Maidstone Borough Council v Secretary of State for the Environment and another

Compulsory purchase — Certificate of appropriate alternative development — Whether r(2) of section 5 of Land Compensation Act 1961 relevant to issue of certificate — Whether use of land for public open space by authority with compulsory powers to be disregarded under section 17(4) On November 9 1990, and pursuant to two compulsory purchase orders made in 1988 and 1989, Kent County Council, the second respondents, took possession of land, owned by Maidstone Borough Council, which had been used as allotments; the land was required for the construction of a road. In September 1990 the borough council, as the local planning authority, issued a certificate of appropriate alternative development that planning permission would be granted for offices, residential development, an hotel and/or car parking. Following an appeal against this certificate by the county council, and a report recommending the appeal be dismissed by the appointed inspector, on April 16 1993 the Secretary of State for the Environment considered the loss of public open space, cancelled the certificate issued by the borough council and certified that if the land were not proposed to be acquired, planning permission would be granted for car parking for 250 cars and for the construction of the road. The borough council’s application to quash the Secretary of State’s decision was dismissed in the court below. They appealed contending, inter alia, that it had to be assumed for the purposes of r(2) of section 5 of the Land Compensation Act 1961 that the borough council were a willing seller, and in that situation in order for the land to be used as a public open space, it would have to be acquired by an authority with compulsory purchase powers; such an acquisition must be disregarded under section 17(4) of the 1961 Act in granting a certificate. Held: The appeal was dismissed. R(2) of section 5 has nothing to do with the assumptions as to planning permission. The Secretary of State was therefore entitled to consider the potential loss of public open space. The Secretary of State had considered the opportunity cost of alternative public open space and the possibility of part development of the site. The borough council had not been prejudiced by any inadequacy of reasons in the Secretary of State’s decision. The following cases are referred to in this report. Clyde & Co v Secretary of State for the Environment [1977] 1 WLR 926; [1977] 3 All ER 1123; (1977) 75 LGR 660; 35 P&CR 410; [1977] 2 EGLR 148; [1977] EGD 892; 244 EG 1024; [1977] JPL 521, CA Granada Theatres v Secretary of State for the Environment (1980) 43 P&CR 258; [1981] 1 EGLR 142; 257 EG 1154; [1981] JPL 278 Horn v Sunderland Corporation [1941] 2 KB 26; [1941] 1 All ER 480; 39 LGR 367, CA Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565, PC Save Britain’s Heritage v Number 1 Poultry Ltd [1991] 1 WLR 153; sub nom Save Britain’s Heritage v Secretary of State for the Environment [1991] 2 All ER 10; (1991) 62 P&CR 105; [1991] 3 PLR 17, HL Scunthorpe Borough Council v Secretary of State for the Environment [1977] JPL 653 Trocette Property Co Ltd v Greater London Council (1974) 72 LGR 701; 28 P&CR 408; [1974] EGD 547; 231 EG 1031, CA This was an appeal by Maidstone Borough Council from the decision of Tucker J who on July 28 1994 refused an application by the borough council under section 21 of the Land Compensation Act 1961 to quash a certificate of appropriate alternative development issued by the first respondent, the Secretary of State for the Environment, following an application and appeal by the second respondents, Kent County Council. Matthew Horton QC and Murziline Parchment (instructed by Sharpe Pritchard, on behalf of Maidstone Borough Council) appeared for the appellants; David Elvin (instructed by the Treasury Solicitor) represented the first respondent; Timothy Comyn (instructed by the solicitor to Kent County Council) represented the second respondents. Giving judgment, Glidewell LJ said: This is an appeal against a decision of Tucker J given on July 28 1994 refusing an application to him under section 21 of the Land Compensation Act 1961 for an order quashing the decision of the Secretary of State for the Environment in a letter dated April 15 1993. The Secretary of State had himself allowed an appeal by Kent County Council (‘Kent’) against a certificate of appropriate alternative development issued by Maidstone Borough Council (‘Maidstone’) as local planning authority under section 17 of the Act of 1961, had cancelled the certificate issued by Maidstone and had issued a new certificate in its place. Land and procedures leading to this appeal The land, the subject of this appeal (‘the site’), was an area of 8.15 acres on the east side of Sandling Road, three-quarters of a mile north of the town centre of Maidstone, in a part of the town which was substantially built up. The Maidstone barracks was nearby. Until its acquisition by Kent, the site formed part of a larger area of 17.63 acres, owned by Maidstone and used as allotment gardens. The site was acquired by Kent for the construction of the A229 Maidstone Spine Road, by two compulsory purchase orders made by Kent on December 5 1988 and September 25 1989, and a request made on March 30 1990 by Kent to Maidstone to negotiate a sale of further land. Kent entered upon and took possession of the whole site on November 9 1990. The state of the land before the acquisition was to be assessed as at the first three of these dates, while the relevant planning policies were to be considered at either all four dates or at the last of them, the date of entry — there are two conflicting decisions of the High Court on this point. Fortunately, all parties were and are agreed that neither the state of the land nor the relevant planning policies altered between the first and last of the material dates. 