Overriding rights of way — Statutory powers to override rights — Acquisition of land by statutory authority — Schedule 20 to Local Government, Planning and Land Act 1980 — Provisions similar to section 237 of Town and Country Planning Act 1990 — Transfer to statutory authority and retransfer — Application to amend pleadings — Whether amendments having chance of success — Whether “acquisition” of land — Whether overriding provisions effective — Whether statutory authority authorised — Whether subsequent owner entitled to rely upon overriding provisions — Whether amendments to pleadings permitted
In April 1993, the claimant became the registered proprietor of land to the west of a public highway (the claimant’s land). This land had the benefit of a right of way over adjoining land (the service road) to the public highway. In 1976, the right of way was reserved in a conveyance of the service road and other land (the Phoenix site). In March 1995, the then owners of the Phoenix site, the Land Authority for Wales (LAW) and T made an agreement; the site was transferred to T at the same time. LAW agreed to acquire the right of way by agreement or to override it by using its statutory powers under sections 103 and 104 of, and Schedule 20 to, the Local Government, Planning and Land Act 1980 (the 1980 Act) (provisions similar to section 237 of the Town and Country Planning Act 1990) so as to secure its realignment in accordance with a development scheme. T transferred the Phoenix site to LAW in April 1995 (the first transfer) and LAW transferred the site back to T around a month later (the second transfer). LAW received £80,000 for exercising its powers, but did not register its title after the first transfer.
Between the first and second transfers, LAW served a notice on the claimant under para 7(1) of Schedule 20 to the 1980 Act to the effect that the right of way might be interfered with by development that had planning permission. It also offered an alternative realigned right of way. The intended development of the Phoenix site did not take place, and new development proposals were not advanced until 2002. As part of the new development, the right of way would be realigned in accordance with an agreement entered into between the first defendant and Cardiff City Council under sections 38 and 278 of the Highways Act 1980. Although the first defendant owned part of the Phoenix site, it had transferred the service road to the second defendant, which became the registered proprietor in August 2005. The claimant issued the present proceedings in July 2005, seeking a declaration that the defendants did not have a right to block its right of way.
The defendants relied upon the overriding provisions of Schedule 20 to the 1980 Act. Following the discovery of documents relating to the true nature of the transactions in 1995, the claimant applied for permission to amend its pleadings. By those pleadings, it contended that because LAW had not been the registered proprietor of the Phoenix site between the first and second transfers, it had not acquired legal and beneficial ownership, and no acquisition had taken place within the meaning of section 104(1)(a) of the 1980 Act (powers of acquisition) to which the overriding provisions in Schedule 20 could apply. By further amended pleadings, the claimant contended that there was no material resolution of LAW authorising the overriding of the right of way after a 20-day period referred to in the 1995 agreement.
Held: The application was dismissed; permission to amend the particulars of claim was refused. The first transfer transferred the beneficial interest in the Phoenix site to LAW, together with the right to be registered with the legal estate. There was no reason why LAW could not “wash” the title through its brief ownership in order to exercise its statutory powers. The second transfer was to a successor in title, and it would not matter whether T registered its title on the basis of the March 1995 transfer to itself or the second transfer. LAW had been acting within its resolutions in taking steps to override the right of way under Schedule 20 after the 20-day period. Under Schedule 20 to the 1980 Act, as under section 237 of the 1990 Act, the effect of the erection and construction of work on land by a person deriving title under an authority that had acquired the land was to override, inter alia, rights of way even where the works were carried out years later: see Midtown Ltd v City of London Real Property Co Ltd [2005] EWHC 33 (Ch); [2005] 19 EG 130; [2005] 1 EGLR 65. LAW’s acquisition of the site was authorised. Since the claimant could have considered the issue of the present proceedings or an application for judicial review of LAW’s actions in 1995, the prejudice caused by the delay was relevant in refusing permission to amend. The proceedings’ real purpose was not to protect an uncompensated loss, but to seek a Stokes premium (Stokes v Cambridge Corporation (1961) 180 EG 839) for releasing the right of way.
The following cases are reported in this report.
