Compulsory purchase — Compensation — Certificate of appropriate alternative development under s17 of Land Compensation Act 1961 — Issue estoppel — Whether evidence can be adduced to show that conclusions by which certificate issued should not be followed in assessing compensation
The claimants
owned land on the outskirts of Evesham. The Secretary of State for Transport
acquired two strips of land (‘the red land’) from the claimants for the
construction of a bypass (‘the yellow route’), and took possession on September
20 1985. The claimants retained adjoining land (‘the blue land’). Following an
appeal under section 18 of the Land Compensation Act 1961, the Secretary of
State for the Environment granted a certificate of appropriate alternative
development for the red land for residential development. He agreed with the
reasoning of his inspector and concluded that because there was an alternative
and more easterly route for the bypass, the red land could have been
residentially developed if it were not being acquired by the acquiring authority
for the yellow route. In the reference to the Lands Tribunal, the acquiring
authority sought to adduce evidence that the conclusions of the Secretary of
State for the Environment should not be followed in assessing compensation for
severance and injurious affection in respect of the blue land. At the hearing
of a preliminary point of law, the tribunal accepted the claimant’s contention
that the Secretary of State for Transport was precluded by the doctrine of
issue estoppel from reopening the issue determined by the certificate of
appropriate alternative development. The Secretary of State for Transport
appealed.
1. Per
Stuart-Smith and Thorpe LJJ: the decision of the Secretary of State for the
Environment on an appeal under section 18 of the Land Compensation Act 1961
cannot give rise to estopped per rem judicatam or an issue estoppel; see
p121. per Peter Gibson LJ:
the determination by the Secretary of State of an issue of hypothetical fact in
reaching his decision under section 18 is one to which an issue estoppel can
apply: see p124F.
2. However the
issue determined by the Secretary of State was not the same as that which has
to be determined by the Lands Tribunal. The Secretary of State does not have to
evaluate the chance of an alternative route being chosen, provided it was more
than 50%; the tribunal would be concerned in assessing value to evaluate the
chances of this happening more precisely: see p122.
to in the judgments
Allied
Maples Group Ltd v Simmons & Simmons
[1995] 1 WLR 1602, CA
Carl
Zeiss Stiftung v Rayner & Keeler Ltd (No 2)
[1967] 1 AC 853; [1966] 3 WLR 125; [1966] 2 All ER 536, HL
Davies v Taylor [1974] AC 207; [1972] 3 WLR 801; [1972] 3 All ER
836, HL
Fidelitas
Shipping Co Ltd v V/O Exportchleb [1966] 1
QB 630; [1965] 2 WLR 1059; [1965] 2 All ER 4; [1965] 1 Lloyd’s Rep 223, CA
Hoystead v Commissioner of Taxation [1926] AC 155, PC
Pointe
Gourde Quarrying & Transport Co Ltd v Sub-Intendent
of Crown Lands [1947] AC 565, PC
Thoday v Thoday [1964] P 181; [1964] 2 WLR 371; [1964] 1 All ER
341, CA
Thrasyvoulou v Secretary of State for the Environment [1988] 1 QB 809;
[1988] 1 EGLR 192; [1988] 10 EG 131 and 11 EG 83; [1988] 2 PLR 37
Thrasyvoulou v Secretary of State for the Environment; Oliver v Secretary
of State for the Environment [1990] 2 AC 273; [1990] 2 WLR 1; [1990] 1 All
ER 65; (1989) 59 P&CR 326; [1990] 1 EGLR 197; [1990] 13 EG 69; [1990] 2 PLR
69, HL
Appeal from
the Lands Tribunal
This was an
appeal by the Secretary of State for Transport from a decision of the Lands
Tribunal ([1995] 1 PLR 130]) on a preliminary point of law in a reference by
the claimants for the determination of compensation arising out of the
compulsory purchase of land by the acquiring authority.
Barnes QC and Christopher Katkowski (instructed by the Treasury Solicitor)
appeared for the appellant.
Spence QC and Nicholas Nardecchia (instructed by Rooks Rider) represented the
respondents.
following judgments were delivered.
STUART-SMITH
LJ: This is an appeal by way of case stated from a
decision of the Lands Tribunal (the president, Judge Marder QC) dated January 6
1995. By virtue of section 3(4) of the Lands Tribunal Act 1949 the appeal is on
law only. The appellant is the acquiring authority.
