Disposal of land by regional health authority — Land acquired by health authority under threat of compulsion — Land formerly in possession of two owners — Owners forming consortium for joint purchase — Whether Crichel Down Rules applying — Whether consortium entitled to “special consideration” under rules — Owners applying for judicial review — Application granted
Land at Wilsthorpe Road, Long Eaton, Derbyshire, was held in two former ownerships, the first applicant (“Westerman”), and Erewash Borough Council, the second applicants, as successor in title to the previous district council. The land was acquired in August 1986 from the first applicant and the second applicants (separately) by the Secretary of State for Social Services, the predecessor in title to the second respondent (the Secretary of State for Health). It was common ground that it was acquired under threat of compulsory purchase, for the purpose of developing the site as a community hospital for the first respondent.
In January 1991, the respondents no longer required the land for that development so it was surplus to their requirement. Under a document of October 1992, non-statutory arrangements were revised for the disposal of surplus government land, acquired by or under the threat of compulsion, ie the Crichel Down Rules. Under para 9 a former owner should, as a general rule, be given first opportunity to repurchase the land previously in his ownership provided that it had not materially changed its character since acquisition. Under para 14 there were exceptions to the general obligation to offer back. By para 14(7), where a site comprised of two or more holdings and there was a risk of a fragmented sale realising substantially less than the best price obtainable for the site as a whole, ie its market value, “special consideration” had to be given if a consortium of former owners indicated a wish to purchase the land collectively. The health authority, acting with estate agents, negotiated with the applicants, who formed a consortium of former owners to purchase the land collectively, at a price of £1.1m. Thereafter it regarded the Crichel Down Rules inapplicable and, on March 15 1995, wrote to the first applicant that it intended that “best and final” offers reach their office no later than March 22 at a sum no less than £1.25m.
Held Judicial review was granted.
1. Where a government department had aggregated two or more parcels of land, injustice to those former owners might be caused if they were disabled from acquiring back their former parcels by reason of the diminished price on a fragmented sale.
2. Further, it was a reasonable objective of the disposing department in the interests of the public purse that the value of the site as a whole should be realizable, but would not be achieved if the sale were to be made to the former owners separately.
3. Rule 14(7) was therefore an express pointer to what “special consideration” should mean. Some other method was devised so that former owners would not be substantially disadvantaged and rendered outlaws.
4. An exception to an exception was thus created: a balance was to be struck between the former owners and the disposing department where the former owners formed a consortium and became in the position of a single owner. That was the “special consideration” to which they were entitled. The purpose of the exception to the exception was rendered perfectly compatible with the intention of the rules as a whole.
5. There had been a valid and subsisting consortium in the instant case to whom a right of pre-emption was to be granted.
Michael Supperstone QC (instructed by Eversheds, of Nottingham) appeared for the applicants; David Stockill (instructed by Gadsby Coxon & Copestake, of Derby) appeared for the respondents.
