Land Compensation Act 1973 — Compensation for depreciation in value attributable to bypass — Whether two valuers necessary — Burden of proof — Whether evidence of settlements and awards nationally relevant — Whether any depreciation in value — Whether subject property benefited by bypass
Prior to the construction of a bypass at Northop, Mold, North Wales, the subject property was situated in a through road between Mold and Connah’s Quay; through traffic on the original A55, which lay 115m from the rear of the subject property, now uses the bypass which was first opened for use on June 26 1989. After its construction the subject property, which lies between 210 and 260m from the bypass, was left in a cul-de-sac caused by the bypass. The claimant, who was represented by a surveyor who was nationally rather than locally based, claimed £600 and contended that the 1973 Act required proof only of depreciation in value of the subject property and not necessarily proof of the open market value of the property before and after the opening of the bypass; accordingly evidence of settlements, awards and sales on a national basis was admissible and appropriate in arriving at the amount of depreciation due to the physical factors together with an analysis of local settlements and sales. The compensating authority denied that there had been any depreciation in value; the property was now in a quieter and more desirable situation. It also sought to have the hearing dismissed for lack of evidence or adjourned to allow the claimant to deliver a report from a second expert to prove the value of the subject property; the expert who was being called could not rely on an opinion of value prepared by a local surveyor.
Decision: The subject property benefited from the bypass and no compensation was payable. It is not necessary under section 1(1) of the 1973 Act for the claimant to give direct evidence of the value of his property before he can assess the depreciation due to physical factors, nor is there need for proof of values before and after the commencement of use of the works. The open market value may be required where depreciation is expressed as a percentage, but the tribunal may be able to assess the depreciation in value from agreed settlements. In respect of claims under Part I of the 1973 Act, it will not normally be necessary for either party to call more than one expert valuer witness. The witness most likely to assist the tribunal will be a surveyor practising in the locality, experienced in selling and valuing similar properties. Depreciation in value may be calculated in many ways, such as by a percentage of the pre-works market value, by taking part of the total reduction in value caused by the works as due to the physical factors, or even as a spot figure based on the valuer’s experience of the locality. The evidence of the claimant’s valuer concerning tribunal decisions and settlements in other parts of the country were irrelevant and little weight was attached to them.
The following cases are referred to in this report.
English Exporters (London) Ltd v Eldonwall Ltd [1973] Ch 415; [1973] 2 WLR 435; [1973] 1 All ER 726; (1972) 25 P&CR 379; [1973] EGD 439; 225 EG 255 & 433
Fallows v Gateshead Metropolitan Borough Council (1993) 66 P&CR 460
Land Securities plc v Westminster City Council [1992] 2 EGLR 15; [1992] 44 EG 153; [1993] 1 WLR 286; [1993] 4 All ER 124
Perry v Dorset County Council unreported (ref 126/91)
W Clibbett Ltd v Avon County Council [1976] 1 EGLR 171; EGD 385; (1975) 237 EG 271, LT
Nicholas Cooke (instructed by the William Ricketts Partnership) appeared for the claimant; Geoffrey Pass (instructed by the Treasury Solicitor) represented the compensating authority.
Giving their decision, The Tribunal said: This is a reference to determine the compensation payable (if any) under Part I of the Land Compensation Act 1973 (‘the 1973 Act’) for the depreciation in the value of the freehold interest in a house, Bryn Hyfryd, Church Road, Northop, (‘subject property’) following the opening of the Northop Bypass (‘the bypass’).
Nicholas Cooke of counsel appeared for the claimant and called Mrs SA Bateman, Mr D Owens and Mr WKR Ricketts FRICS. Geoffrey Pass of counsel appeared for the compensating authority (‘the authority’) and called Mr KP Blackwell, Mr PW Hughes FRICS FAAV and Mr C J Tollitt BEng CEng MICE MIHT.
The cases referred to in the decision are listed at the head of this decision.
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Procedural matters
On the first day of the hearing two procedural matters arose which we dealt with before proceeding to the substance of the case. They related to the identity of the claimant and an application for the dismissal or adjournment of this reference.
First, the identity of the claimant. The claim in this reference was made on August 6 1990 on behalf of Mr John Owens, the then freehold owner of the subject property. On July 29 1991 it was referred to the Lands Tribunal. Mr Owens died on December 1 1991. Copies of a grant of probate dated November 19 1992, assent to the vesting of the subject property in Desmond Owens dated November 23 1992 and the will of the late John Owens were put in evidence. These show that Desmond Owens and Richard Clive Hallows were appointed executors and trustees of the will, that the subject property passed to Desmond Owens and that the residue of the estate passed equally to four children, including Mr Owens.
It was submitted by Mr Nicholas Cooke that Desmond Owens should be substituted as claimant for John Owens deceased. He said that it is the amount of compensation which is in issue in this reference; the recipient of that compensation does not affect the amount and could be decided later. Mr Geoffrey Pass objected. He said that the claim did not pass to Desmond Owens with the subject property; the claim was in the estate but did not follow the estate. Costs would be important if the authority are successful in this reference. Mr Cooke then suggested that Mr Hallows of Hallows Associates, solicitors, one of the executors, should be substituted for the original claimant, with an undertaking as to costs from Mr Ricketts.
We granted an adjournment to allow contact with Mr Hallows. When the hearing was resumed we were handed a fax from Mr Hallows consenting to be substituted as claimant in this reference. We made an order providing that Richard Clive Hallows, the sole proving executor of the will of John Owens deceased, shall be substituted for ‘Executors of John Owens deceased’ as claimant on the undertaking of William Kenneth Ronald Ricketts, given for himself and for his fellow partners in the firm of the William Ricketts Partnership at Cardiff by his consent given, that he or they will indemnify the Treasury Solicitor in the event of any award of costs being made against Richard Clive Hallows in this reference which shall remain unpaid.
The second procedural matter was raised by Mr Pass. It was an application for the reference to be dismissed for lack of evidence or adjourned to allow the claimant to deliver an appropriate report from a second expert witness, on terms that the claimant be ordered to pay the cost of this day’s hearing and for such adjournment.
