Construction of tunnel for Victoria Underground line beneath Westbury Hotel–Tribunal, on examining statutory rights relied on for claim, believe construction of railway was ultra vires and express ‘considerable anxiety’ about their jurisdiction–Possible loss of 25 per cent of site for subbasement on redevelopment ‘too remote’ for compensation for land taken–Claim for injurious affection from train noise on basis of reduced YP by hypothetical purchaser ‘wholly unacceptable’–No evidence that hotel has reputation for train noise–No loss in money or money’s worth established
Mr Peter
Crawford (instructed by Wigram & Co) appeared for the claimants; Mr Ronald
Bernstein QC and Mr J Gaunt (instructed by the chief solicitor to the London
Transport Executive) for the authority.
Giving their
decision, THE TRIBUNAL said: This reference is to determine the claim for
compensation made by the claimants against the respondents.
The claimants
are a North American company owning a number of hotels, including the Westbury
Hotel (the ‘hotel’) which they built in 1955. The claimants’ interest in the
land is that of the owners of a leasehold interest granted for 63 years from
March 1 1955 and a supplemental lease granted on March 13 1965 expiring on the
same date. The hotel was the first ‘luxury’ hotel to be built in London since
the war, has a four-star rating, and attracts visitors from all over the world,
but particularly from the USA. The hotel has its main frontage to Conduit
Street, London W1, with a return frontage over a row of shops to New Bond
Street, and thus is in the heart of the West End of London. There are 285
bedrooms on seven upper floors, each bedroom having its own bathroom and wc;
the ground floor comprises reception, three restaurants, a bar and a lounge. In
the basement there are two public rooms, ‘The Brighton Room’ and the ‘Mount
Vernon Room,’ the boiler house and staff rooms.
Train Noise
Heard in Various Parts of Hotel
On August 5
1965 a notice headed ‘Notice to Treat for Easement’ was served on the claimants
by the London Transport Board enabling the board to purchase and take ‘an
easement or right of using the subsoil or undersurface of the land and
hereditaments aforesaid for the purposes of the undertaking of the board.’ Notice of entry was served on the same date
and construction of the Victoria Underground Railway line began in August 1965;
the line opened in March 1969. The south-bound tunnel runs under the hotel, the
other close to its south-west corner. The distance between the foundations of
the hotel and the top of the tunnel is about 30 ft and, because of the nature
of the ground and the site conditions when the tunnel was constructed, grout
was injected under pressure into the soil via one-and-a-half-inch-diameter
tubes driven from the south-bound tunnel to a distance of 15 ft. Noise
generated by trains running in the tunnel (‘train noise’) is transmitted
through the soil and then via the structure of the hotel building (not through
the air) and can be heard in various parts of the building. The claimants
contend that a total of 16 bedrooms on the first and second floors are
significantly affected, together with the two public rooms in the basement. The
16 bedrooms are hereinafter referred to as ‘the scheduled rooms’ and arithmetically
represent about 6 per cent of the total number of bedrooms in the hotel.
The claimants
claim as compensation £2,375 for value of land taken and £204,000 for injurious
affection resulting from train noise.
On the first
day of the hearing we raised the question of the statutory rights relied on for
the claim. In answer Mr Crawford, for the claimants, referred to section 63 of
the Lands Clauses Act 1845 and section 27 of the British Transport Commission
Act 1955. However, we were not satisfied as to our jurisdiction in the matter
and so we asked Mr Bernstein to let us have the benefit of his submission,
which he did on the last day of the hearing. He also relied upon section 27 of
the British Transport Commission Act 1955, which provides:
Easement
only to be acquired under certain lands
(1) In this section ‘the scheduled lands’ means
the lands referred to in the First Schedule to this Act.
(2) The Commission shall not acquire compulsorily
under the powers of this Act any part of the scheduled lands but they may
acquire within the limits of lateral and vertical deviation prescribed by this
Act in respect of the underground railways such easements or rights under the
scheduled lands as they may require for the purpose of constructing maintaining
renewing and using the underground railways and any necessary works and
conveniences connected therewith without being obliged or compellable to
acquire any greater interest in under or over the scheduled lands and may give
notice to treat in respect of such easements or rights describing the nature
thereof and (subject to the foregoing provisions of this section and to the
other provisions of this Act) the provisions of the Lands Clauses Acts shall
extend and apply in relation to the acquisition of such easements or rights as
if they were lands within the meaning of those Acts.
‘Easements or
Rights’
Mr Bernstein
acknowledged that the respondents had no powers compulsorily to acquire land
for the construction of the Victoria Line, but contended that what the
Executive had acquired was ‘easements or rights,’ for it is clear that the
Victoria Line was one of the works referred to in the First Schedule to the Act
within the meaning of the section — although he also acknowledged that the
construction and use of the work could not be said to constitute the exercise
of any easement known to the law and he therefore placed more emphasis upon the
word ‘rights.’ Although it is said that
the list of classes of easement is not closed, we think that the construction,
permanent occupation and use of an underground railway is far removed from
anything known to the law by the word ‘easements,’ nor can we believe that the
addition of the word ‘rights’ makes any material difference. There seems to be
a further difficulty in the application of section 27 and it is this. Although
the 1955 Act does not say so in terms, there can really be no doubt that the
railway works vest in the respondents and if that is so it would seem to follow
that the construction and use of the works amount in law to a compulsory
acquisition of land; see Taylor v Oldham Corporation (1876) 4 Ch
D 395 and Thurrock, Grays & Tilbury Joint Sewerage Board v Thames
Land Co Ltd (1925) 90 JP 1. If so, then it seems to follow that the
respondents’ actions were directly contrary to the prohibition in the opening
words of subsection (2) of section 27. There is even a further difficulty,
namely that if no property was taken from the claimants, then section 12 would
apply, with the effect that any dispute would fall to be settled not by the
Lands Tribunal but by arbitration.