The case
concerns the determination of the compensation payable by the Secretary of
State for Transport to the claimants for land acquired by him for the
construction of the Evesham bypass. The particular point in issue is whether
the Secretary of State for the Environment in issuing a certificate of
appropriate alternative development on an appeal to him under section 18 of the
Land Compensation Act 1961 can give rise to an issue estoppel which binds the
claimants and the acquiring authority in subsequent proceedings before the
Lands Tribunal to assess the compensation.
The point was
decided by the president of the Lands Tribunal on a preliminary issue to the
effect that there could in principle be an issue estoppel in the above
circumstances. He further held that on the particular facts before him there
was an issue estoppel. The Secretary of State for Transport in this appeal
contends, first, that in principle there cannot be an issue estoppel where the
decision said to found the estoppel is one of the exercise of discretion such
as a decision relating to the grant or refusal of planning permission. Second,
it is submitted that the issue said to have been
decided by the Lands Tribunal and accordingly there is no issue estoppel.
In 1985 the
Secretary of State for Transport proposed to construct a new highway to be part
of the A435 trunk road which would run to the east of the town of Evesham and
would serve as a bypass to that town. The claimants own an area of freehold
land to the east of Evesham which is shown edged blue on the plan. The line of
the proposed highway would pass across the claimants’ land. The proposed line
is shown coloured yellow on the plan (save that where it crosses the claimants’
land it is coloured red). In order to acquire the necessary land the Secretary
of State made the Bath-Lincoln Trunk Road (A434-Evesham bypass) Compulsory
Purchase Order 1985 under powers conferred on him by the Highways Act 1980. The
land to be acquired included a part of the claimants’ land, namely the strip
shown coloured red on the plan (which was, of course, a portion of the line of
the proposed road). Entry on the claimants’ land was made on September 20 1985.
That date became the valuation date for the purposes of assessing compensation.
Compensation
for land compulsorily acquired is assessed in accordance with principles
contained in the Land Compensation Act 1961 (‘the 1961 Act’) and the Compulsory
Purchase Act 1965. It is usual to divide the amount of the compensation payable
into three components: (1) the value of the land acquired; (2) any diminution
in the value of other land of the owners’ retained by them where the diminution
is brought about by the acquisition of the land taken; and (3) disturbance. In
the present case there is no relevant disturbance claim.
The assessment
of the first component, the value of the land taken is governed by r (2) of
section 5 of the 1961 Act which provides:
The value of
land shall, subject as hereinafter provided, be taken to be the amount which
the land if sold in the open market by a willing seller might be expected to
realise.
The assessment
of the second component is governed by section 7 of the Compulsory Purchase Act
1965, which provides:
In assessing
the compensation to be paid by the acquiring authority under this Act regard
shall be had not only to the value of the land to be purchased by the acquiring
authority, but also to the damage, if any, to be sustained by the owner of the
land by reason of the severing of the land purchased from the other land of the
owner, or otherwise injuriously affecting that other land by the exercise of
the powers conferred by this or the special Act.
In assessing
compensation no account is to be taken of any increase or decrease in the value
of the land which is due to the scheme which underlies the compulsory
acquisition: see Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent
of Crown Lands [1947] AC 565 and section 6 and Schedule 1 to the 1961 Act.
The claimants
consequently claim compensation for (a) the value of the land taken (the red
strip on the plan) and (b) a diminution in the value of
after excluding the red strip). In order to assess the land value in both cases
it was necessary to ascertain what planning permission (if any) enured for the
benefit of the areas of land involved.
In accordance
with the Gourde principle the question of what planning permission was to apply
to the areas of land had to be ascertained ignoring the effects of the proposal
to construct the new highway. Sections 17 and 18 of the 1961 Act contain a
statutory procedure for the determination of this question in relation to the
land acquired. An application may be made to the local planning authority by
either the landowner or the acquiring authority for a certificate of
appropriate alternative development (a ‘section 17 certificate’). On receipt of
an application the local planning authority are required by section 17(4) to
issue a certificate either (a) that in their opinion if the land were not
proposed to be acquired compulsorily planning permission would have been
granted for a class or classes of development specified in the certificate, or
(b) that in their opinion in the above circumstances planning permission would
not have been granted for any development. The latter form of certificate is
often called a nil certificate. Sections 14(1) and 15(5) of the Act provide
that in ascertaining the value of the relevant interest it shall be assumed
that planning permission would be granted in accordance with the certificate.
