Condition of planning permission for 20-acre housing estate that strip 0.75-acre in extent be devoted to an access road available for use by persons in an existing row of houses outside the estate–Developer serves purchase notice in respect of the strip–Compensation payable held not to reflect the value of the strip for housing purposes–So-called ‘Pointe Gourde principle’ does not extend or modify earlier authorities–No ‘scheme’ of council’s in existence by which value of strip diminished, or at any rate none in existence by relevant time–Reference to Salop County Council v Craddock (1969) 213 EG 633
This was an
appeal by the City of Birmingham District Council from a decision of the Lands
Tribunal dated July 21 1975 determining the amount of the compensation payable
to the respondent company, Morris & Jacombs Ltd (in liquidation), on
acquisition by the appellants of 0.75-acre of land near Fordhouse Lane,
Stirchley, Birmingham, at £15,000. The Lands Tribunal’s decision was reported
at (1975) 235 EG 679, [1975] 2 EGLR 173.
Mr J Grove
(instructed by Sharpe, Pritchard & Co, agents for the city solicitor)
appeared for the appellants, and Mr M Horton (instructed by Coward Chance)
represented the respondents.
Giving the
first judgment, SIR JOHN PENNYCUICK said: This is an appeal from a decision of
the Lands Tribunal made by Mr R C Walmsley on July 21 1975. The appellant is
the City of Birmingham District Council, to which I will refer as ‘the
council.’ The respondent is Morris &
Jacombs Ltd, to which I will refer as ‘the company.’ The company is in liquidation, but that
circumstance has no significance in the appeal. The issue between the parties
is the basis upon which a certain strip of land should be valued for the
purpose of compensation under a purchase notice given by the company to the
council.
The facts are
set out in full in the case stated by the member. I will summarise them so far
as is necessary for the understanding of the present issue. In 1965 outline
planning permission was granted by the council to the company’s predecessor in
title for the development for residential purposes of a 20-acre area in
Stirchley in the City of Birmingham. Annexed to the case stated is a plan of
the area. It is larger than is necessary for the understanding of the present
issue. The layout of the area is this. There is a road known as Fordhouse Lane,
which is now a main road forming part of the Birmingham ring road. To the north
of Fordhouse Lane there is a row of houses. Those houses have gardens running
to the back, the gardens ending at the south boundary of the area. There was
then no access to those houses for vehicles apart from Fordhouse Lane itself.
The area lies to the north of the backs of those gardens on Fordhouse Lane. The
plan originally submitted by the company provided for residential development
of the whole of the 20 acres. In January 1966 the company submitted a detailed
planning application for this development. After discussion with the council
officials, approval was given by the council to the development on condition
that 2.35 acres of the 20 acres should be used in part as an open space and in
part as a strip available for vehicular access at the back of the Fordhouse
Lane houses and at the back of the houses which should be constructed under the
company’s development, those houses facing in the opposite direction from the
houses in Fordhouse Lane. The condition was that a strip of 0.75-acre should be
left along the southern boundary of the 20 acres as such an access road, that
is to say one giving access to the back of the houses in Fordhouse Lane and the
back of the houses on the south of the new development. No question now arises
as to the land to be used as an open space. The appeal is concerned with the
0.75-acre to be used as an access road.
On June 16
1966 the council informed the company as follows: ‘On receipt of a formal
application, favourable consideration will be given to the granting of planning
permission for the development of land off Fordhouse Lane, Stirchley, by the
erection of dwellings, subject to the provision of an access road at the rear
of dwellings in Fordhouse Lane, to serve such dwellings.’ After one abortive application, which did not
provide for the access road, the company submitted another application, which
did provide for an access road; that is to say, a road running along the south
of the 20-acre area. Planning permission was granted in October 1966 with the
following condition: ‘The road indicated ‘A’ to ‘A’ on the plan submitted [that
is, the strip to the south of the area] shall be provided and shall not be less
than 20 ft and shall be paved with a suitable hard impervious material to the
satisfaction of the local planning authority.’