Mr Pass said that, for the claimant to succeed, it is necessary for him to put before this tribunal evidence of the value of the subject property at the date of valuation and of the depreciation in the value caused by physical factors arising out of the use of the Northop Bypass. He referred to sections 1(1) and 4(1) of the 1973 Act. He said that this evidence cannot now be put to the tribunal. Expert reports have been exchanged and the only report on behalf of the claimant was prepared by Mr Ricketts. This refers to, and is based on, a valuation of the subject property prepared by Mr H Elias-Jones BSc ARICS, who was to have been called as the second expert witness for the claimant. No report from him is before the tribunal. This evidence is therefore hearsay and cannot now be introduced by incorporation in Mr Ricketts’ evidence. If Mr Elias-Jones’ evidence is to be admitted the authority would wish to cross-examine him on his valuation and the reasoning behind it. Mr Pass referred to English Exporters (London) Ltd v Eldonwall Ltd [1973] Ch 415.
Mr Pass acknowledged that evidence of value is contained in Mr Hughes’ report, but submitted that this is not yet before the tribunal (the authority may not call Mr Hughes). His evidence does not contain an opinion as to the gross diminution in value caused by the bypass, to which Mr Ricketts then applies his expertise to find the net compensatable loss. Furthermore, it is not the task of the authority to elicit evidence from Mr Ricketts by cross-examination which should have been adduced on behalf of the claimant. Mr Pass submitted that the absence of this evidence of value deprives the tribunal of jurisdiction. Compensation under the 1973 Act is in the nature of special damages and it is not open to the tribunal to pluck a figure of compensation out of the air. It can only be based on admissible evidence adduced by the claimant, of which the authority have had good notice by the prior exchange of expert reports.
Mr Cooke submitted that the hearing should proceed. He said that it was inappropriate to ask for the dismissal of a claim for lack of evidence before any evidence had been given. A statement of agreed facts has been prepared. This includes a schedule of compensation payments in respect of the Northop Bypass containing capital values and compensation payments for houses close to the subject property. This is sufficient to allow the tribunal to make a decision. Mr Cooke said that section 1(1) of the 1973 Act refers to compensation for depreciation and it is not necessary as a matter of law for this to be assessed by reference to values before and after the use of the new road. He referred to the decision of this tribunal in Perry v Dorset County Council unreported (REF/126/91) at p7. The task of the tribunal is to decide whether, and if so by how much, the subject property has been diminished in value by the physical factors arising out of the public works.
We decided to proceed with the hearing. Generally, we agree with Mr Cooke. We do not accept the submissions of Mr Pass that the claimant must give direct evidence of the value of the subject property before he can assess the depreciation due to physical factors arising out of the public works, nor is there a need for values before and after the use of those works. That is not our interpretation of section 1(1) of the 1973 Act. The submissions by Mr Pass do not apply here where there is a statement of agreed facts, which includes details of other settlements in the immediately adjoining area. The tribunal has to decide whether the subject property has suffered depreciation in value from noise and dust created by the use of, and having regard to any benefits from, the bypass. It may be that this figure, if expressed as a percentage of a hypothetical market value, cannot be calculated until that value has been determined, but where, as in this reference, the tribunal has evidence of settlements, we do not think that the claimant is necessarily required to adduce opinion evidence of the market value of the subject property. The absence of such evidence is not fatal to his case.
We accept that the authority are inconvenienced by the absence of this evidence and the consequent need for Mr Ricketts to amend his evidence, but we do not think they are prejudiced. We emphasise, however, that expert evidence should always be exchanged before a hearing.
It will be convenient to deal here with another procedural matter raised by Mr Pass in his closing submissions. He requested the tribunal to express a view as to the propriety of the direction given in this reference that the claimant should have leave to call two expert witnesses as to value. He said that such a direction materially increases costs and deters an authority from resisting relatively small claims which they consider to be unsubstantiated. In particular, Mr Pass submitted that the evidence of Mr Ricketts is irrelevant. The usual practice where Mr Ricketts appears before this tribunal is for him to rely on expert evidence of values from a local surveyor, to which Mr Ricketts applies a percentage to isolate that part of the value or depreciation in value which is due to the physical factors. Mr Pass said that, to the extent that Mr Ricketts gives evidence of his experience nationally, the different facts of the various cases can give rise to misleading simplification and false analogy. His experience of these cases confers upon him no special ability to quantify the proportion of the depreciation in value attributable to the physical factors in different schemes. If those cases embody principles of law, they may be cited by counsel. Only in rare cases will Mr Ricketts have expert knowledge of local values. If he speaks of settlements in truly comparable cases (ie those involving the same road), the facts may be incorporated in a statement of agreed facts (as in this reference). The evidence of Mr|page:193| Ricketts should only be necessary where an authority refuses to agree details of comparable settlements.
Mr Cooke in reply submitted that we should not express a view on the directions in this reference. He said this is unnecessary and could not assist the conduct of other cases. Where evidence is called needlessly the remedy is in costs. The evidence of Mr Ricketts is both relevant and useful.
We cannot comment on the direction in this reference, giving leave for two expert witnesses for the claimant and it is unnecessary to do so as, in the event, only one such witness, Mr Ricketts, was called. It may be helpful, however, if we give some general guidance on expert evidence in references under Part I of the 1973 Act.
The general rule for hearings before this tribunal is that not more than one expert witness on each side shall be heard unless otherwise ordered (Lands Tribunal Rules 1975, r42(2)). Leave is usually given for more than one expert where evidence is required on several technical matters, such as valuation, planning and highways. Each application for leave to call additional witnesses must be considered individually, according to the circumstances of the case. As a general rule, however, the number of expert witnesses should be kept to a minimum, there should be no duplication of evidence and each witness should deal with the whole of his area of expertise.