It should be noted that the provisions of section 17 and sections 14(1) and
15(5) are such that the certificate and any planning permission assumed in
accordance with the certificate, relate only to the interest in land proposed
to be acquired. It follows that a certificate may determine the situation as
regards planning permission on the land being acquired, but has no statutory
effect on the planning situation on other land of the landowner which is not
being acquired and in respect of which there may be a claim for the diminution
in its value. Section 18 contains a procedure by which the landowner or the
acquiring authority may appeal to the Secretary of State for the Environment
against the decision of the local planning authority in issuing a certificate
under section 17. Section 18(3) prescribes that, if required by either party,
the Secretary of State must hold a hearing before an appointed person (ie an
inspector) before determining the appeal.
The claimants
contended that in the absence of the highway scheme planning permission would
have been granted to develop their land residentially. Accordingly, they said
that the value of the land taken and their claim for compensation for
diminution in the value of the land retained should be assessed on the basis of
the potential of the land for residential development. They applied to the
local planning authority, Wychavon District Council, for a section 17
certificate certifying residential development as the appropriate alternative
development. That council issued a nil certificate (save in respect of a small
and immaterial part of the land being acquired). The claimants appealed to the
Secretary of State for the Environment under section 18 of the Act. A hearing
was held before an inspector in May 1988 and the inspector reported to the
Secretary of State on September 23 1988.
A question
which arose at the hearing was what new highway provision (if any) would have
been made in the vicinity of Evesham in the absence of the proposal to acquire
the claimants’ land to construct a bypass on the line shown in yellow on the
plan. The claimants contended that what would have happened in this
hypothetical situation is that a bypass would have been constructed to the east
of the town on a line shown in green on the plan (the ‘green route’). The green
route would have passed through the claimants’ land some distance to the east
of and roughly parallel with the route actually constructed. The actual route
and the green route start and end at approximately the same point but take a
somewhat different intermediate course. In other words in highway terms they
both fulfil much the same function of providing a bypass for traffic to the
east of Evesham. The purpose of the claimants in making the contention which
they did was that they argued that if there was assumed to be a bypass on the
green route that highway would form a physical boundary to the outward spread
of Evesham and would add force to their argument that planning permission would
then have been granted for the residential development of the greater part of
their land which lay inside the physical boundary.
At the hearing
the local planning authority felt unable to answer the question of what road
project there would have been apart from the project on the line proposed by
the Secretary of State for Transport. The Secretary of State was invited to
attend the proceedings in order to assist on this matter. He was in any event
entitled to attend the hearing by reason of section 18(3) of the Act. The
submissions made on behalf of the Secretary of State were that if the actual
route had not been implemented there would either have been no scheme, or if
there was one, the most likely alternative route would have been (a) a
combination of a central route and a southern bypass and eastern link, or (b)
if an eastern route alone had been selected as an alternative to the actual
route an inner eastern route would have been chosen.
The inspector
who held the hearing rejected the Secretary of State’s submissions and
concluded that the green route was the most likely alternative route. He
included this conclusion in his report to the Secretary of State, and
recommended at para 8.1 of his report that the appeal be allowed and a section
17 certificate be issued specifying residential development as the appropriate
alternative development. The Secretary of State in substance agreed with the
inspector and on November 30 1988 he issued a section 17 certificate with
residential development specified.
The result of
the decision of the Secretary of State and of the certificate issued is that in
the valuation of the land acquired from the claimants it must be assumed that
planning permission would be granted for its residential development. The whole
of the claimants’ claim for compensation (that is the claim to the value of the
land acquired and the diminution in the value of their remaining land) was
referred by them to the Lands Tribunal.
Mr Malcolm
Spence QC, on behalf of the respondents, contends that even if the section 17
certificate does not preclude the Lands Tribunal from
granted for their land to the west of the green route, the finding of the
inspector, accepted by the Secretary of State, that if the actual route had not
been adopted, the bypass would have been constructed on the line of the green
route creates an issue estoppel and the acquiring authority cannot dispute this
in the proceedings before the Lands Tribunal. The distinction is perhaps a fine
one, because, if the green route had been constructed, it is very likely that
it would have formed the eastern boundary of the town’s development and the
respondents would therefore have been likely to have obtained planning
permission up to this line.
This
distinction is one to which Mr Spence attaches some importance, although it is
not fully reflected in the preliminary question of law posed for the decision
of the Lands Tribunal which is in these terms:
Whether the
doctrines of res judicata and/or issue estoppel apply in the
circumstances of this case so as to preclude the acquiring authority from
calling evidence before, and making submissions to the tribunal, that the
conclusions reached by the Secretary of State for Environment as set out in a
letter dated November 30 1988 whereby he decided to issue a certificate under
Section 17 of the Land Compensation Act 1961 for residential development of the
land acquired from the claimants should not be followed and applied by the
tribunal in assessing the amount of compensation to be paid in respect of
severance and/or injurious affection to the land retained by the claimants.