The company proceeded with its development of the 20-acre area, and that
development was completed in December 1968. The company wished to turn the
strip to account in the course of the development. It took certain steps to
that end. In January 1968 it submitted a planning application for the
residential development of the strip. The strip was, of course, quite incapable
of residential development as it stood, and the purpose of that application was
to found a purchase notice. The application was in due course refused by the
council in March 1968. Then the company, on May 6, gave an originating purchase
notice on the ground that the strip had become incapable of reasonable
beneficial use. That notice was given pursuant to section 129 of the Town and
Country Planning Act 1962, which is now reproduced in section 180 of the Town
and Country Planning Act 1971. I need not, I think, read the section.
The council
objected to the purchase notice. The matter was referred to the minister, who,
after a public hearing, affirmed the purchase notice on December 24 1968. That
date, December 24 1968, is the date of the deemed notice to treat under a
provision now contained in section 188 of the 1971 Act. There followed a
lengthy delay during which negotiations took place upon the basis of the
compensation to be paid, pursuant to the deemed notice to treat. I should
perhaps mention that a certificate of alternative development was given by the
authority on March 17 1971, and ultimately confirmed by the minister on October
20 1972. I do not think anything turns upon that fact. Ultimately, the matter
of compensation was referred to the Lands Tribunal on October 4 1974. The
hearing took place on May 18 1975 and, after an adjournment, on June 30 1975.
At the hearing, there was a conflict of evidence on the part of the expert
witnesses as to the value of the strip viewed as a private access road. The
member accepted the company’s valuation of £4,000, and that valuation is not
now challenged. On certain matters, by the time of the resumed hearing, the
parties had reached agreement. One was that the date at which the valuation
fell to be made was June 30 1975, entry
0.75-acre strip, if developed as part of the 20 acres should be taken to be
£15,000, as representing six house plots at £2,500 per plot. So we have before
us simply those two alternative figures: £15,000 on the company’s basis, £4,000
on the council’s basis.
The member,
after finding the facts in full, set out the contentions, referred to a number
of cases, one or two of which I will refer to in due course, and stated the
principles for the fixing of compensation as they appear from those cases. He
then dealt with the conflict of evidence as to the value of the strip as a
strip, and also a point taken by Mr Horton, for the company, under section 9 of
the Land Compensation Act 1961 but not pursued before us. The member then
proceeds as follows, and I will read in full this part of the case without
comment:
It does not
follow from this finding [that is, the finding under section 9] that the price
payable under the purchase notice is necessarily £4,000. There still remains
for consideration the proviso (on which Mr Horton relied, as an alternative)
that the value to be ascertained is to exclude ‘any advantage or disadvantage
due to the carrying out of the scheme for which the property is compulsorily
acquired.’ This principle–the Pointe
Gourde principle–has been affirmed and reaffirmed in a long line of cases
and is accepted as a fundamental rule of compensation law, being one facet of
the wider principle which Scott LJ in Horn v Sunderland Corporation
[1941] 2 KB 26 described as being the most fundamental of all: ‘The principle
of equivalence which is at the root of statutory compensation, the principle
that the owner shall be paid neither more nor less than his actual loss.’ The classic statement of the Pointe Gourde
principle is contained in the speech of Lord MacDermott in Pointe Gourde
Quarrying & Transport Company Ltd v Sub-Intendent of Crown Lands
[1947] AC 565: ‘It is well settled that compensation for the compulsory
acquisition of land cannot include an increase in value which is entirely due
to the scheme underlying the acquisition.’
In the light of the decision in the Craddock case the phrase
‘cannot include an increase’ is now to be read as ‘cannot include an increase
or decrease.’
The cases
cited were all dealing with conventional compulsory purchase orders, whereas
what I am concerned with is a deemed compulsory purchase. In this respect the
circumstances are the same as those in the Jelson case, and I adopt the
view expressed by the learned member of the tribunal, Mr V G Wellings QC, in
that case: ‘I think that Widgery LJ’s words in the Wilson case
(‘whenever land is to be compulsorily acquired, this must be in consequence of
some scheme or undertaking or project’) must be applicable both to a
conventional compulsory purchase order and to a deemed compulsory
purchase.’ Mrs Dean [for the council]
submits that in the present case no ‘scheme’ can be discerned as underlying the
acquisition. With respect, the scheme seems to me readily identifiable; in the
council’s own words, it is ‘the provision of an access road at the rear of
dwellings in Fordhouse Lane, to serve such dwellings.’ I have already mentioned that the value of
the access way, if developed as part of the claimants’ ownership of 20 acres,
has been agreed between the parties at £15,000. I have found its value as a
private access road to be £4,000. Is this decrease in value of £11,000 one
which is entirely due to the scheme underlying the acquisition?
