Compensation for the acquisition of land — Certificate of appropriate alternative development — Relevant date for identifying policies — Whether date of entry or date of notice of making compulsory purchase order — Matters to be disregarded by local planning authority — Whether scheme of acquisition and underlying proposal to be regarded as cancelled on relevant date — Whether all effects of proposal arising before relevant date to be additionally disregarded
On 30 January 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 appellant landowners for a bypass; these were notices for the purposes of section 22(2)(a) of the Land Compensation Act 1961. The date of entry of the affected land was 5 July 1990. In 1992 the landowners applied for certificates of appropriate alternative development under section 17 of the Act. Certificates under section 17(4)(a) for residential and industrial development were issued by the local planning authority in 1993. The Secretary of State for the Environment allowed appeals by the Secretary of State for Transport and substituted nil certificates under section 17(4)(b); the certificates certified that, if the land were not proposed to be acquired by an authority possessing compulsory purchase powers, planning permission would have been granted for the road scheme for which the land was being acquired but that it would not have been granted for any other development. On applications made by the landowners, Dyson J quashed the certificates.
The Court of Appeal allowed appeals by the Secretary of State for the Environment and held: (1) that Dyson J was correct that the relevant date for the determination of certificates of appropriate alternative development was the date for the purposes of section 22(2)(a) of the Act, namely the date of the notice of the making of the compulsory purchase order; and (2) that what has to be disregarded under section 17(4) is the proposal for acquisition and not any fact or policy attributable, at any date in the past, to the underlying scheme. The landowners appealed on the second issue, contending that all effects of the proposal arising before the relevant date should be disregarded; the Secretary of State’s cross-appeals on the first issue were not pursued. |page:94|
Held The appeals were dismissed.
Section 17(4) directs that the local planning authority must issue their opinion regarding the grant of planning permission in respect of the land in question ‘if it were not proposed to be acquired by an authority possessing compulsory purchase powers’. It is plain that the assumption that the local planning authority are directed to make by this subsection requires them to ignore the fact that an interest in the land is proposed to be acquired by an authority possessing compulsory powers as described in section 22(2). This involves disregarding the publication of the notice of the proposed compulsory purchase order, which is the circumstance referred to in section 22(2)(a) that was relevant to the case. The assumption that the local planning authority must make relates to the situation as at the relevant date. The scheme for which the land is proposed to be acquired, together with the underlying proposal, which may appear in any of the underlying documents, must be assumed on that date to have been cancelled. No assumption has to be made as to what may or may not have happened in the past. There was nothing in the overall scheme of the Act that requires the question of whether planning permission would have been granted for any classes of alternative development to be determined by reference to events that may or may not have happened in the past if the proposal had not come into existence.
Fletcher Estates (Harlescott) Ltd v Secretary of State for the Environment, Transport and the Regions [1999] QB 1144; [1999] 2 WLR 730; [1998] 4 All ER 838; (1998) 76 P&CR 382; sub nom Secretary of State for the Environment v Fletcher Estates (Harlescott) Ltd [1998] 3 EGLR 13; [1998] 38 EG 155; [1998] 3 PLR 99
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; 271 EG 625, 1984 SC 1
Jelson Ltd v Blaby District Council [1977] 1 WLR 1020; [1978] 1 All ER 548; (1977) 75 LGR 624; 34 P&CR 77; [1977] 2 EGLR 14; 243 EG 47; [1977] JPL 579, CA
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
Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565, PC
This was the hearing of conjoined appeals by the landowners, Joseph Newell, Elspeth Georgina Longmore and William Longmore, executors of JV Longmore, and Fletcher Estates (Harlescott) Ltd, against a decision of the Court of Appeal ([1998] 3 EGLR 13) allowing appeals by the Secretary of State for the Environment from a decision of Dyson J.
LORD HOPE OF CRAIGHEAD: My lords, the appellants in these conjoined appeals were at all material times the freehold owners of parcels of land at Sundorne, to the east of Shrewsbury. I shall refer to them as ‘the landowners’. It will be convenient to refer to the land owned by Joseph Newell, Elspeth Georgina Longmore and William Hugh Longmore, the executors of JV Longmore, as ‘the Longmore land’ and to the land owned by Fletcher Estates (Harlescott) Ltd as ‘the Fletcher land’. These parcels of land formed, in each case, part of larger areas of land in their respective ownerships.
