Wilkinson and others v Middlesbrough Borough Council

Compulsory acquisition — Compensation — Whether compensation should be on equivalent reinstatement basis under rule (5) in section 5 of Land Compensation Act 1961 — Appeal from Lands Tribunal’s decision that basis of compensation was rule (2) — Compulsory purchase of premises occupied by veterinary surgeons’ multi-principal practice — Normal methods by which interests in veterinary surgeons’ practices are dealt with — Distinction between single-principal and multi-principal practices — Not usual for veterinary premises and practices to be offered for sale in the open market — Whether nevertheless there was a ‘general demand or market for land for that purpose’ — Held by majority of Court of Appeal (Waller LJ dissenting), upholding decision of Lands Tribunal, that the claimants had not discharged the burden of proof of establishing that there was no general demand or market for property for the purpose of carrying on the practice of veterinary surgeons — Rule (5) accordingly not applicable — Appeal dismissed This was an appeal from a decision of the Lands Tribunal (E C Strathon FRICS). The appellants (claimants) contended that the basis of compensation for the compulsory acquisition of premises at 126 Newport Road, Middlesbrough, which were devoted to the carrying on of the appellants’ practice as veterinary surgeons, should be in accordance with rule (5) in section 5 of the Land Compensation Act 1961. The respondent council contended that rule (2) applied and the Lands Tribunal decided in the respondents’ favour. The decision of the Lands Tribunal was reported at (1979) 250 EG 867, [1979] 1 EGLR 201. K R Bagnall QC and S Lightwing (instructed by Newby, Robson & Cadle, of Middlesbrough) appeared on behalf of the appellants; G E Moriarty QC and R Fookes (instructed by the Solicitor, Middlesbrough Borough Council) represented the respondent council. Giving judgment, WALLER LJ said: This is an appeal from a decision of the Lands Tribunal on a preliminary point of law concerning the basis of compensation payable on the compulsory purchase of premises at 126 Newport Road, Middlesbrough. The member found that the basis of assessment of compensation was rule (2) of the rules for assessing compensation under section 5 of the Land Compensation Act 1961, and not rule (5). The appellants claim that the assessment should be on the basis of rule (5). The appellants own the freehold and carry on the practice of veterinary surgeons at 126 Newport Road. The property is about 90 years old and was formerly an end-terrace dwellinghouse. It now comprises on the ground floor a waiting room, inquiry office, small accounts office, a consulting room, x-ray/consulting room, laboratory/operating room, preparation room, a range of four kennels and food-preparation room, an exercising yard and additional kennels and stores. According to a letter written in 1976, that part of the premises was largely custom built in the 1920s. There is also in the original building on the first floor a caretaker’s flat of three rooms and bathroom. The property lies about 550 m to the south west of the town centre in a locality which has been the subject of compulsory purchase orders made under Part III of the Housing Act 1957. A blight notice dated July 8 1977 in respect of the subject property was served under the provisions of the Town and Country Planning Act 1971 and the Land Compensation Act 1973. The only question arising on this appeal is whether rule (5) applies or not. Rule (5) provides: Where 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. A veterinary practice was established at 126 Newport Road, Middlesbrough in 1900, and the appellants are the owners of the practice and the building. Mr Wilkinson joined the practice in 1948, Mr Gale in 1963 and Mr Hall in 1968; no 126 is the headquarters with branches at Hartlepool, Stockton and Billingham. The whole of the ground floor of 126 is used for the practice and the caretaker deals with telephone calls at night and also helps in emergencies. In addition to the three partners there are five veterinary surgeons in the practice; at no 126 the total workforce comprises a partner, four veterinary surgeons and 10 lay staff. Work at no 126 and at the branches is closely related, with communication by telephone, and each surgeon has radio telephone equipment in his car. The practice provides a 24-hour service. The headquarters is responsible for the purchase and storage of drugs and equipment for the practice and has expertise on call for the branches; operations are mainly carried out at no 126 but some at Hartlepool. In 1977 the ‘large animal’ part of the practice was sold and there were mutual restrictive covenants covering an area of a radius of 25 miles from 126 Newport Road. The appellants estimate that their practice covers 50 per cent of the work in the area. There is a plan with the papers showing the layout of the premises and this plan shows that two-thirds of the ground-floor area is occupied by kennels, consulting rooms etc and presumably was the custom-built part referred to in the letter. The plan shows that, with the exception of the caretaker’s flat on the first floor, the whole of the ground floor is devoted to