Greenwich Healthcare NHS Trust v London & Quadrant Housing Trust [1998] 1 WLR 1749; [1998] 3 All ER 437; (1999) 77 P&CR 133
Midtown Ltd v City of London Real Property Co Ltd; Joseph v City of London Real Property Co Ltd [2005] EWHC 33 (Ch); [2005] 1 EGLR 65; [2005] 14 EG 130
Paragon Finance plc (formerly National Home Loans Corporation) v Pender [2005] EWCA Civ 760; [2005] 1 WLR 3412
Roy v Kensington and Chelsea and Westminster Family Practitioner Committee [1992] 1 AC 624; [1992] 2 WLR 239; [1992] 1 All ER 705, HL
Snook v London & West Riding Investments Ltd [1967] 2 QB 786; [1967] 2 WLR 1020; [1967] 1 All ER 518, CA
Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P&CR 278, CA
Stokes v Cambridge Corporation (1961) 13 P&CR 77; 180 EG 839, LT
Wrotham Park Settled Estates v Hertsmere Borough Council (1991) 62 P&CR 652; [1991] 1 EGLR 230; [1991] 21 EG 123; [1991] 22 EG 135; [1991] RVR 107; [1992] JPL 75, LT |page:82|
This was an application by the claimant, Ford Camber Ltd, for permission to amend its particulars of claim in an application for declaratory relief under CPR 8 against the defendants Deanminster Ltd and Grove Properties (Cardiff) Ltd.
George Laurence QC and Ross Crail (instructed by Kingsley Napley) appeared for the claimant; Anthony Porten QC and Ranjit Bhose (instructed by Capital Law, of Cardiff) represented the defendants.
Giving judgment, Peter Smith J said:
Introduction
[1] This judgment arises out of an application by the claimant issued on 5 December 2005 for permission to amend the particulars of claim in the form of the draft amendment annexed to that application. The application came on for hearing on 28 June 2006. On that occasion, in the light of exchanges that took place between Mr George Laurence QC (who, with Ms Ross Crail, appeared for the claimant) and myself, I adjourned the matter to allow an opportunity for disclosure of documents of the former Land Authority for Wales (LAW), held by the Welsh Assembly and others, to be obtained, by order if necessary.
[2] It came on to be heard on 21 July 2006. Before that hearing, in the light of the disclosure that had taken place, Mr Laurence produced a further amendment that he refined again over the short adjournment.
[3] The defendants’ case, as put forward by Mr Anthony Porten QC, who, with Mr Ranjit Bhose, appeared for the defendants, is that none of the proposed amendments has any prospect of success so that permission to amend ought to be refused for all versions of the proposed amendments.
Background
[4] The claimant has, since 1 April 1993, been the registered proprietor of land to the west of Caerphilly Road Heath, Cardiff, under title no WA86121 (the claimant’s land). It has the benefit of a right of way to Caerphilly Road over adjoining land. That adjoining land was initially registered with title no WA61858.
[5] The right of way had been reserved for the benefit of the claimant’s land in a conveyance dated 7 September 1976, between constructors John Brown Ltd (as vendor) and WT Davies Transport Ltd (as purchaser). The wording of the reservation is:
excepting and reserving unto the Vendor and its successors owners and occupiers of the land edged blue on the plan (“the retained land”) or any part thereof…
(3)… a right of way at all times and for all purposes with or without vehicles over and along the land coloured green hatched black on the plan (“the Service Road”) .
[6] The adjoining site is known as the former Phoenix Brickworks (the Phoenix site).
[7] Part of the Phoenix site is now owned by the first defendant under title no CYM170881 (with some being transferred to another company, Westbury Homes (Holdings) Ltd (Westbury) under title no CYM170879.
[8] The first defendant originally owned the site of the service road within its title CYM170881 but, on 23 May 2005, transferred it to the second defendant for a consideration of £1 and it is now registered with a separate title (carved out of CYM170881) under title no CYM240937. It was thus registered on 3 August 2005.
[9] There is a connection between the two defendants through shareholdings. The second defendant, it is believed, has no assets other than such part of the Phoenix site as it might own and carries on no business.
[10] The defendants do not deny that the claimant’s land has the benefit of a right of way over the service road.
[11] The issue between the parties is whether the claimant’s right of way has been overridden by the exercise of statutory powers by LAW so as to enable the redevelopment of the Phoenix site to take place. In this context, the Phoenix site can be developed only if the service road is stopped up. The defendants propose that, in the event that it is stopped up, the claimant’s land would have the benefit of a new road to be constructed over the development of the Phoenix site. It is not suggested by the claimant that this would give it any inferior access.
[12] The reality is that the dispute is not about a right of way as such, but about the amount of money that the claimant can extract by negotiation or otherwise from the defendants as a price for, in effect, allowing the development on the Phoenix site to take place by allowing its private right of way to be diverted over the roadway on the Phoenix site.
Devolution of title of Phoenix site
[13] The Phoenix site was acquired as a whole from Tarian Developments Ltd in 1993 by Thomas Bailey Investments plc (TBI), which was the registered proprietor with title absolute on 26 August 1993.