On 30 January 1986 the Secretary of State for Transport gave notice of the making of draft compulsory purchase orders for the acquisition of land, including the Fletcher land and the Longmore land, for the purpose of constructing the A49 bypass to the east of Shrewsbury. The date of entry in each case was 5 July 1990. The landowners then applied, on 19 October 1992 in respect of the Fletcher land and 4 December 1992 in respect of the Longmore land, under section 17(3) of the Land Compensation Act 1961 for certificates of appropriate development. On 8 May 1993 the borough council issued certificates under section 17(4)(a) of the Act. In the case of the Fletcher land, the certificate was for residential development. In the case of the Longmore land, it was for residential and industrial development. The Secretary of State for Transport appealed against those certificates under section 18 of the Act. On 4 July 1996, having considered the report by an inspector following a public inquiry held under section 18(3) of the Act in Shrewsbury, the Secretary of State for the Environment allowed the appeals, cancelled the certificates that the borough council had issued and replaced them with certificates issued under section 17(4)(b). In the certificates that he issued, the Secretary of State certified that, if the land were not proposed to be acquired by an authority possessing compulsory purchase powers, planning permission would have been granted for the road scheme for which the land was being acquired, but that it would not have been granted for any other development.
The landowners applied to the High Court under section 21 of the 1961 Act to quash the decisions of the Secretary of State to issue certificates under section 17(4)(b) of the Act. On 10 June 1997 Dyson J ordered that the applications be allowed and that the decisions of the Secretary of State be quashed. On 11 June 1998 the Court of Appeal (Nourse, Peter Gibson and Buxton LJJ) set aside the orders of Dyson J and restored the decisions of the Secretary of State.
Two issues were argued before the Court of Appeal. The first issue related to the date at which the determination of the certificates of appropriate alternative development under section 17(4) had to be made. The question was whether this was the date when notice was given of the |page:96| proposal to acquire the interest in land by the authority possessing compulsory purchase powers, as was held by Dyson J, or the date of entry to the land by the acquiring authority, as the Secretary of State had contended. The Court of Appeal affirmed the judgment of Dyson J on this point. The second issue related to the assumption which has to be made by the local planning authority under section 17(4) when they are considering the question of whether planning permission would have been granted for development if the land were not proposed to be acquired by an authority possessing compulsory purchase powers. The competing arguments on this issue were described by Dyson J in the following passage in his judgment, which, as Buxton LJ observed in the Court of Appeal [1999] QB 1144 at p1150C1, provides a neat summary of the competing arguments:
[The landowners] 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.
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1 [1998] 3 PLR 99
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Dyson J upheld the landowners’ argument, but the Court of Appeal disagreed with him on this issue. It held that, in making their determination, the local planning authority had to disregard the proposal for acquisition only and not any fact or policy attributable at any time in the past to the underlying scheme.
The Court of Appeal gave leave to appeal to the landowners against its decision that the orders of Dyson J should be set aside. It granted leave to the Secretary of State to cross-appeal on the first issue as to the relevant date for the determination of the certificates. The Secretary of State presented cross-appeals on this issue, and they were conjoined with the appeals that had been presented on the second issue by the landowners. But, in his written case, the Secretary of State intimated that he no longer wished to pursue his cross-appeals on the first issue. In the result it was common ground before your lordships that the relevant date for the determination of a certificate of alternative development under section 17(4) of the Act of 1961 is the date of the notice that the interest in land is proposed to be acquired by an authority possessing powers of compulsory acquisition. That is the date that is described in section 22(2) of the Act. The issue on which your lordships heard argument was the second issue, as to the assumption that has to be made by the local planning authority when they are determining the application for a certificate.
Statutory framework
The certification by planning authorities of appropriate alternative development is an important part of the law relating to the assessment of compensation for the compulsory acquisition of interests in land, which was consolidated by the Land Compensation Act 1961. Section 1 of that |page:97| Act provides that questions of disputed compensation are to be determined by the Lands Tribunal. The provisions for determining the amount of compensation are set out in Part II of the Act. The basic rules are laid down in section 5. Among these rules are r 1, which states that no allowance shall be made on account of the acquisition being compulsory, and r 2, which states that the value of land shall, subject to the qualifications in the remaining rules, be taken to be the amount that the land, if sold in the open market by a willing seller, might be expected to realise. Section 9 adds to these basic rules another rule that is expressed in these terms (as amended by section 108 of and Schedule 11 to the Town and Country Planning Act 1968):
No account shall be taken of any depreciation of the value of the relevant interest which is attributable to the fact that (whether by way of… allocation or other particulars contained in the current development plan, or by any other means) an indication has been given that the relevant land is, or is likely, to be acquired by an authority possessing compulsory purchase powers.
