Tree preservation order — Compensation — Whether increased funding costs and professional fees compensatable
In late 1988 or early 1989 the claimants
purchased a site for £152,000 with the benefit of a conditional planning
permission granted in October 1988 for the erection of two dwellings. On December
20 1989 the compensating authority made a tree preservation order protecting a
yew tree on one of the building plots. The claimants’ application to lop the
yew tree, supported by an arboriculturist’s report recommending pruning, was
allowed by the Secretary of State for the Environment in March 1992 by way of
an appeal from a refusal of consent by the compensating authority. Meanwhile,
the compensating authority had consented to a revised site plan and in December
1991 had granted consent to pruning in consequence of that revision. The
claimants contended that the tree preservation order, and the initial refusal
of consent under it, delayed the construction work and they claimed
compensation under the order for the additional interest charges incurred in
funding the purchase moneys and building costs, and for professional fees
expended in obtaining the necessary consent.
awarded.
The doctrine in Hadley v Baxendale
(1854) 9 Exch 341 applied; the issue was whether any loss which the claimants
suffered was such as may fairly and reasonably be considered as arising
naturally. The compensating authority’s officers would have been well aware
that the refusal of consent to lop the tree, with the consequential delay which
they advised in building work, would be likely to have given rise to losses
such as those claimed. Professional fees were allowed following the refusal of
consent. Additional interest of £3,862 incurred for a period of 105 days on
borrowings for funding the purchase and works was also allowed: see pp23A and
24E.
Bell v Canterbury City Council (1988)
86 LGR 635; 56 P&CR 211; [1988] 1 EGLR 205; [1988] 22 EG 86; [1988] 2 PLR
69; [1988] RVR 96, CA
Hadley v Baxendale (1854) 9 Exch 341
Reference to the Lands Tribunal
This was a reference to determine the sum
of compensation payable, if any, under section 203 of the Town and Country
Planning Act 1990, following the refusal of permission to lop a yew tree
protected by a tree preservation order.
Maxton, of Leeds, appeared for the claimants, Factorset Ltd.
District Council, appeared for the compensating authority, Selby District
Council.
MR M ST J HOPPER: This is a reference to
determine the compensation, if any, payable to Factorset Ltd (the claimants) by
Selby District Council (the council or the compensating authority) under
section 203 of the Town and Country Planning Act 1990 (the 1990 Act) consequent
upon the refusal of an application for consent to lop a yew tree (the yew tree)
at Bilbrough Manor, Bilbrough, under the terms of a tree preservation order.
From the evidence given at the hearing I
find the following facts:
1. On October 21 1988 the council, as
local planning authority, granted conditional planning permission to Acorn
Properties Ltd for the erection of two dwellings on 0.1 acre of land within the
grounds of Bilbrough Manor.
2. In late 1988 or early 1989 the claimants
purchased the freehold interest in the site the subject of the October 1988
planning permission for £152,000, plus the cost of purchase, including stamp
duty, amounting to 2.1% of £152,000, ie £3,192.
3. On December 20 1989 the council made
the Selby District Council (within the grounds of Bilbrough Manor, Bilbrough)
Tree Preservation Order No 39 1989 (the order), which related solely to the yew
tree, which stood within the site (known as plot 2) of one of the two dwellings
permitted by the planning permission of October 1988.
4. Subject to the provisions of the
order, article 9 thereof provided, inter alia, for the payment of
compensation for loss or damage suffered by any person as a result of a refusal
of consent required by the order.
5. On May 23 1990 the council refused an
application by the claimants for planning permission for two dwellings on the
site the subject of the October 1988 planning permission on the grounds, inter
alia, that the proposed development would require substantial lopping of the
branches of the yew tree.
6. On May 24 1991 the council granted to
the claimants conditional planning permission for the erection of two dwellings
on the land the subject of the October 1988 planning permission; one of the
conditions required the approval of measures to be implemented in order to
protect the yew tree during construction work and no development was to take
place in advance of the approval and implementation of such measures.
7. On July 4 1991 the claimants exchanged
contracts with Fred Davies under which they undertook to construct a house for
him in accordance with plans and specification on plot 2, Manor Court,
Bilbrough, which included the site of the yew tree, and convey the freehold
interest in the plot, and the completed house thereon, to him on or before a
date 13 months from July 4 1991, ie August 4 1992; the purchaser paid a deposit
of £14,750 upon the exchange of contracts and was to pay the balance of the
purchase price of £295,000, ie £280,250, upon completion. The purchaser
was entitled to serve notice to void the contract at any time before the
completion date; in the event of his so doing the contract provided that the
deposit should be accepted in settlement of the claimants damages due to the
purchaser’s failure to complete. The contract also provided, inter alia,
that, should the purchaser require extra works or variations to the works, and
such works were not finished at the end of the 13-month period, the completion
of the purchase should not be delayed.
