Highways — Discretionary power to acquire blighted property in section 246(2A) of the Highways Act 1980 — Whether serious effect on enjoyment of property includes diminution in value as ground for consideration exercise of discretion
In May 1990,
and prior to their purchase of a dwelling-house, the Department of Transport
sent the appellants a statement and plan indicating the route of the proposed
Cirencester bypass passing within a short distance of the property. In October
1990 the appellants purchased the property, spending some £100,000 on its
acquisition and subsequent improvement. In 1991 the department published
details of the works for the proposed bypass, and in July 1992 the appellants
served an application under section 246(2A) of the Highways Act 1980 to have
the property purchased on the grounds that their enjoyment would be seriously
affected by the road works and that any failure to sell the property would
cause financial hardship. In September 1992 a report was sent to the department
on the appellants’ behalf stating that the loss of value of the property was in
the region of £80,000–£100,000 and would be about £25,000–£30,000 when the
bypass was constructed. In refusing to purchase the property, and in applying
the published guidelines, the department’s principal contention was that the
property would not be seriously affected by the anticipated physical
consequences of the bypass; they did not consider the effect on the value of
the property. They also considered that any discretion to purchase should not
be exercised having regard to the appellants’ pre-purchase knowledge of the
bypass proposal. The appellants’ application for judicial review of that
decision was refused by Latham J; the appellants appealed.
allowed. Section 246(2A) requires a highway authority to consider any
application in two stages: first, whether the enjoyment of the land will be
seriously affected, and second, whether the discretion to purchase should be
exercised. In relation to the first stage, the crucial question for the highway
authority is not whether the guidelines have been complied with, but whether in
fact section 246(2A) has been satisfied. The department’s decision was flawed
because the question of the serious effect of diminution in value had not been
fully addressed. With regard to the exercise of their discretion, the
department would be taking advantage of a new purchaser if they could refuse to
acquire on the grounds that the purchaser had knowledge whereas feel obliged to
acquire had the original owner remained.
No cases are
referred to in this report.
This was an
appeal by Col and Mrs Owen from a decision of Latham J who had refused an
application for judicial review of a decision by the Department of Transport to
exercise their discretionary power to acquire the appellants property under
section 246(2A) of the Highways Act 1980.
The appellants
appeared in person; David Elvin (instructed by the Treasury Solicitor)
represented the respondents.
Giving
judgment, NEILL LJ said: This is an appeal by Col David Owen and Mrs
Barbara Owen from the order of Latham J dated December 2 1993 whereby he
refused their application for judicial review, first to quash the decision of
the Secretary of State for Transport (contained in letters dated December 3 1992
and April 20 1993) refusing to purchase the appellants’ property under powers
contained in section 246(2A) of the Highways Act 1980; and, second, to grant a
declaration that the appellants’ property was seriously affected within the
meaning of that section by reason of the construction of the Cirencester and
Stratton bypass.
The appellants
appeal by leave of this court, which was granted on May 4 1994. The appellants
contend that the minister’s decision was perverse and that further, in reaching
the decision he misapplied or misconstrued the guidelines which had been issued
by the Department of Transport for the purpose of the determination of
applications for purchase under the section.
The appellants
are the owners of a small property called Ashgrove, which is situated in The
Whiteway at Baunton on the outskirts of Cirencester. Col and Mrs Owen became
interested in buying that property in March 1990. About the same time, at the
end of March, the Department of Transport published a statement relating to the
construction of the bypass. The statement referred to consultations which had
taken place and announced that the minister had decided in favour of a
modification of one of the three routes which had been proposed for the bypass,
namely a route which was called the ‘blue route’.
In the
statement it was said that a number of modifications to the blue route had been
suggested and that the modifications would include a viaduct crossing of the
Churn Valley instead of an embankment. That viaduct is relevant to this present
case. In para 5 of the statement:
The layouts
of the junctions will be determined as the scheme design progresses but it is
likely that grade separation will be provided at the major junctions.
Then in para 6
some information was given about route description. It was said:
The preferred
modified Blue Route leaves the existing A417 …
just to the north of the Daglinworth crossroads and runs southeast
passing between the Cirencester Golf Course and Peewits Hill Farm. It crosses
the A435 Cheltenham Road and the Churn Valley on a viaduct, to the north of
Baunton. It then passes below the Whiteway and swings to the south, passing
through Hare Bushes.
In para 16
information was given to anyone whose property was likely to be blighted and it
was said that they would be able to serve a blight notice. In paras 17 and 18
reference was made to further action which was going to be taken.