[14] TBI transferred the title to Tesco Stores Ltd on a date previously unknown to the claimant but believed by it to have been prior to 10 March 1995. Following the adjournment from the hearing of 28 June 2006, the claimant requested certain documents from the defendants and Tesco and Tesco’s solicitor Berwin Leighton Paisner. Among other things, a completion statement was produced dated 10 March 1995 and a transfer between (1) Thomas Bailey Investments Ltd (2) TBI and (3) Tesco Stores Ltd.
[15] The completion statement shows that Tesco paid £3,259,261 for the Phoenix site. The transfer of the same date reflects that.
[16] That transfer was probably never registered.
LAW’s involvement
[17] TBI and LAW apparently entered into negotiations before 1995 concerning the possible overriding of the claimant’s right of way. A draft agreement has been disclosed, and it was assumed, for the purpose of the hearing, that the actual agreement was to the same effect. That agreement, after various definitions, contains recitals at clause 1.3 to the effect that LAW had agreed, pursuant to its statutory powers contained in sections 103 and 104 and Schedule 20 to the Local Government, Planning and Land Act 1980 (the 1980 Act), to assist in securing the development of the Phoenix site by the acquisition of “Relevant Interests”. The relevant interests were all rights and interests over the existing right of way held by the owners and occupiers of the claimant’s land. TBI agreed to be responsible for LAW’s costs and fees. The fee in question was £40,000 plus VAT, to be paid to LAW for the use of its statutory powers to facilitate the development of the Phoenix site. Nobody before me has suggested that such a fee was improper, but I have to say that I find it surprising that it can be said that the local authority can bargain away the exercise of its rights for the benefit of a private developer in exchange for a fee. However, as nobody is taking that point, I shall say nothing more about it.
[18] On 17 March 1994, LAW resolved to enter into an agreement with TBI dealing with the claimant’s right of way on the terms and conditions to be first approved by the chief executive. That decision was preceded by three reports dated 8 October 1993, 14 January 1994 and 11 March 1994 respectively. The first of those showed that the LAW involvement was to override the existing right of way, create the new access for existing users and transfer the land back to TBI. It set out the fee in addition to the costs.
[19] On 14 January 1994, there was concern that negotiations had not been fully exhausted and that LAW had to be satisfied that bona fide attempts had been made to resolve the issue. Correspondence was apparently shown to the board that suggested that negotiations had ensued but had not been fruitful. The recommendation then was to purchase and resell the Phoenix site. That was the proposal. Finally, on 11 March 1994, the fee was raised to £80,000 plus costs, and the proposal was that there would be a transfer of the site from TBI to LAW. LAW, using its Schedule 20 powers (which I set out below), would override the existing access rights, create the new access and transfer the site back to TBI or its nominee.
[20] On 21 July 1993 and 10 August 1993, section 106 agreements were entered into that showed that the end of the right of way would be blocked off and the mouth of the road would become dedicated open |page:83| space. It also, of course, showed a diversion of the right of way over part of the land comprised in the Phoenix site.
Subsequent events
[21] That is not precisely how the matter actually proceeded. On 10 March 1995, as I have said, TBI sold the Phoenix site to Tesco for £3,259,261 plus VAT and interest, giving a grand total figure of £3,920,938.52.
[22] Also on 10 March 1995, Tesco, LAW and TBI entered into an agreement (the agreement).
[23] The agreement, after various definitions, had a number of recitals in it. Recital 1.3.1 recited that TBI had used its best endeavours to acquire the relevant interests. The relevant interests are all existing rights of way held by the owners and occupiers of the claimant’s land over the Phoenix site. The second recital (1.3.2) was that the development would not be able to proceed without the provision of the alternative right of way, and the third recital recited that LAW and Tesco wished to secure the development.
[24] Accordingly, LAW, pursuant to its statutory powers under sections 103 and 104 and Schedule 20 of the 1980 Act, agreed that it would assist in securing the development “by the acquisition of the Relevant Interests on such terms and conditions as appear in this Agreement”. Tesco, by recital 1.3.5, agreed that it would, through its agent, secure the approval of the local planning authority for the realignment of the existing right of way to the route of the alternative right of way. I should say that that has been achieved.
[25] Clause 2 contains LAW’s “specific obligations”. The first obligation is to accept the first transfer in the form of the draft transfer annexed and pay the first consideration in accordance with clause 3.1.
[26] Its second obligation is, following the first transfer, to use all reasonable endeavours to acquire the relevant interests whether by agreement with their owners or overriding in accordance with para 7(1) of Schedule 20 to the 1980 Act. The third obligation is that on the 20th working day following the date of the first transfer to execute the second transfer for the second consideration. Clause 2.4 provides that its obligations will not interfere with LAW’s duties to settle compensation pursuant to Schedule 20, but that it will obtain TBI’s written approval as to the amount of consideration, or level of compensation, to be paid (such approval not to be unreasonably withheld).
