Land Compensation Act 1973 — Compensation for depreciation in value attributable to bypass — Whether two valuers necessary — Burden of proof — Whether evidence of settlements and awards nationally relevant — Whether any depreciation in value — Whether subject property benefited by bypass
Prior to the
construction of a bypass at Northop, Mold, North Wales, the subject property
was situated in a through road between Mold and Connah’s Quay; through traffic
on the original A55, which lay 115m from the rear of the subject property, now
uses the bypass which was first opened for use on June 26 1989. After its
construction the subject property, which lies between 210 and 260m from the
bypass, was left in a cul-de-sac caused by the bypass. The claimant, who was
represented by a surveyor who was nationally rather than locally based, claimed
£600 and contended that the 1973 Act required proof only of depreciation in
value of the subject property and not necessarily proof of the open market
value of the property before and after the opening of the bypass; accordingly
evidence of settlements, awards and sales on a national basis was admissible
and appropriate in arriving at the amount of depreciation due to the physical
factors together with an analysis of local settlements and sales. The
compensating authority denied that there had been any depreciation in value;
the property was now in a quieter and more desirable situation. It also sought
to have the hearing dismissed for lack of evidence or adjourned to allow the
claimant to deliver a report from a second expert to prove the value of the
subject property; the expert who was being called could not rely on an opinion
of value prepared by a local surveyor.
was payable. It is not necessary under section 1(1) of the 1973 Act for the
claimant to give direct evidence of the value of his property before he can
assess the depreciation due to physical factors, nor is there need for proof of
values before and after the commencement of use of the works. The open market
value may be required where depreciation is expressed as a percentage, but the
tribunal may be able to assess the depreciation in value from agreed
settlements. In respect of claims under Part I of the 1973 Act, it will not
normally be necessary for either party to call more than one expert valuer
witness. The witness most likely to assist the tribunal will be a surveyor
practising in the locality, experienced in selling and valuing similar
properties. Depreciation in value may be calculated in many ways, such as by a
percentage of the pre-works market value, by taking part of the total reduction
in value caused by the works as due to the physical factors, or even as a spot
figure based on the valuer’s experience of the locality. The evidence of the
claimant’s valuer concerning tribunal decisions and settlements in other parts
of the country were irrelevant and little weight was attached to them.
The following
cases are referred to in this report.
English
Exporters (London) Ltd v Eldonwall Ltd [1973]
Ch 415; [1973] 2 WLR 435; [1973] 1 All ER 726; (1972) 25 P&CR 379; [1973]
EGD 439; 225 EG 255 & 433
Fallows v Gateshead Metropolitan Borough Council (1993) 66 P&CR
460
Land
Securities plc v Westminster City Council [1992]
2 EGLR 15; [1992] 44 EG 153; [1993] 1 WLR 286; [1993] 4 All ER 124
Perry v Dorset County Council unreported (ref 126/91)
W
Clibbett Ltd v Avon County Council [1976] 1
EGLR 171; EGD 385; (1975) 237 EG 271, LT
Nicholas Cooke
(instructed by the William Ricketts Partnership) appeared for the claimant;
Geoffrey Pass (instructed by the Treasury Solicitor) represented the
compensating authority.
Giving their
decision, The Tribunal
said: This is a reference to determine the compensation payable (if any) under
Part I of the Land Compensation Act 1973 (‘the 1973 Act’) for the depreciation
in the value of the freehold interest in a house, Bryn Hyfryd, Church Road,
Northop, (‘subject property’) following the opening of the Northop Bypass (‘the
bypass’).
Nicholas Cooke
of counsel appeared for the claimant and called Mrs SA Bateman, Mr D Owens and
Mr WKR Ricketts FRICS. Geoffrey Pass of counsel appeared for the compensating
authority (‘the authority’) and called Mr KP Blackwell, Mr PW Hughes FRICS FAAV
and Mr C J Tollitt BEng CEng MICE MIHT.
The cases
referred to in the decision are listed at the head of this decision.
Procedural
matters
On the first
day of the hearing two procedural matters arose which we dealt with before
proceeding to the substance of the case. They related to the identity of the
claimant and an application for the dismissal or adjournment of this reference.
First, the
identity of the claimant. The claim in this reference was made on August 6 1990
on behalf of Mr John Owens, the then freehold owner of the subject property. On
July 29 1991 it was referred to the Lands Tribunal. Mr Owens died on December 1
1991. Copies of a grant of probate dated November 19 1992, assent to the
vesting of the subject property in Desmond Owens dated November 23 1992 and the
will of the late John Owens were put in evidence. These show that Desmond Owens
and Richard Clive Hallows were appointed executors and trustees of the will,
that the subject property passed to Desmond Owens and that the residue of the
estate passed equally to four children, including Mr Owens.
It was
submitted by Mr Nicholas Cooke that Desmond Owens should be substituted as
claimant for John Owens deceased. He said that it is the amount of compensation
which is in issue in this reference; the recipient of that compensation does
not affect the amount and could be decided later. Mr Geoffrey Pass objected. He
said that the claim did not pass to Desmond Owens with the subject property;
the claim was in the estate but did not follow the estate. Costs would be
important if the authority are successful in this reference. Mr Cooke then
suggested that Mr Hallows of Hallows Associates, solicitors, one of the
executors, should be substituted for the original claimant, with an undertaking
as to costs from Mr Ricketts.
We granted an
adjournment to allow contact with Mr Hallows. When the hearing was resumed we
were handed a fax from Mr Hallows consenting to be substituted as claimant in
this reference. We made an order providing that Richard Clive Hallows, the sole
proving executor of the will of John Owens deceased, shall be substituted for
‘Executors of John Owens deceased’ as claimant on the undertaking of William
Kenneth Ronald Ricketts, given for himself and for his fellow partners in the
firm of the William Ricketts Partnership at Cardiff by his consent given, that
he or they will indemnify the Treasury Solicitor in the event of any award of
costs being made against Richard Clive Hallows in this reference which shall
remain unpaid.
The second
procedural matter was raised by Mr Pass. It was an application for the
reference to be dismissed for lack of evidence or adjourned to allow the
claimant to deliver an appropriate report from a second expert witness, on
terms that the claimant be ordered to pay the cost of this day’s hearing and
for such adjournment.