After the
statement had been published and the matter had come to his attention, on May
14 1990 Col Owen made a telephone call to the
statement and also a copy of the accompanying plan. The plan, which was based
upon the ordnance survey map, showed a black line indicating the line of the
proposed bypass and showing that it would pass just to the north of the village
of Baunton and within a short distance of Col and Mrs Owen’s property, if they
were to buy it. At that time they had not bought Ashgrove. The statement and
plan was sent to Col Owen under cover of a letter in which it was said:
The preferred
route will now be developed in detail to the stage at which formal proposals
will be published in the form of draft orders, these are expected early next
year and in the meantime further surveys and design work will be carried out
throughout the length of the scheme.
A public
inquiry if required will be held in approximately two years’ time after draft
orders have been published. The estimated start of work date is 1993.
Col and Mrs
Owen decided to continue with the purchase of the property. In October they
exchanged contracts and in the following months the purchase was completed.
They moved in at about Christmas 1990. In his affidavit in support of the
application for judicial review, Col Owen referred to the property as being on
a minor and little known Roman road called The Whiteway some two miles from the
centre of Cirencester. He described, in para 1.4 of that affidavit, the work
that was carried out in the course of 1991 which had the effect of doubling the
size of the accommodation and referred to the redesigning of the garden and
other substantial works, which also involved a purchase from a neighbouring
farmer of some further land. It seems that some sum in excess £100,000 was
spent in aggregate on the purchase of the land and the additional building.
At the end of
1991 the Department of Transport published details of the work which was
required to complete the bypass. It seems clear that it was at this stage, for
the first time, whatever they might or should have read into the earlier
statement published in March 1990, that the appellants first became aware that
the bypass was to be a dual carriage road; that it would be in a cutting under
The Whiteway and that that would require realignment of the small road which
would carry The Whiteway over a bridge in the area of Baunton. It also became
clear at that stage that a nearby landfill site would have to be removed.
According to
Col Owen’s affidavit, as I understand it, the searches which had been carried
out before the purchase of the property had not revealed the presence of the
landfill site. That had only come to light when, after the purchase, they
applied for planning permission. As far as the landfill site is concerned it is
now clear that only part of the landfill site will in fact be moved and not the
whole of it. It has apparently been agreed that the only part which will have
to be removed will be that part which is in fact involved in the excavation of
the site of the new highway itself.
On March 17
1992, Col Owen wrote to the Secretary of State to object to the making of the orders
for the bypass scheme. In that letter Col Owen raised a number of general and
environmental objections. It seems that there was a formal reply to that
letter. But in June Col Owen wrote again saying that he wanted to reiterate his
objections to the scheme.
On July 7
1992, a site meeting took place at Ashgrove. That was the first time that
direct contact had been made with the Department of Transport and the relevant
officials. In para 3.3 of his affidavit, Col Owen said that meeting was
attended by Mr Hauxwell of the department, his solicitor (that is Col Owen’s
solicitor) and their surveyor, his wife and himself. It was on that occasion
that Col Owen saw the press notice and the guidelines which had been issued at
the time of the amendment of the Highways Act 1990 at the end of 1991. In
addition, his solicitor was given copies of the appropriate form to fill in to
make an application under section 246(2A) for the property to be purchased by
the highway authority, in this case the Department of Transport.
The
application was duly completed and was sent in by Col Owen on July 16 1992. I
should make some reference to that form (form G1). On the second page of the
form Col Owen completed his grounds for saying that the enjoyment of the
property would be seriously affected. He set out the reasons in this way:
(ii) its
enjoyment will be seriously affected by the construction works and/or the road
in use following their completion
(iii) the
effects will be serious because …
(a) Due to
the topography of the surrounding area we will be affected by noise from the
viaduct to the north-west, the bypass on level ground to the north-east and
east and the bypass in cutting to the north and the realignment and improved
minor road 40942 and Whiteway.
(b) We will
be affected by noise from use of surrounding road network by construction
traffic.
In para 4 Col
Owen set out the reasons why he needed to sell the property and his interest in
the property:
[He and his
wife] wish to avoid the effects of the scheme both … during construction and thereafter … Whilst we acknowledge we are not within 100
metres of the centre line of the proposed route [but] minor road will be
carried out no more than 80 metres from our boundary.
Reference was
made to their ill-health and the fact that Col Owen was going to take up a job
in south Wales shortly and that it was necessary for that purpose to buy a
property in Monmouth as it was not reasonable to commute from there. In para 6
it was said that if Ashgrove could not be sold, that would inevitably cause
financial hardship.
