Compensation for the acquisition of land — Certificate of appropriate alternative development — Relevant date for identifying policies — Whether date of entry or date of making of compulsory purchase order — Whether only scheme of acquisition or additional underlying facts and policies to be disregarded
On January 30
1986 notices were published and served of the making of a compulsory purchase
order by the Secretary of State for Transport to acquire land belonging to the
respondent landowners for the construction of a bypass; these were notices for
the purposes of section 22(2)(a) of the Land Compensation Act 1961. In
1992 the respondent landowners applied for certificates of appropriate
alternative development under section 17 of the Act. Certificates for
residential and industrial development were issued by the local planning
authority in 1993. On appeals by the Secretary of State for Transport, the
appellant Secretary of State for the Environment allowed the appeals,
substituting negative certificates. In the court below the judge held that the
relevant date for the purposes of section 17(4) was the date for the purposes
of section 22(2)(a), the date of the notices of the making of the
compulsory purchase order. He also found that, in issuing a certificate, the
facts and policies that underly the scheme should be discounted. The Secretary
of State appealed.
date for the determination of planning policies in issuing a certificate was
decided in Jelson Ltd v Minister of Housing and Local Government
[1970] 1 QB 243; it was the section 22(2)(a) date, the date of the
notice of the making of the compulsory purchase order. What has to be
disregarded under section 17(4) of the Act (‘if it were not proposed to be
acquired’) is the proposal for acquisition, and that alone, and not any fact or
policy attributable, at any date in the past, to the underlying scheme. When
considering the grant of a certificate under section 17(4) of the Act, in a
case to which section 22(2)(a) applies, the land shall be considered as
at the date of the publication of notice of the compulsory purchase order,
discounting only that acquisition and the proposal underlying it as it stood on
the date of the notice: this can conveniently be expressed as the valuation on
the basis that the proposal had been cancelled on the date of that notice.
The following
cases are referred to in this report.
Birmingham
Corporation v West Midland Baptist (Trust)
Association (Inc) [1970] AC 874; [1969] 3 WLR 389; [1969] 3 All ER 172;
(1969) 67 LGR 571, HL
Fox v Secretary of State for the Environment (1991) 62 P&CR
459; [1991] 2 EGLR 13; [1991] 40 EG 116; [1991] RVR 171
Grampian
Regional Council v Secretary of State for
Scotland [1983] 1 WLR 1340; [1983] 3 All ER 673; (1983) 47 P&CR 540; 23
RVR 263; [1984] 2 EGLR 175; [1984] EGD 1073; 271 EG 625, HL
Jelson
Ltd v Minister of Housing and Local Government;
George Wimpey & Co v Minister of Housing and Local Government
[1970] 1 QB 243; [1969] 3 WLR 282; [1969] 3 All ER 147; (1969) 67 LGR 543; 20
P&CR 663, CA
Jelson v Minister of Housing and Local Government; George Wimpey &
Co v Minister of Housing and Local Government (1968) 67 LGR 126; 19
P&CR 746; 207 EG 437; [1968] RVR 521, 538
Margate
Corporation v Devotwill Investments Ltd
[1970] 3 All ER 864; (1970) 22 P&CR 328; 69 LGR 271; [1971] EGD 313; 218 EG
559, HL
Pointe
Gourde Quarrying & Transport Co Ltd v Sub-Intendent
of Crown Lands [1947] AC 565, PC
Porter v Secretary of State for Transport (1996) 3 All ER 693;
[1996] 2 EGLR 10; [1996] 35 EG 89; [1996] 1 PLR 111, CA
Robert
Hitchins Builders Ltd v Secretary of State for
the Environment (1978) 37 P&CR 140; [1978] 2 EGLR 125; [1978] EGD 945;
248 EG 689; [1978] JPL 824
Wards
Construction (Medway) Ltd v Barclays Bank plc
(1994) 68 P&CR 391, CA
West
Midland Baptist (Trust) Association (Inc) v Birmingham
Corporation [1968] 2 QB 188; [1968] 2 WLR 535; [1968] 1 All ER 205; (1968)
19 P&CR 9; 66 LGR 348, CA
Wilson v Liverpool Corporation [1971] 1 WLR 302; [1971] 1 All ER
628; (1971) 22 P&CR 282; [1971] EGD 144; 217 EG 987, CA
This was an
appeal by the Secretary of State for the Environment from a decision of Dyson
J, who had quashed decisions of the Secretary of State who had allowed appeals
by the Secretary of State for Transport against certificates of appropriate
alternative development applied for by the respondent landowners.