It follows, therefore, that in claims for compensation under Part I of the 1973 Act, it should not normally be necessary for either party to call more than one expert valuation witness. The purpose of expert evidence is to assist the tribunal to reach a decision on technical issues and we are unlikely to be assisted by two valuers for one party, each giving evidence on part of the valuation issue. This practice unnecessarily increases the cost and length of hearings. The expert witness most likely to assist the tribunal in claims under Part I of the 1973 Act is a surveyor practising in the area of the subject property, experienced in selling and valuing similar properties, who will be able to speak from first-hand experience of the likely depreciation in values due to public works. It should normally be possible for one expert witness to give all the value evidence. It follows, therefore, that we agree with the criticisms made by Mr Pass of the practice of using two expert witnesses as to value, one speaking to local values and the other as to the compensatable depreciation in values based on experience and settlements in other parts of the country. This latter evidence is unlikely to be helpful and we deal with it later in this decision. The whole of the value evidence should be given by one witness with consequent saving in cost and time. This is particularly important where claims are small. The effect of public works on values is a matter of local knowledge, not to be determined by comparables from a wider geographical area or on the basis of other decisions of this tribunal.
Facts
The following facts are agreed or found:
1. The subject property is a detached two-storey double-fronted house built in 1927. It is constructed of brick with pebble-dash rendering and has a pitched slate roof. The accommodation on the ground floor comprises a porch, hall, two living rooms, kitchen and conservatory; and on the first floor there are three bedrooms, bathroom and separate wc. There are gardens at front and rear and there is a garage and external wc.
2. The subject property is in the village of Northop, near Mold, Clwyd, North Wales. It is situated on the south side of Church Road (formerly called Connah’s Quay Road), which runs in a west to east direction from the centre of Northop village. Before the construction of the Northop Bypass this road was part of a through route which led from Mold to Connah’s Quay. It is now a cul-de-sac terminating where it meets the bypass to the east of the subject property. On the north side of Church Road are houses and bungalows, some of them set back from the road and with frontage to a service road which runs parallel to Church Road. There is also other housing on the south side of Church Road with two cul-de-sacs to the east of the subject property, Aber Crescent and Park View. To the rear of the subject property are three-detached houses, then the site of a disused petrol filling station and the former A55 road, which runs parallel to Church Road and is 115m from the rear boundary of the subject property. Traffic lights control the junction of this road and the A5119 in the centre of the village and, before the bypass was opened, long delays in all directions were experienced, particularly during the holiday period and at weekends. With the opening of the bypass, the former A55 has been renumbered the B5126. The subject property is on land which slopes down from the former Church Road to the B5126.
3. At the date of claim (August 6 1990) the subject-property was held freehold with vacant possession and was not subject to any easements or restrictive covenants affecting the value. This interest was a qualifying interest under section 2 of the 1973 Act.
4. The public works under section 1 of the 1973 Act which give rise to this claim are the Northop Bypass, which is part of the A55 Chester to Bangor trunk road and also forms part of euro-route E22 connecting Europe with Southern Ireland. The Northop Bypass is a dual carriageway road which runs in a south-east to north-west direction to the east of the subject property. At its nearest point (to the north-east) it is 210m from the boundary of the subject property. To the north the bypass is 260m from the front boundary of the subject property. The bypass cuts across Church Road, which has become a cul-de-sac terminating to the east of the subject property. The bypass now takes the through traffic which formerly used the former A55, now the B5126.
5. The bypass was first opened to public traffic on June 26 1989 and this is the relevant date under section 1(9)(a) of the 1973 Act.
6. The first claim day under section 3(2) of the 1973 Act is June 26 1990 and compensation (if any) is to be assessed by reference to prices current on that date: section 4(1) of the 1973 Act.
7. On August 6 1990 a claim for compensation under Part I of the 1973 Act was served on the authority on behalf of John Owens in respect of the subject property. The date of this claim fixes the nature of the interest and the condition of the subject property: section 4(4)(a) of the 1973 Act.
8. The subject property does not qualify for any mitigating works under section 20(1) of the 1973 Act.
The issue in this reference is the compensation payable (if any) for the depreciation in the value of the subject property due to the physical factors of noise and dirt caused by the bypass, having regard to prices current at June 26 1990 and the condition of the property at August 6 1990, such compensation to be reduced by any increase in the value of the subject property attributable to the existence of, use or prospective use of the bypass. The claimant seeks £600 compensation, the authority say that no compensation is payable.
Claimant’s case
Mr Cooke submitted that the correct approach to the assessment of compensation in this reference involves the literal application of sections 1(1) and 6(1) of the 1973 Act. What has to be determined under section 1 is whether the physical factors (noise and dirt) caused by the use of the bypass rendered the subject property less attractive in the market. If so then, prima facie, compensation is the figure which is sufficient to restore the impaired competitiveness of the property attributable to the physical factors. This compensation may, however, need to be reduced under section 6(1) of the 1973 Act by the amount of any increase in value attributable to the bypass. Mr Cooke said that the object of the 1973 Act is to give a new right to compensation for depreciation caused by the use of highways. There is no burden imposed on the claimant to prove the market value unaffected by physical factors or that a potential purchaser will offer less than he would in the absence of such factors. The Act only requires the establishment of depreciation. He accepts that, for there to be compensatable depreciation, it must be shown that on the balance of probabilities some purchasers would perceive the effects of the physical factors. Mr Cooke said that the approach of the authority to the assessment of compensation is over-analytical and involves putting a gloss on the Act.
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Mr Cooke submitted that the evidence of Mr Ricketts should not be rejected as irrelevant. He said that it explains how value is affected by physical factors. It is admissible, relevant and useful. He referred to the observations of this tribunal, on the evidence of Mr Ricketts of settlements and awards in other parts of the country, in Fallows v Gateshead Metropolitan Borough Council (1993) 66 P&CR 460, and said that he accepts that the assistance which can be gleaned from this type of evidence will vary from reference to reference, but the observations of the tribunal ought not to be treated as a general disapproval of such evidence. In this reference Mr Ricketts does not rely on the decision of another tribunal to prove a fact in issue. This material is simply used to form part of his experience and learning, tending to reinforce his opinion. It cannot be right that expert evidence as to depreciation in value is admissible when given by a witness with a local base and knowledge but with no experience of the 1973 Act, but that such evidence becomes inadmissible when given by someone who is not locally based but has expert knowledge of the Act. Nor can it be right that a person who is not locally based cannot give details of the material upon which he bases his opinion with a view to establishing that his conclusions are sensible and should be accepted. Mr Cooke referred to small claims and submitted that these are dealt with by section 7 of the 1973 Act, which restricts compensatable claims to those in excess of £50.