[27] The first consideration expressed in the first transfer is £1.725m plus VAT. That is the amount LAW paid. The second consideration (that is, the amount that Tesco pays to reacquire the land) is £1.765m plus VAT. That is an uplift of £40,000. In addition, on 7 March 1995, LAW invoiced TBI for £40,000 plus VAT, which was paid on 23 February 1995; the VAT element (£7,000) was paid on 14 March 1995. That can only be the fee payable under the draft agreement to which I referred above.
[28] Thus, LAW was receiving £80,000 plus VAT in total for exercising its powers to enable the development to take place.
[29] The actual first transfer was executed on 19 April 1995 and the retransfer was effected on 18 May 1995.
[30] No explanation has been provided as to the reduced consideration from the purchase price paid by Tesco when it acquired from TBI.
[31] In the intervening period, under the agreement, LAW was under a duty to negotiate the acquisition of the claimant’s right of way. There had been correspondence on this in the previous year. Thus, for example, the claimant’s solicitor wrote to LAW on 12 May 1994, suggesting that its right of way held the key to the development and that any purchase price to acquire under para 7 of the 1980 Act would require the well known ransom principles of Stokes v Cambridge Corporation (1961) 13 P&CR 77* to apply.
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* Editor’s note: Also reported at (1961) 180 EG 839
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[32] In fact, in my view, any compensation payable could not include the loss of the right in effect to extract a sum of ransom payment. The true measure of compensation under the 1980 Act is diminution in value. This is the same as the principles under section 237 of the Town and Country Planning Act 1990. I reviewed those principles in Midtown Ltd v City of London Real Property Co Ltd [2005] EWHC 33 (Ch)*, in [34], referring to Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P&CR 278 and Wrotham Park Settled Estates v Hertsmere Borough Council (1991) 62 P&CR 652†. Of course, a different measure of damages may be obtainable in an appropriate case in lieu of an injunction: see the authorities again reviewed in Midtown.
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* Editor’s note: Reported at [2005] 1 EGLR 65
† Editor’s note: Also reported at [1991] 1 EGLR 230
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[33] It is therefore clear, nevertheless, that the claimant’s solicitor was intent on seeking to extract a very large sum of money for the “privilege” of having the claimant’s right of way removed a short distance. As I have said above, it is not suggested that the alternative right of way is in any way inferior, nor is it suggested that its removal causes any loss in reality to the claimant.
[34] Following the first transfer, further correspondence passed between the parties’ respective lawyers. On 27 April 1995, LAW wrote to the claimant’s solicitor, enclosing a formal notice as to the operation of para 7(1) of Schedule 20 to the 1980 Act. That notice said that the right of way might be interfered with by the development in accordance with planning permission and that the interference was authorised by para 7(1) of the 1980 Act, but that, prior to any such interference, LAW would propose that the owners of the claimant’s land be offered an alternative right of way over the Phoenix site in the form of the draft easement annexed thereto. It has not been suggested that the proposed easement is in any way unreasonable or unacceptable.
[35] The claimant’s solicitor replied to that letter on 1 May 1995, raising various questions as to the method of acquisition and the like. Some of the information requested was given under cover of a letter dated 26 May 1995, but the terms of the acquisition were kept commercially confidential and the claimant’s solicitor was informed that the land had been transferred to Tesco Stores Ltd.
[36] Nothing happened of significance until later applications were made in 2002 to develop the Phoenix site, and correspondence thereafter ensued between the claimant’s lawyer and the defendants’ lawyer. It is fair to point out that the claimant’s lawyer, in the correspondence with LAW in 1994 (see, for example, the letter of 12 May 1994), had questioned the legality of a purchase by LAW and an immediate resale to TBI. Therefore, although it did not know the details in May 1995 because they had been withheld, it did know in general what had been done. Further, it had been made aware of the fact that arrangements had been put in place to enable a contention that the claimant’s right of way would be overridden and it was told that the land had been transferred to Tesco.
[37] In my view, had it wished to challenge the validity of the process that had been carried out in 1995, it had sufficient material to enable it to do so at that time. In my view, it could have challenged that decision, either by judicial review or by commencing proceedings in 1995 in the form of the present proceedings.
[38] Judicial review is, of course, subject to severe time restraints. There is, however, in my view, no reason why the present proceedings could not have been brought in 1995. No real explanation has been put forward as to why the present proceedings were not issued, save the unconvincing one that there was no need to commence the proceedings at that time; it arose, it is said, only when a prospective development was to proceed. I say “unconvincing” because, in my view, the claimant well knew that the steps LAW had taken were designed to override its rights in 1995 and that is when it ought to have questioned the ability of those processes to be used as the defendants contend.