Duncan Ouseley
QC and Rabinder Singh (instructed by the Treasury Solicitor) appeared for the
Secretary of State for the Environment; Robin Purchas QC and Timothy Comyn
(instructed by Manby & Steward, of Wolverhampton) represented the
landowners.
Giving
judgment, BUXTON LJ said:
Issues and
statutory framework
This appeal
concerns two questions, which we were told were undecided but of considerable
general importance, that arise in connection with the determination by the
Lands Tribunal of compensation for land compulsorily acquired, or proposed to
be compulsorily acquired, under the Land Compensation Act 1961, as amended (the
1961 Act). It will be convenient, first, to refer to the statutory framework.
By Part II of
the 1961 Act, the Lands Tribunal values the land in question at its open market
value as sold by a willing seller, subject, however, to certain assumptions.
Those assumptions include assumptions as to the planning permission that would
be available in respect of the land, that clearly being a significant factor in
its market value. By section 15(5), where a certificate has been issued by the
local planning authority, or on appeal by the Secretary of State, as to the
planning permission that would have been granted for the land, the Lands
Tribunal, in valuing the land, shall assume that that planning permission
would, indeed, be granted.
This process
of certification is dealt with in Part III of the 1961 Act. Since the proper
construction of the relevant provisions lies at the heart of this appeal, they
cannot be summarised, but must be set out in full:
Certification
of appropriate alternative development
17.–(1) Where an interest in land is proposed to be acquired by an
authority possessing compulsory purchase powers, either of the parties directly
concerned may, subject to subsection (2) of this section, apply to the local
planning authority for a certificate under this section …
(3) An
application for a certificate under this section —
(a) shall state
whether or not there are, in the applicant’s opinion, any classes of
development which, either immediately or at a future time, would be appropriate
for the land in question if it were not proposed to be acquired by any
authority possessing compulsory purchase powers and, if so, shall specify the
classes of development and the times at which they would be so appropriate;
(b) shall
state the applicant’s grounds for holding that opinion; and
(c) shall be
accompanied by a statement specifying the date on which a copy of the
application has been or will be served on the other party directly concerned.
(4) Where an
application is made to the local planning authority for a certificate under
this section in respect of an interest in land, the local planning authority
shall, not earlier than 21 days after the date specified in the statement
mentioned in paragraph (c) of subsection (3) of this section, issue to the
applicant a certificate stating either of the following to be the opinion of
the local planning authority regarding the grant of planning permission in
respect
possessing compulsory purchase powers, that is to say —
(a) that
planning permission for development of one or more classes specified in the
certificate (whether specified in the application or not) and for any
development for which the land is to be acquired, but would not have been
granted for any other development; or
(b) that
planning permission would have been granted for any development of which the
land is to be acquired, but would not have been granted for any other
development, …
and for the
purposes of this subsection development is development for which the land is to
be acquired if the land is to be acquired for purposes which involve the
carrying out of proposals of the acquiring authority for that development …
(7) In
determining, for the purposes of the issue of a certificate under this section,
whether planning permission for any particular class of development would have
been granted in respect of any land, the local planning authority shall not
treat development of that class as development for which planning permission
would have been refused by reason only that it would have involved development
of the land in question (or of that land together with other land) otherwise
than in accordance with the provisions of the development plan relating thereto
…
18.–(2) On any appeal under this section against a certificate the
Minister shall consider the matters to which the certificate relates as if the
application for a certificate under section 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 …
22.–(2) For the purposes of section seventeen and eighteen of this Act,
an interest in land shall be taken to be an interest proposed to be acquired by
an authority possessing compulsory purchase powers in the following (but no
other) circumstances, that is to say —
(a) where,
for the purposes of a compulsory acquisition by that authority of land
consisting of or including land in which that interest subsists, a notice
required to be published or served in connection with that acquisition, either
by an Act or by any Standing Order of either House of Parliament relating to
petitions for private bills, has been published or served in accordance with
that Act or Order; or
(b) where a
notice requiring the purchase of that interest has been served under any
enactment, and in accordance with that enactment that authority are to be
deemed to have served a notice to treat in respect of that interest; or
(c) where an
offer in writing has been made by or on behalf of that authority to negotiate
for the purchase of that interest; …
In the present
case there were before the judge two applications under section 21 of the 1961
Act to quash decisions of the now appellant Secretary of State, made under
section 18 of the 1961 Act, whereby he allowed appeals by the Secretary of
State for Transport against certificates of appropriate alternative development
in respect of two parcels of land at Sundorne, Shrewsbury. The land was
proposed for compulsory purchase by the Secretary of State for Transport for
the purpose of constructing the A49 Shrewsbury bypass. The date of the notice
under section 22(2)(a) of the 1961 Act was January 30 1986. In late 1992
the applicants (now the respondents) applied for certificates of appropriate
alternative development under section 17. The local authority issued
certificates on May 8 1993 for residential and industrial development. The
Secretary of State for Transport appealed against the certificates under
section 18. By his decision letter, dated July 4 1996, the Secretary of State
allowed the appeals, substituting negative certificates under section 17(4)(b)
of the 1961 Act.