the practice, the inquiry office and waiting room being underneath the caretaker’s flat. No evidence was called by the acquiring authority. On behalf of the appellants, two partners, two chartered surveyors and the hon secretary of the RSPCA clinic at Halifax were called. In the decision of the tribunal some of the evidence called on behalf of the claimants is set out and the decision summarises it as follows [(1979) 250 EG 867 at 870, [1979] 1 EGLR 201]: In the instant case the evidence about general demand or market comes from Mr Gale and Mr Catterall. Mr Gale says that veterinary practices in the Middlesbrough area are not bought or sold in the open market; it is customary to take partners into the firm. First the single-principal practice which is sold by the owner to the incoming principal after a period of working in dual harness. I think that as such a transaction is the normal method of disposal it points to the existence of a market. I had no evidence as to the extent of such a market; on the one hand the witnesses said they had no knowledge of sales of practices and, on the other24 hand, that practices are normally disposed of in the manner described. Secondly, incoming partners to the multi-principal practice purchase shares in the practice, which continues to operate as a partnership. The instant case provides an example by the purchase of a partnership by Mr Hall in 1968 on terms which Mr Catterall said he would expect from an incoming partner to his own multi-partnership practice of surveyors. There is also the example of the disposal of the ‘large animal’ part of the claimants’ practice to Mr Russ to carry on that part of the business elsewhere. Thus in a multi-partner practice, so long as partners are taken into the business to add to the number of working partners or to take the place of retiring partners the practice as a whole is not offered for sale. In the instant case Mr Gale puts the capital value of the whole practice at about £100,000, and Mr Catterall’s valuation of the goodwill is of the order of £139,000. Mr Gale accepts that a number of veterinary surgeons might band together into one firm and that the subject premises might prove an attraction to such a partnership, but he did not know of any source from which finance could be secured for such a purchase. In the instant case the practice is flourishing; it is commercially viable with every prospect of improving in performance and Mr Catterall considers that having regard to the practice being so well established with income secure, monopoly value attaches to the subject property. The decision concludes: It seems to me that there is a demand and market for premises for the purposes of the single-principal practice of a veterinary surgeon. In respect, however, of multi-principal veterinary practices these never do reach the market, for the simple reason that the aim of such a partnership is to continue to carry on the practice as veterinary surgeons rather than to dispose of the partnership assets. I see no reason to doubt, nevertheless, that for such a practice there would be a market just as there is for the single-principal practice. Mr Bagnall submits: 1. That there is an over-emphasis on the sale of practices as opposed to the sale of land in the decision of the tribunal. 2. There was no evidence of a general demand or market for veterinary surgeons’ practices. 3. Alternatively there was no evidence of a general demand or market for multi-principal veterinary practices. Put another way, although the onus was on the claimant to prove that there was no evidence, having regard to the fact that no evidence was called by the acquiring authority and the member, although a chartered surveyor, was sitting judicially, the only conclusion from the evidence called was that there was no general demand or market. Mr Moriarty, for the acquiring authority, relied on the word ‘demand’ in the rule and submitted that there was some evidence of a market in single practices and, the onus of proof being on the claimant, that the member was entitled to find that it was not proved that there was no general demand for land occupied for multi-principal veterinary purposes. We were referred to a number of cases where rule (5) had been applied and for the most part they related to charitable or non-profit-making purposes; see, for example, Vaughan (Viscount) v Cardiganshire Water Board (1963) 14 P & CR 193, 185 EG 949; Nonentities Society Trustees v Kidderminster Borough Council (1970) 22 P & CR 224, 215 EG 385, 455; Manchester Homeopathic Clinic (Trustees) v Manchester Corporation (1970) 22 P & CR 241, 215 EG 1033; and Sparks v Leeds City Council (1977) 34 P & CR 234, 244 EG 56, [1977] 2 EGLR 163(LT). In Festiniog Railway Society Ltd v Central Electricity Generating Board (1962) 13 P & CR 248 it was held that the rule governed the case of a commercial concern, although as a matter of discretion the tribunal did not apply the rule. Nowhere is there reported a case similar to that with which we are concerned, although the Manchester Homeopathic case is perhaps the nearest. In that case a homeopathic clinic purpose-built in 1939 was compulsorily acquired, and the trustees sought compensation on the basis of rule (5). The tribunal refused