Private dwelling-house at Hounslow demolished under clearance order–Unusual reliance by claimant on enhancement of value under ‘Pointe Gourde’ principle–Freehold purchased by local private development company, who then owned all properties in the clearance area under ‘site-assembly exercise’ for town centre redevelopment for which outline planning permission granted–Council had rescinded earlier CPO resolution in favour of making clearance order–Tribunal does not accept that council ever possessed a scheme for town centre redevelopment–Council’s purpose was simply clearance of unfit properties–To treat developers’ project as a ‘scheme’ confused a scheme underlying an acquisition with a planning decision–Birmingham DC v Morris and Jacombs indistinguishable–Full compulsory purchase value and site value in balance and no entitlement, therefore, to compensation–Claim on reading of decision for amount of gross value under s 10 of 1961 Act
David Oliver
(instructed by Berry, Firth & Johnston) appeared for the claimant; Anthony
Dinkin (instructed by the solicitor to the London Borough of Hounslow) for the
authority.
Giving his
decision, MR WELLINGS said: This is a reference for determination of the amount
of compensation to which the claimant is entitled for the loss of the private
dwelling-house situate and known as 6 Prince Regent Road, Hounslow, Middlesex,
as the result of demolition pursuant to the London Borough of Hounslow (Prince
Regent Road) Clearance Order 1973. All the facts are agreed and the only
dispute between the parties is one of law.
The reference
property was one of a number of properties (13 in all) in a clearance area
declared by the council on July 13 1971. The council had decided to proceed by
clearance order (obliging the owners to clear the properties) rather than by
compulsory purchase order.
Throughout the
period of two years expiring on July 13 1971 (the date relevant for the
purposes of section 68 of the Housing Act 1969 and Schedule 5, para 5(1)(e)
thereof, the claimant owned the fee simple in the reference property and wholly
occupied it as a private dwelling. Accordingly, by virtue of para 2 of Schedule
5, the claimant is entitled to be paid ‘an amount equal to its full compulsory
purchase value less the compensation which was or would have been payable in
respect of the interest in connection with the compulsory purchase of the house
at site value.’ Although there was no
acquisition by the council the assessment of values is required to be made on
the same basis as if there had been a compulsory acquisition.
The relevant
definitions are contained in para 5(2) of Schedule 5. There it is stated that
”full compulsory purchase value’ in relation to any interest in a house, means
compensation which would be payable in respect of the compulsory purchase of
that interest if that compensation fell to be assessed in accordance with
subsections (1) and (4) of section 59 of the Act of 1957 and, in the case of a
house subject to a clearance order, . . . the making of that order were a
service of the notice to treat.’ It is
also stated that ‘site value,’ in relation to the compulsory purchase of a
house, means compensation in respect thereof assessed in accordance with the
provisions of section 59(2) of the Act of 1957.
The effect of
these definitions is that the full compulsory purchase value is assessed
according to market value under rule (5) of section 5 of the Land Compensation
Act 1961 and that the site value is assessed pursuant to section 59(2) of the
Housing Act 1957. The date of the deemed notice to treat is May 16 1973 (the
date of the closing order). The claimant ceased to reside in the reference
property on July 3 1975 upon being rehoused by the council and that date is
agreed to be the date of valuation.
The full
compulsory purchase value of the reference property is agreed to be £9,750. The
site value is agreed to be not less than £9,750 unless the claimant is, as Mr
Oliver on his behalf contends, entitled to rely upon the Pointe Gourde
principle (that is to say, the principle of the decision of the Privy Council
in Pointe Gourde Quarrying & Transport Co v Sub-Intendent of
Crown Lands [1947] AC 565), in which event the site value is agreed to be
£1,500. Thus, if Mr Oliver is right, the amount of compensation to which the
claimant is entitled is £8,250. If Mr Dinkin, for the council, is right, the
compensation to which the claimant is entitled is nil.
The facts and
matters of agreement which I have already mentioned are taken from a statement
of agreed facts and from the documents referred to therein as are the facts and
matters of which the following is a summary:
(1) The declaration (on July 13 1971) of the
clearance area followed recommendations by the council’s Medical Officer of
Health and its Health Committee.
(2) On October 12 1971, the council, following a
recommendation by its Health Committee, resolved to make a compulsory purchase
order pursuant to section 43 of the Housing Act 1957 authorising the purchase
of all the properties in the clearance area.