Against this
background, the issues in the appeal were:
I. Is the
relevant date at which the decision under section 17(4) has to be made:
A. the section
22(2)(a) date (the notice date), as found by the judge?; or
B. the date of
entry on the land, as contended for by the appellant Secretary of State?
II. In making
that decision, do the words ‘if it were not proposed to be acquired’ in section
17(4) mean that there should be discounted:
A. the section
22(2)(a) compulsory acquisition, and the proposal underlying that
acquisition as it stood at the relevant date, as the Secretary of State
contends?; or
B.
additionally, the facts and policies that resulted from the underlying scheme
that culminated in that compulsory acquisition, as the judge found?
This latter
contest, on issue II, was, if I may say so, neatly summarised by Dyson J in the
judgment below:
[The
respondents] contended that … the policies and facts applicable at the relevant
date should have been viewed as if the bypass scheme had never been conceived
at all. [The Secretary of State] contended that the policies and facts should
be taken on the relevant date as if the scheme had been cancelled on that date,
and not as if the scheme had never been conceived at all.
It is
convenient to take these issues separately although, as will become apparent,
in my view, the correct solution to issue I dictates the answer to issue II.
Issue I
This issue is
concluded as a matter of authority by the decision of this court in Jelson
Ltd v Minister of Housing and Local Government [1970] 1 QB 243. In
that case there had been long-standing proposals for the construction of a
bypass. Land abutting the site of the bypass was developed for housing. When
the plan for the bypass was abandoned, the owners of the land on which it was
to have been constructed applied for planning permission for the construction
of housing, which permission was refused because housing on that site would
adversely affect the existing housing. The owners thereupon applied under
section 129(1) of the Town and Country Planning Act 1962, which provides that:
Where, on an
application for planning permission to develop any land, permission is refused
… then if any owner of the land claims —
(a)
that the land has become incapable of reasonably beneficial use in its existing
state, and …
(c) …
that the land cannot be rendered capable of reasonable beneficial use by the
carrying out of any other development for which planning permission has been
granted or for which the local planning authority or the Minister has
undertaken to grant planning permission,
he may …
serve on the council … in which the land is situated a notice requiring that
council to purchase his interest in the land …
The issue in
the appeal was specifically as to the date at which the provisions of section
17(4) of the 1961 Act applied. I mention as a preliminary footnote that, in his
exposition of Part III of the Act, Lord Denning MR assumed, as did everyone
else in the case, that section 22(2)(a) referred to a notice to treat
rather, than is in fact the case, to publication of the notice of the
compulsory purchase order. Subject to one argument that I consider below, and
by which I am not persuaded, this point makes no difference either to the Court
of Appeal’s analysis of the terms of Part III or to the debate in our present
case.
On that basis,
Lord Denning MR at p250B stated the issue in Jelson as follows:
After the
discussion we have had, I think the decision depends on this one short point
under section 17(4): what is the date at which it must be decided whether
planning permission ‘might reasonably have been expected to be granted’? The
Minister says it must be decided as at the date of the deemed notice to treat,
that is, on September 29, 1965. At that date there was this long, narrow strip
of land bordered by great housing estates on either side. At that date planning
permission would not be granted for any beneficial purpose. So there should be
a ‘nil certificate’. But Wimpeys and Jelsons say that that is not that date at
all. They say that the date should be some time in the distant past before
there was any proposal for a ring road. At that time they might reasonably have
expected planning permission to be granted, not only for the housing estates,
but also for this long, narrow strip for residential development.
That issue was
to be determined simply as a matter of statutory construction:
The crucial
word in [section 17(4)] is the word ‘proposed’, which is defined in section
22(2):
‘For the
purposes of sections 17 and 18 of this Act, an interest in land shall be taken
to be an interest proposed to be acquired by an authority possessing
compulsory purchase powers in the following (but no other) circumstances, that
is to say —
(a)
(put shortly) where there is an actual notice to treat;
(b)
(put shortly) where there is a deemed notice to treat;
(c)
(put shortly) where there is an offer to negotiate to purchase.’
That
definition shows that the word ‘proposed’ refers to the proposal contained in
an actual or deemed notice to treat or in an offer to purchase. That gives a
good clue to the date of the proposal. It is the date of the actual or
deemed notice to treat or of the offer to purchase, as the case may be.
