Purchase notice–Land at North Ferriby, Hull, required for highway purposes–Planning permission likely for residential development–Abortive agreement on price in 1969–Agreement reached by parties’ valuers in December 1973 repudiated by council and unenforceable–Question of appropriate date of assessment–Tribunal rejects ‘with some reluctance’ claimants’ submission for date of negotiations and, although it considers ‘commonsense and convenience point overwhelmingly to date of notice of reference,’ it adopts date of hearing, since parties agreed on that as the alternative–Council’s argument that value of subject land fell between December 1973 and February 1975 fails
Mr I D L
Glidewell QC and Mr D M W Barnes (instructed by Rollit, Farrell & Bladon,
of Hull) appeared for the claimants, and Mr A P Fletcher (instructed by the
director of administration of Humberside County Council) represented the
acquiring authority.
Giving their
decision, THE TRIBUNAL said: This is a reference to determine the amount of
compensation payable for the deemed
acres fronting Melton Road, North Ferriby. The village of North Ferriby
straddles, but is predominantly to the south of, the A63
Leeds/Kingston-upon-Hull trunk road. It is approximately 8 miles to the west of
the centre of the city of Kingston-upon-Hull. North Ferriby is a commuter
residential village within the sphere of influence of Kingston-upon-Hull. There
are reasonable local shops, schools and social facilities. North Ferriby lies
on the Selby/Goole/Kingston-upon-Hull railway line, and there is a passenger
station within the village and reasonable services to Hull and Selby. The site
is unused, but it is common ground that if the land had not been required for
highway purposes, it was likely that planning permission would have been
granted for 12 detached dwellings, each plot to have approximately a 70-ft.
frontage to Melton Road. The first issue between the parties is the appropriate
date at which compensation should be assessed. The claimants say that it is
December 1973, when a price was agreed by the parties’ respective valuers. The
respondents say that it is the date of our hearing, or in August 1969 when
there was an abortive agreement. There are also issues on quantum.
History
On December 20
1966, the Beverley Rural District Council refused an outline planning
application for the residential development of the subject land. The reason for
the refusal was ‘the land is required for a possible road improvement at the
junction of Melton Road and the Ferriby By-Pass.’ On December 28 1966, the claimants served on
the Rural District Council a purchase notice under section 129 of the Town and
Country Planning Act 1962, which notice was confirmed by the Minister of
Housing and Local Government on July 24 1967, subject to the substitution of
the East Riding of Yorkshire County Council as purchasing authority.
In a letter of
July 31 1967, the clerk to the East Riding of Yorkshire County Council told the
claimants’ solicitors that the county land agent had been ‘instructed to
negotiate settlement of compensation on the basis that the [subject] land would
attract a certificate of appropriate alternative development for residential
purposes.’
On May 17 1968
the county planning officer informally told the county land agent that if the
land had not been required for highway purposes planning permission as already
described would have been granted.
In December
1968 and January 1969 the claimants’ surveyors and the county land agent agreed
a figure of compensation amounting to £23,050 plus fees and costs. An abstract
of title was delivered and conveyancing procedures were put in hand, but a
dispute arose as to the area of the subject land, which dispute was not
resolved. However, on April 28 1969, the county land agent in a letter to the
claimants’ surveyor, having stated that a number of unexpected difficulties had
to be overcome, went on to say: ‘the county council will soon be in a position
to pay interest on the amount of the agreed settlement.’ Nevertheless the council did not proceed to
implement that agreement but, on the contrary, on May 2 1969 the clerk wrote to
the claimants’ solicitors a letter in which he said ‘I am now asking the
Ministry of Transport to accept responsibility under the purchase notice and
will write to you again on hearing from the Minister.’ The solicitors replied as follows:
‘We thank you
for your letter of the 2nd instant and note that you are now asking the
Ministry of Transport to accept responsibility under the purchase notice in
this matter, but with respect we do not see how this concerns our clients in
any way. As you are aware, our clients have been concerned with the delay in
settling this matter, negotiations having commenced in September 1967, and the
compensation having been settled in August 1968, subject to adjustment in
respect of compensation repayable under the Town and Country Planning Act 1954.