Mrs Dean
submits that all that happened was that the council requested the claimants to
provide the access road; that a planning application was then lodged which
incorporated that provision; and that planning permission was given on the
application as lodged. Mrs Dean’s further argument, as I understood it, was
that if the claimants had intended to put themselves in a position to obtain
the residential value of the access way a different procedure had been open to
them: they should not have complied with the council’s request, but should
instead have lodged a planning application which showed the access way as
within the area to be developed residentially: on that application being
refused they could then have appealed to the Minister; and if the Minister had
upheld the refusal on the grounds that the access way was required as an access
road for dwellings in Fordhouse Lane, it would have been clear on any
subsequent acquisition of the access way that the council would have been
liable to pay residential value. I accept that if the claimants had adopted the
above procedure the present dispute would almost certainly not have arisen. But
this does not assist me in deciding the question posed: is the ascertained
decrease in value one which is entirely due to the scheme underlying the
acquisition?
He then refers
to a letter written to the council by the company’s solicitors in July 1966,
and proceeds:
The above
extracts are to be read against the background of the intimation, received by
the claimants from the council less than a month earlier, to the effect that
the provision of the access road by the claimants was a condition precedent to
the grant of a planning permission.
He then took
note of, but did not express any opinion on, a submission made by Mr Horton
that such a condition, if imposed, would have been unenforceable. He concludes:
The
circumstances I have described leave me in no doubt that the provision of land
for the access road, and the resultant decrease in value of the access way from
£15,000 to £4,000, is entirely due to the scheme underlying the acquisition.
I turn, then,
to the general law. The basic provision as to valuation upon compulsory
purchase is to be found in section 5 of the Land Compensation Act 1961, which
runs, so far as is now material, as follows:
‘Compensation
in respect of any compulsory acquisition shall be assessed in accordance with
the following rules: (1) No allowance shall be made on account of the
acquisition being compulsory. (2) The value of land shall, subject as
hereinafter provided, be taken to be the amount which the land if sold in the
open market by a willing seller might be expected to realise.’
It is well
established by a series of judicial authorities of the highest authority that
in ascertaining market value one must disregard any increase in value due to
the scheme under which the property is acquired. That has been described as a
judicial gloss upon or interpretation of the statutory provision. The principle
of disregarding an increase in value due to the scheme has been laid down, as I
said, in a series of cases of which I need cite only three or four. The
passages are very short ones. In In re Lucas and Chesterfield Gas &
Water Board [1909] 1 KB 16 at p 29, Fletcher Moulton LJ said this:
The
principles upon which compensation is assessed when land is taken under
compulsory powers are well settled. The owner receives for the lands he gives
up their equivalent, ie that which they were worth to him in money. His
property is therefore not diminished in amount, but to that extent it is
compulsorily changed in form. But the equivalent is estimated on the value to
him, and not on the value to the purchaser, and hence it has from the first
been recognised as an absolute rule that this value is to be estimated as it
stood before the grant of the compulsory powers. The owner is only to receive
compensation based upon the market value of his lands as they stood before the
scheme was authorised by which they are put to public uses. Subject to that he
is entitled to be paid the full price for his lands, and any and every element
of value which they possess must be taken into consideration in so far as they
increase the value to him.
