Costs – Upper Tribunal – Compulsory purchase – Compensation – Appellant appealing unsuccessfully against grant of negative certificate of appropriate alternative development – Tribunal determining costs of appeal – Whether tribunal having power to award costs in appeal under section 18 of Land Compensation Act 1961 – Whether the proceedings are “proceedings for compensation for compulsory purchase” – Costs determined accordingly
The appellant had been the owner of land at East Lane End Farm, on the outskirts of Morpeth in Northumberland, until it was compulsorily acquired by the respondent local authority for the construction of the Morpeth northern bypass.
The appellant applied for a certificate of appropriate alternative development (CAAD) under section 17 of the Land Compensation Act 1961 so that the land’s full potential value could be assessed for the purpose of compensation. The respondent granted a negative CAAD and the Upper Tribunal subsequently dismissed an appeal by the appellant under section 18 of the 1961 Act against that decision: [2020] UKUT 150 (LC).
Despite the appeal having been wholly unsuccessful, the parties agreed that the appellant was entitled to the benefit of section 17(10) in respect of its own costs, which provided that costs incurred in connection with the issue of a certificate by a person who was entitled to compensation were a potential head of compensation and would be recoverable under the 1961 Act to the extent that they were reasonably incurred. Section 17(10) applied only to expenses incurred by a person to whom compensation was payable. There was no provision for the payment of expenses incurred by an acquiring authority.
The Upper Tribunal had a general discretion to award costs under section 29 of the Tribunals, Courts and Enforcement Act 2007 and rule 10 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010. Rule 10(6)(a) included the costs of a section 18 appeal within the broad scope of “proceedings for compensation for compulsory purchase”.
The appellant argued that appeal proceedings regarding a CAAD were not compensation proceedings, and therefore not covered by rule 10(6)(a). Further, since section 17(10) of the 1961 Act did not refer to a local authority’s costs, the tribunal had no power to make a costs award in favour of the respondent. The matter was determined on written representations.
Held: The costs were determined accordingly.
(1) The place of a CAAD in the statutory scheme was clear. Section 14 of the 1961 Act was about assessing the value of land in accordance with rule (2) of section 5 for the purpose of assessing compensation in respect of a compulsory acquisition. For that purpose, section 14(3) provided that it might be assumed that planning permission was in force at the relevant valuation date for any development that was appropriate alternative development.
An application might be made to the local planning authority for a CAAD only “where an interest in land is proposed to be acquired by an authority possessing compulsory purchase powers”: section 17(1). The function of a certificate was to identify development (or its absence) which was appropriate alternative development for the purposes of section 14: section 17(6)-(7).
(2) The absence of any separate treatment of the costs of an acquiring authority in section 17(10) was not a matter to which the tribunal gave much weight. Section 17(10) was not principally concerned with costs incurred in appeals to the tribunal, but with expenses of all sorts incurred by a person entitled to compensation in connection with obtaining a certificate. Most applications for certificates did not result in appeals; some appeals were made because the local planning authority had failed to make a decision within the time prescribed by a development order (section 18(3)) and the appeal might be withdrawn if a satisfactory certificate was subsequently issued. The express inclusion of expenses incurred in connection with appeals within the scope of the expenses eligible for compensation could not therefore be taken as an indication that such costs were not additionally recoverable under the tribunal’s general power under section 29 of the 2007 Act. Nor did the existence of a specific provision under section 4 of the 1961 Act provide a pointer one way or the other. Section 4 applied expressly in addition to the powers of the tribunal under section 29 and under the Tribunal Procedure Rules relating to costs: section 4(1).
(3) References to the tribunal for the assessment of compensation under the 1961 Act in respect of land compulsorily acquired routinely raised issues about the planning status of the land taken. An application to a local planning authority for a certificate under section 17 was one procedure for settling any disagreement over the planning assumptions to be made for the purpose of such an assessment, but it was not the only way in which the extent of those assumptions could be determined. Claimants could sometimes bypass the section 17 procedure and deal with planning issues only before the tribunal. In such cases, evidence was adduced to demonstrate that, but for the acquiring authority’s scheme, planning permission could reasonably have been expected to be granted for some alternative use. If the tribunal accepted that evidence it would not issue a certificate, but it would nevertheless be required by section 14(3)(a) to assume that planning permission was, or would be, in force for the development it had found to be appropriate alternative development. The issues which arose in cases that proceeded without any application for a certificate were the same as the issues which arose on an appeal against a certificate under section 17.
Proceedings in which the assumed planning status of land was determined under section 14, or in which an appeal under section 17 was combined with a reference for compensation, were clearly proceedings for compensation for compulsory purchase falling within the scope of rule 10(6)(a). In such cases, it would be anomalous and illogical to divide costs incurred in dealing with planning issues from costs incurred in other aspects of the assessment of compensation. Therefore, a broad interpretation of rule 10(6)(a) was appropriate and the tribunal had jurisdiction to award costs in appeals under section 18.
(4) Accordingly, the order to be made in respect of the costs of the appeal was that the appellant’s costs might be taken into account in the determination of compensation in accordance with section 17(10) of the 1961 Act but that the appellant should pay the respondent’s costs of the appeal on the standard basis, such costs to be the subject of detailed assessment if they could not be agreed.
Eileen O’Grady, barrister
Click here to read a transcript of Leech Homes Ltd v Northumberland County Council