Mr Pass said
that, for the claimant to succeed, it is necessary for him to put before this
tribunal evidence of the value of the subject property at the date of valuation
and of the depreciation in the value caused by physical factors arising out of
the use of the Northop Bypass. He referred to sections 1(1) and 4(1) of the
1973 Act. He said that this evidence cannot now be put to the tribunal. Expert
reports have been exchanged and the only report on behalf of the claimant was
prepared by Mr Ricketts. This refers to, and is based on, a valuation of the
subject property prepared by Mr H Elias-Jones BSc ARICS, who was to have been
called as the second expert witness for the claimant. No report from him is
before the tribunal. This evidence is therefore hearsay and cannot now be
introduced by incorporation in Mr Ricketts’ evidence. If Mr Elias-Jones’
evidence is to be admitted the authority would wish to cross-examine him on his
valuation and the reasoning behind it. Mr Pass referred to English Exporters
(London) Ltd v Eldonwall Ltd [1973] Ch 415.
Mr Pass
acknowledged that evidence of value is contained in Mr Hughes’ report, but
submitted that this is not yet before the tribunal (the authority may not call
Mr Hughes). His evidence does not contain an opinion as to the gross diminution
in value caused by the bypass, to which Mr Ricketts then applies his expertise
to find the net compensatable loss. Furthermore, it is not the task of the
authority to elicit evidence from Mr Ricketts by cross-examination which should
have been adduced on behalf of the claimant. Mr Pass submitted that the absence
of this evidence of value deprives the tribunal of jurisdiction. Compensation
under the 1973 Act is in the nature of special damages and it is not open to
the tribunal to pluck a figure of compensation out of the air. It can only be
based on admissible evidence adduced by the claimant, of which the authority
have had good notice by the prior exchange of expert reports.
Mr Cooke
submitted that the hearing should proceed. He said that it was inappropriate to
ask for the dismissal of a claim for lack of evidence before any evidence had
been given. A statement of agreed facts has been prepared. This includes a
schedule of compensation payments in respect of the Northop Bypass containing
capital values and compensation payments for houses close to the subject
property. This is sufficient to allow the tribunal to make a decision. Mr Cooke
said that section 1(1) of the 1973 Act refers to compensation for depreciation
and it is not necessary as a matter of law for this to be assessed by reference
to values before and after the use of the new road. He referred to the decision
of this tribunal in Perry v Dorset County Council unreported
(REF/126/91) at p7. The task of the tribunal is to decide whether, and if so by
how much, the subject property has been diminished in value by the physical
factors arising out of the public works.
We decided to
proceed with the hearing. Generally, we agree with Mr Cooke. We do not accept
the submissions of Mr Pass that the claimant must give direct evidence of the
value of the subject property before he can assess the depreciation due to
physical factors arising out of the public works, nor is there a need for
values before and after the use of those works. That is not our interpretation
of section 1(1) of the 1973 Act. The submissions by Mr Pass do not apply here
where there is a statement of agreed facts, which includes details of other
settlements in the immediately adjoining area. The tribunal has to decide whether
the subject property has suffered depreciation in value from noise and dust
created by the use of, and having regard to any benefits from, the bypass. It
may be that this figure, if expressed as a percentage of a hypothetical market
value, cannot be calculated until that value has been determined, but where, as
in this reference, the tribunal has evidence of settlements, we do not think
that the claimant is necessarily required to adduce opinion evidence of the
market value of the subject property. The absence of such evidence is not fatal
to his case.
We accept that
the authority are inconvenienced by the absence of this evidence and the
consequent need for Mr Ricketts to amend his evidence, but we do not think they
are prejudiced. We emphasise, however, that expert evidence should always be
exchanged before a hearing.
It will be
convenient to deal here with another procedural matter raised by Mr Pass in his
closing submissions. He requested the tribunal to express a view as to the
propriety of the direction given in this reference that the claimant should
have leave to call two expert witnesses as to value. He said that such a
direction materially increases costs and deters an authority from resisting
relatively small claims which they consider to be unsubstantiated. In
particular, Mr Pass submitted that the evidence of Mr Ricketts is irrelevant.
The usual practice where Mr Ricketts appears before this tribunal is for him to
rely on expert evidence of values from a local surveyor, to which Mr Ricketts applies
a percentage to isolate that part of the value or depreciation in value which
is due to the physical factors. Mr Pass said that, to the extent that Mr
Ricketts gives evidence of his experience nationally, the different facts of
the various cases can give rise to misleading simplification and false analogy.
His experience of these cases confers upon him no special ability to quantify
the proportion of the depreciation in value attributable to the physical
factors in different schemes. If those cases embody principles of law, they may
be cited by counsel. Only in rare cases will Mr Ricketts have expert knowledge
of local values. If he speaks of settlements in truly comparable cases (ie
those involving the same road), the facts may be incorporated in a statement of
agreed facts (as in this reference). The evidence of Mr
of comparable settlements.
Mr Cooke in
reply submitted that we should not express a view on the directions in this
reference. He said this is unnecessary and could not assist the conduct of
other cases. Where evidence is called needlessly the remedy is in costs. The
evidence of Mr Ricketts is both relevant and useful.
We cannot
comment on the direction in this reference, giving leave for two expert
witnesses for the claimant and it is unnecessary to do so as, in the event,
only one such witness, Mr Ricketts, was called. It may be helpful, however, if
we give some general guidance on expert evidence in references under Part I of
the 1973 Act.
The general
rule for hearings before this tribunal is that not more than one expert witness
on each side shall be heard unless otherwise ordered (Lands Tribunal Rules
1975, r42(2)). Leave is usually given for more than one expert where evidence
is required on several technical matters, such as valuation, planning and
highways. Each application for leave to call additional witnesses must be
considered individually, according to the circumstances of the case. As a
general rule, however, the number of expert witnesses should be kept to a
minimum, there should be no duplication of evidence and each witness should
deal with the whole of his area of expertise.
It follows,
therefore, that in claims for compensation under Part I of the 1973 Act, it
should not normally be necessary for either party to call more than one expert
valuation witness. The purpose of expert evidence is to assist the tribunal to
reach a decision on technical issues and we are unlikely to be assisted by two
valuers for one party, each giving evidence on part of the valuation issue.