Then, in the
Privy Council case of Fraser v Fraserville [1917] AC 187 Lord
Buckmaster made this statement at p 194:
The
principles which regulate the fixing of compensation of lands compulsorily
acquired have been the subject of many decisions and among the most recent are
those of In re Lucas and Chesterfield Gas & Water Board [1909] 1 KB
16, Cedar Rapids Manufacturing & Power Co v Lacoste [1914] AC
569 and Sidney v North Eastern Railway Co [1916] 2 KB 760. The
principles of those cases are carefully and correctly considered in the
judgment the subject of appeal, and the substance of them is this: that the
value to be ascertained is the value to the seller of the property in its
actual condition at the time of expropriation with all its existing advantages
and with all its possibilities, excluding any advantage due to the carrying out
of the scheme for which the property is compulsorily acquired, the question of
what is the scheme being a question of fact for the arbitrator in each case.
Finally, on
this point, I will cite again the passage in Pointe Gourde Quarrying &
Transport Company Ltd v Sub-Intendent of Crown Lands [1947] AC 565.
Lord MacDermott at p 572 said:
It is well
settled that compensation for the compulsory acquisition of land cannot include
an increase in value which is entirely due to the scheme underlying the
acquisition.
He then quotes
Eve J in South Eastern Railway Co v London County Council [1915]
2 Ch 252 and the statement of Lord Buckmaster in Fraser v Fraserville.
The principle is established beyond all doubt: for a review of the authorities,
see Halsbury’s Laws of England 4th ed vol 8 para 258.
There has been
some discussion as to what is meant by ‘a scheme’ in this connection. A scheme
means, I think, no more than a project on the part of the authority concerned
to acquire land, and of course to acquire it for some purpose for which it was
authorised so to acquire it. The meaning of the word ‘scheme’ was considered in
the Court of Appeal in the case of Wilson v Liverpool Corporation
[1971] 1 WLR 302. Lord Denning at p 309 said:
A scheme is a
progressive thing. It starts vague and known to few. It becomes more precise
and better known as time goes on. Eventually it becomes precise and definite
and known to all. Correspondingly, its impact has a progressive effect on
values. At first it has little effect because it is so vague and uncertain. As
it becomes more precise and better known, so its impact increases until it has
an important effect. It is this increase, whether big or small, which is to be
disregarded at the time when the value is to be assessed.
At p 310 Lord
Widgery said:
Whenever land
is to be compulsorily acquired, this must be in consequence of some scheme or
undertaking or project. Unless there is some scheme or undertaking or project,
compulsory powers of acquisition will not arise at all, and it would, I think,
be a great mistake if we tended to focus our attention on the word ‘scheme’ as
though it had some magic of its own. It is merely synonymous with the other
words to which I have referred, and the purpose of the so-called Pointe
Gourde rule is to prevent the acquisition of the land being at a price
which is inflated by the very project or scheme which gives rise to the
acquisition.
He then says:
The scheme
will always exist in some shape or form by the time the notice to treat is
served.
I observe at
this point that although the cases to which I have referred are concerned with
an increase in value to the scheme, I have no doubt that a diminution in value
due to the scheme must likewise be disregarded. See, for instance, the case of Salop
County Council v Craddock, reported in the ESTATES GAZETTE for
February 7 1970 [213 EG 633]. Per Lord Denning: ‘The root principle of all
compensation was that one disregarded the scheme under which the acquisition
was being made, for better or for worse.’
See also Lord Dilhorne in the case of Davy v Leeds Corporation
[1965] 1 WLR 445 at p 453. The case turned upon a different section of the
statutory legislation, where Lord Dilhorne said in that connection:
‘Just as it
would be wrong if the price to be paid for land compulsorily acquired was to be
reduced if compulsory acquisition reduced its value, so, equally, would it be
wrong if the price to be paid was increased as a result of what was proposed.’
I mention that
rather obvious point specifically because the contrary was unhopefully argued
by Mr Grove on behalf of the council.