8. On July 11 1991 the claimants made an
application under the terms of the order for consent to lop the yew tree.
9. The claimants commissioned a report
from an arboricultural consultant, Mr Michael Cooper; his report dated August
14 1991 recommending pruning of the yew tree, was sent to the council, but on
September 5 1991, despite receiving a report from their own officer recommending
the grant of consent, subject to conditions, they refused consent.
10. On September 19 1991 the claimants
appealed against the council’s decision to the Secretary of State for the
Environment.
11. On September 27 1991 the claimants
made a further application for consent to lop the yew tree.
12. On October 8 1991 the claimants’
architects provided to the council a revised site plan in substitution for the
site plan attached to the application which was permitted in May 1991.
13. On December 18 1991 the council
resolved to accept the revised plan as an amendment to the planning permission
of May 1991 and to grant consent to the application dated September 27 1991 to
lop the yew tree, subject to the work being carried out by a qualified tree
surgeon and to the satisfaction of the council’s parks and amenities officer.
14. On March 10 1992 the Secretary of
State allowed the claimants’ appeal against the original refusal to lop,
subject to the same condition as that which was imposed on the council’s grant
of consent on December 18 1991.
15. On May 6 1992 the claimants, by a
letter addressed to the council by their solicitors, Elmhirst & Maxton (Mr
Cox’s firm), claimed compensation under the terms of the order; the letter
stated that the claimants had incurred additional interest charges in the sum
of £4,575, had to obtain a consultant’s report at a cost of £1,200 and incurred
additional fees of £1,500 in submitting, a further application and an appeal
and were seeking to recover the sum of £7,275.
Evidence
On behalf of the claimants, Mr Cox called
Keith Jenkinson mciop, an
architect, of Jenkinson Associates and a director of the claimant company and
Mr Rodney Hugh Hemsley Faulconbridge, a solicitor in a firm known as Carod
Consultancy (Carod) and also a director of the claimant company.
Mr Jenkinson had been involved in the
purchase of the relevant land. He said that the claimants’ practice was to
build houses for specific purchasers to whom they sold ‘off plans’, ie they
agreed to sell in advance of construction as in the case of plot 2 at Bilbrough
Manor; the council’s officers were aware of the way the claimants operated.
The claimants found a purchaser for a
house on plot 2; he had wanted the yew tree removed; at the time consent would
have been required for this as the site lay within a conservation area; consent
had been applied for and the council had then made the order; the prospective
purchaser withdrew. Mr Davies then became interested; he was not so concerned
about the yew tree, the claimants had obtained the planning permission of May
1991 and entered into the contract of July 4 1991.
Work on the construction of the house
started about July 6 or 7 1991 with the digging of the footings. Within the
next few days Mr Jenkinson attended a meeting on the site with Mr Glazier, the
council’s planning officer, Mr Foreman, the council’s enforcement officer, and
Mr Harrison, of the council’s parks and amenities department. They expressed
concern regarding the work being carried on in relation to the yew tree; Mr
Jenkinson was advised that work should cease and that the claimants should
apply for consent to lop the yew tree, supported by a tree expert’s report. On
July 11 1991 Jenkinson Associates made an application accordingly supported by
the Cooper report.
As a result of the refusal of consent to
lop, construction work had been delayed, as a result of which the claimants had
to continue paying interest on money borrowed to fund the purchase of the land
and construction of the building. Had the claimants been able to complete the
house on time they would have received the balance of the purchase money. The
profit earned upon completion would have gone to reduce the claimants’
borrowings in relation to the cost of purchasing plot 1, the development of
which had not commenced in August 1991. In fact the house on plot 1 had never
been built, although the claimants hoped to build and sell it in the autumn of
1991. At no time would the claimants have started to build the second house
without a contract to sell it.
He submitted details of fees incurred by
the claimants and payable to Jenkinson Associates in connection with the matter
amounting to £1,762.50, inclusive of VAT. The details are set out in appendix 1
hereto [not reproduced here].
In cross-examination he said that he was
aware of condition 5 imposed by the planning permission of May 1991 and bunting
had been put around the yew tree.
He had put in a notice of commencement of
the construction of the house on plot 2 under the building regulations. There
was nothing in writing to confirm what the council’s officers had said at the
site meeting early in July 1991.
He agreed that the position of the yew
tree was not correctly shown on the site plan attached to the application which
was permitted in May 1991, but the trunk of the tree was no nearer the site of
the permitted house than it was shown as being on that plan. The original site
plan had related to a house for the prospective purchaser who withdrew; the
revised site plan related to the house designed for Mr Davies. The position of
the tree was shown differently from its position on the original site plan and
correctly.