Applying the Pointe Gourde principle (Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565), the reverse situation is regulated by the common law. The compensation cannot include an increase in value that is due to the scheme underlying the acquisition. So the whole question must be approached upon a consideration of the state of affairs that would have existed if there had been no scheme.
But the value of land cannot be determined under these rules without making assumptions about the planning permission, if any, that would have been granted for the development of the land if it were not proposed to be acquired compulsorily. Section 14 provides that the assumptions that are to be made for the purpose of assessing compensation are those set out in sections 15 and 16, and that any planning permission that is to be assumed in accordance with any of the provisions of those sections is in addition to any planning permission that may be in force at the date of service of the notice to treat. These provisions must be read together with those in Part III of the Act relating to certificates of appropriate alternative development, with which they are linked in two ways. Section 14(3) provides that, in determining whether planning permission for any development could reasonably have been expected to be granted in any particular circumstances, regard shall be had to any contrary opinion expressed in relation to that land in any certificate issued under Part III. This is a reference to a certificate issued under section 17(4)(b), which is conveniently referred to as a negative certificate. Section 15(5) provides that, where a certificate has been issued under Part III, it shall be assumed that any planning permission that, according to the certificate, might reasonably have been expected to be granted in respect of the land, or part thereof, would be so granted. This is a reference to a certificate issued under section 17(4)(a), referred to as a positive certificate. |page:98|
As Lord Bridge of Harwich explained in Grampian Regional Council v Secretary of State for Scotland [1983] 1 WLR 1340 at p1343H-1344B:
The sole purpose of the certification procedure is to provide a basis for determining the development value, if any, to be taken into account in assessing the compensation payable on compulsory acquisition. If a positive certificate is issued, it is to be assumed that the certified permission would be granted, subject to such conditions and at such future time, if any, as may be specified in the certificate… If a negative certificate is issued, ‘regard is to be had’ to the negative opinion certified… Although this is not conclusive, it is difficult to envisage a situation in practice in which the Lands Tribunal, when assessing compensation, could be persuaded to act on a contrary opinion to that certified by the planning authority or the Secretary of State on appeal.
The certification procedure that Part III lays down is set out in section 17. Subsection (1) of that section, as substituted by section 65(1) of the Planning and Compensation Act 1991, provides that, where an interest in land is proposed to be acquired by an authority possessing compulsory purchase powers, either of the parties may apply to the local planning authority for a certificate under that section. That subsection must be read together with section 22(2) of the Act of 1961, which prescribes the circumstances in which, for the purposes of sections 17 and 18, ‘an interest in land shall be taken to be an interest proposed to be acquired by an authority possessing compulsory purchase powers’. There are three prescribed circumstances, namely; (a) the publication or service of a notice of the making of a compulsory purchase order; (b) the service of a notice to purchase under any enactment; and (c) the making of an offer to negotiate for the purchase by or on behalf of the authority. In the present case, the landowners’ interests in the Fletcher land and the Longmore land respectively became interests in land that were ‘proposed to be acquired by an authority possessing compulsory powers’, for the purposes of section 17, when the Secretary of State gave notice on 30 January 1986 of the making of the draft compulsory purchase orders.
The procedure that section 17 lays down deals with the making of the application for the certificate and its determination by the local planning authority. The relevant provisions, as substituted (in the case of subsection (4)) by section 65 of the Act of 1991, are these:
(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 |page:99| 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 of the land in question, if it were not proposed to be acquired by an authority possessing compulsory purchase powers, that is to say –
(a) that planning permission would have been granted 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 for 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.
Section 17(7) provides that, in determining whether planning permission for any particular class of development would have been expected to be granted, 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 otherwise than in accordance with the development plan.
Facts
It is now necessary for me to say a bit more about the facts, in order to set the scene for an examination of the issue as to the assumption that the local planning authority must make when they are determining the application for a certificate.
A scheme for an improvement of the A49 to the east of Shrewsbury was originally proposed as part of the 1952 Shrewsbury town map. A protected route for an A49 bypass was first defined across the Fletcher land and the Longmore land in November 1970. The effect of this, in terms of Article 9 of the Town and Country Planning General Development Order 1963, as amended, was that any planning application affecting land within 220ft of the proposed route had to be referred to the Minister of Transport. Between 1963 and 1971 planning permission for residential development was refused on six occasions on various parcels of land owned by Fletcher Estates Ltd because of the proposal for the bypass.