(3) No compulsory purchase order was in fact
sealed because events took a different course. Horne & Sons, chartered
surveyors, acting on behalf of Ellward Properties Ltd and the executors of F J
Welch, deceased, by letters dated October 20 1971, August 3 1972, August 14
1972 and December 1 1972, made known to the council the fact that their clients
objected to the council’s proposal to make a compulsory purchase order in
respect of properties owned by them which, by December 1 1972, included nine of
the properties in the clearance area, but not the reference property, but the
letters indicated that the surveyors were in touch with the claimant with a
view to purchase from him of that property. The letter dated December 1 1972
stated:
Our clients
in some cases have held the ownerships for some time and in other cases have
acquired properties only recently. In the latter case, full market values have
been paid and it is intended that the remaining properties should be acquired
on the same basis, notwithstanding the implications of a clearance order. We
feel that this must be of some advantage to other owners who would otherwise
seek compensation under the machinery of the Housing Acts. We would also like
to emphasise a most important factor with which you may not be entirely
conversant. This relates to the fact that our clients already have substantial
freehold ownerships in High Street, Hounslow, contiguous with the site of the
clearance area, and have recently acquired other freehold property. It is
intended that the clearance area site and adjoining property will be developed
comprehensively as a town centre project and indeed detailed drawings and
designs have already been prepared and discussed favourably with the town
planning department at the
consult Trevor Wright of that Department.
(4) On March 6 1973 the council resolved to
rescind the resolution dated October 12 1971 to make a compulsory purchase
order and resolved to make a clearance order in respect of all the properties
in the clearance area. This followed inter alia a joint report of
officers dated December 4 1972 which referred to a previous recommendation
(dated September 7 1971) of the Health Committee that clearance be dealt with
by way of compulsory purchase order. The joint report of officers in describing
that recommendation, expressed it as follows: namely, that clearance ‘be dealt
with by way of compulsory purchase order, for the purposes of the council’s
town centre scheme.’ The report added: ‘in
view of the fact that the council made a compulsory purchase order on the basis
that it was the only satisfactory way of ensuring the proper treatment of the
area in relation to the town centre scheme, it is now felt that most of the
council’s case has been eroded by the incidence of ownership within the area,
and it would appear that the council will have adequate control over the
redevelopment of the area through its planning functions.’
(5) On May 16 1973 the council made the clearance
order.
(6) The order was confirmed by the Secretary of
State on April 29 1974.
(7) By the end of July 1975 Horne’s clients owned
all the properties in the clearance area as well as nos 86-92 High Street,
Hounslow. In July 1975 they purchased the freehold interest in the reference
property from the claimant for the price of £15,000.
(8) All the properties in the clearance area,
together with other properties in the neighbourhood owned by Horne’s clients,
were demolished between January 1977 and March 1977 by those clients.
(9) The reference property was at all material
times within an area zoned for shopping/business in the initial development
plan for London.
(10) On April 3 1975 the council granted planning
permissions as follows:
(a) To Ellward Properties
Limited, permission for the demolition of existing buildings and erection of
three-storey shop building and three floors of offices over, service road and
car park at 86-98 High Street, 1 and 2 Grosvenor Place, 4-9 Prince Regent Road
and land to the rear of 68-78 High Street, Hounslow;
(b) To Chador Developments
Limited (an associated company of Ellward Properties Ltd, permission for
demolition of existing buildings and erection of three-storey office building,
car park and service road at 1-9 Prince Regent Road, 4-5 Grosvenor Place and
land at rear of 78-98 High Street, Hounslow.
Those
permissions were outline permissions but details were approved between December
2 1975 and July 25 1977.
(11) Agreed values:
(a) ‘Full compulsory purchase value’ is £9,750.
(b) ‘Site value’ on the assumption that in the
circumstances of this case the clearance of the area including the reference
property pursuant to the clearance order constituted a ‘scheme’ and must be
disregarded, value of the land as a clearance site available for development
for one house: £1,500.
(c) ‘Site value’ on the assumption that in the
circumstances of this case the clearance of the area including the reference
property pursuant to the clearance order did not constitute a ‘scheme’ and need
not be disregarded: value of the land as a cleared site and available for
development as part of a redevelopment site: not less than £9,750.