In the light
of that definition, section 17(4) means that the planning authority must form
an opinion as to what planning permission might reasonably have been expected
to be granted at the date of the actual notice to treat, or the deemed notice
to treat, or the offer to purchase, as the case may be. In the present case,
therefore, which is a case of a deemed notice to treat, subsection 17(4) must
be read: ‘… that might have been expected to be granted [at the date of the
service of the deemed notice to treat] in respect of the land in question, if
it were not proposed [at that date] to be acquired …’. The planning authority
must form an opinion as to what planning permission might reasonably be
expected at that date, namely, September 28, 1965. It must look at the position
as at that date, and see, in the circumstances then existing, whether planning
permission might reasonably be expected to be granted: [[1970] 1 QB 243 at
pp250G–251C, Lord Denning MR’s emphasis.]
That same
analysis was adopted by Sachs LJ at p254D, and by Phillimore LJ at p255C. Like
Dyson J, I see no answer to the argument that that determines issue I in our
case. I am fortified in that view by the fact that the same conclusion as to
the effect of Jelson was reached, after a very careful review of
arguments very similar to those advanced in our case, by Roch J in Fox v
Secretary of State for the Environment (1991) 62 P&CR 459 at p475*.
*Editor’s
note: Also reported at [1991] 2 EGLR 13
The Secretary
of State did, however, contend that there was an answer, or rather a series of
related answers, which I should now address.
As his
principal argument the Secretary of State said that it was necessary to
construe Part III in a purposive manner, bearing in mind that the only role of
a Part III certificate was to assist in valuation by the Lands Tribunal: see,
on the latter, undisputed, point Lord Bridge in Grampian Regional Council
v Secretary of State for Scotland (1983) 47 P&CR 540* at p574. It
was established by analogy with the judgment of the House of Lords in Birmingham
Corporation v West Midland Baptist (Trust) Association (Inc) [1970]
AC 874 (West Midland) that the date as at which the Lands Tribunal
should assess compensation was the date of entry on the land. It was therefore
rational that the certificate date should be that date, or at least a date as
close as possible to that date. Mr Robin Purchas QC, for the respondents,
challenged even the necessary rationality of that claim. But, even leaving
those considerations aside, the trouble with this argument is that it flies in
the face of the way in which the court approached its task in Jelson. As
we have seen, the court thought that the issue was concluded by construction of
the 1961 Act. ‘Purposive’ construction, whatever exactly it may import, is
still nevertheless an exercise in construction, not an exercise in judicial
law-making. The Court of Appeal in Jelson construed the 1961 Act in a
manner contrary to that now contended for by the Secretary of State. That
conclusion cannot be displaced, at least in this court, by appeal to an
alternative theory of construction.
*Editor’s
note: Also reported at [1984] 2 EGLR 175
Faced with
that impasse, therefore, the Secretary of State sought to offset or
distinguish the effect of Jelson on two, interrelated, grounds. First,
the case had proceeded, as in particular had the judgment of Browne J at first
instance, which was approved by all the judges in the Court of Appeal, on the
assumption that the valuation date was not the date of entry, as subsequently
established by West Midland, but the date of the notice to treat. It was
therefore wrongly assumed in Jelson that the decision did indeed create
the rational relation between the date of the certificate and the date of the
assessment that the Secretary of State urged. That analysis was supported by a
passage from the judgment of Browne J, (1968) 19 P&CR 746 at p765:
The general
principle is that the value of land for the purposes of compensation for
compulsory purchase is assessed as at the date of the notice to treat. The
actual assessment of compensation in cases to which section 17 relates is
carried out by the Lands Tribunal, and part of the material which will be
before the Lands Tribunal may be a certificate under section 17 (see ss 14(3),
15(5) and 17(2)). The time with which the Lands Tribunal is concerned is the
date of the notice to treat and the facts and circumstances as they existed at
that date, and I should expect, prima facie, that the certificate under section
17 would be dealing with the situation as at the same date.
Second, the communis
error in Jelson, shared by Browne J, that the terms of section
22(2)(a) referred to a notice to treat rather than to publication of a
notice of the compulsory purchase order, had given a spurious appearance of
unity to the three cases addressed in that sub-subsection, and thus (I think
the argument was) had wrongly led to the application to section 22(2)(a)
of the solution that applied to section 22(2)(b); which, being a case of
service of notice to purchase under section 129 of the 1962 Act, was the case
directly addressed in Jelson. The Secretary of State argued that we
should follow the reasoning of Sir Douglas Frank QC in Robert Hitchins
Builders Ltd v Secretary of State for the Environment (1978) 37
P&CR 140* (Hitchins), who had distinguished Jelson broadly on
these grounds. He also submitted that his argument was supported by the
reasoning of the Court of Session and of the House of Lords in Grampian,
a case to which I shall, in any event, have to return when considering issue
II.