This practice unnecessarily increases the cost and length of hearings. The
expert witness most likely to assist the tribunal in claims under Part I of the
1973 Act is a surveyor practising in the area of the subject property,
experienced in selling and valuing similar properties, who will be able to
speak from first-hand experience of the likely depreciation in values due to
public works. It should normally be possible for one expert witness to give all
the value evidence. It follows, therefore, that we agree with the criticisms
made by Mr Pass of the practice of using two expert witnesses as to value, one
speaking to local values and the other as to the compensatable depreciation in
values based on experience and settlements in other parts of the country. This
latter evidence is unlikely to be helpful and we deal with it later in this
decision. The whole of the value evidence should be given by one witness with
consequent saving in cost and time. This is particularly important where claims
are small. The effect of public works on values is a matter of local knowledge,
not to be determined by comparables from a wider geographical area or on the
basis of other decisions of this tribunal.
Facts
The following
facts are agreed or found:
1. The subject
property is a detached two-storey double-fronted house built in 1927. It is
constructed of brick with pebble-dash rendering and has a pitched slate roof.
The accommodation on the ground floor comprises a porch, hall, two living
rooms, kitchen and conservatory; and on the first floor there are three
bedrooms, bathroom and separate wc. There are gardens at front and rear and
there is a garage and external wc.
2. The subject
property is in the village of Northop, near Mold, Clwyd, North Wales. It is
situated on the south side of Church Road (formerly called Connah’s Quay Road),
which runs in a west to east direction from the centre of Northop village.
Before the construction of the Northop Bypass this road was part of a through
route which led from Mold to Connah’s Quay. It is now a cul-de-sac terminating
where it meets the bypass to the east of the subject property. On the north
side of Church Road are houses and bungalows, some of them set back from the road
and with frontage to a service road which runs parallel to Church Road. There
is also other housing on the south side of Church Road with two cul-de-sacs to
the east of the subject property, Aber Crescent and Park View. To the rear of
the subject property are three-detached houses, then the site of a disused
petrol filling station and the former A55 road, which runs parallel to Church
Road and is 115m from the rear boundary of the subject property. Traffic lights
control the junction of this road and the A5119 in the centre of the village
and, before the bypass was opened, long delays in all directions were
experienced, particularly during the holiday period and at weekends. With the
opening of the bypass, the former A55 has been renumbered the B5126. The
subject property is on land which slopes down from the former Church Road to
the B5126.
3. At the date
of claim (August 6 1990) the subject-property was held freehold with vacant
possession and was not subject to any easements or restrictive covenants affecting
the value. This interest was a qualifying interest under section 2 of the 1973
Act.
4. The public
works under section 1 of the 1973 Act which give rise to this claim are the
Northop Bypass, which is part of the A55 Chester to Bangor trunk road and also
forms part of euro-route E22 connecting Europe with Southern Ireland. The
Northop Bypass is a dual carriageway road which runs in a south-east to
north-west direction to the east of the subject property. At its nearest point
(to the north-east) it is 210m from the boundary of the subject property. To
the north the bypass is 260m from the front boundary of the subject property.
The bypass cuts across Church Road, which has become a cul-de-sac terminating
to the east of the subject property. The bypass now takes the through traffic
which formerly used the former A55, now the B5126.
5. The bypass
was first opened to public traffic on June 26 1989 and this is the relevant
date under section 1(9)(a) of the 1973 Act.
6. The first
claim day under section 3(2) of the 1973 Act is June 26 1990 and compensation
(if any) is to be assessed by reference to prices current on that date: section
4(1) of the 1973 Act.
7. On August 6
1990 a claim for compensation under Part I of the 1973 Act was served on the
authority on behalf of John Owens in respect of the subject property. The date
of this claim fixes the nature of the interest and the condition of the subject
property: section 4(4)(a) of the 1973 Act.
8. The subject
property does not qualify for any mitigating works under section 20(1) of the
1973 Act.
The issue in
this reference is the compensation payable (if any) for the depreciation in the
value of the subject property due to the physical factors of noise and dirt
caused by the bypass, having regard to prices current at June 26 1990 and the
condition of the property at August 6 1990, such compensation to be reduced by
any increase in the value of the subject property attributable to the existence
of, use or prospective use of the bypass. The claimant seeks £600 compensation,
the authority say that no compensation is payable.
Claimant’s
case
Mr Cooke
submitted that the correct approach to the assessment of compensation in this
reference involves the literal application of sections 1(1) and 6(1) of the
1973 Act. What has to be determined under section 1 is whether the physical
factors (noise and dirt) caused by the use of the bypass rendered the subject
property less attractive in the market. If so then, prima facie, compensation
is the figure which is sufficient to restore the impaired competitiveness of
the property attributable to the physical factors. This compensation may,
however, need to be reduced under section 6(1) of the 1973 Act by the amount of
any increase in value attributable to the bypass. Mr Cooke said that the object
of the 1973 Act is to give a new right to compensation for depreciation caused
by the use of highways. There is no burden imposed on the claimant to prove the
market value unaffected by physical factors or that a potential purchaser will
offer less than he would in the absence of such factors. The Act only requires
the establishment of depreciation. He accepts that, for there to be
compensatable depreciation, it must be shown that on the balance of
probabilities some purchasers would perceive the effects of the physical
factors. Mr Cooke said that the approach of the authority to the assessment of
compensation is over-analytical and involves putting a gloss on the Act.
Mr Cooke
submitted that the evidence of Mr Ricketts should not be rejected as
irrelevant. He said that it explains how value is affected by physical factors.
It is admissible, relevant and useful. He referred to the observations of this
tribunal, on the evidence of Mr Ricketts of settlements and awards in other
parts of the country, in Fallows v Gateshead Metropolitan Borough
Council (1993) 66 P&CR 460, and said that he accepts that the
assistance which can be gleaned from this type of evidence will vary from
reference to reference, but the observations of the tribunal ought not to be
treated as a general disapproval of such evidence. In this reference Mr
Ricketts does not rely on the decision of another tribunal to prove a fact in
issue. This material is simply used to form part of his experience and
learning, tending to reinforce his opinion. It cannot be right that expert
evidence as to depreciation in value is admissible when given by a witness with
a local base and knowledge but with no experience of the 1973 Act, but that
such evidence becomes inadmissible when given by someone who is not locally
based but has expert knowledge of the Act. Nor can it be right that a person
who is not locally based cannot give details of the material upon which he
bases his opinion with a view to establishing that his conclusions are sensible
and should be accepted. Mr Cooke referred to small claims and submitted that
these are dealt with by section 7 of the 1973 Act, which restricts
compensatable claims to those in excess of £50.
