Town and country planning — Effect of certificate of appropriate alternative development — Section 25 of Land Compensation (Scotland) Act 1963, which is in similar terms to section 17 of the Land Compensation Act 1961 (both with the amendments made by Sched 9 to the Community Land Act 1975 continued by the Local Government, Planning and Land Act 1980, section 121 and Sched 24) — Land required for schools — Appeals from decision of Court of Session affirming decision of Secretary of State for Scotland cancelling certificates issued by planning authority and certifying that planning permission would have been granted, in one case for residential development, in the other for residential or commercial development — Planning authority had issued ‘negative’ certificates stating that permission would not have been granted for any development other than for the schools proposed by the education authority — It was argued on behalf of the authorities that, although in granting a certificate the immediate purpose of the proposed acquisition for schools must be ignored, the underlying requirement of the needs of public education remained, at any rate to the extent that a positive certificate should only be issued if it could be shown that there were one or two alternative sites available which could equally well meet these needs — Held by House of Lords that this argument must be rejected — The essential purpose of the certificate procedure was to ensure that when urban land, otherwise available for some form of urban building development, is acquired for a necessary public object the compensation will reflect its urban development value — Appeals dismissed
These were
four consolidated appeals in which Grampian Regional Council, the education
authority, were the first appellants and Gordon District Council, the planning
authority, the second appellants. The first respondent was the Secretary of
State for Scotland and the second respondents were Ashdale Land & Property
Co Ltd, the landowners.
J A Cameron QC
and A F Rodger, of the Scottish Bar (instructed by Martin & Co, agents for
Shepherd & Wedderburn WS, of Edinburgh) appeared on behalf of the
appellants; M S R Bruce and A C Henry, of the Scottish Bar (instructed by the
Treasury Solicitor, agent for the Solicitor to the Secretary of State for
Scotland) represented the first respondent; I C Kirkwood QC and A M Philip, of
the Scottish Bar (instructed by Simmons & Simmons, agents for A C Bennett
& Fairbrother WS, of Edinburgh, and Storie, Cruden & Simpson, of
Aberdeen) represented the second respondents.
In his speech,
LORD BRIDGE OF HARWICH said: The first appellants (‘the education authority’)
acquired from the second respondents (‘the landowners’) sites for a primary and
a secondary school in a newly developed suburb of Aberdeen called Westhill on
terms agreed pursuant to offers in writing made by the education authority on
December 15 1976 and January 13 1977 respectively. The agreements provided for
the landowners to receive the same compensation, fixed as at the date of the
respective offers, as if the land had been acquired compulsorily.
On July 28
1978 the landowners applied to the second appellants (‘the planning authority’)
pursuant to section 25 of the Land Compensation (Scotland) Act 1963 (‘the Act’)
for certificates of appropriate alternative development. Parallel applications
by the education authority give rise to no separate issue and can for present
purposes be ignored. The planning authority issued certificates to the
landowners stating that, in their opinion, planning permission
carried out by the education authority. The landowners appealed to the first
respondent (‘the Secretary of State’) pursuant to section 26 of the Act who,
after receiving the report of a public inquiry, allowed the appeals, cancelled
the certificates issued by the planning authority, and certified that planning
permission would have been granted, in respect of the primary school site for
residential development and in respect of the secondary school site for
residential or commercial development, in each case subject to conditions. The
education authority and the planning authority applied to the Court of Session,
pursuant to section 29 of the Act, to quash the decision of the Secretary of
State. By a majority (Lord Dunpark and Lord McDonald, Lord Avonside dissenting)
the court affirmed the decision. The education authority and the planning
authority now appeal to your Lordships’ House.
The
substantive provisions governing the assessment of compensation for the
compulsory purchase of land on which the questions raised by these consolidated
appeals depend were first enacted in the Town and Country Planning Act 1959 and
the Town and Country Planning (Scotland) Act 1959. They are now embodied in the
Land Compensation Act 1961 (‘the English Act’) and the Act. Both Acts have been
subject to minor amendments, which do not, in my opinion, affect the questions
presently arising for decision. As one would expect in relation to such a
subject-matter, the substance of the law is the same on both sides of the
border. I shall not encumber this opinion with references to the English Act,
but merely note here that the sections of the Act to which I shall be referring
have their exact counterparts in the English Act.