30 At those dates, a substantial number of the allotments on the whole 17.63 acres were disused. At the time of the inspector’s inspection in February 1992, after the acquisition by Kent, there remained a balance of 9.46 acres still in use as allotment land. On this area at that time most of the allotments were in active use. Kent applied for a certificate of appropriate alternative development, under section 17 of the 1961 Act, on March 30 1990. The application stated that in Kent’s opinion, if the land were not to be acquired by an authority possessing compulsory purchase powers, planning permission would not be granted for any development other than that for which it was being acquired. However, Maidstone, as local planning authority, issued on September 14 1990 a certificate that, on the same assumption, planning permission would have been granted for offices, residential development, an hotel and/or car parking, all subject to conditions. It was against this certificate that Kent appealed. The appeal was the subject of a local inquiry which lasted, for reasons I find difficult to understand, for 23 days starting on 30 July 1991 and ending on February 21 1992. The inspector reported to the Secretary of State on May 15 1992. He recommended that the appeal be dismissed and that Maidstone’s certificate be confirmed. By a letter dated April 15 1993 the Secretary of State did not accept that recommendation. He cancelled the certificate issued by Maidstone and in its place certified that if the land were not proposed to be acquired by an authority possessing compulsory purchase powers, planning permission would have been granted, subject to conditions, for car parking for 250 cars and for the construction of the road, but would not have been granted for any other development. This was the certificate which, by their application to the High Court, Maidstone sought to quash. Legislation Since land compulsorily acquired is not being bought or sold on the open market, the assessment of compensation is necessarily a theoretical process, which is nevertheless intended to quantify the proper value of the land to its owner who is to be deprived of it: see for example the judgment of Scott LJ in Horn v Sunderland Corporation [1941] 2 KB 26 CA, at p42 what [the Act] gives to the owner compelled to sell is compensation — the right to be put, so far as money can do it, in the same position as if his land had not been taken from him. The Land Compensation Act 1961 was amended in several material respects by the Planning and Compensation Act 1991. I shall quote the provisions of the Act as they were worded at the time relevant in this case. The basic rules for the assessment of compensation are contained in sections 5 and 6 of the Act of 1961. The rules in section 5 which are relevant in this case are: (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 requirements of any authority possessing compulsory purchase powers. Section 6 reproduces, at least in part, what is called the Pointe Gourde principle (Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565) that is, that compensation is to be assessed without taking into account any increase or decrease in the value of the land acquired which results from the ‘scheme’ for which the land is being acquired. The person or tribunal assessing compensation obviously also needs to know what if any development has been or would be permitted on the land if it were not to be compulsorily acquired. The Act of 1961 contains the following relevant provisions: 14–. (1) For the purpose of assessing compensation in respect of any compulsory acquisition, such one or more of the assumptions mentioned in sections fifteen and sixteen of this Act as are applicable to the relevant land or any part thereof shall … be made in ascertaining the value of the relevant interest … (3) Nothing in those provisions shall be construed as requiring it to be assumed that planning permission would necessarily be refused for any development which is not development for which, in accordance with those provisions, the granting of planning permission is to be assumed; but, in determining whether planning permission for 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. 