As to plot 1 the only work carried out up
to October 1994 was ducting for services and landscaping to meet the council’s
requirements. Council
claimants’ methods of operation; the claimants’ accounts were open for public
inspection.
As to the fees charged to the claimants
by Jenkinson Associates, Mr Jenkinson’s fees as a member of that practice were
calculated at an hourly rate of £64 plus disbursements. Mr Jenkinson personally
received no salary or fees from the claimant company.
There had been several meetings with the
council’s officers about the matter. On his schedule of fees the first 10 items
related to costs incurred prior to the refusal of consent to lop on September 5
1991 and the last two related to costs incurred after the council granted the
second application to lop on December 18 1991.
In further evidence, after Mr
Faulconbridge had given his evidence, Mr Jenkinson said that Mr Davies had
wanted a ‘backstop’ date in the contract, but he thought that Mr Davies would
have completed sooner, if the house had been completed before the end of the
13-month period.
The cost of the foundation work carried
out prior to the refusal of consent on September 5 1991 was about £1,000 to
£1,200. After the consent of December 1991, due to the erosion of the sides of
the trenches, they had had to be redug.
In further cross-examination he said that
Mr Davies was a particular person. There had been no delays in constructing the
contracted building (other than the delay in the period September 5 to December
18 1991), although there were delays in relation to extra works required by Mr
Davies, eg the stable block. The claimants had been strict about compliance
with the contract and they did not know why Mr Davies would not complete.
In answer to me, Mr Jenkinson said that
the claimants rolled over any development profit from one site to another and
their rate of return upon capital invested varied a good deal between one year
and another.
He said that the cost of building the
house was £130,000; this was the contract price paid in stage payments. The
same contractor was now building a house for Mr Davies elsewhere. The claimants
were going to sue Mr Davies for rescission of the contract and damages.
Mr Faulconbridge said that he had known
Mr Jenkinson for 14 years and that the claimants had been building houses since
1981. His firm charged fees for work done for the claimants.
As from July 4 1991 the claimants had an
unconditional contract to sell the house to be built on plot 2; he produced a
copy of the contract. He and Mr Jenkinson were concerned about the position
following the site meeting in early July and decided that the claimants had no
option but to cease work, otherwise they feared enforcement proceedings.
Mr Davies was due to pay the balance of
the purchase money, £280,250, on completion. Due to the refusal of consent to
lop, work on the house had been delayed for a period of 105 days (September 4
to December 18 1991). In fact the claimants were not in a position to service
notice to complete the purchase on Mr Davies until December 30 1992.
He submitted three alternative
calculations of a claim for interest
appendices 2 to 4 hereto [not reproduced here]. Each is based upon a period of
105 days and an interest rate of 14%. Mr Faulconbridge explained that the
claimants had been charged 3.5% over base rate on their borrowings by Barclays
Bank and, during the whole of the relevant period, base rate had been 10.5%,
producing a charging rate of 14%.
His first calculation was based upon the
outstanding amount of the purchase money and amounted to £11,286.78. His second
calculation was based on the outstanding amount of the purchase money, less
£35,000, being the amount of the profit the claimants anticipated, had the sale
been completed on time on or before August 4 1992; this amounted to £9,877.19.
His third calculation was based upon the net expenditure actually incurred by
the claimants up to September 5 1991, ie the cost of purchasing the site of
plot 2, taken at 50% of the cost of the two plots (£152,000 plus £3,192 =
£155,192 at 50% = £77,600 say £77,000) plus the cost of foundation work; this
amounted to £2,555.
He submitted details of fees charged by
Carod in connection with the matter amounting to £1,762.50, inclusive of VAT.
The details are set out in appendix 5 hereto [not reproduced here].
In cross-examination he said that the
amount originally claimed for loss of interest in May 1992 was based upon an
independent valuation of plot 2 in the amount of £122,000, but in fact the
claimants’ loss was greater. Mr Davies had been due to complete by August 4
1992; he had failed to do so and he thought the council’s action had
contributed to that failure. The house had been completed in accordance with
the terms of the contract; the claimants served notice to complete on Mr
Davies, but he had failed to do so and the completed house remained unsold; the
claimants had been unable to serve a notice to complete prior to August 4 1992,
due to delay in constructing the house.
After refusal of consent to lop it had
not been possible for any work to be done on the construction of the house,
until consent had been received.
He confirmed that the amount of the
claimants’ overdraft referable to plot 2 at the date of the refusal was
£63,450, as shown in his calculation 3.