The principles
of estoppel per rem judicatam and issue estoppel are explained by
Diplock LJ in Thoday v Thoday [1964] p 181; at pp197-8 he said:
… estoppel
per rem judicatam … is a generic term which in modern law includes two
species. The first species, which I will call ’cause of action estoppel’, is
that which prevents a party to an action from asserting or denying, as against
the other party, the existence of a particular cause of action, the
non-existence or existence of which has been determined by a court of competent
jurisdiction in previous litigation between the same parties. If the cause of
action was determined to exist, ie, judgment was given upon it, it is said to
be merged in the judgment, or, for those who prefer Latin, transit in rem
judicatam. If it was determined not to exist, the unsuccessful plaintiff
can no longer assert that it does; he is estopped per rem judicatam.
This is simply an application of the rule of public policy expressed in the
Latin maxim ‘Nemo debet bis vexari pro una et eadem causa‘. In this
application of the maxim ‘causa‘ bears its literal Latin meaning. The
second species, which I will call ‘issue estoppel’, is an extension of the same
rule of public policy. There are many causes of action which can only be
established by proving that two or more different conditions are fulfilled.
Such causes of action involve as many separate issues between the parties as
there are conditions to be fulfilled by the plaintiff in order to establish his
cause of action; and there may be cases where the fulfilment of an identical
condition is a requirement common to two or more different causes of action. If
in litigation upon one such cause of action any of such separate issues as to
whether a particular condition has been fulfilled is determined by a court of
competent jurisdiction, either upon evidence or upon admission by a party to
the litigation, neither party can, in subsequent litigation between one another
upon any cause of action which depends upon the fulfilment of the identical
condition, assert that the condition was fulfilled if the court has in the
first litigation determined that it was not, or deny that it was fulfilled if
the court in the first litigation determined that it was.
It is common
ground that four matters have to be established if there is to be an issue
estoppel.
1. The issue
in question must have been decided by a court or tribunal of competent
jurisdiction. It is accepted by the appellant that the Secretary of State, when
deciding an appeal under section 18 of the 1961 Act, is a competent tribunal.
2. That the
issue must be one which arises between parties who are parties to the decision.
This also is accepted.
3. That the
issue must have been decided finally and must be of a type to which an issue
estoppel can apply.
4. The issue
in respect of which the estoppel is said to operate must be the same as that
previously decided. These propositions derive from Carl Zeiss Stiftung v
Rayner & Keeler Ltd (No 2) [1967] 1 AC 853.
It is in
relation to points 3 and 4 that the controversy in this appeal arises.
The first
question therefore is whether the Secretary of State’s decision on the section
18 appeal is one that can give rise to an issue estoppel. In Thrasyvoulou
v Secretary of State for the Environment [1990] 2 AC 2731 it was held
that certain matters decided by the Secretary of State on an appeal against an
enforcement notice could give rise to a plea of estoppel per rem judicatam
or issue estoppel, but this did not apply, at least so far as estoppel per
rem judicatam is concerned, to a decision on the ground that planning
permission ought to have been granted for development to which the notice
relates.
1 [1990] 2 PLR 69
At p287D Lord
Bridge of Harwich, with whose speech the other members of the House agreed,
dealt with the various grounds under section 88(2) of the Town and Country
Planning Act 1971 on which an appeal against an enforcement notice can be
based.
Ground (a)
is that planning permission ought to be granted for the development to which
the notice relates. Ground (b) is that the matters alleged in the notice
do not constitute a breach of planning control. Ground (c) is that the
breach of planning control alleged in the notice has not taken place. Ground (d)
applies to notices alleging development by carrying out building etc operations
which can only be enforced against within four years of the development taking
place. Ground (d) is therefore established if the breach of planning
control occurred more than four years before the issue of the enforcement
notice. Ground (e) applies to development consisting of making a
material of use of land which can only be enforced against if the change of use
was made since 1963. Ground (e) is therefore established if the change
of use occurred before the beginning of 1964. The remaining grounds
(f) to (h) relate to subsidiary issues which may arise as to the
service of the enforcement notice, the steps required to be taken to remedy the
breach of planning control alleged and the time for taking those steps and
these grounds have no relevance for present purposes.