15–. (1) In a case where — (a) the relevant interest is to be acquired for purposes which involve the carrying out of proposals of the acquiring authority for development of the relevant land or part thereof, and (b) on the date of service of the notice to treat there is not in force planning permission for that development, it shall be assumed that planning permission would be granted … such as would permit development thereof in accordance with the proposals of the acquiring authority… (5) Where a certificate is issued under the provisions of Part III of this Act, it shall be assumed that any planning permission which, according to the certificate, would have been granted in respect of the relevant land or part thereof, if it were not proposed to be acquired by any authority possessing compulsory purchase powers would be so granted … 16–. (1) If the relevant land or any part thereof … consists or forms part of a site defined in the current development plan as the site of proposed development of a description specified in relation thereto in the plan, it shall be assumed that planning permission would be granted for that development. Part III of the Act of 1961 lays down an elaborate procedure for the certification by planning authorities of appropriate alternative development. The provisions which are relevant in this case are: 17 (1) Where an interest in land is proposed to be acquired by an authority possessing compulsory purchase powers … then … either of the parties directly concerned may apply to the local planning authority for a certificate under this section … (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 … 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 development of one or more classes specified in the certificate … 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 … otherwise then in accordance with the provisions of the development plan relating thereto. Section 18 provides that where the local planning authority have issued a certificate under section 17, either the landowner or the authority seeking to acquire the land compulsorily may appeal to the Secretary of State against that certificate. On such an appeal the Secretary of State shall (section 18(2)): consider the matters to which the certificate relates as if the application for a certificate under section seventeen 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. Section 21 provides a procedure for challenging the decision of the Secretary of State under section 18 on the grounds that his decision is: not within the powers of this Act or that any of the requirements of this Act … or rules made thereunder have not been complied with. A person aggrieved by the Secretary of State’s decision may make an application to the High Court which (section 21(1)(b)) 31 if satisfied that the decision is not within the powers of this Act or that the interests of the applicant have been substantially prejudiced by a failure to comply with the said requirements, may quash the decision. It was, of course, under this provision that Maidstone made their application to the High Court to quash the Secretary of State’s decision on the appeal to him under section 18. Development plan provisions At the relevant dates, the development plan consisted of the Kent structure plan and the approved Maidstone town map. The town map was, however, much out of date, and for practical purposes it had been superseded, first, by the Maidstone and vicinity local plan of which a draft was published in 1985, and then by the Maidstone Borough local plan, of which drafts were published in 1989 and 1990. The structure plan contained two relevant policies, TR9 and TR10. These provided that existing recreational open spaces would be safeguarded and where appropriate new areas provided, and that facilities for sports and recreation should be provided within easy reach of centres of population. The town map showed the appeal site allocated for allotment purposes and highway purposes. In the 1985 local plan there was a policy, which was repeated in the borough local plan of 1989 and 1990, which noted the opportunity which open sites in the built-up area of the town presented for the provision of public open space, and said: In view of the high cost of creating a new public open space, the opportunity should be carefully examined before allowing built development on such land. A note said, however, that although it might be important to keep open space, a new use for it must often be found. The plans also said specifically that the council, ie Maidstone, would seek an adequate level of public open space and would investigate opportunities to increase the level of public open space in areas of shortfall as they should arise. In his report the inspector recorded that Maidstone had a total of 612 acres of public open space, which exceeded the standard proposed by National Playing Fields Association of 6 acres per 1,000 population, which would have indicated a requirement of 462 acres. However, the site was in the north ward of the town. If the NPFA standard were applied to that ward alone the requirement would be some 45 acres of public open space. At the time of the inquiry there were less than 4 acres in this ward, and the local plan provided for an addition of some 7 acres, 5.25 acres on the former playing fields of Maidstone barracks and 1.8 acres for a children’s play area on the site itself. Inspector’s report In his conclusions, the inspector considered first the desirability of the use of the site for public open space. He noted that in the public consultation about the local plan there was ‘no pressure from the public for enhanced public open space/playing fields’. As between the site at Maidstone barracks allocated in the plan for public open space and the appeal site, he expressed the view that the barracks’ site was preferable for that use. He concluded: Enhancement of public open space would be wholly in accordance with local planning policy. I do not however consider that the need to take advantage of that opportunity is of such great moment that would rule out other sorts of development. He then considered in turn each of the types of development referred to in the certificate issued by Maidstone. As to offices, he said that office development on the appeal site