Mr Cooke said that traffic on the bypass is not the same as that which used the old A55. The bypass is part of a major trunk road and part of the national road network. The opening of the bypass has introduced more vehicles into the vicinity of the subject property and produced a third source of noise. The overall level of noise may have been reduced but the subject property now suffers noise from three sources, the bypass, the B5126 and Church Road. The additional noise would have affected a prospective purchaser who would have adopted a subjective approach to the price he would pay rather than placing reliance on the measurement of noise levels.
Mr Cook called three witnesses: two of fact, Mrs Bateman and Mr Desmond Owens, and one expert witness of value, Mr Ricketts. He also put in a statement made by John Owens to Mr Ricketts.
Mrs Sheila Alice Bateman said that she has lived at Homestead, Church Road, Northop, for 40 years. Homestead is the second house to the west of the subject property on the same side of the road. Mrs Bateman has an outstanding claim for compensation. Mrs Bateman gave evidence of what she perceived to be the change in traffic noise following the opening of the bypass. She said that previously she had not been disturbed by noise from the old A55 nor from the former Connah’s Quay Road. She was aware of heavy traffic on these roads, which gradually became busier, but she only noticed the noise at weekends and bank holidays. She is a keen gardener but did not notice the traffic noise when she was in the front or back gardens. This latter is screened from the old A55 by vegetation. The new bypass is not screened. Mrs Bateman said that, following the opening of the bypass, she has become aware of traffic noise which seems to increase year by year. In the front of the house with the windows open it is now ‘a continuous roar’. She has installed double glazing throughout most of the house. The noise is now barely noticeable with the windows closed. Mrs Bateman said that the opening of the bypass has changed her sleeping habits. Previously she used the front bedroom in summer (which is cooler) and the back bedroom in winter, where she did not notice any noise from the old A55. She now sleeps in the back bedroom throughout the year to escape the noise and sight of the bypass. She disagreed with the conclusion of Mr Hughes, for the authority, that the opening of the bypass has made the subject property a more desirable house. She said that she can see and hear the bypass, which is busy in a different way to the old A55, with traffic noise throughout the day and night. The new road has also increased the amount of dirt deposited on her house, particularly at the front.
Mr Desmond Owens is the son of John Owens deceased, the original claimant. He now lives at Flint Mountain, but was brought up in the subject property and lived there until 1965. After he moved away he visited his father almost daily and was usually in the house for about half an hour. The gist of Mr Owens’ evidence was that the character of the traffic noise altered and became more obtrusive after the opening of the bypass. This made the subject property less attractive. Double glazing was installed to reduce this noise.
Mr Owens said that, before the bypass opened, traffic noise from the old A55 was hardly audible at the rear of the house, except for motorbikes. This road is screened by vegetation which reduced the noise. With the windows open there was a general background traffic noise, but not a roar. It could be heard in the garden. At the front, Connah’s Quay Road was generally a quiet road but with busy times, particularly at weekends when the traffic noise could be ‘horrendous’. After the opening of the bypass the noise increased and changed in character. At the front of the house Mr Owens said that in winter this noise ‘hit you hard on a cold day’ and in summer ‘it was like the drone of angry bees’. The noise from the bypass is more obtrusive than that from the old A55. This is due to greater speeds, heavier traffic and greater use, seven days a week, 24 hours a day. Mr Owens agreed that traffic on the B5126 and in Church Road has reduced following the opening of the bypass, but he preferred the previous traffic conditions.
Mr Cooke commented on the evidence of Mrs Bateman and Mr Owens that, although a witness who is also a claimant may be biased, it is an unjustified generalised slur for Mr Pass to suggest that this is likely and is unsupported speculation. It depends on each individual case. Mr Cooke conceded that witnesses who have lived in a locality for a long time may become accustomed to a particular noise level and adjustments should be made for this when considering their evidence. Noise from a different direction or of a different quality may, however, be relevant and the evidence of local witnesses is of assistance. The different sources of noise may be important to a prospective purchaser.
Mr Cooke put in evidence a statement made by the original claimant, John Owens, to Mr Ricketts on July 2 1991. This is to the effect that he purchased the subject property in 1952 and that it is adversely affected by noise and dust from the bypass. We indicated that we do not find this statement of assistance.
Mr Cooke called expert valuation evidence from William Kenneth Ronald Ricketts frics of the William Ricketts Partnership, practising in Cardiff. Mr Ricketts said that his firm specialises in compensation under Part I of the 1973 Act and has done so since the Act was passed. He studies every new road scheme throughout the country. Mr Ricketts admitted in cross-examination that if an award of compensation is not made in this reference he will bear the costs. Mr Ricketts also admitted that he has never lived or worked in Northop, he has no personal knowledge of the area or expertise in local property values. He is not an expert on noise.
It was the claimant’s intention to call evidence of local values from Mr Huw Elias-Jones bsc arics and leave had been given for a second expert witness. A report from Mr Elias-Jones was not lodged prior to the hearing and he was not called. Mr Ricketts, therefore, had to abandon his usual approach of attributing part of the total fall in value, as estimated by a local valuer, to the physical factors caused by the public works. At the hearing he revised his estimate of depreciation from £625 to £600, calculated by taking 0.75% of the pre-scheme value of the subject property of £80,000.
Mr Ricketts explained his usual approach to the assessment of compensation under Part I of the 1973 Act. He said that this is equal to the difference between:
(1) the value of the subject property at a date one year after the road was opened, but having regard to conditions at the date of claim, assuming that the new road has been built, there are vehicles using it but the existence and use of the road does not produce any noise, fumes, dirt, vibration and any lighting is not intrusive; and
(2) the value in the real market assuming all the physical factors affecting the value of the property.