The form was
accompanied by a letter from Dreweatt Neate who wrote about the effect of the
work on the value of the property. In para 3 of that letter they wrote:
We have
advised Colonel and Mrs Owen that the effect of the bypass will be to deter
prospective purchasers from buying the property and that, to this extent, it is
‘blighted’. In our experience, there is little worse than for a property to be
marketed, knowing that road works or other development is likely to take place
in the vicinity, since the threat of what the effect of such works might be,
can often, in the mind of the purchaser, be far worse than the reality.
In the
penultimate paragraph:
… it is our opinion that a marketing exercise
will prove unsuccessful as we and our clients will feel bound to disclose the
bypass proposals …
They said that
would act as a deterrent to prospective purchasers showing any further interest
in the property.
There was no
early reply to that letter. As a result, on August 12, Col Owen made a
telephone call to Bristol when he spoke to Mr Hauxwell, who had been at the
meeting in July. Mr Hauxwell said that he had been off work and had not
therefore been able to attend to the application. But he said that he had
written on the previous day to Col Owen though the letter had missed the post.
Col Owen asked what had been in the letter and was told that it was a refusal
of the application. That letter was not in fact ever sent.
About an hour
later, Col Owen spoke to Mr Endacott, Mr Hauxwell’s senior officer. At that
stage Mr Endacott had not been involved in the matter and so he said that he
would look into it himself. It seems clear from the affidavit that Mr Endacott
later swore that the reason why the letter announcing the refusal was never in
fact sent was because Mr Endacott wanted to look into the matter himself.
There were
then further discussions between the parties. Eventually, a little later in
August, a meeting was arranged at the Department of Transport in Bristol on
August 19. Meanwhile however, on August 11 (that is the day before the
telephone call) a letter had been sent to the district valuer by the department
asking him to express his opinion on various matters set out in a form which is
called a form G3. That was completed by the district valuer on about August 21
— it looks as though that is the date it was received back in the south west
regional office of the department. His opinion was sought on the question
whether the vendors had made reasonable endeavours to sell the interest and
whether they had been able to sell the interest at a price substantially less
than that for which it might
highway scheme. The district valuer gave a compendious answer:
Whilst
reasonable endeavours to sell the interest have not, it appears, been made,
nevertheless, I am in agreement with Messrs Dreweatt Neate that any attempts to
sell the interest would prove unsuccessful on account of the proximity of the
line of the proposed road.
The meeting
then took place on August 19. It was attended by Mr Endacott as well as Mr
Huxwell and Mr Deacon from the department and also by Col and Mrs Owen and
their solicitors. On that occasion Mr Endacott asked for some further information,
including medical evidence and also information about noise.
As a result of
that meeting, Col Owen instructed a noise expert, Dr Smith. On October 5 1992
Col Owen’s solicitors sent a report to support the application for
discretionary purchase of Ashgrove by the Department of Transport. It was quite
a long report. In the course of it the solicitors informed the department that
they had collected some more information and evidence, first, on the effect of
the road on the health of both Col and Mrs Owen; second, the reduction in value
of the property and the difficulty of selling it consequent upon the road
proposals; and third, the need for Col and Mrs Owen to set up their proposed
manufacturing business and the consequent need for them to sell the property
and to purchase another.
Attached to
that document was Dr Smith’s report on noise which he had prepared following a
visit to the site on September 3. The report itself was dated September 7. In
para 4 of the solicitor’s report, there was a passage which dealt with the open
market sale of Ashgrove. Para 4 was in these terms:
4.1 The
property has not been placed on the market as it was felt both by the
Applicants and their agents … that such
an exercise would be wasteful of resources and somewhat pointless in that
prospective purchasers would have to be told about the proposed bypass …
Para 4.2 went
on:
In the light
of this information, the Department is requested to confirm that whatever the
outcome of these further representations, the requirement to market the
property for a period of 20 weeks as set out in the guidelines will be waived …
In 4.3 it was
said that a further valuation had been obtained and that the agents had
concluded:
… that at the present time, having regard to
the proposed bypass the loss in value of the property would be in the region of
£80,000 — £100,000 … [and] when the new
highway is in use, depreciation is likely to be between £25,000 and £35,000.
In para 5.13 there
was a reference to financial difficulties:
Whilst it is
not submitted that Colonel and Mrs Owen have serious financial difficulties, it
is nevertheless true that there is an urgent need to enhance their present
income to enable them to continue to enjoy a satisfactory standard of living
and in this respect the sale of the house and a move to an area convenient to
the new business is essential.