As the precise amount of the compensation has now been agreed and you received
a report of the district valuer on or about the 25th ultimo, and you are also
in possession of the abstract of title, it would appear that completion should
take place immediately.’
In reply to
that letter the clerk wrote: ‘it has been obvious throughout these proceedings
that your clients’ land ought to be purchased by the Minister of Transport, and
I am instructed to attempt once again to clarify the Minister’s intentions.’ In reply to that the solicitors reminded the
clerk of the terms of the purchase notice as confirmed and thenceforth
continued to press the clerk for a settlement. On August 1 1969 the clerk said
that he was ‘now in a position to proceed with the conveyancing respecting the
above land’ and then went on to deal with conveyancing matters. But again the
dispute as to the precise area arose and culminated in an acceptance by the
claimants that the area to be acquired was 1.68 acres and not 1.85 acres as
stated on the purchase notice plan. Accordingly, on October 1 1971 the parties
agreed that the surveyors and the county land agent should agree a price for
the reduced area. Further negotiations proceeded and in the summer of 1973 oral
agreement was reached, and on November 21 1973 the county land agent wrote to
the claimants’ surveyors thus:
‘Further to
previous correspondence and discussions I am now in a position to make certain
recommendations, as follows:
1. Purchase
Notice–High Street
(a) The county council to purchase the freehold
interest in the area of approximately 1.68 acres of land shown on the County
Surveyor’s Plan No 3052/L/B for the sum of £84,000. From this has to be
deducted the Registered Charge amounting to £402.17 thereby making a net
purchase price of £83,597.83, say £83,600 (eighty three thousand, six hundred
pounds).
(b) Vacant possession to be given on completion.
(c) The land to be transferred free of any
easements, restrictions or outgoings, and any interests of the owners in mines
and minerals to be included.
(d) No accommodation works to be specified.
(e) The county council to pay the vendor’s
proper legal costs regarding the conveyance to the land.
(f) The county council to pay the vendor’s
surveyors fees of £905.10 (nine hundred and five pounds and ten pence) plus 10%
VAT on the assumption that the vendors do not have a registered business for
VAT.’
The claimants’
surveyors replied on December 7 1973, saying ‘We have now taken our clients’
instructions regarding this matter and wish to advise you that they are
prepared to accept the offer of £83,600, together with the other terms set out
in your letter,’ and went on to give the name and address of the claimants’
solicitors. On January 4 1974 those solicitors asked the clerk of the county
council for a draft conveyance for approval as quickly as possible, but the
clerk replied that the county council were unwilling to shoulder the financial
burden involved and would need a clear assurance of reimbursement by the Secretary
of State as the highway authority actually concerned. Not surprisingly the
claimants’ solicitors wrote a long letter protesting at the council’s attitude
and failure to proceed with the agreement, but the clerk did little more than
reiterate what he had said in his previous letter, as he did in a further
letter in which he suggested that the claimants should drop their claim for
compensation and apply again for planning permission. On April 5 1974 the
present respondents assumed the functions of the former county council, and not
surprisingly Mr Alan Fletcher, who appeared for the Humberside County Council,
did not seek to justify the actions of his clients’ predecessors.
On March 4
1974 the claimants applied for an appropriate alternative development
certificate under section 17 of the Land Compensation Act 1961. On July 12 that
certificate was issued and specified frontage residential development of not
more than 12 houses with paired accesses and the provision of turning spaces
within the curtilage of each dwelling and the planting of a tree belt. That
application was made because it had been said by the clerk of the former county
council that the Lands Tribunal would require such a certificate. On March 5
1974 the claimants, through their solicitors, referred the determination of the
assessment of the compensation to the Lands Tribunal.
Date of
Assessment
Mr. Glidewell
conceded that no enforceable agreement was concluded in 1973, but as that was
the time when the parties agreed to assess compensation it should be adopted.