Part III of
the Act (sections 12 to 24) is headed: ‘Provisions Determining Amount of
Compensation’. Part IV (sections 25 to 30) is headed: ‘Certification by
Planning Authorities of Appropriate Alternative Development’. These two Parts
are interdependent.
Section 25 of
the Act (as amended by the Community Land Act 1975) provides, so far as
relevant, as follows:
(1) Where an interest in land is proposed to be
acquired by an authority possessing compulsory purchase powers, and that land
or part thereof does not consist or form part of —
(a) an area defined in the development plan as an
area of comprehensive development, or
(b) an area shown in the development plan as an
area allocated primarily for a use which is of a residential, commercial or
industrial character, or for a range of two or more uses any of which is of
such a character,
then, subject
to subsection (2) of this section, either of the parties directly concerned may
apply to the planning authority for a certificate under this section.
(2) . . .
(3) An application for a certificate under this
section —
(a) shall state whether or not there are, in the
applicant’s opinion, any classes of development which, either immediately or at
a future time, would be appropriate for the land in question if it were not
proposed to be acquired by any authority possessing compulsory purchase powers
and, if so, shall specify the classes of development and the times at which
they would be so appropriate;
(b) . . .
(c) . . .
(4) Where an application is made to the planning
authority for a certificate under this section in respect of an interest in
land, the planning authority shall . . . issue to the applicant a certificate
stating that, in the opinion of the planning authority in respect of the land
in question, either —
(a) planning permission for development of one or
more classes specified in the certificate (whether specified in the application
or not) would have been granted; or
(b) planning permission would not have been
granted for any development other than the development (if any) which is
proposed to be carried out by the authority by whom the interest is proposed to
be acquired.
(5) Where, in the opinion of the planning
authority, planning permission would have been granted as mentioned in
subsection (4)(a) of this section, but would only have been granted subject to
conditions, or at a future time, or both subject to conditions and at a future
time, the certificate shall specify those conditions, or that future time, or
both, as the case may be, in addition to the other matters required to be
contained in the certificate.
It will be
convenient to refer to the certificates contemplated by subsection (4)(a)
and (b) as positive and negative certificates respectively. A decision
by a planning authority, or by the Secretary of State on appeal, whether a
positive or a negative certificate is appropriate, must proceed on the
hypothesis predicated by subsection (3) and determine what planning permission,
if any, would have been granted if the land were not proposed to be acquired by
any authority possessing compulsory purchase powers. The sole purpose of the
certification procedure is to provide a basis for determining the development
value, if any, to be taken into account in assessing the compensation payable
on compulsory acquisition. If a positive certificate is issued, it is to be
assumed that the certified permission would be granted, subject to such
conditions and at such future time, if any, as may be specified in the
certificate: section 23(5). If a negative certificate is issued, ‘regard is to
be had’ to the negative opinion certified: section 22(3). Although this is not
conclusive, it is difficult to envisage a situation in practice in which the
Lands Tribunal, when assessing compensation, could be persuaded to act on a
contrary opinion to that certified by the planning authority or the Secretary
of State on appeal.
The general
Westhill development was not carried out pursuant to formal provisions of the
development plan. It was approved by the Secretary of State as a departure from
the plan. To use ordinary language and avoid planning jargon, it has always
been envisaged that this substantial new urban community would need to be
served by schools provided by the education authority and the two school sites
which are the subject of these appeals have from the outset been earmarked to
meet that need. The primary school site is surrounded by residential
development. The secondary school site has residential development on three
sides and either has, or will in due course have, commercial and public
buildings on the fourth. The landowners have no doubt profited handsomely from
the development of other land in their ownership at Westhill. But it has not
been suggested that this has any relevance in deciding what certificates are
appropriate for the school sites under section 25(4). The same certificates
would be appropriate if these two sites were isolated pockets of land in
separate ownership from any other land at Westhill.
