Land Compensation Act 1973 – Public works – Respondent adapting former military aerodrome for civil aviation use – Claimants seeking compensation under Part I of 1973 Act for depreciation in value of their properties by reason of works to aerodrome – Whether works comprising “runway or apron alterations” within section 9(6) of 1973 Act – Whether claims barred on limitation or other grounds – Preliminary issues determined
Between October 2000 and July 3012, the respondent carried out various works to adapt Farnborough Aerodrome in Hampshire from its former military use by the Ministry of Defence to use for civilian aviation; after the respondent obtained obtaining a licence from the Civil Aviation Authority in January 2003, the MoD’s regulation of the aerodrome ceased and the respondent thereafter operated the site as the only dedicated business aviation airport in the UK. The claimants were residents of Farnborough and surrounding villages who claimed to have been adversely affected by the changes to the aerodrome. They sought compensation under Part I of the Land Compensation Act 1973, which gave a right to compensation for depreciation in the value of an interest in land as a result of physical factors caused by the use of certain public works, including “runway or apron alterations” to an aerodrome, as defined in section 9(6) of the 1973 Act.
The claims fell into two distinct groups. The first group of claims were commenced in December 2009 by the owners of 264 homes in the vicinity of the aerodrome, and related to works carried out prior to 2003. The second group of claims, by the owners of a further five properties in the area, were commenced in July 2013 in relation to works carried out at the aerodrome up to July 2012. For that purpose, the claimants contended that all the works carried out between October 2000 and 2012 comprised a single set of works, carried out pursuant to a single outline planning permission granted in October 2000, and should therefore be considered as a whole for the purpose of bringing claims under the 1973 Act.
The respondent disputed the claimants’ entitlement to bring the claims. In relation to works completed in 2002, it contended that, inter alia: (i) no compensation was payable since the works were not “runway or apron alterations” as defined in section 9(6); (ii) any claims were now time-barred under section 9 of the Limitation Act 1980, since a claim under Part I could first have been made in respect of those works 12 months after they were completed and first used and the limitation period had expired a further six years thereafter; and (iii) those works were carried out at a time when the aerodrome was still in the occupation of a government department, namely the Ministry of Defence, so as to attract immunity under section 84(1). Preliminary issues were tried to determine the validity of the claims.
Held: The preliminary issues were determined accordingly.
(1) So far as it dealt with runway or apron alterations consisting of the “extension… of an existing runway”, section 9(6)(a) was concerned with physical extensions to the length of the constructed runway surface and not with the “declared distance” or operational runway”, namely the extent of the runway which could be used by aircraft taking off and landing under the prevailing regulatory regime. Section 9 was concerned primarily with physical alterations to public works. Its provisions focused on engineering operations which brought about physical changes to land used for public purposes. The CAA licensing code for aerodromes, which was first published in 1974, did not provide a reliable point of reference to what parliament must have intended by the ordinary word “runway”. Consequently, the respondent’s extension of the runway over land not previously built on fell within section 9(6)(a) notwithstanding that the declared distance had been reduced as a result of the change from MoD regulation to the more prescriptive CAA regime: Brunt v Southampton International Airport Ltd [2005] EWCA Civ 93; [2005] 2 EGLR 105 considered.
(2) Further, works completed by the respondent in November 2002 to construct a new north apron qualified as apron alterations under section 9(6)(b) since they consisted of a substantial addition to, or alteration of, a taxiway or apron the main purpose of which was the provision of facilities for a greater number of aircraft.
The new apron had resulted in a substantial net increase in the apronage at the aerodrome. However, in deciding whether there had been a substantial addition to, or alteration of, the aerodrome apron, it was not appropriate to focus exclusively on the net area dedicated to apron use before and after completion of the relevant works. The relationship of the alteration to what had previously been present on its immediate site could not be left out of account, and was likely to be decisive, especially where a particular facility had been moved from one side of the aerodrome to the other, thereby potentially exposing different neighbouring properties to the physical effects and consequent financial loss for which the Act provided compensation. Functional considerations were also relevant, in so far as the new apron built by the respondent was designed to accommodate large modern aircraft which the previous facilities could not handle. It was a substantial alteration because it brought an area, the greater part of which had not previously been apron, into use for that purpose, so providing a large, regular expanse, better located and capable of much more convenient operation than the areas it came to replace and compatible with CAA standards.