I turn, then,
to the present case. I find it impossible to agree with the decision of the
member. The true position, it seems to me, is that at the date of the deemed
notice to treat, December 24 1968, the strip was simply a strip suitable for
making up as an access road. It was in the same condition at the valuation
date, namely June 30 1975. Its value as such was £4,000. At no relevant date
was any scheme in existence by reference to which the value fell to be adjusted
either upwards or downwards on the principle laid down in the cases to which I
have referred, ie the Pointe Gourde principle. Mr Horton, for the
company, summarised his contention in these terms: the 20 acres were building
land, that is to say, they were building land in 1966; in 1966 a scheme was
made for the provision of an access road along the strip; that scheme was the
local authority’s scheme; the scheme came into being prior to any development;
it continued in being as underlying the deemed compulsory purchase in 1968; the
scheme rendered the strip unusable for any purpose except as a strip. That
contention is based upon the finding of the member which I have quoted and
which I will read again: ‘The scheme seems to me readily identifiable; in the
council’s own words, it is ‘the provision of an access road at the rear of
dwellings in Fordhouse Lane to serve such dwellings’.’ I am unable to accept that there was any
scheme on the part of the council which came into existence in 1966. What
happened in 1966 was that the company lodged with the council a planning
application. The council imposed a condition that the strip should not be built
upon but that it should be made up by the company as an access road with a
width of not less than 20 ft. (I am paraphrasing the exact words of the
condition.) That condition cannot, it
seems to me, be regarded as a scheme on the part of the council in the relevant
sense, namely, a scheme for the acquisition of any part of the company’s land.
The company was to develop its own land, but was to make up the strip as an
access way. There was no question at that time of the council acquiring the
strip or any other land from the company. It seems to me impossible to treat
this condition proposed by the council, and if you like forced upon the company
by the council, as a scheme.
That is a
short point which is really incapable of elaboration. Mr Horton vehemently
maintained that this involved going behind a finding of fact by the member, and
he contended that that was something which we are not entitled to do. Assuming
that the member was indeed intending to find that a scheme on the part of the
council came into existence in 1966 (that is a finding, I suppose, of secondary
fact), his finding is not supported by the evidence but is flatly contradicted
by the evidence. In such circumstances, there is no doubt that an appellate
tribunal can and must go behind the finding of fact of whatever tribunal makes
the finding. I have put it that way because I am not altogether clear that the
member, when he speaks of the council’s scheme, is really intending to refer to
a scheme made in 1966 as opposed to a scheme made in 1968. The preceding
paragraph in the case is concerned with the position where there is not a
conventional compulsory purchase order. At first sight, I read the paragraph as
imputing to the council a scheme upon the making of a deemed compulsory
purchase. That may well be wrong, and it is not important; I need not,
therefore, pursue it.
If, contrary
to my view, the condition introduced into the 1966 planning permission
constituted a scheme, and the result of that scheme persisted in 1968, then the
question would arise as to whether at that stage, the development having been
completed, one can disregard the scheme in fixing compensation in the sense of
going back to 1966 and treating the strip as an integral part of the
undeveloped building land. That might be a difficult question upon a different
set of facts. Upon the facts of the present case, it seems to me to be a
completely unreal question, and I express no view upon it. It is not, as I have
said, the case presented by Mr Horton that the scheme came into existence with
the deemed notice to treat on December 24 1968, and I need not pursue the
question whether the authority can, so to speak, be saddled with some notional
scheme as at that date. We have not heard full argument upon that question, and
I need not express any concluded view. It is sufficient
necessarily be saddled with such a scheme or that the authority could be so
saddled in the present case. I conclude that, there never having been any
relevant scheme, there is no justification for increasing the value of the
strip beyond £4,000. The grievance of the company, I suppose, is that under the
arrangement made in 1966 with the council this strip was sterilised. The
company accepted this sterilisation as a term of obtaining planning permission,
and I can see no ground upon which the company could now claim compensation in
respect of this sterilisation. I am not concerned whether the company might by
some such means as suggested in the case have made a better bargain. I would
allow the appeal as to value by substituting £4,000 for £15,000 as the
compensation payable to the company.
ORMROD LJ: I
agree. Stated in plain English, the Lands Tribunal, in assessing the
compensation payable in respect of the land at £15,000, has valued the land as
it was in 1966 before the respondent company had begun to build houses on what
had previously been 20 acres of allotments. This, on the face of it, is plainly
contrary to the principle which requires that the compensation should be
assessed on the basis of the character of the land on the date of the notice to
treat. In this case, that was December 24 1968. To overcome this difficulty, as
I understand it, Mr Horton relies strongly upon what he calls the ‘Pointe
Gourde principle.’ This so-called
principle strongly influenced also the decision of the Lands Tribunal and is, I
think, the crux of Mr Horton’s argument.