Present proceedings
[39] The claim form was issued on 1 July 2005. In the present claim, the claimant challenges the right of the defendants in effect to block up the existing right of way in accordance with an agreement entered into between the first defendant and Cardiff City Council under section 278 and section 38 of the Highways Act 1980. It is asserted (correctly) that |page:84| the work proposed to be carried out would (if not otherwise lawful) constitute both a substantial interference with the right of way and an actionable nuisance. It would make the right of way impassable because it closes off the exit onto the main road. It becomes a road to nowhere.
[40] The claim form then sets out that the claimed justification for such action is the purported exercise of powers under the 1980 Act.
[41] The claimant disputes that any reliance could be placed upon those provisions and seeks a declaration that the erection of the bollards, etc, is not authorised by the 1980 Act and consequential relief arising out of that.
[42] I accept the claimant’s submission that absent an express clause, there is no power on the part of the owner of servient land to divert a right of way: see the decision of Lightman J in Greenwich Healthcare NHS Trust v London & Quadrant Housing Trust [1998] 1 WLR 1749. I leave open the question (as he did) as to whether, if an alternative route is available and just as convenient, there is no actionable interference (that goes to remedies). Consideration of that point is not before me.
Basis of present application
[43] It is said that the present application arises out of the discovery that LAW acquired the Phoenix site from Tesco and transferred it on to Tesco. It is contended that the claimant believed that LAW acquired the Phoenix site from TBI and then sold it on in May 1995 to Tesco. I accept that, as appears from the correspondence, the claimant did not appreciate the precise nature of the transaction as it has been subsequently disclosed. However, as I have said, the reason why it has not been disclosed is that it was rebuffed on confidentiality grounds in 1995 and took no further steps. The defendants’ initial objections were based upon the grounds that this was a public law issue and ought to have been raised by judicial review with the strict time limits applicable to such a claim. I do not accept that this was necessarily a public law issue for the reasons set out in particular in the House of Lords decision in Roy v Kensington & Chelsea and Westminster Family Practitioner Committee [1992] 1 AC 624, in paras 628G to 629D, per Lord Bridge. In my view, as I have said above, the claimant could have raised the issue in pleadings in the present form, but it could have raised them in 1995. This is especially so when the claimant’s contentions are, as I understand them, not to challenge the decision that LAW made and the actions that it took on Wednesbury grounds, which in my view, would be capable of being challenged only by judicial review. Rather, it is asserting that the intentions of LAW to use its overriding powers have, in fact, not been achieved by what it has done. That seems to me to be primarily a private law issue alone. I therefore conclude (if necessary) that the public law point raised by the defendants is not correct. Mr Porten acknowledged as much in his final submissions. His real point at that stage was that the claimant should be refused the amendment on account of delay. He acknowledged that the claimant could pursue proceedings in either form and he contended (rightly, in my view) that it could have instituted these proceedings more than 10 years earlier than it did.
Statutory powers
[44] The relevant provisions are sections 102 to 104 and paras 6 to 7 of Schedule 20 to the 1980 Act, as follows:
103.—(1) The Authority shall have the function of acquiring land in Wales which in its opinion needs to be made available for development, and of disposing of it to other persons (for development by them) at a time which is in the Authority’s opinion appropriate to meet the need.
(2) Before it acquires the land, the Authority shall —
(a) consider whether the land would or would not in its opinion be made available for development if the Authority did not act,
(b) consider the fact that planning permission has or has not been granted in respect of the land or is likely or unlikely to be granted,
(c) (in a case where no planning permission has been granted in respect of the land) consult county and district councils in whose area the land is situated and consider their views,
(d) consider the needs of those engaged in building, agriculture and forestry and of the community in general.
(3) Where the Authority acquires land, then, before it is disposed of —
(a) the Authority may (with the Secretary of State’s consent) execute works in respect of the land where it is of opinion that it is expedient to do so with a view to the subsequent disposal of the land to other persons for development by them, and
(b) the Authority shall manage and turn to account the land pending its disposal to other persons for development by them.
(4) The works mentioned in subsection (3) above include engineering works and works for the installation of roads, drains, sewers, gas supplies and electricity supplies, but do not include works consisting of the erection of buildings.
(5) If requested to do so by a public authority (within the meaning of Schedule 19 below) the Authority may advise the authority about disposing of any of the authority’s land in Wales to other persons (for development by them), and may assist the authority to dispose of the land.
