Compulsory purchase – Compensation – Prospects of obtaining planning permission for reference land in no-scheme world – Correct approach to assessment of hope value – Whether deduction to be made in respect of betterment to contiguous retained lands of claimants – Preliminary rulings given
Pursuant to a 2000 compulsory purchase order made, the acquiring authority acquired land for the purpose of constructing a trunk road on the A6 to bypass the village of Clapham, Bedfordshire. In May 2000, the claimants referred claims for compensation to the tribunal in respect of part of the land so acquired. Notices to treat had been served on them and entry had been taken in January 2001, which was the relevant valuation date for the references.
The reference land formed part of a larger site for which planning permission had been granted in September 1999 for residential, commercial, community and open-space development. The permission was subject to a condition that excluded the reference land from the development by specifying that there should be no development on any land required for the bypass. The claimants sought to have their compensation assessed on the basis that the reference land would have been developed for housing in the “no-scheme world”. The case was not one to which any of the statutory assumptions in section 16 of the Land Compensation Act 1961 applied, and neither party had applied for a certificate of appropriate alternative development under section 17.
The central issue to the references was whether it was likely that planning permission would have been granted for the reference land in the absence of the bypass and how such a possibility fell to be valued. The tribunal deferred its decision until the House of Lords had delivered its judgment in Spirerose Ltd (in administration) v Transport for London [2009] UKHL 44; [2009] 1 WLR 1797, which dealt with the correct approach to the assumption of planning permission and hope value. A further issue arose as to whether any deduction from compensation should be made in respect of betterment, under section 261 of the Highways Act 1980, on the basis that the land retained by the claimants would not have received the planning permission it did in the absence of the bypass and thus had “benefited by the purpose” for which the reference land was acquired, within the meaning of that provision.
Decision: Preliminary rulings were given.
(1) The correct approach to the assumption of planning permission in the no-scheme world was that, unless it was certain that planning permission would have been granted, compensation should be assessed on the basis of hope value: Spirerose applied. That approach applied equally whether the case was approached under section 6 of and the First Schedule to the 1961 Act, or under section 9, or some other application of the principle in Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565. Since the grant of planning permission could never be a certainty, it might be appropriate, when making a determination as to what would have happened in the past, to treat references to the certainty of planning permission as being to a high probability: Jelson Ltd v Blaby District Council [1977] 2 EGLR 14; (1977) 243 EG 47 and Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426 considered.
Since the prospects of obtaining planning permission were not static over time, the only viable way to assess hope value was by reference to the hope that existed at the relevant valuation date. The correct approach was to determine the prospects as at the valuation date on a “cancellation assumption”, assuming that the scheme was cancelled but that everything else was taken to be as it was at the valuation date: Urban Edge Group Ltd v London Underground Ltd [2009] UKUT 103 (LC); [2009] PLSCS 181 applied. The application of the cancellation assumption to the assessment of hope value was not inconsistent with the approach of the House of Lords in Spirerose. In the instant case, assuming that the scheme were to be cancelled, the condition attached to the September 1999 planning permission would not have been sustainable and, as at the valuation date, its removal would have been almost certain (95%), with the effect that residential development could have taken place on the reference land.
(2) Although planning permission had been granted for residential development on the claimants’ retained land over a significantly larger area than would probably have been the case in the no-scheme world, a deduction for betterment should not be made under section 261 of the 1980 Act. There was no clear and direct dependency between the value of the retained land and the purpose of the acquisition. The only way that the claimants’ contiguous retained lands had benefited by the construction of the bypass was by enabling the grant of planning permission for a larger area than would otherwise have been the case. The relevant planning policies did not depend on the provision of the bypass, although they might have been influenced by it, and the September 1999 planning permission could be implemented in respect of the retained land even if the bypass did not proceed. The bypass was of no direct physical benefit by, for instance, providing a means of access that would not otherwise have been available. Accordingly, the type of planning benefit accruing in the instant case was not one to which the tribunal should have regard under section 261(1)(a): Portsmouth Roman Catholic Diocesan Trustees v Hampshire County Council [1980] 1 EGLR 150; (1979) 253 EG 1236 and 1347 applied; Esso Petroleum Co Ltd v Secretary of State for Transport [2008] RVR 351 considered.
Robin Purchase QC and Philip Petchey (instructed by Williams & Co, of Ampthill) appeared for the claimants; Timothy Morshead (instructed by the Treasury Solicitor) appeared for the acquiring authority.
Sally Dobson, barrister