On November 18
1992, Mr Endacott visited the site for himself. A few weeks later on December 3
1992 came the first of the two decision letters with which this case is
concerned. Before I come to the decision letter, however, it would be helpful
for me to refer first to the relevant section of the Highways Act 1980 and also
to the guidelines which Col Owen had been shown at the meeting on July 7 1992.
I come first
to section 246 of the 1980 Act, which is concerned with the acquisition of land
for mitigating the adverse effects of constructing or improving a highway. A
new subsection was introduced by section 62 of the Planning and Compensation
Act 1991 in these terms:
(2A) Where
the highway authority propose to carry out works on blighted land for the
construction or improvement of a highway, they may acquire by agreement land
the enjoyment of which will in their opinion be seriously affected by the
carrying out of the works or the use of the highway if the interest of the
vendor is a qualifying interest.
At the time
when this amendment came into effect, the Department of Transport, on January
17 1992, published a press notice which drew attention to these extended powers
to buy property affected by road building. Before this amendment there had not
been any power to enter into agreements about properties which might in the
future be affected by the carrying out of road works. The only power to make
agreements had been under the previous section 146(2) where the property was
already being seriously affected.
The press
notice referred to the new powers which had been introduced by section 62 of
the 1991 Act and drew attention to an answer to a Parliamentary question which
had been given by the Roads and Traffic minister in the House of Commons on
November 21 1991. Attached to the press notice were the guidelines. The
guidelines were in these terms. It is necessary to read them in extenso.
GUIDELINES
1. The
Department will use its discretion to purchase in any case where it judges it
would be intolerable for the occupier to remain in the property during works or
once the road is open. (Assessed as forecast noise level of 78 dB(A) LEQ
— that I
understand is a way of measuring noise by an average taken over a period (‘EQ’
standing for equalisation) —
(12 hour) for
6 months)
2. Where the
above criterion is not met the vendor must show that he has made reasonable
efforts to sell. The property must have been on offer for at least 20 weeks at
a reasonable price and has been impossible to sell other than at a price
substantially lower than that for which it might have been expected to be sold
but for the scheme. Normally the difference should amount to not less than 5%.
3. There are
a variety of reasons why a vendor might need to move without delay, and where
they appear cogent, they should be accepted. In the case of owner-occupiers of
dwellings guidelines set out the following main types of reason which should be
accepted:
(i)
Acquisition of a job outside reasonable commuting distance when unemployed
(what is reasonable under this and the next head will vary with the
circumstances, including the means of the individual);
(ii) Acquisition
of a different job outside reasonable commuting distance (it is undesirable for
blight to impede job mobility);
(iii) Need to
move for medical reasons, including need to look after an elderly relative in a
different sort of house;
(iv) Need to
provide for a growing family (primarily to be considered in relation to
bedrooms — it is undesirable for growing children of different sexes to share);
(v) Need to
realise assets, perhaps because of serious financial difficulties or
dissolution of marriage.
4. While each
case must be considered on its merits, acquisition will only rarely be approved
under the new power outside the 100m zone, after start of works.
It will be
apparent from reading section 246(2A) that the question as to whether or not an
agreement should be entered into by the highway authority requires to be
considered in two stages. First, it is necessary to consider whether, in the
opinion of the highway authority, the enjoyment of the land will be seriously
affected by the carrying out of the works for the use of the highway. At the
second stage the question is whether, once that criterion is met, the
department should exercise their discretion to acquire the land by agreement.
The words used in the subsection are ‘they’ (that is the highway authority) ‘may
acquire the land by agreement’.
Accordingly,
the first question to be considered is whether or not the enjoyment of the land
is seriously affected. It is to be noted that, although the guidelines are
directed to section 246(2A), no very clear guidance is given to the officers
who are going to operate the guidelines, as to which paragraphs are directed to
the question of ‘seriously affected’ and which are directed to the question of
‘discretion’.
With that
introduction, I come back to the refusal letter of December 3 1992. After two
introductory paragraphs, the writer of the letter, Mr Endacott, who was the
deputy director of Network
traffic noise once the road had been built. He said it had been calculated that
it would not exceed 60 dB(A) in the year 2011. I need not refer any further to
that paragraph because nothing turns on it. No-one is suggesting that once the
road has been constructed the noise is going to be so serious that the property
ought to be purchased.
He went on in
para 4 in these terms:
As far as
construction noise is concerned your clients’ noise consultant also confirms
that his estimates of noise arising from site excavation works are acceptably
close to the Department’s projection of 71 Leq using the BS5228 method.