He did not think the council were
informed in writing about the contract with Mr Davies, but he thought that the
council’s officers were well aware that the claimants were not going to
commence construction without such a contract.
He agreed that the claimants did not have
to borrow that part of the purchase price, which represented the profit which
they would have made had Mr Davies completed on or before August 4 1992.
As to Carod’s fees, Mr Faulconbridge’s
hourly rate was £75 and his time included substantial travelling time, as his
office was in Birmingham. The first four items in Carod’s fees related to costs
incurred prior to the refusal of consent. In the case of the fifth item,
Jenkinson Associates charged for one and a quarter hours of time against
Carod’s two hours; the latter included time spent perusing papers. There was an
item for perusing an agreement under section 52 of the Town and Country
Planning Act 1971 in Carod’s charges; he thought this perusal a necessary step
to take,
be built on the land the subject of the October 1988 planning permission. He
thought that it was necessary for both Mr Jenkinson and he to attend the site
meeting with the planning committee, although he agreed that only one of them
spoke.
In re-examination he said that under the
terms of the contract 21-days notice to complete had to be given by the vendor;
the house had not been ready on the date fixed for completion; this was a
breach, but the purchaser did not seek to avoid the contract; he had to
complete the purchase later upon the house being completed.
At the resumed hearing he produced a copy
of a letter dated July 8 1994 from M G Street, of Herbert Wilkes, solicitors of
Birmingham, acting for the claimants, in which Mr Street said that he
considered that the claimants had the ability to claim against Mr Davies for
breach of contract, but that, until such time as the house was resold, it was
not possible to quantify the amount of damages; until then the claimants could
not pursue their claim. In answer to me Mr Faulconbridge said that the
claimants had not proceeded with the construction of the house during the
105-day period of delay because the house was designed to suit Mr Davies’
requirements; Mr Davies wanted the yew tree trimmed and the house might not
have suited another purchaser.
Had the claimants earned a profit upon
completion of the purchase in August 1992 they would have been likely to have
reinvested it in the acquisition of further land for residential development.
Submissions
On behalf of the council Mr Jepson did
not call any evidence; he did not think it would assist.
He referred to the wording of the order;
article 9 spoke of compensation for ‘loss in consequence of any refusal’;
article 11 required the claim to be in writing. Para 3(c) of the second
schedule provided that the order did not apply so as to require consent, inter
alia, to lop a tree ‘where immediately required for the purpose of carrying
out development authorised by the (sic) planning permission granted upon
an application made under part 3 of the Act’.
The plan attached to the application
which resulted in the planning permission of October 1988 showed the yew tree
in the wrong position. The plan attached to the application which resulted in
the May 1991 planning permission showed the yew tree in the same wrong
position. This plan, as revised and submitted on October 8 1991, showed the
tree in a different position about 5m further from the nearest point of the
site boundary.
He referred to the letter dated May 6
1992 from Elmhirst & Maxton notifying the council of the claim in the
amount of £7,275 and a further letter dated December 10 1992 from Elmhirst
& Maxton to the council enclosing a note of Carod’s fees and explaining the
basis of the original claim in relation to interest.
He submitted that there were four issues
of principle. The first was a ‘clever point’. The order required any claim to
be in writing and
been submitted in writing and within 12 months, but the Carod fee account had
not been submitted until after the 12-month period had expired. He submitted
that the amount claimed in writing (£7,275) constituted a ‘ceiling’ above which
compensation could not be awarded.
His second point was that under para 3(c)
of the second schedule to the order the claimants never needed consent under it
to lop the yew tree. He did not say that the planning permission of May 1991,
as originally granted, was invalid, because the site plan showed the site of
the yew tree incorrectly, but physically the planning permission could not have
been implemented. He submitted that, if consent to lop had been granted
initially, the development could not have proceeded prior to the approval of a
revised site plan.
His third point related to loss having to
be ‘in consequence of refusal’. Any fees incurred prior to September 4 1991 had
to be disregarded; likewise any fees incurred after December 18 1991, although
he accepted that any of the latter which would not have been incurred but for
the initial refusal, should not be disregarded.
His last issue of principle related to
remoteness. He referred to the case of Hadley v Baxendale in
which he cited the following passage:
Where two parties have made a contract
which one of them has broken, the damages which the other party ought to
receive in respect of such breach of contract should be such as may fairly and
reasonably be considered as either arising naturally ie according to the usual
course of things, from such breach of contract itself, or such as may
reasonably be supposed to have been in the contemplation of both parties, at
the time they made the contract, as the probable result of the breach of it.
He relied upon the ‘second rule’. He also
referred to a further passage from the judgment as follows:
For such loss would neither have flowed
naturally from the breach of contract in the great multitude of such cases
occurring under ordinary circumstances, nor were the special circumstances,
which perhaps, would have made it a reasonable and natural consequence of such
breach of contract, communicated to or known by the defendants.