Mr Ricketts said that when a new road is opened he visits all the properties likely to be affected, particularly those recently purchased, which give a guide to values. He interviews the occupiers, notes the physical factors and arrives at a judgment as to how each property is|page:195| affected by the physical factors under the 1973 Act. He compares values before and after the public works and then segregates the compensatable depreciation by the application of a percentage to the total depreciation in value. Mr Ricketts admitted that his approach is largely an informed guess. He explained that he does not use a before and after method but attempts to assess compensation for loss of value due to the failure to achieve a higher figure on an assumed sale, due to the physical factors caused by the public works.
Mr Ricketts explained how he arrived at the two elements in his assessment of depreciation: the value of the subject property on June 26 1990 as if the bypass had not been built (£80,000) and the percentage depreciation in that value due to the physical factors caused by the bypass (0.75%). Both figures are found by reference to comparables, which he grouped into seven categories.
The first comprises settlements in the immediate locality arising out of the same scheme. These show capital values ranging from £55,000 to £110,000 and compensation payments ranging from 1% to 5% of capital value (£600 to £5,500). Capital value has been agreed to mean ‘the open market value at the first claim date assuming the presence of the new road and traffic but none of the qualifying physical factors (ie as mentioned in the Land Compensation Act 1973) arising therefrom’. Mr Ricketts said that these capital values support his value of £80,000 for the subject property and the pattern of percentage depreciation payments supports his figure of 0.75% for the subject property. Second, Mr Ricketts referred to the sale of Shaldon, a detached four-bedroomed house close to the subject property, in January 1992 for £96,000 (including carpets and curtains). He said that, having regard to values prevailing at the different dates, this price supports his figure of £80,000 for the subject property as at June 26 1990. The third category of comparables comprises decisions of this tribunal without a ‘sandwich’, ie where the subject property is not affected by two roads. Mr Ricketts referred to decisions relating to properties in Maidstone and Gerrards Cross. Fourth, Mr Ricketts referred to claims settled by his firm where no sandwich arises, comprising properties at Ilminster and Easthorpe (Nottinghamshire). Fifth, Mr Ricketts quoted a property in Newcastle upon Tyne where the settled claim included a division of the capital value to indicate the effect of physical and other factors. Sixth, Mr Ricketts considered sandwich cases settled by his firm relating to properties in Tonyrefail (Mid Glamorgan). Finally, Mr Ricketts referred to property in Chester already affected by physical factors from an existing road where compensation was settled by him.
Mr Ricketts said that the last four categories assist him by providing background information and by showing distances from the highway and other circumstances where percentage compensation has been agreed or awarded. Mr Ricketts arrived at his figure of depreciation of £600 by reference to his inspection, his conclusion that the subject property suffers from noise and dirt from the bypass, and having regard to settlements in the immediate area and the sale of Shaldon. Mr Ricketts did not deal specifically with the question of betterment but, in answer to a question from the tribunal, he admitted that, if it is present, it should be taken into account.
Authority’s case
Mr Pass submitted that there has been no diminution in the value of the subject property attributable to the bypass. On the contrary, it is now a quieter and more desirable property.
Mr Pass submitted that section 1(1) of the 1973 Act placed on the claimant the burden of proving:
(a) the market value of the subject property unaffected by physical factors;
(b) that the effect of those factors may be perceived by a potential purchaser;
(c) that due to that perceived effect a purchaser would offer less than he would in the absence of the physical factors. Compensation is the difference between the price a purchaser would pay with and without the physical factors.
The ideal situation would be for the purchaser to inspect the subject property on the day before the road opened, having regard to conditions on the date of claim. On the first claim day (ie one year after the road opened) and having researched the market the purchaser would prepare his offer, based entirely on his previous inspection and his reasonable expectations as to the prospective intensification of use and having regard to the rules in section 5 of the Land Compensation Act 1961. He would then reinspect on the first claim day and adjust his offer in the light of:
(a) the effect of the physical factors;
(b) any benefits flowing from the use or prospective use of the road.
A potential purchaser will not usually be available, however, and the Lands Tribunal must attempt the same exercise assisted by admissible evidence of conditions before and after the opening of the road, by expert evidence, by a view and by settled compensation claims for the same road.
Mr Pass said that evidence should be rejected of the behaviour of a purchaser who, having no reasonable grounds for believing that the amenity of the subject property has been diminished by the physical factors, decides to offer less than he would have done if they had not existed. Furthermore, the tribunal should not place itself in the position of such a purchaser. This evidence should be excluded because such a purchaser might have offered the same price had the road not existed. He is no guide to the diminution in value caused by the physical factors. A person who lacks historical knowledge of the subject property cannot give full weight to any betterment flowing from the road.
Mr Pass said that we should regard the evidence of Mrs Bateman and Mr Owens with caution. They are claimants in their own rights who, therefore, have an interest in any compensation awarded in the present case. Moreover, their claims are modest and they are at no risk as to costs due to the indemnities provided by one of their professional advisors. Accordingly, their evidence is likely to be biased. Furthermore, witnesses who have lived in, or known, a locality for many years will have grown accustomed to a particular noise climate and will cease to notice that noise. But when the same or a lower volume of noise from a different direction, or a different quality of noise is introduced, it is likely to be perceived to be worse than that previously experienced. This would not be the perception of the hypothetical purchaser envisaged when assessing compensation.
Mr Pass referred to the evidence given by Mr Ricketts of compensation agreed or awarded in other parts of the country. He said that this is irrelevant and should be rejected. He referred to the observations of this tribunal in W Clibbett Ltd v Avon County Council (1975) 237 EG 271 at p271 and Fallows v Gateshead Metropolitan Borough Council (1993) 66 P&CR 460 at p466 and to part of the judgment of Hoffman J in Land Securities plc v Westminster City Council [1992] 2 EGLR 15 at p16E.