Insulation would normally be installed if noise levels are likely to be high
over long periods of each day — well in excess of 70 dB(A) Leq — for sustained
periods during a total duration extending over a number of months. The
department has also considered the activities mentioned in the noise report
which Dr Smith considered may result in higher noise levels at the property,
namely the possible removal of all the contents of the landfill site;
construction of temporary roads and a new road bridge; re-alignment of road
40942 and the use of The Whiteway for heavy haulage. However, it is estimated
that the combined effect of these would not increase noise levels above 71
dB(A) Leq even if The Whiteway is used for the removal of the landfill
material. While no final decision has yet been made as to the routes to be used
for general construction traffic, it is considered unlikely that The Whiteway
would be suitable for such a purpose.
5. It is
appreciated that the use of the strip of land alongside The Whiteway included
in the compulsory purchase order … the
noise generating activities could increase these noise levels. However the
Department will ensure that this land, south of the area which is needed for a
temporary highway, is not used for such purposes.
6. Account
has also been taken of other factors not noise related, such as vibration, dust
etc caused by the construction works, and smells arising from the removal of
the tip, together with the effects of the construction noise on your clients’
health. However taking all these into account it is not considered that your
clients’ property will be ‘seriously affected’ by the road scheme under the
terms of section 246(2A) of the Act and it does not fall within the ambit of
that section.
That is an
important paragraph because it is quite clear from that paragraph that by that
stage the writer of the letter had reached a conclusion as to whether or not
the complaints which Col and Mrs Owen were making fell within the terms of the
section and whether it could be said that the clients’ property would be
seriously affected by the road scheme. The letter then went on to deal with
other matters:
7. Your
clients’ case has also been considered in accordance with the Department’s
policy as explained in the Press Notice dated 17 January 1992, namely that
before agreeing to purchase a property under section 246(2A) of the above Act
we also need to be satisfied that —
(1) a sale is
really blighted,
(2) if so that
the vendors need to sell now thus exposing themselves to the risk of such
blight; and
(3) the
hardship in the particular case is substantial enough to warrant purchase by
the public purse.
8. In order
to test (1) above the Department asks vendors for proof that reasonable
endeavours have been made to sell the property, in particular that it has been
on the market for at least 20 weeks at a reasonable price and that it has been
impossible to sell other than at a price substantially lower than that for which
it might have been expected to be sold but for the scheme. Although the
comments of Messrs Dreweatt Neate and your own on this point have been noted
the Department would not be prepared to waive the requirement for this, or any
other property, to be marketed if the requirements at (2) and (3) above were
met.
9. The
requirements at (2) and (3) above have been considered bearing in mind the
guidelines set out in the previously mentioned Press Notice. It is accepted
that your clients have a need to move at the present time. However it has not
been demonstrated that your clients will suffer substantial hardship if they
cannot move. Paragraph 5.13 of the statement enclosed with your letter of 5
October concedes ‘it is not submitted that Colonel and Mrs Owen have serious
financial difficulties’.
Col Owen
criticises that last paragraph as having taken para 5.13 of the statement out
of context. I have already read the relevant part of the letter from the
solicitors of October 5; the force of his criticism can therefore be
appreciated.
The letter
then went on to deal with the knowledge which Col and Mrs Owen had at the time
they purchased the property in November 1990. It was said, among other things:
… the Environmental Statement Plan does not
show any alterations to the junction between The Whiteway and side road 40942,
but this plan was published contemporaneously with the Side Roads Order plan
which does show the full details. The Department takes the view, therefore,
that the problems outlined in your statement are all in the nature of
foreseeable problems in a general sense which could be expected to arise from
the prospect of a known road scheme. The Department does not safeguard people
against the consequences of a purchase made with foreknowledge of a scheme,
especially since in such circumstances a property may well have been bought at
a value which could have reflected the presence of that scheme.
11. The
Department has taken into account all the evidence submitted by yourself and
direct by your clients, including the evidence concerning your clients’ health,
but has concluded that sufficient grounds do not exist at the present time to
justify the Department purchasing the property under the discretionary powers
in section 246(2A) of the Highways Act 1980.
Following that
letter, there was more correspondence. Further information was submitted to the
department and there was a further meeting early in February 1993.
The final
decision was communicated to Col and Mrs Owen’s solicitor on April 1993. Paras
1 and 2 were introductory. In para 3 reference was made to traffic noise on the
new road. The letter continues:
The Secretary
of State has reviewed all the evidence submitted regarding the best forecasts
that can be made of the likely effects of the construction work on your
clients’ property, including noise levels and the incidence of all other
factors including particularly but not exclusively dust, smells, and vibration.
However, for the reasons fully documented in the correspondence from the scheme
Projects Director, the Secretary of State does not consider that the best
estimate of the likely maximum sustained noise level at the property, or any of
the other effects of the construction work on the property, are separately or
cumulatively such as to result in it being ‘seriously affected’ by the road
scheme under the terms of the Act.