An issue on
ground (a) arises in every appeal against an enforcement notice since by
section 88B(3) there is deemed to be an application for planning permission for
the development to which the notice relates. In determining whether to allow an
appeal on that ground the Secretary of State will decide as a matter of policy
and in the exercise of discretion whether planning permission should be granted
and in relation to ground (a) no question of legal right arises. By
contrast the question whether any of the grounds (b) to (e) on
which the appellant relies had been established will be answered by applying
the relevant rules of planning law to the facts found and the answer will
determine in each case an important matter of legal right. This may be simply
illustrated by examples. Thus, if an issue is raised on appeal against a notice
on ground (b) as to whether or not a building operation to which the
notice relates was within the terms of planning permission granted either upon
an express application or by the terms of a development order, a decision of
that issue to allow the appeal on ground (b) will determine the status
of the building in question as having been lawfully erected.
He then went
on to give examples on the grounds (c)–(e). The reference to the
fact that in relation to ground (a) no question of legal right arises
must, I think, be a reference to the fact that the applicant for planning
permission, or appellant from an enforcement notice, has no legal right to a
grant of planning permission, in the event that certain facts are established.
This is in contradistinction to a decision of a court of law where as a rule a
litigant who establishes certain facts which constitute a cause of action is
entitled as a matter of legal right to a decision in his favour. A decision
whether or not to grant planning permission is a matter of discretion based
upon considerations of policy and aesthetic opinion, as to which opinions may
vary. That this is Lord Bridge’s meaning appears from a later passage, where he
makes it plain that someone who has been granted planning permission in respect
of a piece of land thereby acquires legal rights. At p290E he said:
Much of the
argument against allowing a plea of res judicata or issue estoppel
founded on the determination of an appeal against an enforcement notice under
section 88(2) of the Act rested on the proposition that such a determination is
characterised by a ‘planning decision’ and emphasis was placed on the rights of
members of the public to be heard. Mr Laws submitted that no distinction could
be drawn between a decision on ground (a) of section 88(2) to grant or
withhold planning permission for the development the subject of an enforcement
notice, and the decision of any issue arising under grounds (b) to (e).
If an estoppel arises in the one case, he submits, it must equally arise in the
other. I cannot accept this submission. A decision to grant planning permission
creates, of course, the rights which such a grant confers. But a decision to
withhold planning permission resolves no issue of legal right whatever. It is
no more than a decision that in existing circumstances and in the light of
existing planning policies the
Consequently, in my view, such a decision cannot give rise to an estoppel per
rem judicatam. I also think that there is a significant distinction between
the issue raised by an appeal under ground (a) and the issues raised by
any of grounds (b) to (e) in that members of the public have the
right to attend any public inquiry and to be heard as objectors against the
grant of planning permission, but can have no locus standi as objectors,
although they may be heard as witnesses of fact, in relation to the issues
raised on grounds (b) to (e).
Basing himself
on the reasoning of Lord Bridge, Mr Barnes QC, on behalf of the appellant,
submitted that a decision by the Secretary of State under section 18 of the
1961 Act as to whether or not planning permission would have been granted in a
hypothetical situation is of a similar nature to a decision whether it should
be granted in an actual situation, involving similar questions of discretion, policy
and opinion, and accordingly could not give rise to an estoppel.
Mr Spence
sought to distinguish the two, first on the basis that the section 18 decision
is a hypothetical rather than an actual one. But I cannot see that this is a
relevant distinction. Second, on the basis that in a section 18 case the public
have no participation, unlike an appeal on a planning application or against an
enforcement notice. This is the point made by Lord Bridge at the end of his
second paragraph quoted. This is a distinction; but it is only one of the
reasons given by Lord Bridge and does not affect principal ground.
Mr Spence
accepts, as I understand it, that a nil certificate would not estop the
respondents from contesting before the Lands Tribunal that planning permission
would have been granted on the retained land. This he suggests is the effect of
section 14(3) and (3A) of the 1961 Act; though the Lands Tribunal is required
to have regard to the contrary opinion expressed in the nil certificate. But
both section 15(5) and section 14(3) and (3A) are only concerned with the
compulsorily acquired land and do not affect the retained land. In my judgment,
it would be remarkable if an estoppel per rem judicatam could be created
by a positive certificate but not by a nil certificate.
But Mr
Spence’s secondary submission, and one I think on which he places most
reliance, is that even if the decision itself that planning permissions would
have been granted up to the green route does not create an estoppel per rem
judicatam for the reasons given by Lord Bridge, findings of fact made by
the inspector and adopted by the Secretary of State which were a necessary part
of the reasoning which led to the grant of the certificate nevertheless can
give rise to an issue estoppel. Mr Spence cited no authority for this
proposition, though he submitted that it was based on general principle. He
relied upon a dictum of Lord Shaw of Dumfermline in Hoystead v Commissioner
of Taxation [1926] AC 155 at p170 where he said:
It is seen
from this citation of authority that if in any court of competent jurisdiction
a decision is reached, a party is estopped from questioning it in a new legal
proceeding. But the principle also extends to any point, whether
to the decision,
This passage
was cited with approval by Lord Reid in the Carl Zeiss case at p915G. Mr
Spence also referred to two passages from the judgments of the Court of Appeal
in Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630.