Mr Cooke said
that traffic on the bypass is not the same as that which used the old A55. The
bypass is part of a major trunk road and part of the national road network. The
opening of the bypass has introduced more vehicles into the vicinity of the
subject property and produced a third source of noise. The overall level of
noise may have been reduced but the subject property now suffers noise from
three sources, the bypass, the B5126 and Church Road. The additional noise
would have affected a prospective purchaser who would have adopted a subjective
approach to the price he would pay rather than placing reliance on the
measurement of noise levels.
Mr Cook called
three witnesses: two of fact, Mrs Bateman and Mr Desmond Owens, and one expert
witness of value, Mr Ricketts. He also put in a statement made by John Owens to
Mr Ricketts.
Mrs Sheila
Alice Bateman said that she has lived at Homestead,
Church Road, Northop, for 40 years. Homestead is the second house to the west
of the subject property on the same side of the road. Mrs Bateman has an
outstanding claim for compensation. Mrs Bateman gave evidence of what she
perceived to be the change in traffic noise following the opening of the
bypass. She said that previously she had not been disturbed by noise from the
old A55 nor from the former Connah’s Quay Road. She was aware of heavy traffic
on these roads, which gradually became busier, but she only noticed the noise
at weekends and bank holidays. She is a keen gardener but did not notice the
traffic noise when she was in the front or back gardens. This latter is
screened from the old A55 by vegetation. The new bypass is not screened. Mrs
Bateman said that, following the opening of the bypass, she has become aware of
traffic noise which seems to increase year by year. In the front of the house
with the windows open it is now ‘a continuous roar’. She has installed double
glazing throughout most of the house. The noise is now barely noticeable with
the windows closed. Mrs Bateman said that the opening of the bypass has changed
her sleeping habits. Previously she used the front bedroom in summer (which is
cooler) and the back bedroom in winter, where she did not notice any noise from
the old A55. She now sleeps in the back bedroom throughout the year to escape
the noise and sight of the bypass. She disagreed with the conclusion of Mr
Hughes, for the authority, that the opening of the bypass has made the subject
property a more desirable house. She said that she can see and hear the bypass,
which is busy in a different way to the old A55, with traffic noise throughout
the day and night. The new road has also increased the amount of dirt deposited
on her house, particularly at the front.
Mr Desmond
Owens is the son of John Owens deceased, the
original claimant. He now lives at Flint Mountain, but was brought up in the
subject property and lived there until 1965. After he moved away he visited his
father almost daily and was usually in the house for about half an hour. The
gist of Mr Owens’ evidence was that the character of the traffic noise altered
and became more obtrusive after the opening of the bypass. This made the
subject property less attractive. Double glazing was installed to reduce this
noise.
Mr Owens said
that, before the bypass opened, traffic noise from the old A55 was hardly
audible at the rear of the house, except for motorbikes. This road is screened
by vegetation which reduced the noise. With the windows open there was a
general background traffic noise, but not a roar. It could be heard in the
garden. At the front, Connah’s Quay Road was generally a quiet road but with
busy times, particularly at weekends when the traffic noise could be ‘horrendous’.
After the opening of the bypass the noise increased and changed in character.
At the front of the house Mr Owens said that in winter this noise ‘hit you hard
on a cold day’ and in summer ‘it was like the drone of angry bees’. The noise
from the bypass is more obtrusive than that from the old A55. This is due to
greater speeds, heavier traffic and greater use, seven days a week, 24 hours a
day. Mr Owens agreed that traffic on the B5126 and in Church Road has reduced
following the opening of the bypass, but he preferred the previous traffic
conditions.
Mr Cooke
commented on the evidence of Mrs Bateman and Mr Owens that, although a witness
who is also a claimant may be biased, it is an unjustified generalised slur for
Mr Pass to suggest that this is likely and is unsupported speculation. It
depends on each individual case. Mr Cooke conceded that witnesses who have
lived in a locality for a long time may become accustomed to a particular noise
level and adjustments should be made for this when considering their evidence.
Noise from a different direction or of a different quality may, however, be
relevant and the evidence of local witnesses is of assistance. The different
sources of noise may be important to a prospective purchaser.
Mr Cooke put
in evidence a statement made by the original claimant, John Owens, to Mr
Ricketts on July 2 1991. This is to the effect that he purchased the subject
property in 1952 and that it is adversely affected by noise and dust from the
bypass. We indicated that we do not find this statement of assistance.
Mr Cooke
called expert valuation evidence from William Kenneth Ronald Ricketts frics of the William Ricketts
Partnership, practising in Cardiff. Mr Ricketts said that his firm specialises
in compensation under Part I of the 1973 Act and has done so since the Act was
passed. He studies every new road scheme throughout the country. Mr Ricketts
admitted in cross-examination that if an award of compensation is not made in
this reference he will bear the costs. Mr Ricketts also admitted that he has
never lived or worked in Northop, he has no personal knowledge of the area or
expertise in local property values. He is not an expert on noise.
It was the
claimant’s intention to call evidence of local values from Mr Huw Elias-Jones bsc arics
and leave had been given for a second expert witness. A report from Mr
Elias-Jones was not lodged prior to the hearing and he was not called. Mr
Ricketts, therefore, had to abandon his usual approach of attributing part of
the total fall in value, as estimated by a local valuer, to the physical
factors caused by the public works. At the hearing he revised his estimate of
depreciation from £625 to £600, calculated by taking 0.75% of the pre-scheme
value of the subject property of £80,000.
Mr Ricketts
explained his usual approach to the assessment of compensation under Part I of
the 1973 Act. He said that this is equal to the difference between:
(1) the value
of the subject property at a date one year after the road was opened, but
having regard to conditions at the date of claim, assuming that the new road
has been built, there are vehicles using it but the existence and use of the
road does not produce any noise, fumes, dirt, vibration and any lighting is not
intrusive; and
(2) the value
in the real market assuming all the physical factors affecting the value of the
property.
Mr Ricketts
said that when a new road is opened he visits all the properties likely to be
affected, particularly those recently purchased, which give a guide to values.