4.
Notwithstanding the matters set out above, the Secretary of State has also
considered the case to see whether there are wholly exceptional circumstances
which would justify his forming the view that your clients’ property is
nevertheless seriously affected by the road scheme. In respect of this, special
consideration has been given to the additional medical evidence and that
concerning the date of the purchase of the property by your clients.
In para 5,
reference was made to the medical evidence which included a report of January
19 1993 which had been obtained relating to Mrs Owen’s medical condition. In
the course of that report it was said:
It is Mrs
Owen’s reasonable fear that being exposed to the dust and debris of roadworks
close to her home will lead to further episodes of respiratory irritation and
exacerbate the existing problem with her voice box.
Dr Drysdale,
who was the general practitioner said:
[That is] an
opinion with which I concur.
The effect of
dust and debris on her respiratory system was not mentioned in para 5, but a
number of other matters were dealt with. In para 6, the question of the date of
the purchase of the property was taken up again. It was said that in the
opinion of the Secretary of State:
… the matters referred to in the evidence
submitted are generally such as to have been reasonably foreseeable given the
existence of a known proposal for construction of a road.
Having
received the refusal letter, Col and Mrs Owen brought proceedings for judicial
review. The application came before Latham J last December when he dismissed
it. It is from that decision that the appellants bring this appeal.
In my
judgment, these matters fall to be considered under two headings: (1) the
question whether the criterion of ‘seriously affected’ has been fully and
properly considered; and (2) the question of discretion. Col Owen has drawn our
attention to his complaints about
vibration. But, speaking for myself, although I have great sympathy with his
comments, it does not seem to me, having regard to the guidelines which the
department were using for the purpose of judging serious effects through noise
or other similar causes, that there is any basis on which the decision reached
by the department could be impeached. The highest figure which the expert
instructed on behalf of Col Owen could put for construction noise was something
in the order of 74 dB(A), whereas, as will be remembered, the department’s
figure was 78 dB(A) and it was to the figure of 78 that guideline 1 referred.
But there is a
further aspect of the question of serious effect which has given me cause for
concern and led me to the conclusion that the matter has not been fully
investigated and that the decision which has been reached is one with which
this court ought to interfere. That relates to the diminution in value of the
property. It will be remembered that in the second guideline it was said:
Where the
[noise] criterion is not met [that is the 78 dB(A)] the vendor must show that
he has made reasonable efforts to sell. The property must have been on offer
for at least 20 weeks at a reasonable price and has been impossible to sell
other than at a price substantially lower than that which it might have been
expected to be sold but for the scheme. Normally the difference should amount
to not less than 5%.
In this case
it is common ground that the property was not marketed until after the
decision, the reason being that the agents had advised that it would be a
foolish thing to do. But there is no challenge to the figures which the agents
have given for the diminution in the value of this property. In the final
letter (which is dated September 1993) the value was said to be about 50% below
the value which would have been reached if the by-pass had not been planned and
was certainly in the region of 30Ð 35% although, as is usual, the value of the
property would increase again once the road had actually been constructed.
There is no challenge to those estimated figures and Mr David Elvin, for the
Secretary of State, has very fairly conceded that the only basis on which the
diminution in value was attacked was that the guidelines had not been followed
and the property had not been on the market for at least 20 weeks. This was
made clear, he said, in the first of the decision letters. In other words, it
had been made clear that the requirement of the offering of the property for 20
weeks was not going to be waived. But in neither of the decision letters was
the diminution in value treated as a matter which was capable of affecting to a
serious extent the enjoyment of the land.
I have already
drawn attention to the structure of the first decision letter which was
substantially followed in the second letter. The question of serious effect was
very largely concerned with the question of noise, dust, vibration and the
smells that might come from the opening up of the landfill.
It seems to
me, that the question of the effect, serious or otherwise, of the diminution of
value was never fully or properly addressed. The other point that concerns me
is this. Although it may well be right, if there is a challenge to the figures
which are put forward, for the department to require any estimate of diminution
in value to be checked by means of exposure to the market for a period of at
least 20 weeks, the question is not whether the guidelines have been complied
with, but whether in fact section 246(2A) has been satisfied, that is, whether
or not in the opinion of the Highway Authority the enjoyment of the land has
been seriously affected. The crucial question is whether there has been a
diminution in value in fact, not whether some particular guidelines, however
sensible, have been complied with.
It seems to
me, this decision is flawed to this extent: the question of the serious effect
of diminution in value has not been fully addressed. For my part, I do not
consider that this is a matter which should be dealt with by a declaration.