The case
before us falls essentially, in my judgment, to be decided under section 5 of
the Land Compensation Act 1961. It is common ground that sections 6, 15 and 16
of that Act do not apply, so that none of the statutory hypotheses, if I may
call them that, set out in those sections need to be considered in this case.
Section 5 sets out the general principles upon which the valuation is to be
performed, and they are, of course, subject to a long-standing and well-known
rule which is conveniently set out by Lord Buckmaster in the case of Fraser
v Fraserville. I will read it again, although my Lord has already read
it:
‘The value to
be ascertained is the value to the seller of the property in its actual
condition at the time of expropriation with all its existing advantages and
with all its possibilities, excluding any advantage due to the carrying out of
the scheme for which the property is compulsorily acquired, the question of
what is the scheme being a question of fact for the arbitrator in each case.’
It is only
necessary to add that not only must the advantages due to the carrying out of
the scheme be excluded but also any disadvantages arising from it. If we now
perform the exercise indicated in section 5 and in that passage from Lord
Buckmaster, on the present facts we find that on the relevant date, December 24
1968, the actual condition of the land in question was that it was a strip of
land lying between two rows of houses having no practical use except as a rear
access road to the houses in Fordhouse Lane. We are to exclude any increase or
decrease in value due to the scheme, if there was a scheme underlying the
acquisition of the land in question, but in this case, having regard to the
characteristics of the land at the relevant date, the scheme, if there was a
scheme, had no effect on the value of the land in my judgment at all. It
remained what it is; a strip of land useful only for the purpose of an access
road to the rear of the houses. Consequently, the agreed value on that basis is
£4,000.
Mr Horton,
however, goes much further than this. He contends, in effect, that the valuer
must have regard to the history of the land in question and consider how it
came to be in the condition it was on the relevant date, and that if it is
found that its then condition was directly or indirectly due to some scheme of
the acquiring authority, then it must be valued on the land’s condition before
this scheme came into existence. I think it is implicit in and essential to
that argument that the decision of the Privy Council in Pointe Gourde is
to be read as substantially modifying the principle set out by Lord Buckmaster
in Fraser v Fraserville. This so-called principle which is relied
upon in fact consists in a single sentence taken out of Lord MacDermott’s
speech giving the opinion of the Privy Council in the Pointe Gourde
case. The sentence is this: ‘It is well settled that compensation for the
compulsory acquisition of land cannot include an increase in value which is
entirely due to the scheme underlying the acquisition.’ That is now said to be a principle. This
seems to me to be another example of the widespread tendency to isolate
statements or sentences in a judgment or a speech of the House of Lords and
call it a principle, with all the consequential difficulties that arise. I have
no doubt whatever in my own mind that Lord MacDermott had no intention of
modifying or putting a gloss on the existing law when he used that sentence at
all. He was clearly, in my view, merely summarising the law as he understood it
to be
It seems to me
that there are three convincing reasons for this conclusion. Firstly, the facts
of the Pointe Gourde case were all clearly within Lord Buckmaster’s
formulation of the rules, so there was no necessity to consider extending the
principle. Secondly, no argument took place in that case as to the ambit of the
rule. In the Fraser case, the arguments of counsel were directed to an
entirely different issue. It is plain from the form in which Lord MacDermott’s
opinion was expressed that this point was taken by the Privy Council itself
after the argument was concluded, so that it would be most unlikely that his
Lordship would have intended in any way to depart from the existing law. Finally,
if one looks at the rest of the opinion, it is clear that Lord MacDermott was
restating the law. A few lines lower down, he himself cites Lord Buckmaster’s
statement of principle in Fraser v Fraserville. Speaking for
myself, I am entirely unable to see how any argument based upon the Pointe
Gourde case can extend the rule. I cannot see how that argument even starts
to get off the ground. If it does not start to get off the ground, in my
judgment that is the end of Mr Horton’s argument, because he was not able to
refer us to any other authority to support his argument that the well-known
rule extends to the length that he wishes it to be extended.