He also referred to the case of Bell
v Canterbury City Council in this tribunal, the decision in which was
upheld by the Court of Appeal, where it had taken a similar approach to that
taken in Hadley v Baxendale. The council had received no specific
notification of the Davies’ contract and were unaware of its terms.
He accepted that the council must have
realised that there may be consequences when resolving to refuse consent, but
he submitted that the interest claim was too remote having regard to the
claimants’ failure to inform the council about the Davies’ contract, or that
there was a prospect of the claimants suffering financial loss, if consent was
refused.
On issues as to amount, there was no
correspondence with Mr Davies
not shown that there was a loss in consequence of the refusal; there could have
been reasons other than delay why Mr Davies did not complete the purchase. The
council had not necessarily clearly been shown to be the cause of any loss due
to delay.
As to the claim in respect of interest,
he accepted that the claimants paid 14% on their borrowings. As to calculation
1 building costs would have been incurred in any event, but had not been
incurred as at September 4 1991. He questioned the manner in which the profit
element was dealt with. The latter was taken separately in calculation 3; he
suggested that any interest relating to the profit element should be taken at
6%. The claimants said that they would have put the profit back into their
business, but this was too remote a consideration. He accepted 105 days as the
period of delay.
In relation to the claim for fees he said
that the first 10 items on Jenkinson Associates’ breakdown of fees were
incurred prior to the refusal of consent to lop and should be disallowed, likewise
items 16 and 17, which were incurred after consent to lop had been given on the
second application. He also questioned items 12 and 14 relating to the appeal,
as he questioned the need for both the second application and the appeal. As to
item 18, the travelling expenses averaged £14.56 per round trip; four were
undertaken before the refusal and should be disallowed; he questioned three
more, which related either to the appeal or to the period after December 18
1991. He therefore regarded only £240 out of the total fee of £1,376 as
certainly allowable, a further £160 as questionable and the remaining £976 as
not allowable; of the total travelling expenses of £116.48, he regarded £14.56
as certainly allowable, £43.68 as questionable and the remaining £58.24 as not
allowable.
As to the Carod fees he said that the
first four items should be disallowed as being incurred prior to the refusal;
he questioned item 6, because he doubted the need to peruse the section 52
agreement, and item 7, because he doubted the need for both Messrs Jenkinson
and Faulconbridge to attend the site meeting with the planning committee.
Carod’s fee charged was based upon £75 an hour to produce £1,875, but this was
reduced to £1,500, equivalent to £60 an hour. On this basis Mr Jepson regarded
only £150 of the fees as certainly allowable, another £120 as questionable and
the remainder as not allowable. As to the charge for travelling time he
regarded half of this (£300) as questionable and the remainder as not
allowable.
All the amounts mentioned in the last two
paragraphs are net of VAT.
In reply Mr Cox, on behalf of the
claimants, first dealt with Mr Jepson’s four issues of principle. As to the
first he said notice of the claim was given in writing on May 6 1992; he did
not think it was limited as to amount to that which was claimed within the
12-month claim period; in default of agreement the claim was to be determined
by the tribunal; effectively the claim had been amended and the hearing
adjourned so that the council could consider it. He accepted that the claimant
had been somewhat remiss in particularising the claim and apologised to the
council for not having
On the second issue, work on the house
had commenced on the basis of the May 1991 planning permission; there had been
no need to submit a fresh application. Mr Jenkinson had submitted the revised
site plan in person; the buildings shown thereon were in exactly the same
position as on the originally approved site plan. As far as the planning
permission was concerned there was no difficulty about going ahead with the
work, which started in July; there was no mention of any. The council’s
officers’ report commended approval of consent to lop; there was nothing in it
about the tree being shown in the wrong position on the site plan. As to para
3(c) of the second schedule to the order, he relied upon what the council’s
officers had said upon the occasion of the July 1991 site meeting and the fact
that, the site being in a conservation area, consent for lopping was required
regardless of the order, a fact which Mr Jepson appeared to concede.
On Mr Jepson’s third issue of principle,
ie that costs incurred prior to the refusal of consent were not consequential
thereon and thus not compensatable, Mr Cox referred to the July 1991 site
meeting with the officers. The officers had not been called to give evidence;
Mr Jenkinson’s evidence was that the officers had said work had to cease and an
application under the order submitted. This was extremely serious for the
claimants, who had just signed a contract and started work on the house. The
alternative course was to go ahead and risk enforcement proceedings; they had
decided to accept the officers’ advice. Normally the matter would have been
dealt with by agreeing how the tree could properly be lopped; there had been no
need for the matter to be dealt with so heavy-handedly.