He interviews the occupiers, notes the physical factors and arrives at a
judgment as to how each property is
and after the public works and then segregates the compensatable depreciation
by the application of a percentage to the total depreciation in value. Mr
Ricketts admitted that his approach is largely an informed guess. He explained
that he does not use a before and after method but attempts to assess
compensation for loss of value due to the failure to achieve a higher figure on
an assumed sale, due to the physical factors caused by the public works.
Mr Ricketts
explained how he arrived at the two elements in his assessment of depreciation:
the value of the subject property on June 26 1990 as if the bypass had not been
built (£80,000) and the percentage depreciation in that value due to the
physical factors caused by the bypass (0.75%). Both figures are found by
reference to comparables, which he grouped into seven categories.
The first comprises
settlements in the immediate locality arising out of the same scheme. These
show capital values ranging from £55,000 to £110,000 and compensation payments
ranging from 1% to 5% of capital value (£600 to £5,500). Capital value has been
agreed to mean ‘the open market value at the first claim date assuming the
presence of the new road and traffic but none of the qualifying physical
factors (ie as mentioned in the Land Compensation Act 1973) arising therefrom’.
Mr Ricketts said that these capital values support his value of £80,000 for the
subject property and the pattern of percentage depreciation payments supports
his figure of 0.75% for the subject property. Second, Mr Ricketts referred to
the sale of Shaldon, a detached four-bedroomed house close to the subject
property, in January 1992 for £96,000 (including carpets and curtains). He said
that, having regard to values prevailing at the different dates, this price
supports his figure of £80,000 for the subject property as at June 26 1990. The
third category of comparables comprises decisions of this tribunal without a
‘sandwich’, ie where the subject property is not affected by two roads. Mr
Ricketts referred to decisions relating to properties in Maidstone and Gerrards
Cross. Fourth, Mr Ricketts referred to claims settled by his firm where no
sandwich arises, comprising properties at Ilminster and Easthorpe
(Nottinghamshire). Fifth, Mr Ricketts quoted a property in Newcastle upon Tyne
where the settled claim included a division of the capital value to indicate
the effect of physical and other factors. Sixth, Mr Ricketts considered
sandwich cases settled by his firm relating to properties in Tonyrefail (Mid
Glamorgan). Finally, Mr Ricketts referred to property in Chester already
affected by physical factors from an existing road where compensation was
settled by him.
Mr Ricketts
said that the last four categories assist him by providing background
information and by showing distances from the highway and other circumstances
where percentage compensation has been agreed or awarded. Mr Ricketts arrived
at his figure of depreciation of £600 by reference to his inspection, his
conclusion that the subject property suffers from noise and dirt from the
bypass, and having regard to settlements in the immediate area and the sale of
Shaldon. Mr Ricketts did not deal specifically with the question of betterment
but, in answer to a question from the tribunal, he admitted that, if it is
present, it should be taken into account.
Authority’s
case
Mr Pass
submitted that there has been no diminution in the value of the subject
property attributable to the bypass. On the contrary, it is now a quieter and
more desirable property.
Mr Pass
submitted that section 1(1) of the 1973 Act placed on the claimant the burden
of proving:
(a) the market
value of the subject property unaffected by physical factors;
(b) that the
effect of those factors may be perceived by a potential purchaser;
(c) that due
to that perceived effect a purchaser would offer less than he would in the
absence of the physical factors. Compensation is the difference between the
price a purchaser would pay with and without the physical factors.
The ideal
situation would be for the purchaser to inspect the subject property on the day
before the road opened, having regard to conditions on the date of claim. On
the first claim day (ie one year after the road opened) and having researched
the market the purchaser would prepare his offer, based entirely on his
previous inspection and his reasonable expectations as to the prospective
intensification of use and having regard to the rules in section 5 of the Land
Compensation Act 1961. He would then reinspect on the first claim day and
adjust his offer in the light of:
(a) the effect
of the physical factors;
(b) any
benefits flowing from the use or prospective use of the road.
A potential
purchaser will not usually be available, however, and the Lands Tribunal must
attempt the same exercise assisted by admissible evidence of conditions before
and after the opening of the road, by expert evidence, by a view and by settled
compensation claims for the same road.
Mr Pass said
that evidence should be rejected of the behaviour of a purchaser who, having no
reasonable grounds for believing that the amenity of the subject property has
been diminished by the physical factors, decides to offer less than he would
have done if they had not existed. Furthermore, the tribunal should not place
itself in the position of such a purchaser. This evidence should be excluded
because such a purchaser might have offered the same price had the road not
existed. He is no guide to the diminution in value caused by the physical
factors. A person who lacks historical knowledge of the subject property cannot
give full weight to any betterment flowing from the road.
Mr Pass said
that we should regard the evidence of Mrs Bateman and Mr Owens with caution.
They are claimants in their own rights who, therefore, have an interest in any
compensation awarded in the present case. Moreover, their claims are modest and
they are at no risk as to costs due to the indemnities provided by one of their
professional advisors. Accordingly, their evidence is likely to be biased.
Furthermore, witnesses who have lived in, or known, a locality for many years
will have grown accustomed to a particular noise climate and will cease to
notice that noise. But when the same or a lower volume of noise from a
different direction, or a different quality of noise is introduced, it is
likely to be perceived to be worse than that previously experienced. This would
not be the perception of the hypothetical purchaser envisaged when assessing
compensation.
Mr Pass
referred to the evidence given by Mr Ricketts of compensation agreed or awarded
in other parts of the country. He said that this is irrelevant and should be
rejected. He referred to the observations of this tribunal in W Clibbett Ltd
v Avon County Council (1975) 237 EG 271 at p271 and Fallows v Gateshead
Metropolitan Borough Council (1993) 66 P&CR 460 at p466 and to part of
the judgment of Hoffman J in Land Securities plc v Westminster City
Council [1992] 2 EGLR 15 at p16E.
Mr Pass
submitted that, in the real market, not every disadvantage affecting a property
will be reflected in the price. Below a certain figure de minimus applies
and it would be wrong for this tribunal to translate into compensation every
perceptible impact of the physical factors upon the subject property. Valuation
is imprecise and a claimant must prove his entitlement to every pound of
compensation. Where such alleged entitlement falls within the normal range of
error in valuation, the claimant will have failed to discharge the burden of
proof.