During the early 1970s, in response to a Department of the Environment circular directing local authorities to release more land for housing, Shropshire County Council drew up advisory plans for the development of four areas in and around Shrewsbury. One of these, the Sundorne advisory plan, was adopted by the county council in May 1973. This plan included land for housing to the west of the protected route for the bypass and to the north of it. But land on the protected route and to the east of it was excluded from the proposed housing development. The Shropshire county structure plan, which was approved in February 1980, |page:100| required the urgent identification of additional housing land. In 1984 a public inquiry was held into the scheme for the bypass. Consideration was given to an alternative route, identified by the objectors, that lay to the east of the Fletcher land and the Longmore land. In 1985 it was confirmed that the A49 bypass would be built on the alignment of the preferred route across the Fletcher land and the Longmore land, which had been defined in 1970. In the Shrewsbury urban area local plan, which was adopted in June 1985, the preferred route for the A49 bypass across the Fletcher land and the Longmore land was protected, and it was thus shown as not available for any other development. The plan allocated a large area of land for development for housing at the Moveage in the urban area of Shrewsbury.
From this brief history, it can be seen that the scheme for the A49 bypass can be traced back to 1952, when the improvement scheme was first included in the Shrewsbury town map. By 1970, the route for the bypass had been clearly identified. From that date onwards until the date when the notice of the making of the proposed compulsory purchase orders was published, this had the effect that the Fletcher land and the Longmore land were excluded from consideration as land for residential and other development. This was on the ground that they lay on the route of the proposed bypass. The larger areas of land to the east in the same ownership were also excluded from development. Other land was identified as suitable for development to meet the need for more land for housing in the area.
The inspector concluded, after considering the evidence led at the public inquiry under section 18(3) of the Act of 1961, that there was no reasonable basis for considering residential development as appropriate on any part of the Fletcher land, or residential and industrial development as appropriate on any part of the Longmore land, as at 30 January 1986, which was the date of the publication of the notice of the proposed compulsory purchase orders, if it was to be assumed that the bypass would have been built on the alternative route to the east, which was considered and rejected at the 1984 inquiry. The Secretary of State for the Environment, acting on the same assumption, accepted the inspector’s conclusions on this point when he decided to cancel the certificates issued by the local planning authority and to replace them with negative certificates.
Issue in this appeal
It is now possible to identify more precisely the issue that divided the parties to this appeal, bearing in mind that they were agreed that the relevant date for determining the content of the certificates of alternative development was the date of publication of the notices of the proposed compulsory purchase orders.
The issue relates to the meaning and effect of the direction in section 17(4) of the Act of 1961 that the local planning authority must issue their opinion regarding the grant of planning permission in respect of the land in question ‘if it were not proposed to be acquired by an authority |page:101| possessing compulsory purchase powers’. It is plain that the assumption that the local planning authority are directed to make by this subsection requires them to ignore the fact that an interest in the land is proposed to be acquired by an authority possessing compulsory purchase powers as described in section 22(2). This involves disregarding the publication of the notice of the proposed compulsory purchase order, which is the circumstance referred to in section 22(2)(a) that is relevant to this case. The question is — how much else must the local planning authority disregard when making their assumption?