There may be some explanation. It may be that when the department look at this
matter again they may come to the conclusion that the loss in value had not had
a serious effect. I do not think it would be right for this court to reach any
decision of fact but, in my view, Col and Mrs Owen have not had the benefit of
a decision on this vital question: has our property been seriously affected
within the meaning of section 246(2A) by the diminution of value to which our
agents have drawn attention and where the figures, are it seems, not in
dispute.
In those
circumstances it is not necessary for me to say any more about discretion. I
have already drawn attention to the fact that one part of the medical evidence
does not seem to have been considered, but Mr Elvin has explained that in any
event, the department would not think it right to purchase this property on the
simple ground that in their view the Owens had sufficient knowledge when they
bought it to know what might happen.
I do not
decide this case on the basis of interfering with any discretion. It seems to
me, on the first point, and in the respect which I have sought to identify, the
decision as it presently stands is defective. I would therefore allow the appeal.
Agreeing, SIMON
BROWN LJ said: Because, however, we are disagreeing with the careful and
sympathetic judgment of a judge with acknowledged experience in this field, I
would add a short judgment of my own.
In determining
the appellants’ application under section 246(2A) of the Highways Act 1980, the
respondents for the department in the particular circumstances of this case had
to address two questions. First, whether or not the enjoyment of their property
would ‘be seriously affected by the carrying out of the works or the use of the
highway’; second, if the first question were to be answered affirmatively and
the power thus arose, would it be right to exercise that power?
Although the
two decision letters, respectively of December 3 1992 and April 20 1993,
purport to decide both those questions adversely to the appellants, the letters
appear to me to betray a surprising inability to separate out those two
questions and the considerations relating to each. As but an instance of the
somewhat illogical approach which appears to have been taken, I quote para 4 of
the second letter which is these terms:
Notwithstanding
the matters set out above [in the previous paragraphs the conclusion has been
reached that the property is not ‘seriously affected’ by the scheme] the
Secretary of State has also considered the case to see whether there are wholly
exceptional circumstances which would justify his forming the view that your
clients’ property is nevertheless seriously affected by the road scheme.
Turning to
question 1, whatever view one takes of the guidelines issued by the department
on January 17 1992, and at best they have been characterised as ineptly drawn,
they seem to me at least to support one view, which in any event I for my part
would readily have arrived at, namely that any significant depreciation of
property consequent upon a road scheme indicates of itself that, looking at the
matter prospectively, the scheme has a serious effect on the enjoyment of the
land. Why else would the property be unsaleable or at any rate unsaleable save
at a very substantially depreciated value?
The department
here appears to have accepted that the appellants’ property is indeed very
considerably depreciated, but they have failed to indicate how they reconcile
the acceptance of that fact with the suggestion that the prospective enjoyment
of the land is nevertheless not to be regarded as seriously affected. Rather
they seem to have answered question 1 adversely to the appellants on this part
of the case by reliance upon the stipulation in the guideline that the property
must be on offer for at least 20 weeks, a futile exercise which the appellants,
understandably, declined to undertake.
It follows
that, in my judgment, the department can be seen to have failed to answer
question 1 in a proper and cogent manner.
Should this
court nevertheless uphold the Secretary of State’s decision and refuse to allow
this appeal on the ground that the department have another string to their bow,
namely that even had they determined question 1 in the appellants’ favour, they
would nevertheless have exercised their discretion against them to refuse to
purchase the property.
As I
understand it, the department rely essentially on two matters to justify
exercising their discretion in this way. First, they point out that
the property is not within 100m of the centre line of the proposed new bypass;
rather it would be some 150m distant. True, the guidelines suggest that
‘acquisition will only rarely be approved’ unless the property falls within the
100m distance, but this consideration does not appear to have loomed large in
the defendants’ thinking in the present case and that may very well be because
this particular development, in so far as it affects the appellants, is not
simply one involving the construction of a road, and thus inviting a touchstone
as simple as a 100m distance test, but rather a development consisting of a
complex junction with a bridge over a dual carriageway and indeed the
excavation of an adjacent landfill site.
The second,
and apparently, the main basis upon which the department hitherto have been
inclined to exercise any discretion against the appellants is because ‘the
Secretary of State does not safeguard people against the consequences of a
purchase made in the foreknowledge of road scheme’, see para 6 of the second
decision letter. Although the guidelines themselves are silent as to
foreknowledge, they do not purport to be exhaustive, and certainly there is
reference to this consideration in the notes to form G1 (that is the proforma
application form published by the department). The relevant passage reads:
… the Department will not normally consider
purchase of property indirectly affected by the alignment of a scheme, if
information which would have been sufficient to identify the effects had
already been published before the date of purchase by the owner occupier
concerned, and in the case of a mortgagee, before the date on which the
mortgage was entered into. In particular, the Department will not normally
repurchase property previously acquired by it, and subsequently sold.