*Editor’s
note: Also reported at [1978] 2 EGLR 125
The principal
difficulty about these arguments is that they can only prevail if it can be
established either that the judgment in Jelson was delivered per
incuriam or that it is inconsistent with what was said by the House of
Lords in Grampian. I dispose of the latter point immediately, since I do
not understand how it came to be advanced. Lord Bridge in Grampian, at
pp573–574 of the report, made a reasoned, albeit confessedly obiter,
finding that the relevant date was the date on which the land was proposed to
be acquired. In so far as that assists at all in the present case, it supports
the case for the respondents. As to the status of the judgment in Jelson,
the Secretary of State appeared to draw back from saying that it must be
disregarded, but that, in my view, is what he has to argue in order to succeed.
There is no
justification for any such argument. First, it is true that Browne J assumed a
rule as to the date of assessment different from that provided in West
Midland. But, as is apparent from the passage from his judgment already
cited, he regarded the conjunction of the assessment date and the certificate
date as only a starting point. Like the Court of Appeal, his actual decision
was based on the terms of the 1961 Act. That is apparent from, among other
things, a further passage that I cite below in connection with issue II.
Second,
although Browne J did not have the benefit of West Midland, by the time
that Jelson reached the Court of Appeal that court had decided that
case, and held, as subsequently did the House of Lords, that the assessment
date should not be the date of the notice to treat: that is most conveniently
seen from the headnote to the report of the case in the Court of Appeal: see
[1968] 2 QB 188 at p189. That case in the Court of Appeal was cited to the
court in Jelson, it would seem, by both sides: see [1970] 1 QB 243 at
p248A–C. Although it was not referred to in the court’s judgments, it is
impossible to contend that Jelson was decided in ignorance of it. Nor,
since the issue before the court was one of construction, is it possible to say
that either the Court of Appeal or Browne J would have decided the case
differently had the present point about West Midland been put to them
directly.
Third, in his
exposition at [1970] 1 QB 243 at pp250G–251A, Lord Denning MR did not say, nor
can he be construed as thinking, that what he saw as the similarity of section
22(2)(a) and (b) as dealing with notices to treat dictated the
construction that he put upon the section. Rather, he pointed out that the use
of the word ‘proposed’ in the common part of section 22(2) had to apply to, and
was illuminated by, each of the cases to which it referred, which included
sub-subsection (c), which has nothing to do with notices to treat. That
section 22(2) must apply equally to each of the three cases set out in it is a
point of some importance when we come to consider issue II.
by, and indeed was not in any way affected by, his assumption that section
22(2)(a) related to a notice to treat.
I have
discussed these arguments at some length because of the importance placed on
them by the Secretary of State. They cannot, however, displace the plain
conclusion that is to be drawn from Jelson. The deputy judge in Hitchins
was wrong to distinguish Jelson on these grounds, and I would overrule
that case. The appeal on issue I fails.
Issue II
Here again
there is, in my view, a short answer, though in this instance it is not that
which appealed to the judge.
The issue is
as to the meaning, or at least the reference or application, of the words ‘if
it were not proposed to be acquired’ in section 17(4) of the 1961 Act. I agree
that it is not entirely clear that that issue, in its present connotation, was
before the court in Jelson. The court concentrated on the relevant date,
issue I, and therefore I do not hold in relation to issue II that the matter is
concluded by authority. But in Jelson, as the passages already cited
from Lord Denning MR’s judgment demonstrate, this court held that the word
‘proposed’ in section 17 refers, as the statute requires, to whichever of the
cases in section 22(2) is appropriate to the facts; and the planning authority
look at the matter as at the date of that ‘proposal’:
The planning
authority must form an opinion as to what planning permission might reasonably
be expected at that date … It must look at the position as at that date, and
see, in the circumstances then existing, whether planning permission might
reasonably be expected to be granted: [[1970] 1 QB 243 at p251C.]
In our case,
therefore, what has to be disregarded under section 17 is the case described in
section 22(2)(a): the proposal for compulsory acquisition. In making the
assessment of whether planning permission would have been granted in that case,
the planning authority otherwise look at the circumstances existing at the
relevant date, and not at the circumstances that would have existed at what
Lord Denning MR described as some time in the distant past, before the scheme
that underlay that acquisition was conceived.
I therefore
see no escape from the conclusion that, as a matter of statutory construction,
what has to be disregarded under section 17 is the proposal for acquisition and
that alone; and not, as the respondents contended, any fact or policy
attributable, at any date in the past, to the underlying scheme.