Lord Denning MR said at p640:
The rule then
is that, once an issue has been raised and distinctly determined between the
parties, then, as a general rule, neither party can be allowed to fight that
issue all over again.
Diplock LJ at
p641 said:
The final
resolution of a dispute between parties as to their respective legal rights or
duties may involve the determination of a number of different ‘issues,’ that is
to say, a number of decisions as to the legal consequences of particular facts,
each of which decisions constitutes a necessary step in determining what are
the legal rights and duties of the parties resulting from the totality of the
facts.
These passages
are quoted by Lord Wilberforce in Carl Zeiss at p964. But these were cases
where the original decision was one capable of creating an estoppel per rem
judicatam or cause of action estoppel, because they were decisions of a
court determining the legal rights of the parties by applying the law to the
facts found. It is entirely understandable that an issue estoppel can arise
from such a decision. They do not lend any support to the contention that where
the decision is not such as to create an estoppel per rem judicatam, the
lesser creature, issue estoppel can nevertheless arise. Such a conclusion seems
to me to be inconsistent with the reasoning of Lord Bridge in Thrasyvoulou.
At the beginning of his speech he posed the question thus at p285:
My Lords,
these two appeals raise the question whether a decision of the Secretary of State
allowing an appeal against an enforcement notice on one of the grounds in
paragraphs of (b) to (e) of section 88(2) of the Town and Country
Planning Act 1971, as amended by the Local Government and Planning (Amendment)
Act 1981, is capable of giving rise to an estoppel per rem judicatam or
to an issue estoppel.
If Lord Bridge
had thought that even though a decision whether or not to grant planning
permission was not one to which estoppel per rem judicatam could apply,
it was possible for an issue estoppel to arise in relation to some finding of
fact made by the Secretary of State and necessary to his decision, I find it
very surprising that he did not say so. It seems to be implicit in his judgment
that he thought no such thing. In fact as Diplock LJ made clear in the passage
I have cited from Thoday v Thoday, estoppel per rem judicatam
embraces both cause of action estoppel and issue estoppel. Since Lord Bridge
cited this passage, it seems to me clear
give rise to estoppel per rem judicatam, he must be taken to have
included in this issue estoppel.
Mr Spence
sought to gain some support from a dictum of Ralph Gibson LJ in the
Court of Appeal in the Thrasyvoulou v Secretary of State for the
Environment [1988] 1 QB 8091 at p824A he said:
1 [1988] 2 PLR 37
It is
necessary now to consider whether issue estoppel can arise out of the decision
by the Secretary of State or an inspector upon a section 36 appeal. In my
judgment issue estoppel can so arise if the party seeking to raise it proves
that the earlier decision in the section 36 appeal was given in his favour
against the planning authority upon an issue as to his existing rights of use
of the property, and was a decision of the same issue as that raised in the new
proceedings.
A section 36
appeal is simply an appeal from the refusal of planning permission by the local
planning authority, and raises identical issues to those in an appeal against
an enforcement notice under section 88(2). But I do not understand this passage
to differ in any way from what Lord Bridge said in the House of Lords. It
relates to grounds other than the question whether or not planning permission
should be granted and is made clear in the next paragraph of his judgment.
Moreover, I
think there is force in Mr Barnes’ submission that it would be remarkable if,
although no estoppel per rem judicatam could arise on a section 17
certificate, whether positive or negative (and Mr Spence concedes there cannot
be in relation to a nil certificate), there were to be an issue estoppel in
relation to a finding of fact upon which the section 17 certificate is largely
based.
There is I
think an additional reason why a decision of the Secretary of State whether to
grant planning permission, whether on an appeal from an enforcement notice or
original refusal by the local authority, cannot give rise to estoppel per
rem judicatam, either in the form of cause of action or issue estoppel, and
that is because it lacks the necessary element of finality. It is well
established that a judgment pending trial, such as whether or not to grant an
interlocutory injunction, cannot give rise to an estoppel of either sort,
because it lacks this element of finality. As Lord Bridge pointed out in Thrasyvoulou
a refusal of planning permission does not finally determine the matter; a fresh
application can be made. Moreover, although a grant of planning permission can
create rights and if acted upon cannot be revoked, if it is allowed to lapse
determines nothing.