The
cornerstone of the argument for the appellants is section 30(2) of the Act,
which provides:
For the
purposes of sections 25 and 26 of this Act, an interest in land shall be taken
to be an interest proposed to be acquired by an authority possessing compulsory
purchase powers in the following (but no other) circumstances, that is to say —
(a) where, for the purposes of a compulsory
acquisition by that authority of land consisting of or including land in which
that interest subsists, a notice required to be published or served in
connection with that acquisition, either by an Act or by any Standing Order of
either House of Parliament relating to petitions for private bills, has been
published or served in accordance with that Act or Order; or
(b) where a notice requiring the purchase of that
interest has been served under any enactment, and in accordance with that
enactment that authority are to be deemed to have served a notice to treat in
respect of that interest; or
(c) where an offer in writing has been made by or
on behalf of that authority to negotiate for the purchase of that interest.
It is said
that the only circumstance which the planning authority, or the Secretary of
State on appeal, is required to ignore in answering the hypothetical question
raised by an application under section 25 is the immediate event which has
resulted in the applicant’s interest in land becoming one which is ‘proposed to
be acquired by an authority possessing compulsory purchase powers’ under
section 25(1), in this case the education authority’s written offers to
purchase. Whilst those offers must be ignored, so runs the argument, the
underlying requirement to devote these sites to fulfil the needs of public
education remains and affords a complete answer to the claims for positive
certificates.
If it were
right to confine attention to section 25(3) and (4) and section 30(2) alone,
this literalistic argument might have some appeal. If, however, one considers
the wider statutory context and the function of certificates of appropriate
alternative development in the scheme of the Act as a whole, it becomes clear
that the argument is untenable.
First, the
argument flies in the face of section 16 of the Act, which provides:
No account
shall be taken of any depreciation of the value of the relevant interest which
is attributable to the fact that (whether by way of designation, allocation or
other particulars contained in the current development plan, or by any other
means) an indication has been given that the relevant land is, or is likely, to
be acquired by an authority possessing compulsory purchase powers.
As Lord Dunpark
succinctly put it: ‘It seems to me to follow from the fact that the value of
the land is not to be affected by the prospect of compulsory acquisition that its
value is not to be affected by the development proposed by the acquiring
authority. One cannot discount the one without the other.’
Next, I refer
to section 25(7) which provides:
In
determining, for the purposes of the issue of a certificate under this section,
whether planning permission for any particular class of development would have
been granted in respect of any land, the planning authority shall not treat
development of that class as development for which planning permission would
have been refused by reason only that it would have involved development of the
land in question (or of that land together with other land) otherwise than in
accordance with the provisions of the development plan relating thereto.
The primary
purpose of this provision, in my view, is to obviate the possibility that
where, as in the usual case, urban land is allocated in the development plan
for a necessary public purpose for which it will in due course need to be
acquired, that provision of the plan can be relied on to deny the landowner a
positive certificate. If the planning need to use land for a public purpose,
which underlies a proposed compulsory acquisition, is not a sufficient ground
to withhold a positive certificate where that need is recognised and provided for
in the development plan, I do not see how the underlying planning need can ever
be such a sufficient ground.
But the
overriding consideration which impels me to reject the argument for the
appellants is that it would, in my opinion, if accepted, defeat the essential
purpose of the procedure for obtaining certificates of appropriate alternative
development, as part of the overall scheme of the Act to secure the payment of
fair compensation to landowners who are compulsorily expropriated, or,
expressed more specifically, to ensure that, when urban land, otherwise
available for some form of urban building development, is acquired for a
necessary public purpose, the compensation will reflect its urban development
value. Assuming, as I do, that every compulsory purchase of land can be
justified by reference to the public purpose for which the land is required, to
allow reliance on that public requirement to determine the question raised by
an application under section 25 would lead to the issue of a negative certificate
in every case. Counsel for the appellants, recognising that this conclusion
would be fatal to his argument, sought to avoid it by contending that the
applicant for a positive certificate could succeed if, but only if, he could
show that, at the date of his application, there were one or more alternative
sites available which could equally well or perhaps better be used to meet the
public need for which his own land was proposed to be taken. I unhesitatingly
reject this contention. An application for a certificate of appropriate
alternative development presupposes that the land to which it relates is in
fact to be acquired by an authority possessing compulsory purchase powers and a
certificate issued will only be of significance if the acquisition proceeds to
completion. The availability of alternative sites is very relevant at the stage
when a proposed compulsory acquisition is being resisted. But once it has been
decided that site A, rather than site B or site C, is to be acquired, the fact
that site B or site C might have been chosen instead can have no conceivable
relevance in determining the fair basis of compensation which the acquiring
authority ought to pay to the owner of site A.