When considering the purpose of the alterations, what mattered was the aerodrome’s capacity for business aviation, operating on different principles and with much more flexible procedures than a commercial airport. In addressing whether the works increased the capacity of the aerodrome by providing facilities for a greater number of aircraft, it was necessary to consider the number of aircraft capable of using the aerodrome before and after the completion of the alterations, in each case taking into account, in a realistic way, the extent to which that use could have been intensified and numbers increased without additional runway or apron alterations. That test was to be applied by reference to the use that was actually achieved under the management of competent operators rather than purely theoretical capacity. The provision of facilities for a greater number of aircraft than could realistically be accommodated utilising the aprons available before 2002 was fundamental to the respondent’s decision to construct the new north apron. That apron was a substantial addition to, or alteration of, an apron, with the main purpose of providing facilities for a greater number of aircraft.
(3) The construction of a new hangar at the aerodrome did not amount to apron alterations. An apron was an uncovered space whereas a hangar was covered. The fact that a hangar was used for the parking of aircraft, or for loading or unloading, did not make it an apron.
(3) Assuming that the runway extension and north apron amounted to a single package of works, the “relevant date” for compensation purposes was October 2002 when the new apron was completed and first used. It followed that the compensation claim had arisen 12 months after that date and the six-year limitation period had expired in October 2009. The first group of claims were time-barred since the notices of reference had not been submitted until December 2009. A statement issued by the respondent for the purposes of section 15 of the 1973 Act, stating that the works had been completed in 2002 and that the January 2003 date of the CAA licence could be considered to be the “relevant date”, did not give rise to an estoppel preventing the respondent from relying on the limitation defence. Although a section 15 statement was a formal document intended to have legal consequences, its purpose was to provide the date of first use of public works following completion of alterations, rather than to state a relevant date. The respondent’s section 15 statement indicated that the works were completed in 2002 and subsequent correspondence had reiterated that statement and made it clear, by May 2005 at the latest, that the respondent was not prepared to adopt January 2003 as the relevant date. It followed that, by May 2005, the section 15 statement was no longer capable of providing the basis for an estoppel preventing reliance on a limitation defence.
(4) The relevant date in respect of the 2002 works could not be delayed, for limitation purposes, by regarding all the works permitted by the October 2000 outline planning permission as a single set of runway or apron alterations completed only when the final elements of the permitted scheme were finished. Whether the alterations specified by the claimants amounted to a single alteration or programme of alterations, or whether they were a series of distinct alterations, was an issue of fact. In the instant case, the relevant alterations were carried out not as part of a continuous programme of work but with a break of at least five years between the completion of the 2002 works and the decision to proceed with the next phase of development. They were distinct projects undertaken in different parts of the aerodrome, using different contractors: Davies v Mid-Glamorgan County Council (1979) 38 P&CR 727; [1979] 2 EGLR 158 distinguished.
(5) In any event, any claim in respect of the works to the runway extension and new apron completed in 2002 was barred on the further ground that the aerodrome was, at that time, still in the possession of a government department so as to give rise to immunity under section 84 of the 1973 Act. The respondent’s rights of access to the site at that time, derived from various applicable agreements including an agreement for lease, were limited and did not amount to a right of occupation. Those rights were not inconsistent with the continuing occupation of the aerodrome by the MoD, which had in fact been physically present on the site. The respondent had not satisfied the conditions precedent to the grant of a lease of the aerodrome until January 2003; only then did it become entitled to an interest sufficient to exclude the MoD from occupation.
(6) It followed that the first group of claims should be dismissed in their entirety. The second group of claims likewise failed in respect of the 2002 works but could proceed in relation to later works carried out between 2009 and 2010 to create a further apron; if the claimants sought to rely on a further enlargement to that apron completed in 2012, they would need to seek permission to amend their claim notices accordingly.
Richard Wald and James Burton (instructed by Hugh James) appeared for the represented claimants; Peter Village QC and Andrew Tabachnik (instructed by Herbert Smith Freehills) appeared for the respondent.
Sally Dobson, barrister
Read the transcript here: Johnston and others v TAG Farnborough Airport Ltd
