Compensation for compulsory purchase — Pointe Gourde rule — Respondent acquiring land for nature reserve to mitigate environmental damage from construction of barrage — Lands Tribunal deciding any increase in value of land arising from need for nature reserve to be disregarded — Whether scheme underlying acquisition was construction of barrage or use of land for nature reserve — Appeal dismissed
The appellants were the various owners of 225 acres of farmland, adjacent to the Severn Estuary, acquired by the respondent’s predecessor, the Land Authority for Wales, under a 1997 compulsory purchase order. The Land Authority’s sole function was to acquire land and dispose of it to others for development. The 1997 order was made in the context of plans for the Cardiff Bay urban development area, which included a scheme to build a barrage across the estuary of the Taff and Ely rivers. The appellants’ land was required for a nature reserve to mitigate the environmental damage that would otherwise result from the barrage, namely the loss of wetlands designated as a site of special scientific interest. The appellants’ land was transferred to the body responsible for the Cardiff Bay development, and then to the Countryside Council for Wales.
The appellants submitted claims for compensation to the Lands Tribunal. They argued that their land should be valued on the basis that it had a “ransom value” in excess of its value as agricultural land because it was the most suitable place for the necessary nature reserve. The president of the tribunal considered, as a preliminary issue, the application of the rule in Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 that compensation for compulsory purchase should not include any increase in the value of the land that was due entirely to the scheme underlying the acquisition. A question arose as to whether the “scheme” encompassed the construction of the barrage or merely the use of the land as a nature reserve.
The president decided that: (i) the rationale of the Pointe Gourde rule was that any increase in the value of land attributable solely to the public purpose prompting a compulsory purchase was to be disregarded; (ii) it was immaterial which of the suggested alternatives constituted the “scheme” underlying the acquisition, since the only effect that the barrage project had upon demand for the appellants’ land related to the public purpose of providing a nature reserve; (iii) any increased value attributable to that purpose was to be disregarded; and (iv) in any event, the relevant scheme did encompass the barrage, since the nature reserve had been made necessary by the barrage plans, which could not otherwise have gone ahead without meeting with enforcement action by the European Commission on environmental grounds. He accordingly rejected the appellants’ suggested basis for valuation, and also concluded that the narrow definition of “scheme” in Gajapatiraju v Revenue Divisional Officer Vizagaptam [1939] AC 302 was no longer good law since it conflicted with later authorities. The appellants appealed.
Held: The appeal was dismissed.
1. Although the “public purpose” referred to by the president was no substitute for the conventional “scheme” test, his decision was not open to challenge on that ground because he had also considered the scope of the scheme. The public purpose to be served was a relevant consideration in defining that scheme.
2. It was immaterial that the scheme identified by the president was to be carried out by bodies other than the acquiring authority. The unusual role of the Land Authority (to acquire land for schemes undertaken by others) had had more to do with the mechanics of acquisition than its substance, and ought not to affect materially the basis upon which compensation was assessed. The president had correctly treated the relationship between the various bodies as simply one of the considerations to be taken into account in the factual exercise of defining the scheme: Birmingham City District Council v Morris & Jacombs Ltd [1976] 2 EGLR 143 considered.
3. The president had been entitled to find that the proposed nature reserve on the appellants’ land had become an integral part of the barrage scheme, notwithstanding that that land had not been identified as part of the scheme until much later, when the barrage project was already under way: Fraser v City of Fraserville [1917] AC 187 applied. He had also been justified in finding that the completion of the barrage scheme was dependent upon the nature reserve in a factual sense. It had been open to him to find that the nature reserve was part of the barrage scheme. That finding was consistent with the policy of the Land Compensation Act 1961.
4. The apparently narrow definition of “scheme” in Gajapatiraju, suggesting that it meant no more than the obtaining of compulsory purchase powers, could be reconciled with later authorities if taken in context and viewed as turning on its particular facts, rather than as a general statement. Accordingly, the president should not have treated it as simply wrong.
David Holgate QC and Timothy Morshead (instructed by Jacklyn Dawson & Meyrick Williams, of Newport) appeared for the appellants; Anthony Porten QC and Adrian Trevelyan Thomas (instructed by the solicitor to the Welsh Development Agency) appeared for the respondent.
Sally Dobson, barrister