A number of
further considerations support this analysis.
First, it
seems an odd use of language to say that land is ‘proposed’ to be acquired from
the very first moment of a scheme that relates to it. In the present case, as
the judge found, the bypass was proposed in the town map in 1952, but a defined
protected route was not formulated until 1970. The respondents’ argument would
require everything from 1952 onwards to be disregarded. Mr Purchas said that
once a road scheme is formulated it is to be assumed that the land required
will be acquired by public acquisition. That may well be so, but to say so
would seem to fall short of being able to say that from 1952 onwards this land
was ‘proposed to be acquired’. Some force is added to that contention by a
comparison with the language of section 9 of the 1961 Act, which in the
valuation process excludes consideration of depreciation caused by the
‘prospect’ of acquisition by an authority possessing compulsory purchase
powers. That excludes any depreciation attributable to an ‘indication’ that the
powers will be or are likely to be exercised. That language seems more easily
to describe the effect of inclusion of land in a town map. That it was not
employed also in sections 17 and 22 would seem to be significant.
Second,
section 17(4) requires the planning authority to form an opinion in respect of
the land at the relevant date ‘if it were not proposed to be acquired’. That is
the language of present conditional: as if, at the relevant date, no proposal
existed. Had it been intended to exclude any ‘proposal’ dating back into time,
the section would have had to say ‘if it had not been’, or some similar use of
the past tense.
These points
were indeed recognised by Browne J in his judgment in Jelson, which, as
we have seen, was mentioned with approval by all three members of the Court of
Appeal in that case. Browne J said, (1968) 19 P&CR 746 at p767:
In my
judgment, the fundamental fallacy in all the arguments for the applicants on
this point is that they are really saying that the question is what planning
permission might have been expected to be granted if these sites had not been
reserved for a ring road. Although [counsel] disclaimed any such contention, it
seems to me that their argument really involves reading the words of section
17(4) ‘if it were not proposed to be acquired by any authority’ as if those
words read ‘if it had never been proposed to be acquired by any authority’, and
also reading ‘proposed’ as including ‘intended’. This is obviously impossible,
both on the wording of section 17(4) itself and in view of section 22(2).
I respectfully
agree.
There is a
further such point. In seeking to distinguish Jelson before the judge,
the respondents argued that that case involved a purchase notice, provided for
in section 22(2)(b). There was no scheme or other proposal underlying
the acquisition, since the bypass proposals in that case had been abandoned
three years before the notice was served. That was why it was, in any event,
impossible for the court in Jelson to go back to an original scheme or
proposal, since there was no scheme to revert to: not so in a case, such as our
case, that arises under section 22(2)(a). As a ground of distinction
this would not seem to create a difference. As we have seen, the applicants in Jelson
did seek to go back to the start of the original, if now abandoned, scheme, and
the Court of Appeal dealt with that argument without in any way suggesting that
it could not arise on the facts: to the citations already given I would add the
words of Phillimore LJ at [1970] 1 QB 243 at p255C. The argument is, however,
revelatory in another way. If it is the case that the respondents’ argument
runs in respect of section 22(2)(a), but not in respect of section
22(2)(b), that can only be because ‘proposed to be acquired’ has a
different meaning in the one sub-subsection from the other. But that cannot be
right, because the phrase is used in the common part of section 22(2) and must
therefore apply indifferently to each case that section 22(2) addresses. The
same consideration, it will be recalled, applies to the similar argument
adduced, by the opposite party, in relation to issue I.
The judge,
although inclining to the view that the respondents’ arguments were correct, in
any event, on issue II, did not consider that issue in detail, because he
thought that an answer to it was dictated by the judgments in the House of Lords
in Grampian. That was because he thought that the argument advanced
before him by the Secretary of State, and repeated before us, was the same
argument as failed in Grampian. I cannot agree. In order to explain why
that is so it is necessary to look in some detail at what was in issue in Grampian.
The contention
advanced by the planning authority is accurately set out in the headnote:
(1983) 47 P&CR 540:
The first
appellants, the education authority, by agreement acquired land from the second
respondents for sites for primary and secondary schools. The agreements
provided that the second respondents should receive the same compensation,
fixed as at the date of the offers to purchase, as if the land had been
compulsorily acquired … The appellants contended that the only circumstance
that the local planning authority, or the Secretary of State on appeal was
required to ignore in answering the hypothetical question posed by section 25
of the Act of 1963 was the immediate event that had resulted in the applicant’s
interest in land becoming one that was ‘proposed to be acquired by an authority
possessing compulsory purchase powers’ under section 25(1), viz in the
present case the first appellants’ written offers to purchase, and that the
underlying requirement to devote the sites to fulfil the needs of public
education remained and afforded a complete answer to the second respondents’
claim for ‘positive certificates’.