Mr Pass submitted that, in the real market, not every disadvantage affecting a property will be reflected in the price. Below a certain figure de minimus applies and it would be wrong for this tribunal to translate into compensation every perceptible impact of the physical factors upon the subject property. Valuation is imprecise and a claimant must prove his entitlement to every pound of compensation. Where such alleged entitlement falls within the normal range of error in valuation, the claimant will have failed to discharge the burden of proof.
Mr Pass called three witnesses: one of fact, Mr Blackwell; and two expert witnesses, Mr Hughes on value and Mr Tollitt on traffic and noise.
Mr Kevin Paul Blackwell is the owner of Shaldon, a house on the same side of Church Road as the subject property and situated slightly to the west. He purchased it two years ago. Mr Blackwell said that he previously lived in Connah’s Quay and drove through Northop to work twice a day. He knew the traffic conditions in the village before the bypass was built and said that, although he would have lived in Northop village before this road was opened, he would not have|page:196| purchased Shaldon. His decision to buy this house followed the improved traffic conditions after the opening of the bypass. Mr Blackwell said that he reduced the price by £4,000 in negotiations before purchase but this was not due to the new road. He was unaware of the claim for compensation by the former owner. He installed double glazing but this was not due to traffic noise.
Mr Peter Weston Hughes frics faav gave evidence of value. He said that he has 38 years’ experience in the profession. He has been employed by the valuation office for 28 years and since 1986 has been a senior valuer in the Wrexham office. He negotiated the purchase of land for the bypass and settled the claims under Part I of the 1973 Act. He has experience of Northop before and after the opening of the bypass.
Mr Hughes said that before the bypass the subject property received traffic noise from the old A55 and from Connah’s Quay Road. On the eastbound carriageway of the old A55, to the rear of the subject property, was a petrol filling station which was an additional source of noise and dirt. The opening of the bypass has taken away almost all the through traffic from the old A55 and Connah’s Quay Road, the petrol filling station has been demolished and traffic now flows freely on the new bypass. The south-west wind previously carried noise and dirt from the old A55 to the subject property, but it now carries the bypass noise away from the house. Although some noise is experienced from the bypass, it is further away, at a lower level and partially screened by the bungalows opposite. The subject property is now more pleasant and desirable. Mr Hughes put this benefit at approximately 10%.
Mr Hughes gave evidence of the compensation settlements on adjoining properties. They were agreed before traffic flow figures were available and were made without the benefit of noise level readings. They were all agreed with Mr Ricketts, except Wortley House in Church Road. The physical factors were noise and dust and the compensation payments have been expressed as a percentage of the capital value at the first claim day assuming the presence of the bypass but without the physical factors.
On the opposite side of Church Road to the subject property compensation equivalent to 5% of the capital value has been agreed. Many of these properties have access from a service road off Church Road and had a secluded agricultural aspect to the rear. Noise from the old A55 was minimal. The bypass runs diagonally at the rear. These properties have benefited from a reduction in noise from Connah’s Quay Road, but a greater amount of noise is experienced from the bypass. To the east of the subject property, compensation of 4% has been agreed for two bungalows at the end of the cul-de-sac, Park View. Prior to the bypass these properties suffered noise from Connah’s Quay Road and to a lesser extent from the old A55. The noise is now from the bypass, situated in a cutting at this point and screened by a wooden baffle fence. Other bungalows in Park View (nos 3 to 13 and 22) have been agreed at 3%. They previously suffered from noise from Connah’s Quay Road and, in the case of no 22, the old A55. They are now affected by noise from the bypass which runs diagonally to the south and to the rear of these bungalows. Compensation for 1 Park View has been agreed at 2%. This bungalow previously suffered from noise from Connah’s Quay Road and is now affected by the bypass which runs out of the cutting to the north-west of the property. 2 Park View has received compensation of 1.25%. This bungalow was previously affected by noise from Connah’s Quay Road at the front and the old A55 at the rear. This latter noise has considerably diminished but the property is now affected by the bypass. The percentage agreed is less than for no 1 because it is situated further from the bypass. Finally, moving to the west of Park View towards the subject property, Mr Hughes said that compensation of 1% has been agreed for 17 and 18 Aber Crescent. Before the bypass these properties experienced noise from both Connah’s Quay Road to the front and the old A55 at the rear. Now they are affected by the bypass. These properties are closer to the bypass than the subject property.
Mr Hughes said that claims have been received from the occupiers of 12 other properties close to the subject property (including Homestead and Shaldon). Nil offers of compensation have been made and the claims have not so far been further pursued.
Mr Hughes said that he valued the subject property as at June 26 1990 at £70,000. There were no known sales in the immediate area at this date although he has had regard to the sale of Shaldon. He said that, in his opinion, no compensation should be awarded for the subject property. It has not been depreciated by physical factors caused by the Northop Bypass. It is further away from the new bypass than from the old A55 and is protected from noise by the properties opposite. It has benefited from the reduction of traffic in Church Road. Nil compensation, said Mr Hughes, is consistent with the compensation agreed for the adjoining properties, all of which are adversely affected by the bypass, and by the offers of nil compensation which remain uncontested. Mr Hughes said that he has reached this opinion on his local experience by taking an overall view of the effect of the bypass on values, particularly having regard to the effect of the new road on the traffic on the former Connah’s Quay Road and A55. He was not aware of noise level figures when he reached this opinion but this evidence supports his practical approach.
Mr Christopher John Tollitt beng ceng mice miht gave evidence of traffic noise and flows. He is employed by the Welsh Office highways directorate at Colwyn Bay. He said that during construction of the Northop Bypass (between November 1987 and June 1989) he spent on average two days per month on site. In addition he commuted twice daily through Northop during the year from April 1987, he drove frequently through the village at weekends and at night and, after moving house in April 1988, he has often travelled through Northop. He said that he is conversant with conditions before and after the bypass. He is now project engineer/manager for major highway schemes and is experienced in the measurement of traffic noise and flows. Mr Tollitt said he has not been inside the subject property: all readings and measurements have been taken externally around the property.