to restrict the purpose to that of a homeopathic clinic and regarded the purpose as that of a clinic but came to the conclusion that the evidence was that sales of land used for the purpose of clinics were so few that it was not possible to infer that there was a general demand or market for such purpose. In giving his decision in the present case the member, while dealing with single-principal veterinary practices, came to the conclusion that there was a market but that there would be a period of working in dual harness as the normal method of disposal. The period of dual harness of course would be the safeguard for the personal goodwill. In the present case the tribunal was concerned with land on which are premises largely custom built and occupied by a multi-principal practice. A clinic for domestic animals, submitted Mr Bagnall, is not unlike the medical clinic in the Manchester case. This clinic is ancillary to the multi-partner practice, which depends to a large extent on goodwill. The goodwill of this practice must be largely personal and not local. The personal part of goodwill was aptly described by Sir George Jessel MR in May v Thompson (1882) 20 Ch D 705, at 718, when he said: What is the meaning of selling a medical practice?  It is the selling of the introduction of the patients of the doctor who sells to the doctor who buys, he has nothing else to sell except the introduction. He can persuade his patients probably who have confidence in him to employ the gentleman he introduces as being a qualified man and fit to undertake the cure of their maladies, that is all he can do. This would apply very much to a veterinary practice. Indeed the sale of the large animal part of the practice may be an indication of personal goodwill because much the greater part of that work will be done on the farm and not at the premises of the veterinary surgeon (the plan shows one horse box as opposed to five to six kennels). No doubt there is a local element as well, what was known in the days of the Landlord and Tenant Act 1927 as the cat element as opposed to the dog element, ie the customers who stay with the premises as opposed to those who follow the practitioner (see Whiteman Smith Motor Co Ltd v Chaplin [1934] 2 KB 35, per Scrutton LJ at p 42). But it is because of the personal element that no sale takes place, because the only way to transfer the goodwill is by personal introduction. The result is that, as the evidence shows, multi-principal practices are not sold in the open market. The transfer of the goodwill is done gradually by introducing a new partner who buys his share of the partnership over a period of years. In this case the land consists for the greater part of custom-built kennels, x-ray room, etc, and Mr Moriarty realistically accepts that the land would not be sold without the goodwill. The purpose is that of a multi-principal veterinary practice and in this respect is to be contrasted with professional offices of surveyors, solicitors or other similar occupations. Although there was no evidence about it, there are obviously other multi-principal veterinary practices in various parts of the country. In the Cleveland district there is this one, and it has roughly 50 per cent of the domestic animal practice within 25 miles of 126 Newport Road, which probably covers a substantial part of Cleveland. In considering rule (5) it is necessary first to consider what is the purpose to which the land is devoted. There is no dispute that it is devoted to the purpose of a multi-principal veterinary practice, and in my opinion it is a fair inference from the letter of June 10 1976, which the acquiring authority quoted, that the premises are such as to require several veterinary surgeons for running them. The land therefore is devoted to the purpose of a multi-principal veterinary practice and but for the compulsory acquisition would have continued to be devoted to that purpose. In the context of rule (5) I must consider whether the purpose is of such a nature that there is no general demand or market for land for that purpose. As I have already said, there was no evidence of the existence of other multi-principal practices save that they do exist but they are not bought and sold as a whole. Is there a demand for such land and, if there is, is it a general demand?  If the practice is separated from the land the evidence shows that there is a demand for a share in a pre-existing practice, but there is no evidence of the sale of a multi-principal practice and the fact of the demand for a share indicates that it is the personal goodwill which is being bought and accordingly the sale of the whole practice would be unlikely. However, it is not the practice but the land with which this case is concerned. Rule (5) is concerned with the situation where there is to be reinstatement in some other place. If that fact has to be taken into account there would certainly be no demand for land for this purpose, or for this land. But if the assumption is that all the partners are retiring and so some of the personal goodwill will remain, there would be a demand for this land. But the rule pro-25 vides that there must be no general demand or market for land for that purpose. That indicates to me that it is