Mr Pass called
three witnesses: one of fact, Mr Blackwell; and two expert witnesses, Mr Hughes
on value and Mr Tollitt on traffic and noise.
Mr Kevin
Paul Blackwell is the owner of Shaldon, a house on
the same side of Church Road as the subject property and situated slightly to
the west. He purchased it two years ago. Mr Blackwell said that he previously
lived in Connah’s Quay and drove through Northop to work twice a day. He knew
the traffic conditions in the village before the bypass was built and said
that, although he would have lived in Northop village before this road was
opened, he would not have
conditions after the opening of the bypass. Mr Blackwell said that he reduced
the price by £4,000 in negotiations before purchase but this was not due to the
new road. He was unaware of the claim for compensation by the former owner. He
installed double glazing but this was not due to traffic noise.
Mr Peter
Weston Hughes frics faav gave evidence of value. He said that he has 38 years’ experience in
the profession. He has been employed by the valuation office for 28 years and
since 1986 has been a senior valuer in the Wrexham office. He negotiated the
purchase of land for the bypass and settled the claims under Part I of the 1973
Act. He has experience of Northop before and after the opening of the bypass.
Mr Hughes said
that before the bypass the subject property received traffic noise from the old
A55 and from Connah’s Quay Road. On the eastbound carriageway of the old A55,
to the rear of the subject property, was a petrol filling station which was an
additional source of noise and dirt. The opening of the bypass has taken away
almost all the through traffic from the old A55 and Connah’s Quay Road, the
petrol filling station has been demolished and traffic now flows freely on the
new bypass. The south-west wind previously carried noise and dirt from the old
A55 to the subject property, but it now carries the bypass noise away from the
house. Although some noise is experienced from the bypass, it is further away,
at a lower level and partially screened by the bungalows opposite. The subject
property is now more pleasant and desirable. Mr Hughes put this benefit at
approximately 10%.
Mr Hughes gave
evidence of the compensation settlements on adjoining properties. They were
agreed before traffic flow figures were available and were made without the
benefit of noise level readings. They were all agreed with Mr Ricketts, except
Wortley House in Church Road. The physical factors were noise and dust and the
compensation payments have been expressed as a percentage of the capital value
at the first claim day assuming the presence of the bypass but without the
physical factors.
On the
opposite side of Church Road to the subject property compensation equivalent to
5% of the capital value has been agreed. Many of these properties have access
from a service road off Church Road and had a secluded agricultural aspect to
the rear. Noise from the old A55 was minimal. The bypass runs diagonally at the
rear. These properties have benefited from a reduction in noise from Connah’s
Quay Road, but a greater amount of noise is experienced from the bypass. To the
east of the subject property, compensation of 4% has been agreed for two
bungalows at the end of the cul-de-sac, Park View. Prior to the bypass these
properties suffered noise from Connah’s Quay Road and to a lesser extent from
the old A55. The noise is now from the bypass, situated in a cutting at this
point and screened by a wooden baffle fence. Other bungalows in Park View (nos
3 to 13 and 22) have been agreed at 3%. They previously suffered from noise
from Connah’s Quay Road and, in the case of no 22, the old A55. They are now
affected by noise from the bypass which runs diagonally to the south and to the
rear of these bungalows. Compensation for 1 Park View has been agreed at 2%.
This bungalow previously suffered from noise from Connah’s Quay Road and is now
affected by the bypass which runs out of the cutting to the north-west of the
property. 2 Park View has received compensation of 1.25%. This bungalow was previously
affected by noise from Connah’s Quay Road at the front and the old A55 at the
rear. This latter noise has considerably diminished but the property is now
affected by the bypass. The percentage agreed is less than for no 1 because it
is situated further from the bypass. Finally, moving to the west of Park View
towards the subject property, Mr Hughes said that compensation of 1% has been
agreed for 17 and 18 Aber Crescent. Before the bypass these properties
experienced noise from both Connah’s Quay Road to the front and the old A55 at
the rear. Now they are affected by the bypass. These properties are closer to
the bypass than the subject property.
Mr Hughes said
that claims have been received from the occupiers of 12 other properties close
to the subject property (including Homestead and Shaldon). Nil offers of
compensation have been made and the claims have not so far been further
pursued.
Mr Hughes said
that he valued the subject property as at June 26 1990 at £70,000. There were
no known sales in the immediate area at this date although he has had regard to
the sale of Shaldon. He said that, in his opinion, no compensation should be
awarded for the subject property. It has not been depreciated by physical
factors caused by the Northop Bypass. It is further away from the new bypass
than from the old A55 and is protected from noise by the properties opposite.
It has benefited from the reduction of traffic in Church Road. Nil
compensation, said Mr Hughes, is consistent with the compensation agreed for
the adjoining properties, all of which are adversely affected by the bypass,
and by the offers of nil compensation which remain uncontested. Mr Hughes said
that he has reached this opinion on his local experience by taking an overall
view of the effect of the bypass on values, particularly having regard to the
effect of the new road on the traffic on the former Connah’s Quay Road and A55.
He was not aware of noise level figures when he reached this opinion but this
evidence supports his practical approach.
Mr
Christopher John Tollitt beng ceng mice
miht gave evidence of traffic noise and
flows. He is employed by the Welsh Office highways directorate at Colwyn Bay.
He said that during construction of the Northop Bypass (between November 1987
and June 1989) he spent on average two days per month on site. In addition he
commuted twice daily through Northop during the year from April 1987, he drove
frequently through the village at weekends and at night and, after moving house
in April 1988, he has often travelled through Northop. He said that he is
conversant with conditions before and after the bypass. He is now project
engineer/manager for major highway schemes and is experienced in the
measurement of traffic noise and flows. Mr Tollitt said he has not been inside
the subject property: all readings and measurements have been taken externally
around the property.