Mr Tollitt said that noise readings relating specifically to the subject property were not taken before and after the opening of the bypass. In September 1983 work by Clwyd County Council on the effect of the bypass identified the subject property as likely to benefit from a 5 to 10 dB decrease in noise levels. It was not therefore considered necessary to carry out any ambient noise readings in the immediate vicinity of the property. Some ambient noise levels were recorded in October 1986 and these have been adjusted by the prediction method to relate them to the area adjacent to the subject property. Actual noise levels were then recorded in April 1993 and have been used for comparison purposes. The results, showing that noise levels have reduced, are as follows:
|
In Church Road outside subject property |
|||||||
|
Leq |
L10 |
||||||
|
Without bypass |
65.9 |
68.5 |
|||||
|
With bypass |
59.8 |
60.5 |
|||||
|
Difference |
6.1 |
8.0 |
|||||
|
In B5126 (former A55) at former petrol filling station |
|||||||
|
Leq |
L10 |
||||||
|
Without bypass |
80.0 |
83.4 |
|||||
|
With bypass |
71.4 |
75.5 |
|||||
|
Difference |
8.6 |
7.9 |
|||||
Leq means the equivalent sound level in dBA over a given period of measurement.
L10 means the arithmetic mean of the noise levels in dBA exceeded for 10% of the time in each of the 18 hour periods between 6.00 am and midnight.
Mr Tollit said that the volume of traffic is one of the most important factors affecting noise levels. The following table shows traffic flows (rounded to the nearest 100) expressed as the 1990 annual average daily total:
|page:197|
|
No Bypass |
Bypass open |
||||
|
Northop Bypass (A55) |
0 |
33,000 |
|||
|
Church Road (former Connah’s Quay Road) |
4,200 |
600 |
|||
|
B5126 (former A55) |
31,000 |
4,600 |
|||
Mr Tollitt commented on these figures. He said that the flow on the bypass of 33,000 is slightly higher than the previous flow on the old A55 of 31,000 due to the release of suppressed demand. In terms of noise, however, this increase is not significant and equates to a difference of only 0.27 dB, which would not be discernible by the human ear. To achieve a noticeable difference the traffic volume would need to double to 62,000 vehicles. In Church Road the reduced figure of 600 with the bypass open is for the full length of the road but, because it is now a cul-de-sac, Mr Tollin said that the volume of traffic outside the subject property is likely to be only 100 to 200 vehicles per day. The vehicles using the new B5126 (4,600) is slightly higher than those previously using Connah’s Quay Road (4,200). This is due to the effect of the ‘off’ slip road from the new bypass and the connection of the village road to the B5126 instead of the bypass.
Mr Tollitt analysed the noise and traffic figures by inspection and by calculation and measurement. He said that the traffic volume and noise which were 14m to the front of the subject property in Connah’s Quay Road have transferred to the new B5126, 120m to the rear of the house; and the traffic which would have been 120m to the rear on the old A55 is now 216m away on the bypass. The majority of the bypass is screened from the subject property. By inspection, therefore, the subject property has benefited from the bypass. Before the new road was built the front of the subject property received most of its traffic noise from Connah’s Quay Road. The 1993 measured noise levels show reductions of 6.1 dB Leq and 8.0 dB L10. At the rear, prior to the bypass, virtually all the traffic noise came from the old A55. A comparison of noise levels taken at the former petrol filling station shows that the opening of the bypass decreased levels by 8.6 dB Leq and 7.9 dB L10. In reality this decrease has been significantly greater due to other factors.
It can be clearly seen, said Mr Tollitt, that by measurement and prediction the bypass has had a significant beneficial effect on noise levels at the subject property. To the front the bypass traffic is audible as a distant drone that probably cannot be heard inside with the windows shut. Without the Bypass, traffic on the old Connah’s Quay Road would have been 20 to 40 times the current level and almost high enough to justify noise insulation on its own. At the rear, the old A55 is closer than the new bypass, but now only carries 15% of the pre-bypass traffic. The traffic noise from the old A55 differs from that from the bypass: streams of separate vehicles can be heard compared to the continuous drone from the bypass. Furthermore, there was an almost constant roar of heavy goods vehicles and other vehicles at the traffic lights. Traffic noise levels at night would be noticeably lower than in the day but the subject property still benefits from the bypass.
Mr Tollitt said that Northop was subject to serious traffic congestion on both the old A55 and the existing A5119. At peak times traffic jams regularly extended along the A55 and to a lesser extent on the A5119. The transfer of the A55 traffic on to the bypass has made Northop village generally a far more pleasant place.
Mr Tollitt said that a tarmac road, once constructed, does not in general produce any noticeable quantities of dust and he has some difficulty in understanding the reference to dust in the claim. He said that the only effect the bypass could have on levels of dust at the subject property is beneficial.
Mr Tollitt’s overall conclusion is that the bypass has had no detrimental effect on the subject property; the only significant effect has been beneficial.
Mr Pass put in evidence a letter dated March 8 1994 from the Met Office, which stated that at their Hawarden Station for the period 1986 to 1993 the prevailing wind direction was from the south-east for approximately 14% of the time followed by the south-west and north-west (approximately 12% and 11% of the time respectively).
Decision
We deal first with the submissions on the correct approach in law to the assessment of compensation and the burden of proof. In general we agree with Mr Cooke’s literal approach to the construction of Part I of the 1973 Act.
Under section 1 of the Act a claimant must prove, as a matter of law, a depreciation in value by physical factors caused by the use of public works, but we do not agree with Mr Pass that this must be proved in any particular way. In our view, the assessment of depreciation is a matter of fact and opinion. We think it would be wrong to convert it into a question of law by laying down a particular test or method of assessment which must be followed. It may well be that the test proposed by Mr Pass, involving a hypothetical purchaser and his perceptions of value, will be followed by many valuers when dealing with Part I claims. We decline to say, however, that as a matter of law it must necessarily be followed or that there is a burden of proof on claimants to show that it has been followed. Depreciation may be calculated in many ways, all of them equally good. It may be found, for example, by taking a percentage of the capital value before the public works, or by taking part of the total reduction in value caused by the works as due to the physical factors, or even as a spot figure based solely on the valuer’s experience of the locality. These are matters of evidence, of fact and opinion, not of law.