Here, as Neill
LJ has explained, by the time of the appellants’ purchase of this property, the
line of the bypass had been settled and there had been published in March 1990
a statement following public consultation with regard to it. Did that statement
however include ‘information sufficient to identify the effects’ of the scheme?
Some of the effects of the scheme, of course, were indicated. But, there seems
to me, at the very least room for argument and further consideration as to
whether the appellants were really on notice as to the full effects of the
development as it would affect them. The published document did not, for
instance, make it clear that the bypass would be a dual carriageway in their area,
nor did it make mention of the landfill site. And certainly the case is very
far from one where the department is being invited to repurchase property
previously acquired and sold by them as expressly envisaged in the note from
which I have quoted.
It seems to
me, moreover, that the department ought properly to have this thought in mind
too. That, as the judge below accepted, the scheme had in fact no apparent
effect on the value of the property at the time when the appellants themselves
acquired it. Plainly now it has, indeed apparently a very substantial effect. I
can quite understand why the department are not readily prepared to compensate
those who know perfectly well what they are buying and buy at a price which
reflects the blighting caused by the development. But, it seems to me, quite
another thing to suggest that the department should be positively advantaged by
the inter-position, as here, of a new purchaser. Let me explain. Had these
appellants not purchased this property, there can be no doubt that the previous
owners could themselves have made application to the department under section
246(2A). And whatever else had been taken into consideration against such an
application in the exercise of the department’s discretion, it could not have been
any element of foreknowledge.
It
accordingly, seems to me, by no means certain that the department will feel
bound to exercise its discretion — assuming it finds, as a result of addressing
question one afresh, that it has such a discretion — in the same way as the
documents suggest it has hitherto approached it.
For those
reasons, in addition to the reasons given by Neill LJ, I, too, would allow this
appeal.
Also agreeing,
HENRY LJ said: When section 246(2A) was introduced by the minister to
Parliament, in answer to a Parliamentary question, he paraphrased the new
statutory test thereby introduced (namely as to whether the enjoyment of land
is seriously affected) as being whether the land is suffering from serious
blight by proximity. That was an accurate paraphrase. Dreweatt Neate’s letters
of September 7 1992 which was before the minister before the first decision
letter and January 28 1993 which was before him on the second, raised a strong
case, in my judgment, of just such a blight. The reasons advanced in those
letters were not specifically addressed by the minister in his decision letter.
In the first
decision letter there was a specific finding that the property had not been
seriously affected; there was no blight by proximity. In my judgment, it was
wrong to make that finding without addressing and saying why the minister was
differing from Dreweatt Neate’s conclusions. In the second decision letter, the
letter is far from clear, but either there was no finding one way or the other
or there was an implicit finding of rejection of the blight point. Again, the
case that had been made was not met.
As to the
point raised by my lord, Simon Brown LJ, as to the affect of foreknowledge of
the scheme as shown by the market value of the property in 1990, the minister,
when making his April 1993 decision, would not then have had before him the
evidence from Lane Fox set out in their letter of July 29 1993, namely that the
asking price for the property when it was sold to the Owens in 1990 was not
significantly affected by ‘the line on the map’. That letter says:
When we first
wrote to Miss Rivers-Moore the Department of Transport had already published a
consultation leaflet setting out the four alternative routes for the bypass.
Two of these routes crossed The Whiteway, near the Baunton turning. The general
impression is that one of these two routes (the blue route), was likely to be
chosen. No detail plans were available. Based on this information our view was
that the likely effect on the value of Ashgrove was not significant and not
capable of being quantified. Our suggested asking price took this into account.
Shortly after
it was announced that the blue route had been selected as the preferred route.
It was represented by a thick line on a small scale plan. Its announcement did
not appear to have a noticeable effect on the interest being shown, most people
being more concerned with the condition of the property.
Sale Price
In our view,
we would find it difficult to prove that Col Owen paid anything other than the
full market price for Ashgrove.
That, I
presume, was the basis for the trial judge’s finding that in 1990 the price had
not then been blighted by the marking of the blue route on the map and the
choice of the blue route. That, as I say, was not a matter before the minister
in the April decision. But it is a matter he will doubtless wish to address
carefully when he reconsiders this matter.
Appeal
allowed.
