Compulsory purchase order — Dental surgeries — Acquisition for development scheme by local authority — Valuation by Lands Tribunal — Decision challenged by way of case stated — Submission by local authority that award made on ground not put forward by either party — No opportunity to make submissions on that ground — Whether breach of natural justice — Breach established — Case remitted to tribunal
A reference was made to the Lands Tribunal to determine the compensation payable on the compulsory purchase of dental surgeries at 71 Western Road, Romford, to form a site for office development. There was also a sum in respect of disturbance, which had yet to be determined. The compulsory purchase order was made by Havering London Borough Council in 1985 and the agreed valuation date was determined for 1988. The tribunal rejected the valuations (known as valuations A, B and C) put forward by the parties (see [1991] 2 EGLR 209) on the basis that they were of little assistance.
The tribunal, after detailed analysis of the parties’ primary valuations, considered the value on the approach adopted to be £474,000, which produced a total of £635,336 with the disturbance claim. However, before turning to the latter claim, the tribunal noted that the total of £635,336 was lower than an amount of £717,000 based on the value of a free-standing office development. That had been adopted during the hearing by the claimants’ valuer as a check on his primary valuation using the same unit price as a nearby comparable. The tribunal accepted the amount of £717,000 as the award.
It was submitted on an appeal by the local authority that the tribunal had thus proceeded on the basis of a valuation known in argument as valuation D. They contended that the tribunal had acted contrary to the principles of natural justice by failing to inform them of the basis of valuation that was proposed to be adopted, and that that was not a basis relied upon by either party for determining the value of the premises. Further, they were prejudiced in that they were deprived of the opportunity of challenging certain key findings. The tribunal stated a case to the High Court on whether it had erred in law and whether its decision was perverse as being made upon evidence of value not specifically relied upon by the claimants.
Held The appeal was allowed.
1. In Sabey & Co Ltd v Secretary of State for the Environment [1978] 1 All ER 586, it was held in relation to a planning inquiry at which there had been a “bare reference” to a certain objection, that there had been a breach of natural justice; there had been nothing which had emerged during the hearing, it was stated, which could fairly be said “to have put the applicants on notice … and therefore nothing to alert them to the fact that they should apply to call further evidence on that question”. Also the House of Lords in a decision on a compulsory purchase order held that it was contrary to natural justice to confirm the order on a basis of facts which the appellants had no opportunity of showing was erroneous and of an opinion with which they had no opportunity to deal: see Fairmount Investments Ltd v Secretary of State for the Environment [1976] 1 WLR 1255. In the present case, the applicability of that principle had been acknowledged, but the question of whether there had been a breach of that principle was at issue.
2. Although the tribunal had fixed the proper amount of the valuation by the claimants at £474,000 and had rejected valuations B and C, in the event the sum awarded was different.
3. Valuation D had not been distinctly and separately put forward. There was no direct reference to it at any stage as a separate basis of valuation.
4. It was clear that the tribunal in its judgment preferred valuation D as a better appraisal in the need to do justice between the parties. However, if the tribunal thought it right to approve valuation D, the parties should have had the proper opportunity to deal with it. The council were entitled to an opportunity to direct their questioning, evidence and submissions so as to modify or destroy any conclusion which might otherwise have been based upon that valuation as the proper one for the compensation claim.
5. It was for the tribunal, in wishing to proceed on that ground of valuation, to have raised the matter at the hearing or called the parties back for further submissions.
6. The reference to the valuation as a “check” calculation by the claimants’ valuer did not provide a proper opportunity to the council to deal with it as a separate basis of claim.
7. The matter was remitted to the tribunal for rehearing before another member, which was not a reflection on the previous chairman.
Philip Walter (instructed by Clifford Chance) appeared for the appellants, Havering London Borough Council; Timothy Straker (instructed by Hunt & Hunt & Houghtons, of Romford) appeared for the claimants.