not sufficient that there should be a demand for the land in question but that there should be a general demand, ie a demand not only for that land but for other land elsewhere for the same purpose. Furthermore the use of the word ‘market’ connotes in my opinion something more than the fact that there are potential users of the land for the named purpose but that there is a buying and selling for that purpose. In the Manchester case the tribunal did not pay attention to evidence of lettings. The member thought that only sales were relevant to market and not lettings. Whether he was correct in his conclusion or not, I am quite satisfied that buying a share in a practice is not evidence of a general demand for the purchase or sale of that practice. In my opinion the evidence is against the buying and selling of whole multi-principal practices. In other words, in my opinion the evidence indicates that there is no buying and selling of land for multi-principal practices. In his decision the member said: ‘It seems to me that there is a demand and market for premises for the purposes of the single-principal practice of veterinary surgeon’. In my opinion he was entitled so to find on the evidence. However, he went on: In respect however of multi-principal veterinary practices these never do reach the market for the simple reason that the aim of such a partnership is to continue to carry on the practice as veterinary surgeons rather than dispose of the partnership assets. I see no reason to doubt nevertheless for such a practice there would be a market just as there is for the single principal practice. In my opinion the member was in error in finding there would be a market. For the reasons which I have given I am of opinion that in relation to multi-principal veterinary practices the evidence was all one way, namely that there is no general demand or market for that purpose. I am of opinion that the member was in error in his final conclusion. The question is not whether there would be a market, it is whether there is a general demand or market. In my judgment the only conclusion on the facts found by the member is that there was no general demand or market for the sale of land for a multi-principal veterinary practice. Taking the contrary view, namely, that the appeal should be dismissed, TEMPLEMAN LJ said: In 1979 the three claimants who are the present appellants were carrying on in partnership a practice of veterinary surgeons at the premises 126 Newport Road, Middlesbrough, held by the claimants in fee simple. The premises were on September 10 1977 compulsorily acquired by the respondents, the Middlesbrough Borough Council, and the claimants became entitled to compensation to be agreed or determined by the Lands Tribunal. The premises were originally an end-terrace house. The groundfloor rooms were used by the claimants as offices, waiting rooms and consulting and operating rooms with kennels. The former garden of the house was used as an exercise yard and outbuildings were installed to provide additional kennels, storerooms and ancillary rooms in connection with the practice. The first-floor rooms of the premises were used as a caretaker’s flat comprising three rooms and a bathroom. The partnership practice was carried on from the premises 126 Newport Road, Middlesbrough, with subordinate branches at Hartlepool, Stockton and Billingham. The profits of the partnership practice derived by the three claimants, who worked full-time in the practice, increased from £36,000 in 1973 to £56,000 in 1977 and £71,000 in 1978. By section 5 of the Land Compensation Act 1961 compensation shall be the amount which the land if sold in the open market by a willing seller might be expected to realise (rule (2)) and there shall be added compensation for disturbance or any other matter not directly based on the value of the land (rule (6)). If rules (2) and (6) apply, the claimants will be entitled to the value of the premises and to the value of any goodwill of the practice which they lose. But section 5 also provides that: Where 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 the reinstatement in some other place is bona fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement (rule (5)). If rule (5) applies the claimants will be installed in or entitled to the costs of acquiring equivalent premises. The respondent council contend that rules (2) and (6) apply. The claimants contend that rule (5) applies. The Lands Tribunal decided in favour of rules (2) and (6). The claimants appeal to this court. The premises 126 Newport Road constitute land devoted to the purpose of carrying on the practice of veterinary surgeons in partnership. But for the compulsory acquisition the land would continue to be devoted to that purpose. On behalf of the claimants it is submitted that there was no or no sufficient evidence to support the finding of the Lands Tribunal that the claimants had not satisfied the tribunal that there is no general demand or market for land for the purpose of carrying on the practice of veterinary surgeons in partnership. It is clear that the class of purchasers interested in land to be used for the purpose of carrying on the practice of veterinary surgeons in partnership must be limited to