In my
judgment, Mr Barnes is correct on the first question and the decision of the
Secretary of State on a section 18 appeal cannot give rise either to estoppel per
rem judicatam or an issue estoppel.
I turn to
consider the second question, namely whether the issue determined by the
Secretary of State is the same as that which has to be
Lands Tribunal has to assess is the diminution in value, if any, to the land of
the respondents retained by them. Consideration of the open market value of a
piece of land will involve an assessment of the chances of planning permission
being granted for it, together with such questions as the demand for such
development. The assessment of the prospect of planning permission no doubt depends
to a large extent on where an alternative bypass would have gone if it had not
followed the yellow route. To this extent the questions before the Lands
Tribunal and the Secretary of State are similar; but, in my view, they are not
the same.
The point can
best be illustrated by taking an example where the facts may be somewhat
different from those which in fact existed. Suppose there were two alternative
routes to the route chosen, one to the east of it and one to the west. The two
alternatives might be very evenly balanced. But the Secretary of State might
decide that the scales just tipped in favour of the eastern route, with the
result that he concludes that planning permission would have been granted up to
that alternative route and this would include the claimants’ land. Because of
the assumptions required to be made in relation to the acquired land, this
finding is the equivalent of a certainty that planning permission would be
granted in relation to that land. Mr Spence also submits that the finding as to
the position of the alternative route must also be regarded as a certainty,
because he says it is a finding of hypothetical fact. It is only necessary for
the Secretary of State to find the position of the alternative on a balance of
probability; but the Lands Tribunal have to assess the extent of the chance,
which in the example given is only just better than even.
Where a court
or tribunal has to decide what would have happened in a hypothetical situation
which does not exist, it usually has to approach the matter on the basis of
assessing what were the chances or prospect of it happening. The chance may be
almost a certainty at one end to a mere speculative hope at the other. The
value will depend on how good this chance is. Where however the court or
tribunal has to decide what in fact has happened as an historical fact it does
so on balance of probability; and once it decides that it is more probable than
not, then the fact is found and is established as a certainty. This distinction
is well illustrated by the case of Davies v Taylor [1974] AC 207
and Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR
1602 CA.
It would be
unnecessary for the Secretary of State to evaluate the chance of the eastern
route being the preferred alternative route in the event that the actual route
was not chosen, provided it was more than 50%; but the Lands Tribunal would be
concerned in assessing value to evaluate the chances of this happening more
precisely.
It may well be
that on the facts of this case the only viable alternative was the green route
and other alternatives can be completely discounted. I do not know. But a
question of principle cannot be determined on the basis of favourable facts of
a particular case, and for this reason also I am of the opinion that the
Secretary of State’s decision did not create an issue estoppel.
I would allow
this appeal and answer the question posed in para 4 of the case stated, namely
whether the Lands Tribunal erred in law in rejecting the acquiring authority’s
submission that no issue estoppel was created in favour of the claimants in the
alternative.
PETER GIBSON
LJ: There is much that is common ground between the
parties. Of the four conditions for there to be an issue estoppel, which
Stuart-Smith LJ has set out in his judgment, only the satisfaction of part of
the third condition, viz that the issue in question must be of a type to
which an issue estoppel can apply, and the fourth condition, viz that
the issue, in respect of which the estoppel is said to operate, must be the
same as that previously decided, is now contested by the acquiring authority.
It is right to
point out at the outset that, as Mr Spence QC for the claimants emphasised,
they do not rely on the certificate under section 17 of the Land Compensation
Act 1961 itself, which was directed by the Secretary of State on the appeal to
him under section 18, for the issue estoppel asserted by the claimants; they
merely rely on one issue of hypothetical fact underlying the certificate. That
fact is that there would have been an alternative bypass to the east along the
line of the preferred route in the absence of the actual bypass. There is no
doubt but that the issue whether there would have been such an alternative
bypass on that line was an issue that was distinctly raised by the claimants
and determined by the Secretary of State in the course of arriving at his
decision to issue the section 17 certificate.
The first
question is therefore, in my view, more accurately stated as whether the
determination by the Secretary of State of an issue of hypothetical fact in
reaching his decision under section 18 is one to which an issue estoppel can
apply. Mr Barnes QC for the acquiring authority submitted that the Secretary of
State had to reach a decision whether in his opinion planning permission would
have been granted for a form of development on the land acquired if it were not
being acquired compulsory, and that in essence was the decision the Secretary
of State makes on any planning appeal, including an appeal on ground (a)
of section 88(2) Town and Country Planning Act 1971. He relied on what Lord
Bridge said in Thrasyvoulou v Secretary of State for the Environment
[1990] 2 AC 273 at pp287 and 290 as authority for the proposition that the
decision of the Secretary of State in the section 18 appeal is one of a nature
and category which cannot give rise to an estoppel per rem judicatam. If
that proposition were limited to the decision whether to direct the issue of a
section 17 certificate, I would accept it. Mr Barnes submitted that if the
genus of estoppel per rem judicatam does not apply to a decision, it
would be absurd to hold that one species of that genus, issue estoppel, can
apply to the same decision. Put that way, his submission is a mere truism which
does not help to resolve the real question.