He referred to Birmingham Corporation v West Midland Baptist (Trust)
Association (Inc.) [1970] AC 874 for the proposition that where there is no
contract and where possession has not been taken, their Lordships’ speeches
point to the date of assessment as being appropriate; see, for example, Lord
Morris of Borth-y-Gest at p904. He said that in the peculiar circumstances of
this case agreement had been reached and it was only necessary to make the
reference to the Lands Tribunal in order to force the council to complete it.
Mr. Fletcher
invoked the decision in W & S (Long Eaton) Ltd v Derbyshire
County Council (1974) 233 EG 403, [1975] 1 EGLR 160 for his submission that
where entry has not occurred and there is no enforceable contract, compensation
is to be assessed at the date of the hearing. That case, he said, was rightly
decided. Further, he maintained that Mr. Glidewell’s test was imprecise,
because, for example, when did the valuers agree the assessment? Was it in July 1973, when they reached oral
informal agreement, or was it in November, when the agreement was confirmed in
writing by the county surveyor, or was it in December, when the amount was
accepted. If, he said, the rules of contract were not to be followed, then it would
be appropriate to take the early agreement, even though it transpired that the
parties were not ad idem as to the area of the land to be acquired.
In the Derbyshire
case the tribunal said:
‘It seems to
us that we should conclude from the Birmingham case that there are at
least three different events, the date of occurrence of which may determine the
date of assessment. They are: (i) entry by the acquiring authority; (ii) the
making of an enforceable contract; and (iii) the hearing by the Lands Tribunal.’
The tribunal
went on to find that a contract which was not enforceable did not qualify.
However, we may say in passing that we understand that an appeal is pending in
that case. A somewhat different issue is raised in this case, namely, whether
where the parties’ valuers are negotiating the notional market price as at the
date of their negotiations, then that date is or should be held to be the date
of assessment, so that there is yet another category of events. We can see that
in the present case justice and convenience supports that view. Indeed, there
might be much to be said for it in other cases because, for example, it would
prevent a party resiling from his agreement because of a change in the market
between the agreement and completion. In this case the council repudiated the
agreement by their predecessors’ valuer because they thought that by doing so
they would be able to pay less for the land. It could also be said that both
parties had committed themselves, not to the values agreed by their respective
valuers but to having compensation assessed at the date of their agreement. We
are attracted by the theory and it is with some reluctance that we find against
it. We do so because it must be necessary to extract from it a date certain and
that cannot be done, particularly where negotiations are protracted as they
were in this case. We do not think the references in the Birmingham case
to the date of assessment mean the date of negotiations.
The important
question now arises: which is the appropriate date? The Birmingham case requires us to
disregard the date of the deemed notice to treat. There is no contract. A
notice of entry has not been served. It seems to us that where there is a
reference to the Lands Tribunal three dates fall for consideration, namely, the
date of reference, the date or dates of the hearing, and the date of the
decision. It could be argued that the date of the decision is the appropriate
date because thereafter either party can call for specific performance, but in
practice it would be impossible to assess values at the date of decision save
in those cases where the decision was given on the day of or within a few days
of the hearing. There are also disadvantages in adopting the date of the
hearing, because at the time of the hearing values may have changed and changed
quite substantially between the lodging of documents pursuant to rule 42 and
that date. They can also change during the course of a protracted hearing,
particularly if there are long adjournments; in the Derbyshire case the
council’s valuer contended that there had been a fall in values of 20 per cent
over a fortnight, although on the evidence that was not accepted by the
tribunal. The other alternative, namely the date of the reference, has certain
obvious advantages. It enables either party to fix the date of assessment; on
the contrary argument, that can only be done at present by the acquiring
authority giving notice of entry, thus enabling it to select a date most
advantageous to it. It also fixes a single date for the date of assessment of
values without either party standing to benefit or disbenefit by the shifting
sands of the market. The choice of that date as the valuation date has one
advantage, that valuations and particulars of comparable properties do not have
to be altered right up to the time of, or during the course of, the hearing.