Mr Oliver,
having referred to the decision of the Court of Appeal in Wilson v Liverpool
Corporation [1971] 1 WLR 302, submitted that at the date of the resolution
by the council to make a compulsory purchase order the council had a scheme,
namely, a town centre development scheme, as described in the joint report of
officers dated December 4 1972. When the council discovered that local
developers had their own scheme for a town centre development there was a
change in machinery to control by planning permission. The council participated
in the local developers’ scheme by changing its own course, by conveying
properties to the developers and by rehousing occupants. That scheme was the
scheme which underlay the notional acquisition notwithstanding that other
persons were involved in it or were the authors of it. The fact that the
claimant sold his property to the developers for £15,000 was irrevelant.
Mr Dinkin said
that it was unusual for a claimant to rely on the Pointe Gourde
principle in the case of an enhancement of value. That in itself,
suggested that Mr Oliver, could not be right Mr Dinkin submitted that the
council had had no scheme scheme for town centre development. There was a
private developers’ scheme for town centre development but that was not the
council’s scheme. The council’s purpose was at all material times clearance. As
at the date of the deemed notice to treat (May 16 1973) the position was as
follows:
(1) The reference property was zoned for shopping
and business in the initial development plan;
(2) A clearance area had been declared;
(3) A decision had been taken not to make a
compulsory purchase order;
(4) The local private developers had started a
site-assembly exercise;
(5) No planning permission had been given for the
development which was eventually carried out;
(6) But discussions had taken place between the
developers and the council’s officers with respect to the development
proposals.
On that
factual background, Mr Dinkin submitted, there there was no scheme. The only
proposal which the council had made was a proposal to clear the area.
In reply, Mr
Oliver said that it was unrealistic to value as at July 1 1975 in relation to
facts as at May 16 1973. The scheme existed by May 16 1973. The only difference
thereafter was that by July 3 1975 planning permission had been granted.
No doubt, as a
matter of theory there is a scheme at the root of every compulsory acquisition,
whether actual or deemed, although in the case of a deemed order it is
frequently difficult to identify it. This is particularly difficult in the case
of an order deemed to exist by the provisions of the Fifth Schedule to the
Housing Act 1969 because those provisions do not deem the scheme. They do not,
for example, provide that the acquisition shall be deemed to be made for one of
the purposes set out in Part V of the Town and Country Planning Act 1971. On
the agreed facts and documents, I do not accept that the council itself ever
possessed a scheme for town centre redevelopment. The only suggestion that the
council had such a scheme is to be found in the joint report of officers, but
that is a very bald statement with no particulars. Moreover the other documents
produced, such as the report of the Medical Officer of Health, the
recommendations of the Health Committee, the council’s declaration of the
clearance area and its resolutions to make a compulsory purchase order, to
rescind that resolution and to make a clearance order, all show that the
purpose of the council was clearance because the properties in question were
unfit for human habitation. In deciding to proceed by the one method permitted
by statute (compulsory purchase) and then by the other (clearance order) the
only purpose of the council as shown by the documents was clearance simply. In
the circumstances, to treat the developers’ project as a ‘scheme’ would be to
confuse a scheme underlying an acquisition with a planning decision: see the
decision of the Court of Appeal in Birmingham District Council v Morris
& Jacombs Ltd (1976) 33 P & CR 27 the facts
For these reasons, the agreed full compulsory purchase value and the
appropriate agreed site value are in balance and the claimant is not entitled
to any compensation. Accordingly I make no award.
I may add that
I have seen no valuation and heard no evidence showing how the agreed
alternative figures for site value are assessed, and even if it could be said
that there was a scheme of town centre development which underlay the deemed
acquisition, it should not be assumed that I accept that the agreed enhancement
of site value was entirely attributable thereto or at all.
Mr Oliver, on
reading of this decision, claimed compensation for the claimant in the sum of
£200, namely, the sum which he alleges is the amount of the gross value at the
relevant date, by virtue of section 10 of the Land Compensation Act 1961 and
para 3 of the second Schedule thereto. In order to enable Mr Iveson [an officer
of the council] for the council to take instructions I deem this decision to be
an interim decision and adjourn the hearing generally.
The claimant
will pay the acquiring authority half their costs in these proceedings, such
costs if not agreed to be taxed by the Registrar of the Lands Tribunal on Scale
4 of the County Court Scales of Costs.