would have been beneficial to meet a demand for small to medium office premises. With regard to housing, he said: While I do not consider there to be an absolutely compelling case on need grounds for residential development of the appeal site, I do think the appeal site could, in the no-scheme world, have been considered for early development thus enabling other sites to be allocated post–1996 rather than pre–1996 thereby usefully assisting the five years’ supply situation. As to an hotel, he considered that such a development would be ‘wholly in keeping’, though the location of the appeal site was not ideal. Finally, as to car parking, he said: In my opinion 250 vehicles could be accommodated on the site which could be satisfactorily screened so as not to unacceptably harm visual amenity. His overall conclusion was that: Development of the appeal site with offices, residential, hotel and car parking would have been beneficial in land use planning terms at all the relevant dates. He therefore recommended that the appeal should be dismissed and the certificate issued by Maidstone, as local planning authority, should be upheld. Secretary of State’s decision The reasoning in the Secretary of State’s decision letter, which Mr Matthew Horton QC, for Maidstone, challenges in his submissions in this appeal, was contained in paras 5, 7 and 8 of the decision letter dated April 15 1993. Para 5 said: The Inspector’s conclusions, at paragraphs 7.2 to 7.4 of his report, with regard to the parties’ submissions relating to the judgment of the High Court in the case of Scunthorpe Borough Council v Secretary of State for the Environment and others [1976] JPL 653, are noted. There are two issues to be addressed here. The first is whether it is admissible to issue a section 17 certificate specifying development for public open space: and the second is whether the safeguarding of a use for public open space is capable of being a proper consideration in determining the alternative development (if any) that should be specified in a certificate. On the first issue, the Scunthorpe judgment is not directly relevant because in that case the land in question was being acquired for public open space, whereas in this instance it is being acquired in connection with a highway scheme. Instead, it is relevant to consider the third rule for assessing compensation in section 5 of the 1961 Act, as amended by the Planning and Compensation Act 1991. By analogy with this rule, it is inappropriate, other than as specified in section 17(a) and (b), to issue a certificate under section 17 for a purpose which could be realised only in pursuance of statutory powers, or for which there is no market apart from the requirements of any authority possessing compulsory purchase powers, because a certificate in such terms would be meaningless. On the second issue it is noted that the circumstances in the present appeal are distinguishable from those in the Scunthorpe case. Use of the appeal site as public open space would not involve the public acquisition of land, since the site is (or was at the relevant dates) owned by the Borough Council. For this reason, it is considered that in this instance the loss of potential public open space is capable of being a material consideration in determining whether planning permission would have been granted in a ‘no scheme world’ for any class of development. In para 6, the Secretary of State accepted the inspector’s identification of the main issues in the appeal to him as: Highway considerations, loss of potential open space/playing fields and the intrinsic merits of the certificate developments themselves. He also agreed with the inspector that the likely increase in road traffic resulting from the types of development referred to in the certificate: would not have been sufficiently serious to have warranted the refusal of permission for any of the classes of development specified in the certificate on highway grounds. The Secretary of State then expressed his conclusion on the other two issues as follows: 7. The other conclusions of the Inspector have been very carefully considered but, in certain respects, rather different views have been formed for the reasons which follow. Opportunities to provide additional public open space/playing fields in Maidstone, without incurring substantial public expenditure on land acquisition, are very limited. Although Maidstone as a whole is well provided with public open space/playing fields, there is a substantial shortage in the locality of the appeal site. As the Inspector notes, this deficiency and similar ones elsewhere have been addressed by policies and proposals in successive development plans. Prior to the formulation of the acquisition scheme, there was a specific proposal (RT 8) in the Maidstone and vicinity local plan for the Borough Council to investigate the possibility of establishing new public open space at Sandling Road Allotments. Other more general policies called for the careful consideration of the use of disused allotments and other open land in the urban area to rectify local open space deficiencies. The Inspector’s conclusions with respect to the use of the adjacent Maidstone Barracks site are noted, but it is considered that the rare opportunity presented by the appeal site would have been vigorously safeguarded. For the above reasons, there would have been serious planning objections to the development of the land. These objections would have been set aside