Compulsory purchase – Assessment of compensation – Valuation evidence – Both appellant and respondents acquiring authority proceedings on residual valuation method – Lands Tribunal preparing detailed draft decision on that basis – Appellant thereafter seeking to adduce evidence of earlier offers to purchase its property – Whether tribunal correctly refusing to admit evidence – Principles relevant to admission of evidence at late stage – Appeal dismissed
By a compulsory purchase order (CPO) made in 2003 and confirmed in 2005, the respondent council acquired land that included an office building owned by the appellant. The latter’s claim for compensation was referred to the Lands Tribunal, to be assessed as at September 2005 on the assumption, under sections 14 to 16 of the Land Compensation Act 1961, that planning permission would have been granted for the redevelopment of the property. The parties agreed that the residual valuation method would be followed in the absence of relevant comparables. The appellant posited several redevelopment schemes; in a detailed draft decision issued in June 2009, the tribunal awarded compensation on the basis of one of those schemes in the sum of £4.5m, in contrast to the appellant’s residual valuation of £15.2m.
Before the decision became final, the appellant applied to the tribunal to admit new evidence, consisting of three offers to purchase its property that had been received from developers between 2002 and 2003 in amounts ranging between £19.5 and £23m. The appellant contended that the offers provided valuable comparable evidence against which the tribunal’s valuation should be tested, but that its valuation witness had forgotten or overlooked them when preparing or giving his evidence.
Applying the test in Ladd v Marshall [1954] 1 WLR 1489, the tribunal determined that the evidence should not be admitted because it could not have been obtained with reasonable diligence for use at the trial.
The appellant appealed. It contended that the tribunal had failed to take into account three relevant matters, namely: (i) the likely cogency and effect of the new evidence if it were admitted; (ii) the reasons given for the failure to adduce it at an earlier stage; and (iii) the fact that the respondents also knew of the offers but had failed to refer to them.
Held: The appeal was dismissed.
In general, permission should not be given to admit fresh evidence on a new point, after judgment had been given but before the order was drawn up, unless: (i) the evidence could not have been obtained with reasonable diligence for use at the trial; (ii) it would probably have an important influence on the outcome of the case although it need not be decisive; and (iii) it should be apparently credible, although it need not be incontrovertible: Ladd and Charlesworth v Relay Roads Ltd (No 2) [2000] 1 WLR 230 applied. The tribunal had not misdirected itself as to the existence of its discretion to admit the new evidence or the principles on which it should exercise that discretion, and the appellant was unable to show that the way in which it had exercised the discretion was wholly wrong.
This was not a case in which the new evidence that the appellant sought to adduce would supplement, reinforce or qualify the evidence already put before the tribunal. Given that the offers were so widely divergent from the tribunal’s valuation figure on the residual analysis, the only purpose of “testing” the tribunal’s residual valuation by reference to the offers would be to seek to persuade it to abandon the residual method of valuation and to adopt a new method, not by reference to comparable sales, because it was agreed that there were none, but by reference to the three offers. In order to be of any real significance, the new evidence would have to supplant that earlier evidence; in effect, permission was being sought for the presentation of a new valuation case, which, if successful, would render the earlier residual valuations otiose.
Throughout negotiations and the preparation of evidence over a three-year period from June 2006 to June 2009, the appellant’s witness had forgotten a piece of evidence that was of critical importance. The respondents would reasonably have expected the appellant’s witness to mention any evidence on which he relied, particularly evidence that was of such importance to his valuation, and would have assumed that the reason for his failure to mention it was that he, in agreement with the respondents, did not think that it would assist the tribunal. Even assuming that it was possible to distinguish between the “reasonable diligence” of a litigant and that of its expert witness, the appellant had not acted with reasonable diligence on the facts of the case. The valuation witness had not prepared his evidence in a vacuum; its preparation must have involved a certain amount of teamwork, with contributions from the appellant. Even if the failure was that of the witness alone, the appellant’s ability to obtain redress for any such failure in professional negligence proceedings, following the abolition of expert witnesses’ immunity from suit, was a powerful reason for not permitting the appellant to mount a new valuation case.
Moreover, the tribunal’s decision did not mean that it had failed to take into account the principle of equivalence and the public interest in ensuring that the correct amount of compensation, no more and no less, was paid by an authority acquiring land under compulsory powers. It had validly taken the view that none of the arguments put forward by the parties outweighed the failure to adduce evidence that had been available to the appellant at all material times. It had been entitled to strike the balance in that way. Its decision to refuse to admit the new evidence was correct and could not sensibly be described as “wholly wrong”.
Michael Barnes QC and Robert Lewis (instructed by Berwin Leighton Paisner LLP) appeared for the appellant; Neil King QC and Rupert Warren (instructed by Ashurst LLP) appeared for the respondents.
Sally Dobson, barrister