Issue
estoppel, as distinct from cause of action estoppel, will arise where cause of
action estoppel cannot be established but nevertheless there has been a final
determination of a precise point distinctly put in issue and the contrary of
the same point is sought to be raised in
an issue estoppel in respect of the determination of such a point may not arise
in the course of proceedings culminating in a decision which itself cannot be
the subject of an estoppel. It is said that Lord Bridge’s speech in Thrasyvoulou
is inconsistent with the possibility of an issue estoppel arising in such
circumstances. I am unable to agree. The observations of Lord Bridge on ground
(a) of section 88(2) and the reasons why he distinguished that ground
from grounds (b) to (e), were directed to the decision of the
Secretary of State as to whether planning permission should be granted. As he
said (at p289), that decision will be reached ‘as a matter of policy and in the
exercise of discretion’ and (at p290) ‘It is no more than a decision that in
existing circumstances and in the light of existing planning policies the
development in question is not one which it would be appropriate to permit’.
None of that reasoning is pertinent to the determination of a point of fact,
actual or hypothetical, that determination not being dependent on policy or
discretion. I would add that in that part of Lord Bridge’s speech where he considers
ground (a) of section 88(2), he uses the terms ‘estoppel per rem
judicatam‘ and ‘issue estoppel’ indifferently (see p295) but goes on to
distinguish between them by reference to the terminology used by Diplock LJ in Thoday
v Thoday [1964] P 181 at pp197-8. Thus applying that terminology and
classification by analogy to the issues which arise on an appeal against an
enforcement notice on any of grounds (b) to (e) of section 88(2),
he thought the analogue of a cause of action estoppel would arise whenever the
determination of the ground decided in favour of the appellant on an appeal
against an enforcement notice could be relied on in an appeal against a second
enforcement notice in the same terms and directed against the same development
as the first. But he contrasted that with the issue estoppel that arose on the
appeal in Oliver v Secretary of State for the Environment,
(decided at the same time as the Thrasyvoulou appeal) where there was a
determination of an issue of fact (as to an established use) which Lord Bridge
described as an essential foundation for the finding of an inspector, which
issue could not be raised in subsequent proceedings. I cannot see why the
determination of an issue of fact which was an essential foundation for the
decision of the Secretary of State on an appeal under ground (a) should
not similarly give rise to an issue estoppel.
It is not
suggested that an issue of hypothetical fact should be treated differently from
an issue of actual fact. Accordingly, I would hold on the first question that
the determination by the Secretary of State of an issue of hypothetical fact in
reaching his decision under section 18 is one to which an issue estoppel can
apply.
That leaves
the second question: is the issue of whether there would have been an
alternative bypass on the line of the preferred route the same as that to be
determined by the Lands Tribunal? For the reasons given by Stuart-Smith LJ I
agree with him that it is very similar but that it is not the same.
I, too, would
allow the appeal and answer the question in para 4 of the case stated in the
manner proposed by Stuart-Smith LJ.
THORPE LJ: The result for which the land owners contended in the Lands
Tribunal has obvious practical attractions. If by an expensive appellate
procedure the Secretary of State has pronounced what would have happened had
the yellow route not been selected, the proposition that the same hypothetical
question of fact should be reinvestigated in subsequent proceedings between the
same parties is obviously unattractive. Therefore the decision of the president
of the Lands Tribunal is hardly surprising and I would have favoured upholding
it had authority permitted.
However, Mr
Barnes swiftly demonstrated that authority does not permit and Mr Spence’s
manful efforts to turn the attack were, in my judgment, unavailing. For me the
case of Thrasyvoulou v Secretary of State for the Environment
[1990] 2 AC 273 is determinative. Although the speech of Lord Bridge does not
expressly state that issue estoppel cannot underlie a decision to which
estoppel per rem judicatam cannot apply, I share the view of
Stuart-Smith LJ, that that is the effect of his judgment by implication. Thus I
accept Mr Barnes’ submissions on both issues and agree that this appeal should
be allowed.
Appeal
allowed.