veterinary surgeons. The claimants did not suggest that there was no demand for veterinary surgeons in Middlesbrough or elsewhere or that veterinary surgeons were not being trained or were leaving the profession. In these circumstances the Lands Tribunal found it impossible to believe that there was not a general demand by veterinary surgeons for premises devoted to veterinary surgery or that there was no general demand by veterinary surgeons for 126 Newport Road for the purpose of veterinary surgery in view of the fact that a practice was carried on at those premises and was producing £71,000 per annum for three full-time partners. I share the incredulity of the Lands Tribunal. It was submitted in this court that evidence and authority precluded the Lands Tribunal and this court from giving effect to such incredulity. The evidence as set out in the case stated by the Lands Tribunal was as follows: (1)  Until 1977 the practice comprised a small animal practice concerned with pets and a large animal practice concerned with horses and farm animals. By an agreement dated March 2 1977 the goodwill of the large animal practice was sold to a vet for £14,500. The claimants covenanted not to carry on a ‘large animal’ practice for five years within 25 miles of 126 Newport Road, Middlesbrough; the purchaser of the large animal practice covenanted not to carry on a small animal practice for five years within 25 miles of his address at Maltby, Cleveland. It appears from this that it was possible to carry on a ‘large animal’ practice from 126 Newport Road, that there was a purchaser for a ‘large animal’ practice formerly carried on at 126 Newport Road and the inference is that there would have been a purchaser of 126 Newport Road for the purpose of carrying on an animal practice from those premises if the premises had been offered for sale by a willing seller. (2)  It appears from the case stated that ‘the claimants say that the goodwill of the practice attached to the subject site where there has been a veterinary practice since 1900; they would not voluntarily leave the site’. The inference is that 126 Newport Road would be attractive to veterinary surgeons as potential purchasers because of the goodwill attached. The inference is also that the evidence of the claimants with regard to the difficulties of selling, though no doubt frank and truthful, must be regarded with some caution in the present context because they are clearly not the ‘willing sellers’ postulated by rule (2). (3)  Mr Gale, one of the claimants, said that ‘in the Cleveland area veterinary practices are not bought or sold; in the open market the normal course is to take a partner. A single partner practice would advertise for a partner; the newcomer would work with the principal for a period and would then take over the practice and pay out the principal.’  From this it appears that there are purchasers for single-partner practices. The fact that the interests of both vendor and purchaser lead to a transitional takeover period does not disguise the fact that practices are bought and sold and it would be little use in most cases in selling the practice without the premises26 upon which the practice was being carried on. Similarly, interests in partnership practices change hands at negotiated prices. It appears that partners in veterinary practices do not choose to offer for sale either the premises or the practice because it suits them not to sell as a whole. But there may be a general demand for such practices and premises nevertheless. The demand is evinced by the fact that interests in partnerships are sold to new partners. In the present case if the three claimants had been killed in 1976 before any threat of compulsory acquisition, I find it impossible to believe that the executor of the last survivor would not have found veterinary surgeons willing and anxious to acquire 126 Newport Road for the purpose of carrying on a veterinary practice. Similarly if partners quarrel or move to another part of the country so that a veterinary practice or premises occupied for the purposes of a veterinary practice come on the market, I can see no reason why purchasers should not appear from the ranks of veterinary surgeons. (4)  Mr Catterall, an experienced chartered surveyor, said that in his firm, which practised within an area of 1,000 square miles, there was no experience of veterinary practices coming on to the market. I do not find this surprising in view of the evidence given by Mr Gale that it is not common to find veterinary practices and premises being offered for sale and even less surprising that they are not offered for sale through surveyors and estate agents. But it is significant that Mr Catterall was able to value the premises 126 Newport Road and the goodwill of the practice for the purposes of rules (2) and (6). He ‘considered that three years’ purchase would be the measure to apply where the practice is so well established. It is the figure that Mr Catterall would apply to his own practice when seeking an incoming partner. It was supported by the three years’ purchase paid by Mr Hunt one of the claimants when he entered the practice in 1968′. In my judgment this evidence demonstrates a demand for veterinary practices and for