only if they were outweighed by a very strong need for a particular class of development. On the available evidence, the view is taken that the need for more land for offices, housing or hotels would not have overridden the objections. In reaching this view, full consideration has been given to the possibility that an office development could have provided for either a new road link to adjacent existing commercial premises or the relocation of those premises to the appeal site, with consequent local benefits. However, for the reasons given by the Inspector in paragraph 7.38 of his report regarding a car park development, the view is taken that the need for additional parking facilities would have outweighed the planning objections and that planning permission would have been granted for such a class of development. In taking this view, particular weight is placed on the location of the site within walking distance of the town centre. Although this factor would make the site attractive for a hotel or office development, for those classes of development it is not of the same overriding importance and a greater choice of location is possible. 8. The view is taken, having regard to the surrounding land uses, that planning permission would not have been granted for any other class of development for which permission is required. Grounds of appeal In the notice of motion, the grounds for the application to quash the Secretary of State’s decision were that he erred in law in: 1. Taking into account as a material consideration the loss of potential public open space; 2. Failing to take into account that the question posed by the application for a certificate of appropriate alternative development is to be decided on the hypothesis that the owner of the land, the subject of the application, is willing to sell the land; 3. Alternatively, in relation to the decision which the Appellant would have taken, if it is lawful to hypothesise that the Appellant would have considered retaining the land in its ownership by: (a) failing to take into account the opportunity cost to the Appellant of retaining the land and developing it as public open space; (b) failing to consider whether the Appellant would have permitted the development of part of the land for public open space and part for offices, hotel and residential development, or for accommodation of two or more thereof. The grounds of appeal are more extensively set out, but grounds l to 8 inclusive raise essentially the same issues as those contained in grounds 1 and 2 of the notice of motion to which it is therefore sufficient to refer. Grounds 9 and 10 of the appeal are the same as ground 3(a) and (b) in the notice of motion. The issues set out in grounds 1 and 2 of the notice of motion are the major issues in this appeal and I therefore consider them first. Mr Horton argues that land used as public open space is almost invariably owned by a local authority, ie an authority possessing compulsory purchase powers. If the site were not owned by a local authority, it could only be used as public open space if it were acquired by an authority possessing compulsory purchase powers. Section 17(4) requires that in deciding what planning permission would have been granted such an acquisition must be disregarded. Therefore in that situation planning permission for the use of the site as public open space would not be granted: see the decision of Sir Douglas Frank QC in Scunthorpe Borough Council v Secretary of State for the Environment [1977] JPL 653. Up to this point, in my view, Mr Horton’s argument is correct. The argument continues that the Secretary of State distinguished the present case from the facts in Scunthorpe Borough Council because: Use of the appeal site as POS would not involve the public acquisition of land, since the site … was at the relevant dates owned by the BC. He therefore decided that the loss of potential POS was capable of being a material consideration in determining what planning permission would have been granted in the ‘no-scheme world’, which means, if the site had not been acquired for the construction of the road. Mr Horton argues that making this distinction because the site was owned by Maidstone was both unfair and wrong in law. It was unfair because it would result in Maidstone obtaining less compensation than they would if they were not a local authority. It was wrong in law because r(2) of section 5 of the Act of 1961 requires the valuer to assume that the vendors (Maidstone) are a willing seller. Thus, for the purposes of a section 17 certificate, it must be assumed that Maidstone are selling or have sold the site. In that factual situation, in order to be used as public open space, the land would have had to be acquired by another authority possessing compulsory purchase powers, which section 17(4) requires to be disregarded. Therefore the loss of potential public open space is not a material consideration. As to whether the result of the Secretary of State’s decision is unfair, opinions may differ. Many sensible people might think that, since the site was being transferred from one local authority to another for a public purpose, and some of the compensation was being provided out of the national purse by way of a grant from the Department of Transport, there was nothing unfair in the compensation which would pass being less than the sum which would be paid to a private land owner whose land was acquired. But in any case fairness is only relevant