Mr Tollitt
said that noise readings relating specifically to the subject property were not
taken before and after the opening of the bypass. In September 1983 work by
Clwyd County Council on the effect of the bypass identified the subject
property as likely to benefit from a 5 to 10 dB decrease in noise levels. It
was not therefore considered necessary to carry out any ambient noise readings
in the immediate vicinity of the property. Some ambient noise levels were
recorded in October 1986 and these have been adjusted by the prediction method
to relate them to the area adjacent to the subject property. Actual noise
levels were then recorded in April 1993 and have been used for comparison
purposes. The results, showing that noise levels have reduced, are as follows:
|
In Church Road outside subject property |
|||||||
|
Leq |
L10 |
||||||
|
Without bypass |
65.9 |
68.5 |
|||||
|
With bypass |
59.8 |
60.5 |
|||||
|
Difference |
6.1 |
8.0 |
|||||
|
In |
|||||||
|
Leq |
L10 |
||||||
|
Without bypass |
80.0 |
83.4 |
|||||
|
With bypass |
71.4 |
75.5 |
|||||
|
Difference |
8.6 |
7.9 |
|||||
Leq means the equivalent sound level in
dBA over a given period of measurement.
L10 means the arithmetic mean of the noise levels in dBA exceeded for
10% of the time in each of the 18 hour periods between 6.00 am and midnight.
Mr Tollit said
that the volume of traffic is one of the most important factors affecting noise
levels. The following table shows traffic flows (rounded to the nearest 100)
expressed as the 1990 annual average daily total:
|
No Bypass |
Bypass open |
||||
|
Northop Bypass (A55) |
0 |
33,000 |
|||
|
Church Road (former Connah’s Quay Road) |
4,200 |
600 |
|||
|
B5126 (former A55) |
31,000 |
4,600 |
|||
Mr Tollitt commented on these figures. He said that the flow on the
bypass of 33,000 is slightly higher than the previous flow on the old A55 of
31,000 due to the release of suppressed demand. In terms of noise, however,
this increase is not significant and equates to a difference of only 0.27 dB,
which would not be discernible by the human ear. To achieve a noticeable
difference the traffic volume would need to double to 62,000 vehicles. In
Church Road the reduced figure of 600 with the bypass open is for the full
length of the road but, because it is now a cul-de-sac, Mr Tollin said that the
volume of traffic outside the subject property is likely to be only 100 to 200
vehicles per day. The vehicles using the new B5126 (4,600) is slightly higher
than those previously using Connah’s Quay Road (4,200). This is due to the
effect of the ‘off’ slip road from the new bypass and the connection of the
village road to the B5126 instead of the bypass.
Mr Tollitt
analysed the noise and traffic figures by inspection and by calculation and
measurement. He said that the traffic volume and noise which were 14m to the
front of the subject property in Connah’s Quay Road have transferred to the new
B5126, 120m to the rear of the house; and the traffic which would have been 120m
to the rear on the old A55 is now 216m away on the bypass. The majority of the
bypass is screened from the subject property. By inspection, therefore, the
subject property has benefited from the bypass. Before the new road was built
the front of the subject property received most of its traffic noise from
Connah’s Quay Road. The 1993 measured noise levels show reductions of 6.1 dB
Leq and 8.0 dB L10. At the rear, prior to the bypass, virtually all the traffic
noise came from the old A55. A comparison of noise levels taken at the former
petrol filling station shows that the opening of the bypass decreased levels by
8.6 dB Leq and 7.9 dB L10. In reality this decrease has been significantly
greater due to other factors.
It can be
clearly seen, said Mr Tollitt, that by measurement and prediction the bypass
has had a significant beneficial effect on noise levels at the subject
property. To the front the bypass traffic is audible as a distant drone that
probably cannot be heard inside with the windows shut. Without the Bypass,
traffic on the old Connah’s Quay Road would have been 20 to 40 times the
current level and almost high enough to justify noise insulation on its own. At
the rear, the old A55 is closer than the new bypass, but now only carries 15%
of the pre-bypass traffic. The traffic noise from the old A55 differs from that
from the bypass: streams of separate vehicles can be heard compared to the
continuous drone from the bypass. Furthermore, there was an almost constant
roar of heavy goods vehicles and other vehicles at the traffic lights. Traffic
noise levels at night would be noticeably lower than in the day but the subject
property still benefits from the bypass.
Mr Tollitt
said that Northop was subject to serious traffic congestion on both the old A55
and the existing A5119. At peak times traffic jams regularly extended along the
A55 and to a lesser extent on the A5119. The transfer of the A55 traffic on to
the bypass has made Northop village generally a far more pleasant place.
Mr Tollitt
said that a tarmac road, once constructed, does not in general produce any
noticeable quantities of dust and he has some difficulty in understanding the
reference to dust in the claim. He said that the only effect the bypass could
have on levels of dust at the subject property is beneficial.
Mr Tollitt’s
overall conclusion is that the bypass has had no detrimental effect on the
subject property; the only significant effect has been beneficial.
Mr Pass put in
evidence a letter dated March 8 1994 from the Met Office, which stated that at
their Hawarden Station for the period 1986 to 1993 the prevailing wind
direction was from the south-east for approximately 14% of the time followed by
the south-west and north-west (approximately 12% and 11% of the time
respectively).
Decision
We deal first
with the submissions on the correct approach in law to the assessment of
compensation and the burden of proof. In general we agree with Mr Cooke’s
literal approach to the construction of Part I of the 1973 Act.
Under section
1 of the Act a claimant must prove, as a matter of law, a depreciation in value
by physical factors caused by the use of public works, but we do not agree with
Mr Pass that this must be proved in any particular way. In our view, the
assessment of depreciation is a matter of fact and opinion. We think it would
be wrong to convert it into a question of law by laying down a particular test
or method of assessment which must be followed. It may well be that the test
proposed by Mr Pass, involving a hypothetical purchaser and his perceptions of
value, will be followed by many valuers when dealing with Part I claims. We
decline to say, however, that as a matter of law it must necessarily be
followed or that there is a burden of proof on claimants to show that it has
been followed. Depreciation may be calculated in many ways, all of them equally
good. It may be found, for example, by taking a percentage of the capital value
before the public works, or by taking part of the total reduction in value
caused by the works as due to the physical factors, or even as a spot figure
based solely on the valuer’s experience of the locality. These are matters of
evidence, of fact and opinion, not of law.
Section 6(1)
of the 1973 Act provides that the compensation shall be reduced by the increase
in value attributable to the existence, use or prospective use of the public
works. We do not think that this provision necessarily requires a separate
deduction or any other particular method of giving effect to it. Provided that
such an increase in value has been taken into account we think it entirely a
matter of fact and opinion how this statutory provision is translated into a
net figure of compensation. A specific deduction for betterment from a specific
figure of compensation may be made but we do not think it would be wrong in law
for a valuer to go directly to a net figure of compensation based on his
experience.