Mr Duncan Ouseley QC, for the Secretary of State, accepted that the assumption extended to the proposal that the land was to be acquired by an authority possessing compulsory purchase powers for the purposes of the A49 bypass as it stood at the relevant date. As at that date, the route for the proposed bypass was shown as a protected route on the Shrewsbury urban area local plan. He accepted that it would not be possible to make sense of section 17(4) if that proposal could be taken into account by the local planning authority when they were considering the content of the certificate, as this was the same proposal as that which had led to publication of the notices that the land was to be acquired compulsorily. He accepted that, if the planning status of the land was to be considered on the basis that it was to be assumed that the land was not proposed to be acquired compulsorily on the relevant date, the proposal underlying that acquisition as it stood at the relevant date must also be disregarded. So, when the assumption was made that the section 22(2)(a) notices
had been cancelled, the underlying proposal that led to the publication of those notices must also be assumed to have been cancelled as at the relevant date
Mr Robin Purchas QC, for the landowners, submitted that the statutory assumption required the local planning authority to disregard not only the underlying proposal, as it stood at the relevant date, but also all the effects of that proposal that had arisen before that date. According to his argument, it was necessary, in order to give effect to the statutory assumption, to eliminate all the consequences of the safeguarding of the proposed route for the bypass from the date when the proposal first began to affect the planning history of the land that was proposed to be acquired. If one was able to look back and to remove the consequences of the designation of the route for the bypass as a protected route, other land in the immediate area of the Fletcher land and the Longmore land would have been released for housing development prior to the relevant date. This would have enabled the view to be taken on the relevant date that planning permission for the development of these parcels of land also would have been granted if the land were not proposed to be acquired compulsorily. In short, the local planning authority must disregard the effects and incidents of the proposal as a whole, irrespective of whether they occurred on, before or after the relevant date. The policies and facts should be assumed to be those that would have been applicable if the scheme for the proposed bypass had never been conceived in the first place. |page:102|
Mr Purchas submitted that his approach was supported by the reasons which Lord Bridge gave for the decision in Grampian Regional Council v Secretary of State for Scotland [1983] 1 WLR 1340 at p1345A-1346C. He accepted that the argument that was rejected in that case was a narrower argument than that for the Secretary of State in the present case. But he said that the essential reasoning that was expressed in Lord Bridge’s judgment as to the purpose for which section 17(4) had been enacted supported his argument that it was not just the proposed acquisition that had to be disregarded. It was necessary to consider as a whole what would have happened if the land had not been proposed to be acquired at all.
Decision in Grampian
In my opinion, it is clear, from an examination of the facts and the arguments in the Grampian case, that their lordships were concerned in that case with a different issue from that that has been argued in this appeal. It is not just that the argument which Mr Ouseley advanced for the Secretary of State in the present case is not the same as that that was advanced for the regional council in Grampian. The argument that Mr Purchas advanced for the landowners is also different, as he sought to widen the scope of the statutory assumption to include matters that did not arise on the facts that were before the House in Grampian.
The Grampian case concerned an area at Westhill, near Aberdeen, for which planning permission in principle was given in 1972 for the building of a new town. It was envisaged that the new town proposals would require the provision of a secondary school and at least two primary schools in the Westhill area. The development proceeded, and, in due course, a secondary school and one primary school were built on sites that had belonged to the developer. The regional council, which had power to acquire these sites compulsorily, as education authority, offered to purchase the two sites from the developer. The developer applied to the local planning authority for certificates of alternative development so that compensation for the acquisition could be assessed. The local planning authority issued negative certificates on the basis that, if there had been no proposal to acquire the land, they would nevertheless have granted planning permission only for the erection of the two schools. The developer appealed to the Secretary of State for Scotland, who issued positive certificates on the basis that, if he had to disregard the proposal to acquire, he must also disregard the fact that the two sites had been allocated by the developer for the erection of the two schools in the plans which had accompanied the plans in their application for outline planning permission.
Counsel presented the same arguments in the Court of Session when the regional council appealed against the Secretary of State’s decision to issue positive certificates. They were summarised in these words by Lord Dunpark 1984 SC 1 at p13; (1983) 47 P&CR 540 at p552:
Counsel for all parties agreed that the grantor of the certificate must disregard the proposal to acquire. The issue between the appellants and the respondents is whether or not the purpose or reasons for the acquisition |page:103| must also be disregarded for certificate purposes. On the one hand, it is said that it is nonsense to grant a certificate for development for which the grantor knows planning permission would not be granted. On the other hand, it is said that, as this is a hypothetical, not a practical, exercise, if one has to disregard the proposal to acquire, one must also disregard the purpose of the acquisition.
Having considered these arguments, Lord Dunpark observed at p553, in a passage that was quoted with approval by Lord Bridge [1983] 1 WLR 1340 at p1345C-D:
It seems to me to follow from the fact that the value of the land is not to be affected by the prospect of compulsory acquisition, that its value is not to be affected by the development proposed by the acquiring authority. One cannot discount the one without the other.
In the House of Lords, the argument for the regional council, as noted by Lord Bridge at p1344H, was unchanged:
Whilst [the] 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.