premises adapted for the purposes of that practice. The fact that demand can usually only be met by buying into the partnership which owns the premises does not mean that there is no demand. (5)  Mr Gale ‘accepts that a number of veterinary surgeons might band together into one firm and that the subject premises might prove an attraction to such a partnership, but he did not know of any source from which finance could be secured for such a purpose’. But there was no evidence that veterinary surgeons were a bad risk or that the practice of veterinary surgeons was so peculiar that money could not be provided or borrowed to purchase a practice which was operating at a profit. In my judgment there was evidence from which the Lands Tribunal could properly reach the conclusion that the claimants had failed to show that there was no general demand for premises for the purpose of carrying on the practice of veterinary surgeons in partnership or that there would be no general demand if a willing seller offered to sell 126 Newport Road for the purpose of carrying on such a practice. The relevant evidence consisted of the profitability of the partnership carried on upon the premises, the assertion by the claimants themselves that goodwill attached to the premises, the sale of the large animal practice, the admitted sales of veterinary practices by sole proprietors to other sole proprietors, the admitted sales of an interest in the veterinary practice carried on at 126 Newport Road to new partners on the basis of three years’ profits, the admission that interests in other veterinary partnerships were sold to new partners and the admission that the premises if offered for sale might prove an attraction to a veterinary practice. There was an entire absence of any evidence that premises occupied by veterinary surgeons would be any more difficult to sell than premises occupied by chartered accountants or solicitors or members of any other profession. I cannot think that rule (5) was intended to apply for the purposes of reinstating professional occupiers. The fact is that the claimants understandably resist rules (2) and (6), not because 126 Newport Road could not be sold by a willing seller for the purpose of a veterinary practice to be carried out in partnership but because the claimants fear, rightly or wrongly, that the value of 126 Newport Road plus any further compensation under rules (2) and (6) would not enable them to construct a new veterinary surgery in the neighbourhood. The relevant authorities to which we were referred are as follows: (1)  In Festiniog Railway Society Ltd v Central Electricity Generating Board (1962) 13 P & CR 248, 176 EG 271 the Lands Tribunal exercised its discretion not to assess compensation under rule (5), although all the requisites of that rule were satisfied, because the cost of reinstatement was wholly disproportionate to the total value of the assets of the claimants. In the present case the Lands Tribunal have postponed consideration of the question whether, if rule (5) is satisfied, the Lands Tribunal should exercise its discretion in assessing compensation under that rule. In the Festiniog case this court [(1962) 181 EG 787] declined to interfere with the decision of the Lands Tribunal because by section 3(4) of the Lands Tribunal Act 1949 a decision of the Lands Tribunal should be final provided that any person aggrieved by the decision’s being erroneous in point of law may require the tribunal to state a case. In the present case no point of law arises unless there was no evidence from which a reasonable Lands Tribunal could reach the same conclusion. (2)  In Vaughan (Viscount) v Cardiganshire Water Board (1962) 14 P & CR 193, 185 EG 949 the Lands Tribunal refused to apply rule (5) to a cottage which was used for the purposes of estate management. It was held that there was a general demand or market for premises devoted to estate management, though no general demand for premises devoted to the particular estate in question. I do not find this decision helpful to the submissions made on behalf of the claimants. (3)  In Nonentities Society Trustees v Kidderminster Borough Council (1970) 22 P & CR 224, 215 EG 385, 455 there was evidence that there was no general market or demand either for a commercial theatre or a non-commercial theatre in Kidderminster or in any similar town. There was evidence that many theatres had been closed. Rule (5) was applied. In the present case there is no evidence that premises for use by veterinary surgeons in practice are not profitable or that there are no veterinary surgeons willing and anxious to acquire premises for the purpose of carrying on the practice of veterinary surgeons from 126 Newport Road or from similar premises in Middlesbrough and elsewhere. (4)  In Manchester Homeopathic Clinic Trustees v Manchester Corporation (1970) P & CR 241, 215 EG 1033 it was held that there was no general demand or market for premises to be used for the purposes of a clinic, group medical practices, for example, being limited by a licensing system to one per area and other possible purchasers of such premises being very few and far between. That case was complicated by the licensing system and by the fact that medical practices under the