The appellants
have sought support for their arguments in three decided cases to which I
should briefly refer. In Bell v Lord Advocate 1968 SC 14 Glasgow
Corporation acquired 40 acres of land as public open space. The land was
allocated for that purpose in the development plan. The landowner sought a
certificate under section 25 for industrial, commercial or residential
development. The certificate issued by the planning authority and affirmed by
the Secretary of State on appeal was limited to development ‘for a commercial
sports stadium, private golf course, private playing fields or for other
private open-air recreational use’. This was challenged in the Court of Session
as a contravention of section 25(7). The court affirmed the decision of the
Secretary of State. As I understand the judgments, the court upheld the reasoning
of the Secretary of State on the footing that he was not merely relying on the
provision of the development plan as a ground for refusing to certify the kind
of building development sought by the landowner, but on a planning policy to
keep the 40-acres in question as open space substantially free from building
development, which could be supported on planning grounds quite independently
of any scheme for acquisition of the land as public open space. So understood,
I respectfully agree with the decision and can find nothing in it to assist the
appellants in this case.
Very similar
considerations apply to the unreported decision of Griffith J, as he then was,
in Skelmersdale Development Corporation v Secretary of State for the
Environment (1979). A large site of 45 acres was to be acquired for
educational purposes. The certificate of appropriate alternative development
issued by the planning authority and affirmed by the Secretary of State on
appeal was confined to development ‘for an institute in large grounds or for
open recreational use playing fields’. Here again, the essential ground on
which, as I read his judgment, Griffith J refused an application to set aside
the decision of the Secretary of State was that it was based on a planning
policy which justified the preservation of the site as part of a larger area of
substantially open land, independently of any scheme to use it for educational
purposes. I do not think the judgment lends any support to the proposition that
the educational requirement in itself could afford a ground for the issue of a
negative certificate. If it does, I must, to that extent, respectfully disagree
with it.
Finally it was
submitted that the decision of this House in Margate Corporation v Devotwill
Investments Ltd [1970] 3 All ER 864 established the relevance of the
availability of alternative sites. This case arose, not from an application for
a certificate of appropriate alternative development, but from a decision of
the Lands Tribunal on disputed compensation. The land to be acquired was shown
in the development plan as allocated for residential use. Permission for actual
residential development was refused on the ground that part of the land was
required for a bypass road. The owners served a purchase notice. They were entitled
to have the land valued with the benefit of the assumption derived from section
16(2) and (7) of the English Act that planning permission would be granted for
such residential development as might reasonably have been expected to be
permitted if the land were not proposed to be acquired by any authority
possessing compulsory purchase powers. Access to the site was from a highway
suffering from severe traffic congestion, which the proposed bypass road was
designed to relieve. The owners contended that it must be assumed in deciding
the scope of the national residential development of the site that the bypass
road would be built elsewhere and would relieve the local traffic problem, so
that the notional development of the subject land should not be restricted in
any way by reference to the difficulties of access arising from the existing
local traffic congestion. This contention prevailed before the Lands Tribunal
and in the Court of Appeal. This House allowed an appeal by the acquiring
authority and remitted the case to the Lands Tribunal on the ground that the
effect on the development to be assumed under section 16(2) and (7) of a bypass
road on an alternative route was not a matter of assumption but of evidence. In
a speech with which all the other members of the Appellate Committee agreed,
Lord Morris of Borth-y-Gest said (p 869):
If there was
not to be a by-pass on the respondents’ land it by no means followed that there
would inevitably be a by-pass somewhere else. There might be or there might not
be. It might have been possible to have another route for a by-pass; it might
have been quite impossible. It would be a question depending on topographical
and various and many other factors whether there could be a by-pass somewhere
else. It would be for consideration whether any alternative by-pass was or was
not possible or probable and further whether its construction was or was not
likely. These matters could not rest on any assumptions but rather on an
examination of all the evidence.
