Compensation for revocation — Construction of statutory provisions — Calculation of amount of loss or damage — Demolition of dwellinghouse — Assumption that fresh permission would be granted for rebuilding of existing building — Whether assumption to be applied where such planning permission was subject of revocation proceedings — Whether words to be implied into statutory provision — Lands Tribunal adding words to effect that development not being the same as that associated with revocation order — Council’s appeal allowed in Court of Appeal — House of Lords upholding appeal court’s decision
The appeal related to Marley House, Whitstable, which in 1961 had been granted outline planning permission for the “demolition of the house and erection of new dwelling”. The house standing on the property was demolished in 1963, but no new dwelling was ever erected. In 1986, Mr and Mrs C purchased the land for £14,500. C made application for the erection of a house within the same curtilage as the original Marley House and, although the application was refused, the respondent council told the appellants the original permission was regarded as valid. However, in 1987, the council notified C that they had made an order revoking the 1961 permission, which had been submitted to the Secretary of State for confirmation.
The appellants claimed compensation under section 164 of the Town and Country Planning Act 1971 which provided under subsection (4) that in calculating the amount of any loss or damage consisting of depreciation of the value of an interest in land, “it shall be assumed that planning permission would be granted for development of the land of any class specified in Schedule 8 to this Act”. Schedule 8 had a general heading “Development not constituting new development”, which included the rebuilding of a building previously destroyed or demolished.
The Lands Tribunal took the view that that the land, valued with the benefit of 1961 permission was £115,000. Without that permission, the valuation was said to be £8,250. Accordingly, compensation for depreciation was assessed at £106,750. However, if effect had to be given to Schedule 8 assumption, compensation payable for loss of value was £45,000 calculated on the basis that with Schedule 8 development rights the land was worth £70,000 at the material date. With the benefit of planning permission the land was worth £115,000. The difference between the two was the amount of compensation payable.
The tribunal was greatly influenced by the fact that the development to which the revoked permission related was, in substance at least, the very permission which it was required by section 164 to be still subsisting. The tribunal’s view was that “in revocation order cases section 164 will only operate as Parliament intended it to operate if the development resulting from the Schedule 8 assumption … is not that which also corresponds with the subject of the associated revocation order”. The council appealed by way of case stated to the Court of Appeal whether the tribunal was right in adding the words to the end of section 164(4) the words “unless such planning permission is the subject of revocation order proceedings”. The Court of Appeal found that the court was not justified in departing from the plain meaning of the words of section 164(4): see [1992]EGCS47. Mr and Mrs C appealed.
Held The appeal was dismissed.
1. The results of section 164(4) could be anomalous. That was beyond doubt. The result of this statutory assumption, where the holder of a permission to demolish and rebuild had actually carried out the demolition at the date when the permission was revoked, was to leave him without a house and with a site upon which he could neither rebuild nor, effectively, claim any compensation for its depreciation in value.
2. Nevertheless the provisions of section 164(4) were, in terms, mandatory and there was no escape from the proposition that they were required to be applied even in the case postulated of the notional permission to be assumed being the very permission that had been revoked.
3. In Stock v Frank Jones (Tipton) Ltd [1978] 1 All ER 948, it was stated that a court would only be justified in departing from the plain words of the statute where it was satisfied that there was a clear and gross anomaly; Parliament could not have envisaged it and nor have been prepared to accept it in the interests of their objective; it could be obviated without detriment to the objective; and the language of the statute was susceptible of the modification required.
4. However in the instant case, the words implied by the tribunal involved more than a mere purposive construction. It involved substantially rewriting the section. Accepting that the appellants had suffered hardship in being deprived of a substantial part of the value represented by the revoked permission, it none the less could not be regarded as a legitimate approach to construction of the statute.
5. In reviewing the legislative history of the origins of the section, no support was to be found for the purposive construction put forward by the appellants. The argument underlined the impossibility of escaping the conclusion that the clear purpose of the legislature was to limit the amount of compensation payable for depreciation due to a revocation of planning permission. It fixed a base value for the land in all cases on the footing that planning permission for any class of Schedule 8 development would be granted. That included, however arbitrary it seemed, even development of that very class which was the subject-matter of the revoked permission.
David Keene QC and Barry Payton (instructed by Hempsons) appeared for the appellants, Mr and Mrs Colley; Roger Henderson QC and Edward Cousins (instructed by Sharpe Pritchard, agents for Canterbury City Council) appeared for the respondents.