It will be
seen that that is in fact a different argument from that advanced by the
Secretary of State in our case. That latter argument, as formulated by the
judge in the passage that I have already cited, is that the assessment has to
be made as if on the relevant date the ‘scheme’ had been cancelled. But in Grampian
the argument, as understood by Lord Bridge, was that:
the only
circumstance which the planning authority … is required to ignore in answering
the hypothetical question raised by an application under [section 17] is the immediate
event which has resulted in the applicant’s interest in land becoming one which
it is ‘proposed to be acquired by an authority possessing compulsory purchase
powers’ under [section 22], in this case the education authority’s written
offers to purchase. Whilst those offers must be ignored, so runs the argument,
the underlying requirement to devote these sites to fulfil the needs of public
education remains and affords a complete answer to the claims for positive
certificates: [(1983) 47 P&CR 540 at p569, my emphasis.]
In other
words, the scheme was to be taken as still in place: all that was to be ignored
was the notices issued under that scheme.
Lord Bridge
rejected that argument, pointing to its obvious fallacy:
the
overriding consideration which impels me to reject the argument for the
appellants is that it would, in my opinion, if accepted, defeat the essential
purpose of the procedure for obtaining certificates of appropriate alternative
development, as part of the overall scheme of the Act to secure the payment of
fair compensation to landowners who are compulsorily expropriated, or,
expressed more specifically, to ensure that, when urban land, otherwise
available for some form of urban building development, is acquired for a
necessary public purpose, the compensation will reflect its urban development
value. Assuming, as I do, that every compulsory purchase of land can be
justified by reference to the public purpose for which the land is required, to
allow reliance on that public requirement to determine the question raised by
an application under section 25 would lead to the issue of a negative
certificate in every case: [(1983) 47 P&CR 540 at p570.]
That passage
seems to me to demonstrate two things. First, Lord Bridge was meeting and
rejecting the very narrow argument advanced by the acquiring authority that,
while the acquisition itself must be discounted, the underlying policy should
not be. Second, he was confirming what was in fact the submission of the
Secretary of State in our case, that there should be ignored not only the
acquisition proposal itself but also the planning policies that underlay that
proposal at the relevant date. His judgment was understood in that sense, in my
respectful judgment correctly, by Roch J in Fox v Secretary of State
for the Environment (1991) 62 P&CR 459 at p477, a passage in fact cited
by the judge in our case. And there is certainly no suggestion in any of this
authority that it supports the much wider contention advanced by the
respondents, that there should also be disregarded the effect of the underlying
proposals, if they can be characterised as such, at any time before the
relevant date.
I am not
therefore able to agree with the judge that Grampian concludes the
present case in the respondents’ favour. I do not find Grampian of
relevance in solving the very different problem that our case presents. In so
far as it assists, it supports the arguments of the Secretary of State.
I am similarly
not assisted by another case shown to us by the respondents; Margate
Corporation v Devotwill Investments Ltd [1970] 3 All ER 864. In that
case planning permission for residential development was originally refused
because the land would be required for road development. When that particular
development was not proceeded with the owners served a purchase notice. The
assessment of compensation, on the basis of a hypothetical planning permission,
was affected by the difficulty of access to the site, which the road
development had been intended to alleviate. The Lands Tribunal assumed that
because of the underlying planning policies some other access would be
provided. The House of Lords held, and held no more than, that the likelihood
of there being services to the site in the future must be decided on evidence
and not by assumption. The case has nothing to do with any assumptions as to policies
affecting the land itself. That was recognised in Grampian, Lord Bridge,
(1983) 47 P&CR 540 at p573, dealing with the case thus:
It is to be
noted that in the Margate case it was never suggested that the
underlying requirement to use part of the claimant’s land for the construction
of a by-pass road provided any ground for restricting the extent of the
residential development for which it ought to be assumed that permission would
be granted if the land were not to be acquired. The restriction on the extent
of the notional development for which the acquiring authority contended arose
solely from the undoubted problems of access to the site due to the existing
traffic congestion on the main road from which access would have to be
obtained. A by-pass road, if provided elsewhere than on the claimant’s land,
would relieve the traffic congestion and substantially diminish the problems of
access. Hence the relevance of considering, in the hypothetical situation
predicated by the statute, the prospect of a by-pass being provided elsewhere
than on the claimant’s land was not and could not be disputed. The decision of
your Lordships’ House that the strength of that prospect fell to be decided as
a matter of evidence and could not be founded on any assumption does not seem
to me to be of the least help to the present appellants, or indeed to be
relevant to any issue arising in these appeals.