The fact is
that the claimants themselves decided to accommodate their plans for the
development of this area of 20 acres to what they knew of the local authority’s
views. They did so perfectly reasonably from a business point of view, because
they knew it would save time and they would be likely to get their planning
permission quickly, whereas if they took another course they would have to
expect some opposition. Accordingly, they built their houses on the 20 acres in
such a way that they themselves, as my Lord has said, sterilised the strip for
reasons which seemed good to them at the time. Whether they could at that
period have made any claim for compensation is not a matter which is necessary
for this court to consider, but I am quite satisfied, so far as the present
proceedings are concerned, that they are not now entitled to have compensation
for the value of this land as it was before they embarked on the development of
this site as a whole.
Finally, I
agree with the observations of Sir John Pennycuick that on the facts of this
case there was in fact no scheme. There is clearly a danger that the word
‘scheme’ is acquiring or will acquire a mystique of its own and be used as a
starting-point for highly elaborate — I almost said ‘sophisticated’ — argument,
whereas if one looks at the authorities the scheme referred to is the scheme
for which the property is being compulsorily acquired. I can see no
scheme of acquisition by the local authority in this case. In fact, on the
evidence set out in the case the indications are that the one thing which the
local authority had no intention of doing was to acquire this land until they
were compelled to do so. The rule in the Fraser case applies to schemes
for which the property is compulsorily acquired and not to schemes in general.
In those circumstances, in my view the member of the tribunal went wrong, and
went wrong in law, for the reasons which I have given. I agree that the figure
of £4,000 should be substituted for his figure of £15,000.
STAMP LJ: I
entirely agree with both of the judgments which have been delivered. In view of
the fact that we are differing from the member of the tribunal, I will add a
few words of my own. The principles to be applied are, in my judgment
sufficiently stated in the two short passages, one from the judgment of
Fletcher Moulton LJ in In re Lucas and Chesterfield Gas & Water Board,
at p 29 of the report, and the other in the judgment of the Privy Council
delivered by Lord Buckmaster in Fraser v Fraserville, at p 194 of
the report, to which my Lord, Sir John Pennycuick, has already referred. I will
not take up time by rereading those passages, but I will treat myself as having
read them for the purpose of this judgment, beginning at p 29 of the report,
where he says ‘The principles upon which,’ etc, and the passage at p 194 of the
later report, beginning ‘The value to be ascertained,’ etc. These principles,
in my judgment, run through the authorities to which we have been referred as
far as the authorities are relevant to the issue in the instant case. The word
‘scheme’ in the context in which it is used in the cases, in those
circumstances, refers, in my judgment, to a scheme pursuant to which the
property is being compulsorily acquired, and not, as was submitted by counsel
for the respondents, to a policy or, if you will, a ‘scheme’ whereunder permission
to develop the property as building land would if applied for have been
refused.
The member of
the tribunal was, in my judgment, wrong in law in accepting, as I understand he
did, the latter view. At the time of the planning permission, the local
authority, so far as we know, had no plan or scheme for the acquisition of this
strip of land, the value of which was, as I see it, reduced from the figure of
£15,000 which it might have had if it had still been available as building land
to a figure of £4,000 at the date when it fell to be valued, not by the effect
of any scheme but by the effect of the limited planning permission which was
sought and obtained, and by the fact that that limited planning permission was
implemented in such a way that the developer was left with a strip of land so
narrow that no building could physically be built upon it. I am prepared to
assume, without deciding, that at some time after the originating purchase
notice of May 6 1968 a scheme for the acquisition of the strip came into being,
and that the strip was acquired pursuant to that scheme, but by May 6 1968 the
land was worth £4,000, not the £15,000 which it might have been worth had it
been building land. I am not deterred from this simple conclusion by the
consideration that town and country planning law and the law of compulsory
purchase is, as counsel submitted, very sophisticated. I agree that the figure
of £4,000 should be substituted for the figure of £15,000.
The appeal
was allowed with costs. Leave to appeal to the House of Lords was refused.
