurate for the purpose of giving verbal expression to what everybody understands as a matter of business; but in strictness the thing which is to be ascertained is the price to be paid for the land — 09that land with all the potentialities of it, with all the actual use of it by the person who holds it, is to be considered by those who have to assess the compensation. In Horn v Sunderland Corporation [1941] 2 KB 26 the question posed was whether, in the application of rules (2) and (6) under section 2 of the Act of 1919, the owner of agricultural land acquired compulsorily which had a market value as land ripe for building development far in excess of its value as agricultural land was entitled, in addition to that value, to compensation for the loss of his farming business. By a majority (Sir Wilfrid Greene MR and Scott LJ, Goddard LJ dissenting) the court held that he was not. Sir Wilfrid Greene MR said, at pp 34-35: Now, rule 6 does not confer a right to claim compensation for disturbance. It merely leaves unaffected the right which the owner would before the Act of 1919 have had in a proper case to claim that the compensation to be paid for the land should be increased on the ground that he had been disturbed. It is true that the arbitrator now cannot well avoid doing what a jury under the Lands Clauses Acts was not bound to do, namely, arrive at one figure for the value of the land and (in a proper case) another figure for disturbance, but these two figures are still, in my opinion, merely the elements which go to build up the global figure of price or compensation payable. . . . The truth of the matter is that, as in cases under the Lands Clauses Acts alone, so in cases where the Act of 1919 applies, the sum to be ascertained is in essence one sum, namely, the proper price or compensation payable in all the circumstances of the case. If those circumstances are such as to make it impossible for the owner to claim that he has suffered damage through disturbance for which he ought to be compensated, then he is not entitled to have the price or compensation for his land increased by an addition for disturbance even if he has in fact been disturbed. It is a mistake to construe rules 2 and 6 as though they conferred two separate and independent rights, one to receive the market value of the land and the other to receive compensation for disturbance, each of which must be ascertained in isolation. Horn’s case has been accepted ever since as settling an important principle in relation to the operation of the compensation rules. In M’Ardle v Glasgow Corporation 1972 SC 41 the claimant landowner carried on business as a publican on the land acquired. In part of the public house premises the business was carried on under a temporary planning permission which, at the date of acquisition, had less than two years to run. Under the Land Compensation (Scotland) Act 1963, which embodies the same rules for assessing compensation as section 5 of the English Act of 1961, sections 22(1) and 24(4), also corresponding to parallel provisions in the Act of 1961, required that ‘in ascertaining the value of the relevant interests’ it should be assumed that planning permission would be granted for the public house use. It was contended for the authority that, while the statutory planning assumption permitted the market value of the premises to be assessed under rule (2) as having full permission for use as a public house, compensation for disturbance of the publican’s business should nevertheless be assessed on the basis that he would in any event have had to cease using part of the premises for the purpose of that business on expiry of the temporary planning permission. The Court of Session rejected this contention. The Lord President, Lord Clyde, in delivering the opinion of the court, said, at pp 47-48: But the fact is that nowhere in this series of statutory provisions since 1845 is a disturbance claim treated as something separate and distinct from the rest of the claim. It is an element in the total computation of the compensation. The distinction which the acquiring authority seek to make between a disturbance claim and a claim for the value of the land is thus a false distinction. They are both elements in the value of the relevant interest within the meaning of that phrase in this series of Acts of Parliament. Thus, although compensation in respect of the market value of land acquired and compensation for disturbance must in practice be separately assessed, the courts have consistently adhered to the principle, both before and after the present rules were first introduced by the Act of 1919, that the two elements are inseparable parts of a single whole in that together they make up ‘the value of the land’ to the owner, which, unless he retains other land depreciated by severance or injurious affection, was the only compensation which the 1845 code awarded to him. This principle must have been perfectly well known to the draftsman of the Act of 1919 and when he used in rule (4) the phrase ‘the value of the land,’ meaning the value of the land acquired, it seems to me that he must have used it in the sense it would have conveyed to any lawyer familiar with the 1845 code as judicially interpreted, ie as embracing both elements of compensation, unless the context clearly calls for a narrower meaning. For my part I can see nothing in the context which does call for a narrower meaning. Rule (2) introduces the new principle that ‘the value of land’ (not, be it noted, ‘the value of the land’) is to be the open market value obtainable by a willing seller. Rule (6) is a necessary qualification of that principle in order to preserve the disturbance element which is to be unaffected by rule (2); but rule (6) makes no reference to rule (4). Over and above these considerations the most formidable obstacle which, to my mind, confronts the claimants’ construction of rule (4) is that it imputes to the legislature a quite paradoxical intention. If, as I take to be obvious, it is just and right that the owner of land acquired compulsorily