for the light it sheds upon the proper interpretation of the statutory provisions. As to whether the Secretary of State was wrong in law, I start by expressing my firm opinion that, unless there is something in the statutory provisions to the contrary, the loss of potential public open space clearly was a material consideration. There is authority for the proposition that the desirability of retaining land in its existing use is a material consideration, and thus a valid reason for refusing permission for any development which would conflict with that use. See Clyde & Co v Secretary of State for the Environment [1977] 1 WLR 926* and Granada Theatres v Secretary of State for the Environment† [1981] JPL 278, in which the late Forbes J, in his usual trenchant way, said that: *Editor’s note: Also reported at [1977] 2 EGLR 148. †Editor’s note: Also reported at [1981] 1 EGLR 142. he was surprised that it should have been necessary for there to be an authority for the proposition that in a change of use case the desirability of preserving the existing use was a material consideration because it seemed to him so self-evident a proposition. In my view, where land is open with no buildings on it, the desirability of keeping it unbuilt upon but putting it to a different use is equally a material consideration. I am not sure that Mr Horton argues to the contrary. What then of his argument that by the application of r(2) of section 5, Maidstone must be presumed to have sold or to be selling the land? The argument may appear to derive some support from one sentence in the judgment of Megaw LJ in Trocette Property Co Ltd v Greater London Council (1974) 28 P&CR 408 at p415 when he said: In a case which concerns compensation for the acquisition of a freehold interest in land … no question can arise as to the special characteristics of the particular freehold owner. But Megaw LJ continued: The compensation which falls to be paid does not vary according to whether the freehold owner would in fact refuse to sell, if he had the choice, or whether, if he sold, he would be likely to be a hard bargainer or a soft bargainer, or whether he would insist on conditions which would reduce the value of the land in the hands of the purchaser. It is clear that in this passage Megaw LJ was expounding r(2) of section 5. He was not considering the present question at all. Put shortly, the answer to Mr Horton’s submission is that r(2) of section 5 has nothing to do with assumptions as to planning permission at all. Section 5 of the Act of 1961 substantially repeats and is derived 32 from section 2 of the Acquisition of Land (Assessment of Compensation) Act 1919. Before 1919, there had grown up among statutory arbitrators who were assessing compensation for compulsory purchase a practice of assuming that the seller was unwilling to sell (as in fact, of course, he usually was). The arbitrators then reflected this unwillingness in an increase in the compensation, ie as being the amount which might tempt an otherwise unwilling seller to become willing to sell. The enactment of r(2) of section 5 put an end to this approach. At that time, if land were thought to have development value, as we now call it, the valuer had to assess what the prospects of development were, as well as what value to give the land with such prospects. Horn v Sunderland Corporation is a good example of a case in which this happened. But with the advent of rigid planning control in 1948, and the return in 1959 to market value as being the basis for the assessment of compensation for the compulsory purchase of land, the need arose for a procedure for answering the valuer’s question: What, if any, planning permission should I assume would be granted if there were no compulsory purchase? The answer is to be found by the application of the provisions of sections 14, 15, 16 and Part III of the Act of 1961. The rules in section 5 play no part in this process of deciding what planning permission is to be assumed. When the valuer obtains an answer to the question what planning permission is to be assumed, he can then proceed to value the land, applying the other provisions of Part II of the Act of 1961, including where appropriate r(2) in section 5. Tucker J seems to have accepted a submission that r(2) did not apply to a certificate of appropriate alternative development because sections 5 and 17 are contained in different parts of the Act of 1961: see the passage at p15B of the transcript of his judgment. I do not think that this of itself is an answer to Mr Horton’s submission, but in all other respects I agree with the judge’s conclusion on this issue. He said at p16C: When it comes to assessing compensation, the Lands Tribunal will assume a willing seller, but one who is selling land for which planning permission other than for car parking would not be available. But at this stage we are not concerned with the actual assessment of compensation, but with the proper basis for the assessment under the certification procedures. In my judgment, in this respect the learned judge was entirely correct. However, one later sentence in the judge’s judgment, at p18 C, where the judge said that he accepted: that the notion of what Maidstone would have done with the land as owners was not relevant to a determination under section 17, appears to conflict with the other passage I have just quoted. This is explicable because by p18 the judge had concluded his judgment on grounds 1 and 2 of the notice