It was in response to this argument, which he rejected, that Lord Bridge said at p1345F-G:
The primary purpose of this provision, in my view, is to obviate the possibility that where, as in the usual case, urban land is allocated in the development plan for a necessary public purpose for which it will in due course need to be acquired, that provision of the plan can be relied on to deny the landowner a positive certificate. If the planning need to use land for a public purpose, which underlies a proposed compulsory acquisition, is not a sufficient ground to withhold a positive certificate where that need is recognised and provided for in the development plan, I do not see how the underlying planning need can ever be such a sufficient ground.
No question was raised in the Grampian case about the wider effects of the proposal, which is the point to which Mr Purchas’s argument was directed. This is because, on the facts of that case, the issue about wider effects did not arise. It was not disputed that, if the underlying requirement for schools to be built on the sites were to be disregarded, the way was clear for the granting of positive certificates. The facts were simple. The sites would have formed part of the housing development in the surrounding area had they not been set aside for the schools. No changes had taken place prior to the relevant date that would have justified the issuing of negative certificates.
Mr Ouseley made it clear that his argument was a different one from that that had been presented for the regional council in Grampian. As he pointed out, his argument was entirely consistent with the decision in that case. He accepted that section 17(4) required the local planning authority to disregard not only the notice of the making of the compulsory purchase
order but also the purpose that underlay the need for the land to be |page:104| acquired for public purposes. The key issue in the present case, to which he directed his argument, was as to the wider effects of the assumption directed by section 17(4) on the facts of this case, which did not arise for consideration in Grampian.
Section 17(4)
It is necessary, in these circumstances, to examine the wording of section 17(4) more closely, in order to see whether the assumption that it directs can accommodate the wider effects for which Mr Purchas contended on behalf of the landowners.
The critical words in the subsection to which attention must be directed are to be found in the phrase ‘if it were not proposed to be acquired’. Those words must be examined in the light of the agreed fact that the relevant date, as at which the local planning authority are required by the subsection to issue their opinion regarding the grant of planning permission, is the date of the section 22(2)(a) notice. The language is, as Buxton LJ observed [1999] QB 1144 at p1155F, not of the past but of the present conditional. The assumption that has to be made is that the land is not ‘proposed to be acquired’ at the relevant date. The words ‘proposed to be acquired’ are given a particular meaning by the statute. They appear in section 17(1), which identifies the time when the parties may apply for a certificate of alternative development, and they appear again in section 17(3), which describes the contents of the application for a certificate. The circumstances in which an interest in land shall be taken to be an interest proposed to be acquired are defined in section 22(2). It is by reference to the circumstances defined in section 22(2) that the relevant date for the determination of the issue about planning permission is identified. The effect of that subsection is that an interest in land cannot be taken to be an interest proposed to be acquired, for the purposes of section 17, until one or other of the circumstances that it describes has occurred.
The position appears, therefore, to be quite straightforward upon a consideration of the ordinary meaning of the words used in the statute. The assumption that the local planning authority must make relates to the situation as at the relevant date. The scheme for which the land is proposed to be acquired, together with the underlying proposal that may appear in any of the planning documents, must be assumed on that date to have been cancelled. No assumption has to be made as to what may or may not have happened in the past.
Wider considerations
This conclusion as to the meaning of the words used in section 17(4) is consistent with the nature of the exercise that the local planning authority are required to perform. The system of planning control that requires planning permission to be obtained for the development of land brings into account a variety of facts and circumstances. Factors such as predictions of population growth and the availability of suitable land for development affect the need for more land to be released for housing in the area. These factors need to be reassessed at regular intervals. A need |page:105| that was identified 10 or five years ago may have disappeared. The predicted growth on which it was based may have been reduced. The need may have been fully met by the building of the required number of houses in the given area. Or other factors may have changed, leading to the conclusion that the need must be met elsewhere. It is one thing to examine these factors, on the assumption that the proposal has been cancelled on the relevant date, in the light of existing circumstances. It is quite another to look back into the past and to try to reconstruct the planning history of the area on the assumption that the proposal had never come into existence at all. The further back in time one goes, the more likely it is that one assumption as to what would have happened must follow on another and the more difficult it is likely to be to reach a conclusion in which anybody can have confidence.