Section 6(1) of the 1973 Act provides that the compensation shall be reduced by the increase in value attributable to the existence, use or prospective use of the public works. We do not think that this provision necessarily requires a separate deduction or any other particular method of giving effect to it. Provided that such an increase in value has been taken into account we think it entirely a matter of fact and opinion how this statutory provision is translated into a net figure of compensation. A specific deduction for betterment from a specific figure of compensation may be made but we do not think it would be wrong in law for a valuer to go directly to a net figure of compensation based on his experience.
We therefore resist the temptation to add to the 1973 Act by imposing a particular burden on proof on claimants requiring them to show that the assessment of compensation has been calculated in a particular way. Valuation is best left as a question of fact and opinion to be dealt with on the evidence, affected as little as possible by questions of law.
We inspected the subject property and the surrounding area in the early afternoon of a cold, dry, cloudy day, with a light south-westerly wind.
On the evidence we agree with the authority that no compensation is payable to the claimant in respect of the use of the bypass. We can state our reasons briefly because on nearly all matters we prefer the evidence of the authority to that of the claimant.
First, the evidence of fact. Mrs Bateman and Mr Desmond Owens spoke of the increased noise and dirt from the bypass. In contrast, Mr Blackwell said that he purchased Shaldon because traffic conditions in Church Road had improved after the opening of the bypass. He did not seek any reduction in the price due to this road. We prefer Mr Blackwell’s evidence. We believe that Mrs Bateman and Mr Owens have translated a change in the nature of the traffic noise into an increase in that noise. This is not supported by the noise measurements provided by Mr Tollin.
Second, the expert evidence of value. We prefer the evidence of Mr Hughes to that of Mr Ricketts. Mr Ricketts lacks the local knowledge and experience possessed by Mr Hughes, which we believe to be important in these claims. He was forced to recast his evidence at the hearing to deal with the lack of evidence of local values due to the inability to call Mr Elias-Jones. We found Mr Ricketts’ evidence unconvincing. We also agree with Mr Pass that his comparables comprising decisions of this tribunal and settlements in other parts of the country are irrelevant. We are reluctant, without full argument, to say that this evidence is inadmissible but we attach little weight to it. We agree with the observations on this type of evidence made by the tribunal (J C Hill frics) in Fallows (p466):
|page:198|
During the hearing Mr Ricketts referred to a number of decisions by this tribunal and to settlements involving compensation for depreciation arising from the construction of highways. As part of his analysis of the resulting figures he expressed the award or settlement in each case as a percentage of the undepreciated capital value of the property concerned. I would comment, however, that the facts in this type of case are likely to vary so much in respect of such matters as the size and type of highway, distance from the property concerned, traffic intensity, topography, etc that it is highly unlikely that any pattern can emerge which can be relied on for evidential purposes. In the nine cases to which he referred the percentages varied considerably with no discernible pattern and I found them of no assistance.
We would add that, for this evidence to be given any weight at all, it would be necessary for the tribunal to inspect these properties, requiring an extensive tour round the country, adding to the time and cost of these decisions. We hope that we have heard the last of this evidence. We have also had regard to the statement made by Mr Ricketts in cross-examination that, if this reference fails to produce an award of compensation, he will be required to bear the costs. If an expert witness has a financial interest in the outcome of a dispute, other than his fees (which should be the same whatever the result), this must be seen to affect his objectivity.
Third, the evidence on traffic noise and volume. We found the evidence of Mr Tollin helpful. It confirmed by measurement what would otherwise be matters of perception and impression. We accept that there is no direct correlation between traffic noise and volume and property values and that a prospective purchaser does not have measurements and counts taken before he purchases a house. Nevertheless, these figures are useful background information and our decision has been influenced by the dramatic reduction in traffic on the new B5126 and in Church Road, when set against the noise and volume of traffic on the bypass.
Fourth, we have been assisted by the settled claims on adjoining properties. In our view, a nil figure of compensation for the subject property is in accordance with the pattern of settlements as explained by Mr Hughes. Mr Cooke, for the claimant, submitted that it cannot be correct for settlements of 5% of capital value to apply to the properties opposite the subject property but nil for the subject property. During the hearing we admit that this did seem to be an inconsistency, but the position became clear at our inspection. These properties suffer greatly from the noise from the bypass, which we experienced when we crossed Church Road from the subject property, and they have obtained less benefit than the subject property from the closure and diversion of traffic from Church Road (many of the properties being set back from this road by a hedge and service road) and the reduction in traffic on the new B5126.
Finally, we have the evidence of our inspection. Inside the subject property with the double glazing open but windows closed we could hear little noise. We did not find the slight noise in the front and back gardens to be obtrusive. We noted how quiet Church Road is and the low volume of traffic on the B5126. We viewed all the immediately adjoining comparables and agree with the reasons given by Mr Hughes for the varying percentage settlements.
For the reasons set out above, we find that, having regard to sections 1 and 6 of the 1973 Act, the subject property has benefited from the use of the Northop Bypass by the diversion of traffic from Church Road and the B5126, to a greater extent than any depreciation from the noise and dirt from this new road. Accordingly, this claim must fail and we find that no compensation is payable to the claimant.
This decision determines the substantive issues raised between the parties and the award of this tribunal 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 the 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
We have received written representations from the parties as to costs. We order that the claimant shall pay the costs of the authority, such costs if not agreed, to be taxed by the registrar of the Lands Tribunal on the High Court standard basis. We are satisfied that costs should be awarded on this basis because, although the amount claimed was small, other claims are still outstanding for adjoining properties. Furthermore, matters of principle and evidence arose out of this reference and we accept the representations on behalf of the authority that substantial costs were incurred in dealing with these matters and resisting this claim after a nil offer of compensation had been made.
We further order that, in the event of the claimant failing to pay all or any of such costs, then William Kenneth Ronald Ricketts and/or the William Ricketts Partnership at Cardiff shall pay all or any part of such costs which remain unpaid.