Our feeling is
that in the interest of justice and convenience there is much to be said for
the date of the reference. The date of the reference is, no doubt, in practice
the date at which valuations submitted under rule 42 of the Lands Tribunal
Rules 1963 are assessed. We do not find, at least in a rule (2) case, that
there is anything in the Birmingham case to the contrary. However, we
have not heard argument in favour of it, and indeed when asked to deal with the
suggestion both Mr Fletcher and Mr Barnes (in the absence of Mr Glidewell)
argued in favour of the date of our hearing, although it must be said that they
had very little time to consider the alternative we put to them. We think that
commonsense and convenience point overwhelmingly to the date of the notice of
reference. Nevertheless, as the parties seem to be agreed that the alternative
to Mr Glidewell’s submission is the date of the hearing, we adopt that date as
a matter ex concessis and we will now consider valuations on that basis,
without prejudice to the possibility that in some later case the date of the
notice of reference may be put forward as being the right date.
Assessment of
Value
The valuation
of Mr Seaton FRICS, the claimants’ valuer, was £83,600. Mr J M Bell BSc (Est
Man) FRICS, now county estates and valuation officer, produced two valuations,
one of £49,200 and the other £49,700. The main issue is whether the value of
the subject land has fallen between the December 1973 provisional agreement and
February 1975, the date of the hearing. It is clear that both Mr Seaton and Mr
R Gregory ARICS, then an assistant to the county land agent, reached agreement
on values in 1973 by direct comparison with the sale (in lots comprising one or
more plots) in March 1973 of the Aston Hall Estate, an area of 4.5 acres lying
about 250 yds from the subject land. In January 1975 one of the plots was
resold for £7,000 by comparison with its 1973 price of £6,500, a sale which Mr
Seaton regarded as supporting his opinion that the value of the subject land
had not fallen since 1973. Mr Bell had concluded at the outset that the values
of land, including the subject land, had fallen since 1973; he had therefore
rejected the 1973 Aston Hall sales and for his primary valuation had relied on
a sale by auction in September 1974 of three plots in a village six miles west
of the subject land.
We do not
accept that the evidence adduced (in so far as it was admissible) as to a fall
in the values of land was sufficiently dependable as to cause the rejection of
the Aston Hall sales, which we consider to be the better comparables. Indeed,
Mr Bell himself did not regard his comparables as adequate evidence on which to
rely for his valuation.
We now turn to
Mr Bell’s other valuation, in which he adopted the 1973 agreement as the
starting point and reduced it by a percentage which was derived directly from
the difference in the sale prices of two areas of land in August 1973 and
October 1974 respectively. In our view the characteristics of the two sites are
so disparate that a reliable judgment could not be made as to the amount, if
any, of a fall in value between those dates.
We therefore
accept Mr Seaton’s basis of valuation and his basic valuation of £83,600. But
there are two subsidiary matters for decision. On the point of paired accesses,
specified in the section 17 certificate, none of the witnesses had had
experience as to whether such a condition had any effect on the selling price of
building plots. We decide that no deduction falls to be made pursuant to such a
condition. As to drainage, it was clear that neither Mr Seaton nor Mr Gregory
was aware that the main sewer was not laid along the frontage of the subject
land. The issue was argued and various estimates of the costs of connection
were given in evidence. We have concluded that in the market a purchaser would
reduce his bid on this account and he would round down the basic price from
£83,600 to £80,000.
Accordingly we
determine the compensation payable at £80,000.
The acquiring
authority will pay the claimants the sum of £80,000, to which will be added a
surveyor’s fee based on scale 5 (a) of the scales of professional charges of
the Royal Institution of Chartered Surveyors, also any legal costs properly
incurred from the date of the confirmation of the purchase notice up to the
date of the notice of reference.
Having read
the decision in this matter and having then opened the sealed offer of
compensation lodged by the acquiring authority, we find that the amount thereof
is less than the amount of our award; accordingly the acquiring authority will
pay to the claimant its costs of this reference, such costs, unless agreed, to
be taxed by the Registrar of the Lands Tribunal on the High Court Scale.