We have given
much thought to the question whether we have jurisdiction in this matter and
this has caused us considerable anxiety. We have to bear in mind, however, that
should we come to the conclusion that we have no jurisdiction because the
construction of the railway was ultra vires (which we believe), that
indeed would be of immense significance going far beyond the issues in this
case. We also bear in mind that the parties have had the expense of the hearing,
which lasted seven days, and the wish of both of them that we should assume
jurisdiction. We also take into account that we have not had the benefit of any
argument to the effect that we have no jurisdiction. Under the circumstances we
have thought it right to proceed to determine the reference.
Compensation
for Land Taken
This claim was
made on the footing that although the construction of a subbasement under the
present hotel was not feasible, it would be so if the whole site were to be
redeveloped following demolition of the existing building, in which case about
25 per cent of the site for such a sub-basement would be lost because of the
tunnel, and the costs of construction would be higher because of its presence.
We conclude that this possible loss is too remote to warrant payment of any
compensation for this item, and that there was no evidence on which any
assessment could be made.
Assessment of
Train Noise
We heard the
evidence of a number of witnesses who have slept in some of the scheduled
rooms, of some of the hotel staff, and of two sound engineers. We visited the
hotel one night and listened to the noise in a sufficient number of rooms to
enable us further to assess the evidence. We have come to the following
conclusions:
1. As to the
public rooms in the basement, the noise would not interfere significantly with
the kinds of activities carried on in them.
2. As to the
scheduled rooms, having regard to the volume and frequency of the train noise
and to the kinds, volume and frequency of noise from other sources, few people
would be affected by the train noise. But persons having an above-average
sensitivity would be annoyed by the train noise in a few of the scheduled
rooms, but they would also be annoyed by the noise of ventilation machinery,
ambulance sirens, radios in adjoining rooms and general traffic noise.
3. As to the
other rooms, the train noise is of no significance.
The figures of
profit from the hotel showed a rise each year from 1965 to 1972, but there was
a small drop from 1969 to 1970 to 1971 when these figures were adjusted for
inflation by reference to the retail price index. The overall room-occupancy
rate for the hotel dropped from 1969 to 1970 and for each subsequent year. The
claimants sought to show that this drop occurred earlier, and to a greater
extent, than in the cases of other hotels in the W1 district and it should be
assumed to be due to the hotel having obtained a reputation for disturbance by
train noise. They further contended that purchasers of the hotel in 1969 would
have anticipated that competition would increase and that the boom years would
pass, and that then because of the train noise their hotel would be at a
disadvantage.
The valuer
called on behalf of the claimants valued the leasehold interest, the goodwill
and contents by capitalising the profit for 1968 (£318,600) at 12 per cent in
perpetuity to give £2,655,000 and deducting therefrom the sum arrived at by
capitalising the same profit at 13 per cent (£2,451,000), a difference of
£204,000 (7.6 per cent of £2,655,000). That, he contended, was the measure of
loss.
The
respondents said that there was no evidence of loss but that on the contrary
the evidence was of no loss.
The claimants
made no attempt to formulate a claim on the basis of loss of profits, although
we gave them the opportunity of doing so. Such evidence as there was does not
establish that the train noise caused loss of profits.
Policy of
‘Last Let’
Apart from
figures of overall occupancy, almost all the documents referred to dates after
March 1969 and thus did not compare matters before and after the date when
trains began. Comparisons were made between the scheduled rooms and other rooms
as to occupancy rates, tariffs and takings, all after March 1969, but rebates
were granted and room changes made for a variety of reasons, to such an extent
that
basis between takings of scheduled rooms and room-occupancy rates for the whole
hotel, and others between the occupancy figures for the ‘Westbury’ hotel and
those of other hotels in W1, but again we could not come to any reliable
conclusion. It was said by the hotel manager, but denied by an assistant
manager, that shortly after March 1969 a policy of charging less for some of
the scheduled rooms was put into operation but it was abandoned by the
management towards the end of 1970 as they considered that it drew attention to
the effect of train noise on the whole hotel. In the middle of 1969 a policy of
‘last let’ was adopted for the scheduled rooms, that is guests were put into
them only if they could not or would not go into other rooms. The result of
this policy was reflected in some of the documents, but not always; the policy
is not followed so as to be wholly effective, as some of the scheduled rooms
were the most sought-after and the most expensive in the hotel and some guests
booked individual scheduled rooms in advance by number. Some guests asked to
return to a specified scheduled room. This ‘last let’ policy is still in
operation, but when the hotel is underoccupied all guests can be accommodated
in non-scheduled rooms without loss in takings, although this arrangement is
not easy to put into practice and is by no means always adopted.
We return to
the claim as formulated by the claimants, that is the reduced years’ purchase
by a hypothetical purchaser. We find that wholly unacceptable. There was no
evidence that the hotel has the reputation for train noise or that a drop in
profits on that account could have been foreseen in 1969. Moreover, the figure
of 13 per cent yield is arbitrary and unsupported by evidence.
There was no
evidence of any loss of bookings for the basement rooms by reason of train
noise.
We conclude
that although train noise can be heard in a few rooms it adds very little to
noises from other sources and that no loss in money or money’s worth has been
established. Accordingly, we determine that no compensation is payable.
The claimants
will therefore pay the costs of the respondents less £100, such costs if not
agreed to be taxed by the Registrar of the Lands Tribunal on the High Court
Scale.