National Health Service cannot be bought and sold and by the fact that the numbers of persons interested in clinics, particularly a clinic which had formerly been carried on as a homeopathic clinic, were necessarily limited. There was no evidence, as there is in the present case, of sole practitioners and partners being ready and willing to buy into the practice of a veterinary surgeon. The test submitted by counsel and accepted by the Lands Tribunal in the Manchester case at p 252 was as follows: ‘Assume that the premises were on the market for use for a purpose of the kind already discussed’ (in that case a clinic and in the present case a practice in partnership of the profession of veterinary surgeons) ‘and assume that that purpose was to be continued, then the real question was would the vendor say to himself that he could reasonably expect to find a purchaser of the premises for that purpose at a fair price’. In my judgment if that test is applied to the present case there was ample evidence before the Lands Tribunal which justified the Lands Tribunal in deducing that a willing vendor could reasonably expect to find a purchaser of 126 Newport Road for the purpose of carrying on a veterinary practice in partnership at a fair price. In the result I can see no reason for interfering with the decision of the Lands Tribunal in the present case. SIR DAVID CAIRNS said: I agree with Templeman LJ that this appeal should be dismissed. In order to bring into play rule (5) of section 5 of the Land Compensation Act 1961 it is necessary for him who asserts that that rule is applicable to establish (a) that but for the compulsory purchase the land would continue to be devoted to a certain purpose;27 (b) that that purpose is of such a nature that there is no general demand for land for that purpose; (c) that there is no market for land for that purpose; (d) that reinstatement in some other place is bona fide intended. If and only if the Lands Tribunal is satisfied of all these matters it may award compensation on the basis of the reasonable cost of reinstatement. I make the following comments on some points of construction of rule (5) as I have divided it up: In (a) it is obviously the land which is the subject of the compulsory purchase that is referred to. It seems to me equally obvious that in (b) and (c) it is not that very land which has to be considered. For (b) I think it has to be established that practically nobody in the area wants to obtain land for the specified purpose and under (c) that practically no sales for the purpose take place in the area. The effect of the word ‘general’ is no doubt to indicate that the fact that one particular person wants to obtain a piece of land for the specified purpose would not make the rule inapplicable. I am not sure that the word ‘general’ is intended to qualify ‘market’ as well as ‘demand’ but, however that might be, I should not consider that the fact that an isolated transaction had taken place would constitute a ‘market’. Now in the present case the appellants established points (a) and (d) but they failed to satisfy the Lands Tribunal of either (b) or (c) and in my judgment the member was right in his conclusion that rule (5) was not applicable. As to (b) it was clear from the evidence that people did from time to time take up the practice of veterinary surgery in partnership with others. I do not consider that the fact that no evidence was given of a firm of veterinary surgeons acquiring premises in which to practise showed that there was no demand for land for such a purpose. Clearly veterinary surgeons can find work in Cleveland. Clearly it is not unusual for them to do such work in partnership. There must therefore be a demand for land for that purpose. Whether the demand takes the form of several partners seeking premises to move into together or of one veterinary surgeon seeking premises where others will later join him is irrelevant. I agree with Waller LJ that it is a demand for land for the practice rather than a demand for a share in a practice that is relevant, but I can see no reason to suppose that a person who buys a share in a practice does not wish to buy a share in the premises where the practice is carried on. So far as financing such a purchase is concerned, I agree with Templeman LJ that there was no evidence that veterinary surgeons would have any greater difficulty in obtaining the money for such a purchase then would the members of any other profession. As to (c) I feel more doubt whether the transactions described in the evidence could properly be said to constitute a ‘market’, but on the whole I am of opinion that they do. Of the authorities that were cited to us, I do not find in any of them any support for the view that the decision of the Lands Tribunal was wrong in law and I agree with Templeman LJ that the test applied in Manchester Homeopathic Clinic Trustees v Manchester Corporation is a suitable test and that by that test the member was fully justified in reaching his decision in favour of the corporation. Therefore, with great respect for the differing view of Waller LJ, I agree with Templeman LJ that the appeal should be dismissed. The appeal was dismissed with costs. Leave to appeal to the House of Lords was refused.