(6) The Authority may assist county and district councils in Wales in any assessment such a council makes of land which is in its area and which is in its opinion available and suitable for development.
(7) The Authority may charge a reasonable fee for any advice or assistance under subsection (5) or (6) above.
(8) A county or district council in Wales shall have power to enter into, and carry out, an agreement with the Authority whereby the council will, as agents of the Authority, perform any service or execute any works which the Authority could perform or execute by virtue of this Act.
(9) The Authority shall, without prejudice to its powers apart from this subsection, have power to do anything to facilitate, or anything which is conducive or incidental to, the performance of any of the Authority’s functions.
104.—(1) The Authority —
(a) shall have power to acquire by agreement, or
(b) on being authorised to do so by the Secretary of State shall have power to acquire compulsorily, any land which, in the Authority’s opinion, is suitable for development.
(2) Where the Authority exercises or has exercised its powers under subsection (1) above in relation to any land, it shall have power to acquire by agreement or on being authorised to do so by the Secretary of State shall have power to acquire compulsorily —
(a) any land adjoining that land which is required for the purpose of executing works for facilitating its development or use;
(b) where that land forms part of a common or open space or fuel or field garden allotment, any land which is required for the purpose of being given in exchange therefor;
(c) new rights over land (that is, rights not previously in existence) required for the purpose of exercising the Authority’s functions.
(3) The 1946 Act shall apply in relation to the compulsory acquisition of land in pursuance of this section as if —
(a) this section were contained in an Act in force immediately before the commencement of that Act;
(b) the Authority were a local authority.
(4) Schedule 20 below, in which —
(a) Part I modifies the 1946 Act as applied by subsection (3) above,
(b) Part II deals with the acquisition of land by agreement, and
(c) Part III contains supplemental provisions as respects land acquired under this section, shall have effect.
Paragraph 7 of Schedule 20 provides as follows:
7.—(1) The erection, construction or carrying out, or maintenance, of any building or work on land which has been acquired by the Authority under section 104 above, whether done by the Authority or by a person deriving title under it, is authorised by virtue of this paragraph if it is done in accordance with planning permission notwithstanding that it involves interference with an interest or right to which this paragraph applies, or involves a breach of a restriction as to the user of land arising by virtue of a contract.
(2) Nothing in this paragraph shall authorise interference with any right of way or right of laying down, erecting, continuing or maintaining apparatus on, under or over land, being a right vested in or belonging to statutory undertakers for the purpose of the carrying on of their undertaking.
(3) This paragraph applies to the following interests and rights, that is to say, any easement, liberty, privilege, right or advantage annexed to land and adversely affecting other land, including any natural right to support.
(4) In respect of any interference or breach in pursuance of sub-paragraph (1) above, compensation shall be payable under section 7 or 10 of the Compulsory Purchase Act 1965, and shall be assessed in the same manner and subject to the same rules as in the case of other compensation under those sections in respect of injurious affection where the compensation is to be estimated in connection |page:85| with a purchase to which the said Act of 1965 applies, or the injury arises from the execution of works on land acquired by such a purchase.
(5) Where a person deriving title under the Authority is liable to pay compensation by virtue of sub-paragraph (4) above, and fails to discharge that liability, the liability shall, subject to sub-paragraph (6) below, be enforceable against the Authority.
(6) Nothing in sub-paragraph (5) above shall be construed as affecting any agreement between the Authority and any other person for indemnifying the Authority against any liability under that sub-paragraph.
(7) Nothing in this paragraph shall be construed as authorising any act or omission on the part of any person which is actionable at the suit of any person on any grounds other than such an interference or breach as is mentioned in sub-paragraph (1) above.
(8) In this paragraph —
(a) a reference to a person deriving title from another person includes a reference to any successor in title of that other person;
(b) a reference to deriving title is a reference to deriving title either directly or indirectly.
[45] The claimant’s contention based upon these statutory provisions is set out in the proposed paras 14A to 15A and 23 of the amendments proposed to the particulars of claim.
[46] The first contention is that acquisition of land within the meaning of section 104(1)(a) of the 1980 Act meant acquisition of the legal and beneficial ownership of the land. Because LAW was not registered and because it took subject to an obligation to retransfer and did not part with ownership of moneys, it therefore never acquired the Phoenix site within the meaning of the Act.