should not receive in compensation any enhancement of the market value of the land attributable to a use of the land in any of the categories to which rule (4) applies, I can conceive of no reason why the legislature should nevertheless have thought it just and right that he should be compensated for being prevented from continuing any such use. Accordingly, in agreement with Dillon LJ, I would answer the first question in favour of the acquiring authority and allow the appeal. I turn now to the cross-appeal. Ever since July 1 1948, when the Town and Country Planning Act 1947 came into force, planning permission has been required for the carrying out of any development of land and the definition of development has included the making of any material change in the use of land. Hence, a use of land begun without planning permission, although it could be stopped under the Act only by the somewhat cumbrous machinery for the enforcement of planning control initiated by the service of an enforcement notice, was unlawful ab initio: Attorney-General v Smith [1958] 2 QB 173. But the Act of 1947 imposed a time-limit for the service of an enforcement notice of four years from the date when the development to which the notice related was carried out. This applied to any form of development, including making a material change of use. Under the 1947 Act regime it was customary to use the phrase ‘existing use right’ to describe the right enjoyed by an occupier of land in relation either to a use of land begun before July 1 1948 or to a use begun after that date without planning permission which had continued for more than four years without service of an enforcement notice. So long as a use in either category continued, the nature of the right which the user enjoyed was for all practical purposes the same. Under the Caravan Sites and Control of Development Act 1960 express planning permission to use land as a caravan site was a prerequisite to the grant of a caravan site licence. In Hartnell v Minister of Housing and Local Government [1965] AC 1134 this House held that in granting such a permission in relation to land which had been used as a caravan site without planning permission for more than four years the local planning authority were not entitled to impose conditions which had the effect of cutting down the scope of the owner’s existing use right. Lord Evershed said, at p 1163: . . . it will be observed that what has in the case before your Lordships been referred to as the respondent’s ‘prescriptive right’ as regards the northern part of his field OSP 145 is derived from the effect of section 23 of the Act of 1947; for at the time of the coming into operation of the Act of 1960 the respondent, though he had never obtained permission for its use under the Act of 1947, had in fact used it as a caravan site for upwards of four years and no notice for discontinuance under that section had ever been served upon him by the local planning authority. It follows that the respondent had under the existing legislation at the relevant date what may fairly be called a ‘vested right’ to the use of this part of the field as a caravan site to which the local planning authority could only put an end by the procedure under section 26 of the Act of 1947, which would involve payment of compensation under the succeeding section. Lord Wilberforce, at p 1169D, described the existing use right as ‘a form of vested right analogous to a right established by prescription’. Under the Town and Country Planning Act 1971 any use of land begun without planning permission since the end of 1963 is now amenable to enforcement proceedings without limit of time. Four years remains the time-limit for the service of an enforcement notice relating to building development carried out without planning permission. The important status of a use of land begun at any time before the end of 1963 and continued ever since that date is recognised by the procedure under sections 94 and 95 and Schedule 14 which enable any person interested in the land, on proof of the relevant facts relating to that use, to obtain either from the local planning authority or from the Secretary of State on appeal what the33 Act calls an ‘established use certificate’, which operates as a conclusive bar to protect the use, so long as it continues, against the operation of an enforcement notice. If the local planning authority serve an enforcement notice within the four-year time-limit in respect of a building erected without planning permission or at any time in respect of a use of land begun without planning permission since the end of 1963 the notice, when it takes effect, may, of course, require the removal of the building or the discontinuance of the use without payment of compensation. If, however, the local planning authority seek to secure either the removal of a building or the discontinuance of a use of land at a time when the building or use is no longer amenable to enforcement proceedings, they may do so only by order under section 51 subject to all the safeguards which that section provides and subject also to the obligation to pay compensation under section 170. The measure of compensation is the damage which any person has suffered ‘by depreciation of the value of any interest in the land to which he is entitled’ or ‘by being disturbed in his enjoyment of the land’: section 170(2). Section 178(1) then provides, in relation to compensation for depreciation but not in relation to compensation for disturbance, that: The rules set out in section 5 of the Land Compensation Act 1961 shall, so far as applicable and subject to any necessary modifications, have effect as they have effect for the purpose of assessing compensation for the compulsory acquisition of an interest in land. In the light of ‘the well-known principle that a statute should not be held to take away private rights of property without compensation unless the intention to do so is expressed in clear and unambiguous terms’ (see Colonial Sugar Refining Co Ltd v Melbourne Harbour Trust Commissioners [1927] AC 