On Mr Jepson’s fourth issue of principle,
Mr Cox distinguished the case of Hadley v Baxendale on the
grounds that that related to a breach of contract between two individuals and
not a decision by a local planning authority. There was no duty on the
claimants to disclose details of their position to the council; it was
reasonable that the council should foresee that loss might be suffered as a
consequence of their refusal, but they could not expect the amount of it to be
worked out in advance.
Turning to Mr Jepson’s issues as to
amount, he could not say why Mr Davies had not completed; it was not particularly
relevant; the building was severely delayed and notice to complete could not be
served until December 1992. Mr Davies did not give notice to void the contract
under its terms; account should be taken of his failure to complete and the
claimants’ right of action against him.
As to the interest claim, the period of
delay was 105 days; the development was 100% funded by Barclays Bank and the
interest rate payable was 14%; the claimants were deprived of interest on
£280,250; as to the profit element, the claimants had been denied it and
received no benefit from it.
The fees incurred on the second
application to lop had been necessarily incurred; the appeal decision was not
given until March 1992 and, if the claimants had simply relied upon the appeal,
the period of delay would have been doubled; the second application had thus
mitigated the claimants’ loss. The claimants were also entitled to the fee
relating to
It was reasonable for the claimants to
have both their lawyer and their planning consultant at the site meeting with
the planning committee; they were substantially outnumbered by the council’s
officers.
Finally, Mr Cox submitted that I should
accept, on the evidence, that the application for consent to lop was made as a
direct result of advice received from the council’s officers at the July 1991
site meeting. Following the initial refusal on September 5 1991, consent had
been granted on December 18 1991, a delay of 105 days; the claimants were
entitled to compensation for their losses. Due notice of their claim had been
given and they had the right subsequently to amend it. Fees charged by
Jenkinson Associates and Carod were claimable in full, together with loss of
interest based on Mr Faulconbridge’s calculation 1.
If I decided calculation 1 was not
appropriate and that the profit element should be deleted, the unchallenged
evidence was that the profit would have amounted to £35,000. Calculation 3 gave
the amount of borrowing prior to the initial refusal of consent.
Decision
This reference raises a number of issues
both as to principle and as to amount. I first consider the council’s second
issue of principle, ie that under the provisions of para 3(c) of the second
schedule to the order, the claimants never needed to obtain consent thereunder
as the council’s submissions under this head appeared to be designed to strike
down the claim in its entirety. Para 2 of the order provides that ‘subject to
the provisions of this order and to the exemptions specified in the second
schedule hereto, no person shall, except with the consent of the Authority …
lop … any tree specified in the first schedule hereto …’. The second schedule
provides that ‘this Order shall not apply so as to require the consent of the
Authority to … the lopping of a tree … where immediately required for the
purpose of carrying out development authorised by the (sic) planning
permission granted on an application made under part 3 of the Act …’.
Mr Cox said that, because the tree was in
a conservation area, consent to lop would have been required in any event and
Mr Jepson appeared to concede this point. However reference to section 211 of
the 1990 Act, which is the relevant statutory provision, makes it clear that
the protection afforded to trees in conservation areas thereunder, does not
apply to trees already the subject of a tree preservation order, as was the yew
tree in this case at the material time.
Returning to consideration of para 3(c)
of the second schedule to the order, the planning permission of May 1991 was
granted under Part 3 of the 1990 Act rather than the Town and Country Planning
Act 1971, but nothing turns on this. Was the lopping of the yew tree
immediately required in order to carry out the development permitted by it? The
evidence as to this is not entirely clear. Mr Jenkinson said that work has
ceased upon the insistence of the council’s officers at the July 1991 site
meeting; they had expressed concern regarding work being carried on in relation
to the yew tree; he was advised that work should cease and that
said that, after the refusal of consent to lop, it had not been possible to
proceed with construction work; in answer to me he said that the house was designed
to Mr Davies’ requirements and he wanted the yew tree trimmed.
In his report upon the application to
lop, the council’s planning officer stated: ‘When the District council granted
planning permission for the erection of two dwellings on the site, care was
taken to ensure that the sitting of the dwellings would not interfere with the
spread of the tree’.
There was no written record of the July
1991 site meeting and no letters written to record what was said at it. The
council could have called evidence about it, but chose not to do so. However,
the council’s subsequent conduct is consistent with their taking the view that
consent to lop was required. The officers’ report to the council upon the
application nowhere suggests that consent was not required and the council
accepted and decided both the initial application and the second application,
as well as responding to the appeal proceedings relating to the refusal of the
initial application.