[47] I disagree with that analysis, unless a challenge is being made to the genuineness of the documents as they appear to be executed. It must be appreciated, that at all material times, the title was a registered title. The legal estate is not acquired by the transfer; it is acquired by the act of subsequent registration. Under the provisions of the Land Registration Act 1925, which applied to the transfer, LAW, like any other transferee with a right to register, is enabled to deal with the title before becoming registered: see section 37 of the 1925 Act. The effect of the transfer is to transfer the beneficial interest in the Phoenix site to LAW. It also conferred on LAW the right to be registered. It could have registered the first transfer but it chose not to do so. Doubtless, the reasons for that were twofold. First, it would be transferring the title away 20 days later, and, second, to save Land Registry fees. This provision was reviewed (among other things) in a Court of Appeal decision of Paragon Finance plc (formerly known as National Home Loans Corporation) v Pender [2005] EWCA Civ 760; [2005] 1 WLR 3412 (in [64], in the context of a mortgagee). Had the title been unregistered, the legal estate would have vested in LAW at the time of a conveyance/transfer in its favour. It might then be subject to an obligation to retransfer back to Tesco, but that does not affect the plain fact that LAW acquired by the first transfer the entirety of the estate that it could acquire from Tesco, the transferor. It became the owner in equity and it would become the owner in law upon registration. I do not see why LAW could not “wash” the title through its brief ownership in order to exercise its statutory powers, provided that it considered the exercise properly. It is not suggested that the decision was improper or wrong.
[48] Equally, the second transfer by LAW to Tesco is plainly, in my view, a transfer to a successor in title. If one analyses the position, if Tesco had ordinarily sought to register itself it would have to produce the chain of transfers. It does not need to do so in this case because it is, of course, already the registered proprietor. It is not clear whether Tesco registered the title on the basis of the 10 March transfer or the first and second transfers together. However, it does not matter in my opinion.
[49] It seemed to me that the only way to challenge these dispositions was on the basis of suggesting that they were shams within the principle elucidated in the decision of Snook v London & West Riding Investments Ltd [1967] 2 QB 786, at p802C-F, as follows:
As regards the contention of the plaintiff that the transactions between himself, Auto Finance and the defendants were a “sham,” it is, I think, necessary to consider what, if any, legal concept is involved in the use of this popular and pejorative word. I apprehend that, if it has any meaning in law, it means acts done or documents executed by the parties to the “sham” which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. But one thing, I think, is clear in legal principle, morality and the authorities (see Yorkshire Railway Wagon Co v Maclure (1882) 21 ChD 309 and Stoneleigh Finance Ltd v Phillips [1965] 2 QB 537), that for acts or documents to be a “sham,” with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating. No unexpressed intentions of a “shammer” affect the rights of a party whom he deceived. There is an express finding in this case that the defendants were not parties to the alleged “sham.” So this contention fails.
[50] At the first hearing, Mr Laurence did not suggest that that was his stance, although he came close to saying so. In light of my observations, he produced at the adjourned hearing further amendments in paras 15AA and 15AAA.
[51] The first of those is an allegation that there was no material resolution of LAW to enter into the agreement. Accordingly, it is submitted that the acquisition of the Phoenix site was ultra vires and without legal effect. This, during the course of argument, was refined and Mr Laurence produced a third draft in handwritten form that reflected the analysis of his claim as amendment 15AA was argued. In effect, he argued that the authorisation enabled LAW to negotiate only the acquisition of the claimant’s right of way or override it within the 20-day window and that it did not authorise any subsequent overriding outside that period.
[52] This is extremely technical and, in my view, although ingenious, is wrong. The authority derived from the 1994 resolutions plainly shows that LAW intended to use its powers under the 1980 legislation to override the claimant’s right of way. It also minuted that as regards TBI. It, that is TBI, was a party to the agreement. It is plain therefore, in my view, that the agreement was entered into under the aegis of the earlier minutes. That is why TBI was a party; it will be recalled that TBI paid £47,000 for the privilege. By that stage, it is plain that TBI had negotiated an onward sale to Tesco, but it does not alter the primary basis for LAW exercising its powers under the existing resolutions. I should say that I do not exclude the possibility that there were later resolutions that have now been lost. That can only improve the defendants’ position.
[53] Equally, although under the agreement it contracted to negotiate and acquire the claimant’s right of way, the overall position was ultimately its intention to override the right of way if necessary and that is the effect of the notice that was served by letter on the claimant.
[54] If it were necessary, I would conclude that the correspondence (albeit brief) that ensued between LAW and the claimant’s lawyers following the acquisition from Tesco was done in accordance with clause 2 of the agreement.
[55] Amendment 15AAA recites the earlier recommendations and reports. It then (in subpara 5) denies that there was any effective resolution and suggests that LAW “lent its name to an agreement which merely involved a transfer and re transfer and thereby earned a fee of £80,000”. Amendment 15AAA (6) asserts that LAW could comply with its statutory powers only by itself carrying out the works in accordance with the planning permission, since it was never contemplated that it would carry out the obligations. Thus, it is suggested that clause 2.2 of the agreement was intended to give the appearance of creating, by the emphasised obligation, a means of achieving the overriding of the claimant’s right of way that the parties never intended LAW to carry out and that LAW did not intend to carry out.