We therefore
resist the temptation to add to the 1973 Act by imposing a particular burden on
proof on claimants requiring them to show that the assessment of compensation
has been calculated in a particular way. Valuation is best left as a question
of fact and opinion to be dealt with on the evidence, affected as little as
possible by questions of law.
We inspected
the subject property and the surrounding area in the early afternoon of a cold,
dry, cloudy day, with a light south-westerly wind.
On the
evidence we agree with the authority that no compensation is payable to the
claimant in respect of the use of the bypass. We can state our reasons briefly
because on nearly all matters we prefer the evidence of the authority to that
of the claimant.
First, the
evidence of fact. Mrs Bateman and Mr Desmond Owens spoke of the increased noise
and dirt from the bypass. In contrast, Mr Blackwell said that he purchased
Shaldon because traffic conditions in Church Road had improved after the
opening of the bypass. He did not seek any reduction in the price due to this
road. We prefer Mr Blackwell’s evidence. We believe that Mrs Bateman and Mr
Owens have translated a change in the nature of the traffic noise into an
increase in that noise. This is not supported by the noise measurements
provided by Mr Tollin.
Second, the
expert evidence of value. We prefer the evidence of Mr Hughes to that of Mr
Ricketts. Mr Ricketts lacks the local knowledge and experience possessed by Mr
Hughes, which we believe to be important in these claims. He was forced to
recast his evidence at the hearing to deal with the lack of evidence of local
values due to the inability to call Mr Elias-Jones. We found Mr Ricketts’
evidence unconvincing. We also agree with Mr Pass that his comparables
comprising decisions of this tribunal and settlements in other parts of the
country are irrelevant. We are reluctant, without full argument, to say that
this evidence is inadmissible but we attach little weight to it. We agree with
the observations on this type of evidence made by the tribunal (J C Hill frics) in Fallows (p466):
During the
hearing Mr Ricketts referred to a number of decisions by this tribunal and to
settlements involving compensation for depreciation arising from the
construction of highways. As part of his analysis of the resulting figures he
expressed the award or settlement in each case as a percentage of the
undepreciated capital value of the property concerned. I would comment,
however, that the facts in this type of case are likely to vary so much in
respect of such matters as the size and type of highway, distance from the
property concerned, traffic intensity, topography, etc that it is highly
unlikely that any pattern can emerge which can be relied on for evidential
purposes. In the nine cases to which he referred the percentages varied
considerably with no discernible pattern and I found them of no assistance.
We would add
that, for this evidence to be given any weight at all, it would be necessary
for the tribunal to inspect these properties, requiring an extensive tour round
the country, adding to the time and cost of these decisions. We hope that we
have heard the last of this evidence. We have also had regard to the statement
made by Mr Ricketts in cross-examination that, if this reference fails to
produce an award of compensation, he will be required to bear the costs. If an
expert witness has a financial interest in the outcome of a dispute, other than
his fees (which should be the same whatever the result), this must be seen to
affect his objectivity.
Third, the
evidence on traffic noise and volume. We found the evidence of Mr Tollin
helpful. It confirmed by measurement what would otherwise be matters of
perception and impression. We accept that there is no direct correlation
between traffic noise and volume and property values and that a prospective
purchaser does not have measurements and counts taken before he purchases a
house. Nevertheless, these figures are useful background information and our
decision has been influenced by the dramatic reduction in traffic on the new
B5126 and in Church Road, when set against the noise and volume of traffic on
the bypass.
Fourth, we
have been assisted by the settled claims on adjoining properties. In our view,
a nil figure of compensation for the subject property is in accordance with the
pattern of settlements as explained by Mr Hughes. Mr Cooke, for the claimant,
submitted that it cannot be correct for settlements of 5% of capital value to
apply to the properties opposite the subject property but nil for the subject
property. During the hearing we admit that this did seem to be an
inconsistency, but the position became clear at our inspection. These
properties suffer greatly from the noise from the bypass, which we experienced
when we crossed Church Road from the subject property, and they have obtained
less benefit than the subject property from the closure and diversion of
traffic from Church Road (many of the properties being set back from this road
by a hedge and service road) and the reduction in traffic on the new B5126.
Finally, we
have the evidence of our inspection. Inside the subject property with the
double glazing open but windows closed we could hear little noise. We did not
find the slight noise in the front and back gardens to be obtrusive. We noted
how quiet Church Road is and the low volume of traffic on the B5126. We viewed
all the immediately adjoining comparables and agree with the reasons given by
Mr Hughes for the varying percentage settlements.
For the
reasons set out above, we find that, having regard to sections 1 and 6 of the
1973 Act, the subject property has benefited from the use of the Northop Bypass
by the diversion of traffic from Church Road and the B5126, to a greater extent
than any depreciation from the noise and dirt from this new road. Accordingly,
this claim must fail and we find that no compensation is payable to the
claimant.
This decision
determines the substantive issues raised between the parties and the award of
this tribunal is final. The parties are invited to make such submissions as
they are advised as to the costs of the hearing, and a letter accompanies this
decision as to the procedure for the submissions in writing. The tribunal will,
in due course, incorporate an order as to costs in an addendum to this
decision. Rights of appeal under section 3(4) of the Lands Tribunal Act 1949
and Rules of the Supreme Court, Ord 61, will not accrue until the decision has
been thus completed, ie from the date of the addendum.
Addendum
as to costs
We have
received written representations from the parties as to costs. We order that
the claimant shall pay the costs of the authority, such costs if not agreed, to
be taxed by the registrar of the Lands Tribunal on the High Court standard
basis. We are satisfied that costs should be awarded on this basis because,
although the amount claimed was small, other claims are still outstanding for
adjoining properties. Furthermore, matters of principle and evidence arose out
of this reference and we accept the representations on behalf of the authority
that substantial costs were incurred in dealing with these matters and
resisting this claim after a nil offer of compensation had been made.
We further
order that, in the event of the claimant failing to pay all or any of such
costs, then William Kenneth Ronald Ricketts and/or the William Ricketts
Partnership at Cardiff shall pay all or any part of such costs which remain
unpaid.