The contention that consent was never
required was not expressly put to the claimants’ witnesses and only first
introduced after all the evidence had been given. Whether or not in July 1991
the council’s officers had in mind the provisions of para 3(c) of the second
schedule to the order I know not, but I find that they did advise the claimants
that they should cease work and make an application for consent to lop. Further
the evidence as to whether the lopping of the yew tree was ‘immediately
required for the purpose of carrying out’ the development permitted by the May
1991 planning permission is not entirely clear. In all the circumstances I am
not persuaded that the claimants never need have applied for consent to lop the
yew tree.
Under the heading of his second issue of
principle Mr Jepson said that, while the May 1991 planning permission was not
invalid, it could not have been implemented prior to the approval of the
revised site plan. The evidence was that, whereas the position of the yew tree
was changed upon the revised plan, that of the permitted building was not. I
find Mr Jepson’s argument difficult to follow and am not persuaded that the
planning permission of May 1991 could not have been implemented prior to the
approval of the revised site plan.
I now return to Mr Jepson’s first issue
of principle. There is no question that the claim was made in the correct form
and in time. That having been done I accept Mr Cox’s submission that the claim
can subsequently be amended, as it has been, and I find that the total amount
originally claimed does not constitute a ‘ceiling’ for my award, although as
will be seen, in the event, this is not a live issue.
As to Mr Jepson’s third issue of
principle, had consent been granted instead of refused on September 5 1991,
there could have been no claim and I accept that fees incurred before that date
cannot be recovered. However, fees incurred after the council had granted the
second application may well not have been incurred, but for the initial
refusal,
them, which I consider hereafter.
As to Mr Jepson’s last issue of
principle, I reject Mr Cox’s submission that the doctrine in Hadley v Baxendale
does not apply. The issue is, therefore, whether any loss which the claimants
suffered was such as may fairly and reasonably be considered as arising
naturally. Although they may well have been unaware of the contract with Mr
Davies, I think the council’s officers would have been well aware that the
refusal of consent to lop the yew tree, with the consequential delay in
building work which they had advised, would be likely to have give rise to
losses such as those which are the subject of the claim. I accept Mr Cox’s
submission that the council cannot expect to be advised in advance of the
amount of the likely loss. I do not gain any further assistance from Bell’s case
and find that the losses in respect of which compensation is claimed are not
too remote.
As to issues as to amount I deal first
with the claim for fees incurred; first, those of Jenkinson Associates. I
disallow the first 10 items as being incurred prior to the refusal. I find that
the claimants were well advised to pursue both their appeal and make the second
application, as there could be no certainty as to the success of the latter,
prior to its being granted, and because the grant of the second application
effectively reduced the period of delay. The items relating to the period after
the grant of the second application related to the recommencement of building
work on site and these fees would not appear to have been incurred had works
not ceased for a lengthy period. I therefore allow items 11 to 17 amounting to
£560 in full. Four of the eight trips were undertaken after the refusal of
consent and I allow £58.24 (£116.48 ÷ 8 = £14.56 × 4 = £58.24). No submissions
were made about the item of £7.52 related to telephone calls; I allow 50%, ie
£3.76, making a total of £622 (£560 + £58.24 + £3.76); no question was raised
as to the addition of VAT and I add 17.5% to produce £730.88.
As to Carod’s fees I disallow the first
four items as being incurred prior to the refusal of consent. I accept the
necessity of perusing the section 52 agreement and Mr Faulconbridge attending
the site meeting with the planning committee in addition to Mr Jenkinson. I
therefore accept items 5 to 8 in full amounting to £270 (4.5 hours at a net £60
an hour); Mr Faulconbridge charged travelling time on visiting the site on
three occasions, two of these were before the refusal of consent. I therefore
allow a third of his travelling time, ie 3.33 hours at £60 an hour equals
£199.80, say £200, making a total of £470, which with VAT added comes to
£522.25.
Turning to the claim for interest, I
first consider it upon the assumption that Mr Davies had completed the purchase
of the house on plot 2 upon its physical completion and paid the balance of the
purchase price, £280,250.
As at September 5 1991, on the evidence,
the claimants had borrowed £63,450 in respect of plot 2 (calculation 3).
Subsequent to December 18 1991, on the evidence, they would have borrowed a
further amount to fund the construction of the house. I accept Mr Jepson’s
submission that borrowing charges on the latter would have been incurred in any
event over a building period ending with Mr Davies’ completion of the purchase;
I think the same is true of associated fees.