[56] In subpara (7), it is asserted that LAW made no attempt to acquire the claimant’s right of way.
[57] Once again, in my view, this is an ingenious exercise but it is unreal. I do not see how it can be seriously argued that LAW did not acquire and then dispose to a successor in title, that is Tesco, (and any successor from Tesco) that would carry out the works of interference. The key words in my view in para 7(1) “are the erection construction… [of] work on land which has been acquired by the Authority under s104… whether done by the Authority or by a person deriving title |page:86| under it, is authorised by virtue of this paragraph”. It is plain from the resolutions and the agreement that LAW acquired, in my view, under section 104. I come to that conclusion irrespective of whether that is in accordance with the agreement or generally. Second, it is plain that it acquired the Phoenix site for that purpose and for subsequent disposal of it to a successor in title (Tesco). The fact that Tesco transferred to it is, in my view, irrelevant. There is a chain of title. One poses the question, for example, if either LAW or Tesco had refused to complete whether there would have been litigation based upon the documents. The registered title in question might have been the subject matter of cautions lodged to protect interest. I do not see how the transactions are any different from transactions that could have occurred if LAW had acquired from Tesco and disposed in favour of the defendants many years later. Such a practice happens under section 237 of the Town and Country Planning Act 1990 (see my decision in Midtown). The wording in these sections is precisely the same. Its purpose is to enable a local authority to facilitate redevelopment in its area by exercising its powers. The exercise of those powers overrides any third-party right subject to compensation. In my view, that is plainly what has happened in this case. If the claimant had wished to challenge the decision it could have done so by judicial review in 1995, or possibly by commencing proceedings in the present way.
[58] The amendments, however, in my view, have no prospect of success at this stage. First, for the reasons that I have set out above, I do not accept the legal analysis as put forward by Mr Laurence in his opening argument.
[59] Second, I do not accept that the actual acquisition was not authorised for the reasons that I have set out above and, finally, I do not accept that the transactions can be challenged as being not genuine or (rather) not effective under the statutory powers.
Delay
[60] If necessary, I would have accepted Mr Porten’s submission in closing that the application should be refused because of the delay. In my view, to refuse such an application to amend on that basis requires clear delay that causes prejudice. There is clear prejudice arising from the delay. First, if the technical points had any merit and had been raised expeditiously in 1995, they undoubtedly would have addressed them by either fresh resolutions or fresh transactions. That cannot be done now because LAW has been dissolved and its functions transferred to the Welsh Development Agency, which itself has been dissolved and its functions transferred to the National Assembly for Wales. Second, it is quite wrong, in my view, to allow an application to proceed to examine events that are more than 10 years old. Memories are likely to fade and although some documents have been found there is the possibility (for example) of a lost memorandum sanctioning the agreement. It is unrealistic as the claimant suggests in para 5 of its supplemental skeleton that I should allow an amendment that would involve interviewing members and officers of LAW who were involved at the time (that is, 10 years ago). To ask people to be interviewed for the first time about events going back to 1993 when proceedings could have been issued over a decade ago is unacceptable in the modern regime. Finally, in this context, I have to bear in mind two further factors. First, if the decision of LAW is to be impugned it cannot, in my view, be done in proceedings to which its statutory successor the National Assembly is not a party. That will further delay matters. Second, although the claimant has been in a position to litigate since 1995 at the latest, it has not done so for more than a decade. Absent a claim, the defendants acquired the title. They are entitled to assume, after the correspondence in 1995 petered out, that there would have been no challenge. In this context, the difficulty of obtaining documents is self-evident. Further development has taken place, and if the right of way cannot be diverted that might make the whole planning permission unlawful. That, in my view, is a significant amount of prejudice.
[61] In addition, I am, in this context, guided by the fact that this claim is not about a severe uncompensatable loss or damage to the claimant. It will be no worse off with a diverted right of way. It is all about using this litigation as a stick to beat the defendants into making a payment greater than the minimum amount of statutory compensation that will be payable as a result of the exercise of the powers. There is no genuine loss or damage in this case.
[62] For all of those reasons, I therefore refuse the claimant permission to amend the particulars of claim and dismiss its application.
[63] Given my judgment, the defendants might like to consider the position of the proceedings as a whole, and I will entertain submissions in that regard when this judgment is handed down.
Application dismissed; permission to amend particulars of claim refused.