There is
therefore, in my view, no authority that stands in the way of the solution to
issue II that I find to follow from construction of the 1961 Act. Further,
although I am prepared to accept that Jelson does not bind us on this
point, the approach of this court in that case, and in particular the
assumption on the part of Lord Denning MR and Phillimore LJ that it could not be
appropriate to take the inquiry back to a distant time, possibly years before
the relevant date, gives strong rational support to the contentions of the
Secretary of State. As I have already indicated, attempts on the part of the
respondents to distinguish Jelson, although they attracted the judge, do
not seem to be well founded.
Mr Purchas,
however, advanced a further argument. He reminded us that in performing its
valuation task the Lands Tribunal was bound by the Pointe Gourde
principle, Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent
of Crown Lands [1947] AC 565, to disregard any increase (or decrease) in
value of the land that is entirely due to the scheme underlying the
acquisition. How that principle applies in practice was explained by this court
in Wards Construction (Medway) Ltd v Barclays Bank plc (1994) 68
P&CR 391 at p396:
In order
correctly to apply the Pointe Gourde principle it is necessary, first,
to identify the scheme and, secondly, its consequences. The valuer must then
value the land by imagining the state of affairs, usually called ‘the no-scheme
world’, which would have existed if there had been no scheme.
Mr Purchas
submitted that since it was accepted that the only purpose of a Part III
certificate was to assist in the valuation exercise of the Lands Tribunal under
Part II; and since parliament in formulating Part III must have been aware of
the Pointe Gourde rule; therefore, the same approach should be applied
by the Secretary of State to his certification task as the Lands Tribunal
applied to the subsequent valuation. From that it followed that what had to be
disregarded in our case could not simply be the immediate proposal that
underlay the acquisition, but rather the whole long term policy that would be
regarded as the ‘scheme’ under Pointe Gourde, and all the consequences
of that scheme. Mr Purchas drew our attention to some remarks of Stuart-Smith
LJ in Porter v Secretary of State for Transport [1996] 1 PLR 111*
at p114B, where it is suggested that section 17 of the 1961 Act is indeed an
application of the Pointe Gourde principle. However, that was not the
issue in that case; it does not seem to have been argued, and certainly not
argued with the care with which the point has been considered before us; and
the point was not addressed by the other lord justices. Mr Purchas very fairly
agreed that we were not constrained by that case.
*Editor’s
note: Also reported at [1996] 2 EGLR 10
I could not
find the present argument compelling if, as is the case, it conflicts with the
plain wording of the statute. But, in any event, I am not persuaded that it has
force even taken on its own. First, as a matter of policy, if the Lands
Tribunal has in its valuation exercise to have regard to Pointe Gourde,
that would, if anything, seem a lesser rather than a greater reason for
straining to introduce that principle at an earlier stage. Second, however, it
is far from clear that adoption of this approach would lead to the simplicity
and clarity that the respondents urged. It is trite law that identification of
the ‘scheme’ for the purposes of Pointe Gourde is a question of fact for
the Lands Tribunal: see for instance per Widgery LJ in Wilson v Liverpool
Corporation [1971] 1 WLR 302 at p310A. If the Secretary of State engages in
that exercise in advance of its being considered by the Lands Tribunal, his
assessment cannot bind the Lands Tribunal and may be different from that of the
tribunal. It can hardly be right that the Lands Tribunal should become bound,
by section 15(5) of the 1961 Act, to give effect to a certificate based on an
assumption as to the factual application of Pointe Gourde that the Lands
Tribunal itself has rejected.
I add,
finally, that various arguments were addressed to us by both parties as to the
potential inconvenience, or even injustice, of the solutions proposed by their
opponents. I did not find these contentions of assistance. They again cannot be
compelling in the face of plain statutory language. In so far as it is helpful
to comment, I bear in mind the point made by the Secretary of State that issues
of this nature would, in any event, be reviewed by the Lands Tribunal in the
eventual valuation; and in particular that a negative certificate could
be there reopened.
Conclusion
I would
therefore find in favour of the respondents on issue I, but in favour of the
Secretary of State on issue II, and thus allow the appeals. The effect of so
holding is that when considering the grant of a certificate under section 17(4)
of the 1961 Act in a case to which section 22(2)(a) applies, the land
shall be valued as at the date of the publication of notice of the compulsory
purchase order, discounting only that acquisition and the proposal underlying
it as it stood on the date of the notice, which can be conveniently expressed
as a valuation on the basis that the proposal had been cancelled on the date of
that notice.
PETER GIBSON and NOURSE LJJ
agreed and did not add anything.
Appeals
allowed with costs.