In Jelson Ltd v Minister of Housing and Local Government [1970] 1 QB 243, where a proposed ring road had been cancelled owing to the construction of a motorway, the landowners applied for certificates of appropriate alternative development. The minister confirmed the negative certificates that had been issued by the local planning authority. It was contended that the question of whether planning permission might reasonably have been expected to be granted should be considered, not as at the date of the section 22(2)(a) notice but as at a date before there had been any proposal for the strip of land to be used for a ring road. The landowners’ appeals were dismissed on the ground that the local planning authority must determine the question of planning permission as at the date of the notice, in the circumstances then existing, and not by looking at events in the past. Lord Denning MR and Sachs LJ saw the question as one of construction. They reached their conclusion by examining the meaning of the words used in section 17(4). But Phillimore LJ added these observations at p255C:
An important factor is that, apart from the question of construction, once you start looking back, the whole exercise becomes hopelessly uncertain. Did it all result from the designation of this strip as required for the ring road? How far was the state of the land due to the appellants’ own action in building right up to the strip? Could they have avoided loss by serving notice to purchase in 1959 when the provisions of the Act of 1961 were first [enacted]? Have they really suffered any loss, or did they pay for the strip on the basis that it was blighted land? At any rate, when they acquired it they knew this to be the case. It seems to me that to look back beyond the date of the deemed notice to treat would open up a considerable field of guesswork which would often make it impossible to give firm advice to any member of the public as to his rights. Accordingly, both as a matter of construction and on wider grounds, I would dismiss these appeals.
Some of Phillimore LJ’s observations in that passage relate to issues that are for consideration by the Lands Tribunal and not by the local planning authority. None of his questions as to the actions of the landowners have been raised in the present case. But there is much force in his point that once one starts looking back in time, the exercise becomes clouded in uncertainty. The questions that are likely to arise will be complex and difficult. They will involve matters of evidence as to past |page:106| events, the assessment of which is likely to lie outside the expertise of the local planning authority. Their normal function is to examine planning issues in the light of existing circumstances. The fact that applications for certificates of appropriate alternative development are made to the local planning authority lies at the heart of the matter. It supports the view that the determination as to the contents of the certificate should be arrived at by applying ordinary planning principles to the existing circumstances, not by assessing what may or may not have happened in the past.
The question that the local planning authority, and, in his turn, the Secretary of State for the Environment, had to answer in this case was therefore a relatively simple one. It was capable of being determined, on the assumption that the proposal had been cancelled on the relevant date, in the light of the circumstances existing at that date and by the application of ordinary planning principles. The question was whether reasons existed for the refusal of planning permission that were quite independent of any scheme for the acquisition of the land for use for the purposes of the proposed bypass: see per Lord Bridge in Grampian Regional Council v Secretary of State for Scotland at p1346F.
Lord Bridge said in Grampian at p1345G-H that the overriding consideration that impelled him to reject the argument for the appellants in that case was that it would, 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 that was to secure the payment of fair compensation to landowners who were being compulsorily expropriated. The flaw that he observed in the appellants’ argument was that to allow reliance on the underlying public requirement to determine the question would lead to the issue of a negative certificate in every case. This purposive approach to the words used in section 17(4) led inevitably to a rejection of the argument advanced by the acquiring authority that, while the acquisition itself must be discounted, the underlying proposal should not be. The position that Mr Ouseley has adopted in the present case removes that difficulty. The assumption, which he accepts, that the underlying proposal must be taken to have been cancelled on the relevant date, as well as the section 22(2)(a) notice that gave effect to it, meets the objection that the cancellation approach will always lead to the issue of a negative certificate. On his approach, the scheme for the payment of fair compensation can be put into effect in a way that will reflect the development value of the land at the relevant date independently of any scheme for the proposed bypass.
I can find nothing in the overall scheme of the Act that requires the question of whether planning permission would have been granted for any classes of alternative development to be determined by reference to events that may or may not have happened in the past if the proposal had not come into existence. It may be, as Mr Ouseley suggested, that these wider issues can be raised under section 9 of the Act, when the amount of the compensation that is to be paid for land that is to be taken compulsorily is being assessed by the Lands Tribunal: see Jelson Ltd v Blaby District Council [1977] 1 WLR 1020, in which Jelson was held to be entitled |page:107| to the full economic value of the land that had been taken from it, disregarding the effects of the scheme under section 9 of the Act of 1961. But that is not a matter that your lordships need to resolve in this case. I would hold that these wider issues are not relevant to the determination that the local planning authority must make as to the contents of a certificate of appropriate alternative development.
I would dismiss these appeals.
LORD BROWNE-WILKINSON: I agree.
LORD CLYDE: I agree.
LORD HOBHOUSE OF WOODBOROUGH: I agree.
LORD MILLETT: I agree.
Appeals dismissed.