It is to be
noted that in the Margate case it was never suggested that the
underlying requirement to use part of the claimant’s land for the construction
of a bypass road provided any ground for restricting the extent of the
residential development for which it ought to be assumed that permission would
be granted if the land were not to be acquired. The restriction on the extent
of the notional development for which the acquiring authority contended arose
solely from the undoubted problems of access to the site due to the existing
traffic congestion on the main road from which access would have to be
obtained. A bypass road, if provided elsewhere than on the claimant’s land,
would relieve the traffic congestion and substantially diminish the problems of
access. Hence the relevance of considering, in the hypothetical situation
predicated by the statute, the prospect of a bypass being provided elsewhere
than on the claimant’s land was not and could not be disputed. The decision of
your Lordships’ House that the strength of that prospect fell to be decided as
a matter of evidence and could not be founded on any assumption does not seem
to me to be of the least help to the present appellants, or indeed to be
relevant to any issue arising in these appeals.
The
conclusions I have already expressed are sufficient to dispose of these
appeals. The appellants, however, sought to raise a further question as to what
is the relevant date by reference to which an
permission for the certified development, if the certificate does not specify a
future time, will be assumed to have been granted under section 23(5). The
submission for the appellants is that the relevant date is the date of the
application under section 25. The Secretary of State and the majority of the
Court of Session have held that it is the date when the land is first ‘proposed
to be acquired by an authority possessing compulsory purchase powers’ in
accordance with the definition of that formula in section 30(2). If that is
right, it means that the relevant date in relation to each school site is the
date of the education authority’s offer to purchase, which is also the date for
the assessment of compensation.
Having
concluded that the availability of alternative school sites is irrelevant, it
seems to me that the point as to date, in the circumstances of this case, is
entirely academic, since the appellants are unable to suggest that there was
any change in planning policy or other material change of circumstance between
the dates of the offers to purchase and the date of the application for
certificates. However, since the point was argued, it is right to express an
opinion about it.
The words
‘either immediately or at a future time’ were introduced into section 25(3)(a)
of the Act by the Community Land Act 1975. It seems to have been suggested to
the Court of Session that they changed the previous law. Counsel before your
lordships disclaimed this suggestion, but relied on the word ‘immediately’ as emphasising
what he submitted the law had always been. The applicant for a certificate,
counsel points out, is, and always has been, required to specify the classes of
development which, he claims, ‘would be appropriate for the land in question if
it were not proposed to be acquired by any authority possessing compulsory
purchase powers’. Counsel submits that the words ‘would be’ can only refer to
the present, not the past. That is the beginning and end of his argument. Here
again, consideration of the scheme of the Act shows the argument to be
fallacious. The purpose of the certificate is solely as an aid to the
assessment of compensation. Unless it is effective to indicate what planning
permission would have been granted at or before the date when compensation
falls to be assessed or at some future time specified in the certificate, it
will not serve that purpose effectively. In agreement with Lord Dunpark, I
consider that the submission for the appellants on this point leads to a
nonsensical result.
My Lords, I
would accordingly dismiss these appeals. Both respondents were properly
represented. The Secretary of State was vitally interested in the principle at
issue, the landowners in the effect of the outcome on the compensation they
will receive. Joint representation would, for obvious reasons, have been
inappropriate. I would propose that the appellants be ordered to pay both
respondents’ costs of the appeals to your Lordships’ House.
LORDS FRASER
OF TULLYBELTON, KEITH OF KINKEL, SCARMAN and TEMPLEMAN expressed agreement with
the speech of Lord Bridge of Harwich and the reasons contained in it, and did
not add anything of their own.