343, at p 359, per Lord Warrington) and in the light of the provisions of the Act of 1971 to which I have referred, it seems to me impossible to treat an established use under the Act of 1971 as being ‘contrary to law’ within the meaning of rule (4) of the compensation rules. The right to such a use is aptly described by Lord Wilberforce as ‘analogous to a right established by prescription’ and the legitimate status of the use is now expressly recognised by the statutory procedure for giving it the imprimatur of an established use certificate. If, on compulsory acquisition, a landowner is not entitled to compensation for the enhanced value of land attributable to an established use or for being disturbed in the enjoyment of such a use, it would often be cheaper for a local planning authority to acquire the land compulsorily than to secure the discontinuance of the use by order under section 51 of the Act of 1971. Moreover, if rule (4), as applied by section 178 of the Act of 1971 to the assessment of compensation under section 170, were construed as applicable to an established use as ‘contrary to law’, this would produce the bizarre result that section 178 would operate to nullify any right to compensation conferred by section 170(2) in respect of damage suffered by depreciation of the value of land caused by discontinuance of an established use, but would have no effect on compensation for disturbance occasioned by the same discontinuance. If the legislature had intended that any distinction were to be made in the compensation payable under section 170 in respect of a discontinuance order under section 51 between, on the one hand, a use of land begun before July 1 1948 or with planning permission after that date and, on the other hand, a use of land begun between July 1 1948 and December 31 1963 without planning permission, it is surely inconceivable that they would not have done so in clear and explicit terms. As Dillon LJ, in his dissenting judgment, aptly observed [1990] 1 WLR 845 at p 852E: Indeed it would be monstrous if the acquiring authority could avoid paying compensation for the disturbance, by closing down of the business carried on by the claimants on the blue land, when that business, in so far as carried on on the blue land, could have legitimately been sold by the claimants to any other purchaser of the blue land. The majority of the Court of Appeal felt constrained to reach an opposite conclusion by the authority of LTSS Print & Supply Services Ltd v Hackney London Borough Council [1976] QB 663. The question in that case was whether a landowner, being required by an enforcement notice to discontinue a use of land begun without planning permission since the end of 1963, was entitled to resume the use being made of the land immediately before the development which was the subject of the enforcement notice, if that previous use was begun before the end of 1963. The answer to that question depends on section 23(9) of the Act of 1971, which provides: Where an enforcement notice has been served in respect of any development of land, planning permission is not required for the use of that land for the purpose for which (in accordance with the provisions of this Part of this Act) it could lawfully have been used if that development had not been carried out. The Court of Appeal held that the previous use, although it had been immune from enforcement proceedings, was not a use for ‘the purpose for which (in accordance with this Part of this Act) [the land] could lawfully have been used’ if the subsequent development had not been carried out. Your lordships have not been invited to overrule this decision, nor do I see any reason to do so. All three members of the court emphasised the importance of the words in parenthesis as justifying a narrow construction of the subsection and with this I have no quarrel. But in so far as the reasoning in the judgments goes further and may suggest that a use of land begun without planning permission between July 1 1948 and December 31 1963 must be treated for all purposes and in all contexts as unlawful I am unable to agree with it. Section 23(9) is concerned solely with the question whether a use voluntarily discontinued and unlawfully supplanted by another materially different use, which is then forcibly discontinued, may be resumed (involving another material change) without planning permission. Looking at the underlying policy of the Act there is good reason why the legislature should have wished to authorise such resumption only of uses lawfully begun before July 1 1948 or thereafter with planning permission. This supports the narrow construction which the court adopted, but the words ‘contrary to law’ in rule (4) of the compensation rules appear in a totally different context and relate to a totally different subject-matter. To hold that these words apply to an established use under the Act of 1971 leads, for the reasons that I have sought to demonstrate, to manifest injustice and is quite unacceptable. Again in agreement with Dillon LJ, I would answer the second question of law in favour of the claimants and allow the cross-appeal. The effect of allowing the cross-appeal is simply to restore Mr Wellings’ valuation of the uncovered part of the blue land at £17,500. The effect of allowing the appeal, however, is that compensation for disturbance will have to be reassessed on the basis that the claimants are entitled to be compensated for the effect of the acquisition upon their business in relation only to the blue land. I would, accordingly, set aside the orders of the Court of Appeal and the Lands Tribunal and remit the case to the Lands Tribunal to redetermine the amount of compensation in accordance with this opinion. I think the fair result as regards the costs of the appellate proceedings is that there should be no order. The costs before the Lands Tribunal remain in the discretion of the tribunal. LORDS TEMPLEMAN, GRIFFITHS, ACKNER and LOWRY agreed with the speech of Lord Bridge of Harwich and the order proposed by him and did not add anything.