of motion, and had turned to consider ground 3. Thus the later sentence is to be understood in an entirely different context. Indeed the sentence itself makes this clear because it starts with the words: In this connection … Although as I have said, these two grounds in the notice of motion have been expanded into eight grounds of appeal, on which Mr Horton addressed us at length, all the expanded grounds relate to, or depend upon, the issues set out in grounds 1 and 2 of the notice of motion. It is therefore unnecessary to consider them in more detail. In so far as any of the grounds of appeal raise arguments which can still be advanced on the assessment of compensation, if necessary before the Lands Tribunal, I do not intend to say anything that would prevent that happening. In relation to this appeal I say simply that for the reasons I have sought to explain, I reject the arguments contained in grounds 1 and 2 of the notice of motion, and in grounds 1 to 8 inclusive of the notice of appeal. This leaves grounds 9 and 10 of the appeal. Ground 9 relates to what is called ‘opportunity cost’. It seems that this phrase was not used during the argument before the inspector. However, it is clear from his report that Maidstone did make a submission to him that if there were a need for more POS in the northern area of the town, then: (a) other areas of land, unsuitable or less suitable than this site for building development, could be acquired and used for open space purposes — see para 6.53 and 6.54 of his report; and (b) if planning permission were given for any of the developments specified in the certificate, that would result in a payment to Maidstone which could then be used to acquire other land for use as public open space and/or for other public projects: see paras 6.63 and 6.64 of the report. Since he recommended that permission would be granted for the certificate developments, the inspector did not make a direct recommendation on this argument. However, in para 7 of the decision letter the Secretary of State said: On the available evidence, the view is taken that the need for more land for offices, housing or hotels would not have overridden the objections. In reaching this view, full consideration has been given to the possibility that an office development could have provided for either a new road link to adjacent existing commercial premises or the relocation of those premises to the appeal site, with consequent local benefits. It is therefore clear that the Secretary of State did consider that aspect of the ‘opportunity cost’ argument and reached a conclusion upon it. Mr Horton argues that his reasoning on this issue is not sufficiently clear. This is only a ground of challenge under section 21 as a breach of the relevant rules of procedure, which require the Secretary of State to give reasons. It can only succeed if, to refer back to section 21, ‘the interests of (Maidstone) have been substantially prejudiced by a failure to comply with’ the rules in this respect. In his speech in Save Britain’s Heritage v Number 1 Poultry Ltd [1991] 1 WLR 153 at p167E-H, Lord Bridge of Harwich defined the various ways in which an applicant for planning permission or a local authority respondent may be prejudiced by a failure to give reasons. Although Maidstone are understandably disappointed by the Secretary of State’s decision in this case, I cannot conclude that they are prejudiced by any inadequacy in his reasoning in this respect. This leaves ground 10. As to this Tucker J said at p20: This ground relates to the allegation that the Secretary of State did not consider the possibility of part of the land being developed, and part being used as POS. The submission under this head was refreshingly brief. It was that after deciding that the POS/playing fields objections would have overridden the certified developments, the Secretary of State did not consider the possibility of part of Maidstone’s land being developed and part being used as POS. It is clear to me from the decision letter that the Secretary of State was fully aware of the findings made by the inspector and of the arguments put forward at the inquiry. I very much doubt whether the matters raised under this ground featured prominently in those arguments. In my opinion, there was no necessity for the Secretary of State to make express reference to them. The absence of such a reference does not mean that they were not considered. There is in my opinion nothing in this ground. I, too, doubt whether these matters featured prominently in the argument at the inquiry. But I am of the view that it is clear that the Secretary of State did consider the issue. His certificate is for permission for car parking for 250 cars, which would only occupy a relatively small part of the site. In relation to the balance of the site, he clearly rejected the proposal for planning permission for offices, housing or an hotel — for any form of built development — because of the importance in his view of the loss of potential open space. Therefore his reasoning adequately covers the possibility of planning permission being granted partly for POS and partly for some other form of built development. I would therefore reject this argument also. 33 For these reasons I conclude that Tucker J came to a correct decision on all the arguments advanced to him and raised in this appeal, which I would therefore dismiss. Morritt LJ and Sir John May agreed and did not add anything. Appeal dismissed.