Had Mr Davies completed the purchase on
or before August 4 1992, the claimants would have repaid their bank borrowings
and, after payment of interest charges, fees, etc, on the evidence, they would
have earned a profit of £35,000. They would thus not have had the benefit of
interest on the outstanding purchase price. Had Mr Davies completed the
purchase upon the physical completion of the house, the claimants would
likewise have repaid their borrowings. Again they would never have had the
benefit of interest on the outstanding purchase price. I therefore reject the
claim based upon calculation 1, and any claim based upon calculation 2, which
also essentially rests upon same false assumption. However, the claimants would
have incurred the cost of borrowing in relation to the costs incurred, as at
September 5 1991, for an additional period and the profit would have been
reduced by the amount of such additional interest. As far as the additional
interest is concerned, the period of delay is agreed as being 105 days and the
borrowing rate 14%; this produces £2,555, as in Mr Faulconbridge’s calculation
3. The profit would thus have been reduced from £35,000 to £32,445 and receipt
of this reduced amount would have been delayed. Again the period of delay is
agreed at 105 days, but there is disagreement as to the interest rate to be
applied. On the evidence it seems most likely, as Mr Jenkinson said, that the
profit would have been applied to reduce the outstanding borrowings on plot 1,
which remained undeveloped, and that the claimants’ loss is the extent to which
interest would have had to be paid in relation to plot 1 during the period of
delay. I do not regard this consideration as too remote. The period of delay is
agreed at 105 days and I find that the borrowing rate of 14% should be applied
producing £1,306.68, say £1,307. My calculations are set out on appendix 6
hereto. I find that, had Mr Davies completed the purchase upon the physical
completion of the house, the claimants’ loss would have been £3,862 (£2,555 +
£1,307).
Last, I turn to Mr Jepson’s first issue
as to amount. In fact Mr Davies did not complete the purchase of the completed
house and it was still not sold at the time of the hearing. The claimants did
not put their claim upon the basis that Mr Davies failure to complete was due
to the delay, although Mr Faulconbridge thought it was a contributory factor,
nor was it contended that the claimants would have otherwise been better placed
to sell the house had construction not been delayed. The claim for interest can
therefore only be substantiated upon the basis that the claimants can
successfully pursue a claim against Mr Davies for the outstanding purchase
price of £280,250, no doubt with added interest and costs. I accept that they
have not done so up to now because, until the house be sold, the full amount of
their claim cannot be quantified.
I accept Mr Jepson’s submission that the
cause of Mr Davies’ failure to complete the purchase is unknown; but I think it
is clear that Mr Davies could not be held liable for any loss due to delay
caused by the refusal of consent to lop and that the claimants only hope of
recovering this element of their loss is by way of the instant claim.
Because of the risks and uncertainties of
legal actions, I would have been inclined to discount the claimants’ loss,
calculated upon the
physical completion; however I received no evidence or submissions on this and
I therefore award £3,862 in respect of the claim for interest.
This produces a final claim made up as
follows:
|
|
|
£ |
|
|
(a) Loss of interest |
|
3862.00 |
|
|
(b) Fees of Jenkinson |
|
730.85 |
|
|
(c) Fees of Carod |
|
522.25 |
|
|
|
|
5,115.10 |
|
and I determine the compensation payable
by the council to the claimants at £5,115.10.
This decision determines the substantive
issues raised between the parties and the tribunal’s award is final. The
parties are invited to make such submissions as they are advised as to the
costs of the hearing, and a letter accompanies this decision as to the
procedure for submissions in writing. The tribunal will, in due course,
incorporate an order as to costs in an addendum to this decision. Rights
of appeal under section 3(4) of the Lands Tribunal Act 1949 and Rules of the
Supreme Court Ord 61 will not accrue until the decision has been thus
completed, ie from the date of the addendum.
Addendum as to costs
I received submissions from the parties
as to costs; the claimants claimed their costs upon an indemnity basis; the
compensating authority disputed the claimants claim. I order that the
compensating authority pay 50% of the claimants costs, upon the standard basis,
such costs, if not agreed, to be taxed by the registrar of the Lands Tribunal
on county court scale 3.
APPENDIX 6
Tribunals calculation of claim for loss
of interest assuming purchase completed by Mr Davies
|
|
|
£ |
|
£ |
|
Purchase price of plot 2 |
|
77,000 |
|
|
|
Add |
|
1,200 |
|
|
|
|
|
78,200 |
|
|
|
Less |
|
14,750 |
|
|
|
|
|
63,450 |
|
|
|
Interest at 14% for 105 days on £63,450 |
|
|
|
2,555 |
|
Profit likely to have been earned if Mr Davies had |
|
35,000 |
|
|
|
Less |
|
2,555 |
|
|
|
|
|
32,445 |
|
|
|
Interest at 14% for 105 days on £32,445 |
|
|
|
1,307 |
|
|
|
|
|
3,862 |
|
|
|
|
|
|
Compensation awarded.
