Appellants’ land subject to compulsory purchase — Assessment of compensation — Whether compensation should include value of minerals excavated from land and used elsewhere by respondent council — Sections 15 and 17 of Land Compensation Act 1961 — Appeal dismissed
The appellants held the freehold interest in agricultural land that the respondent council had compulsorily purchased for the purposes of building a road. A compensation claim was referred to the Lands Tribunal, but proceedings were stayed until the council were granted a certificate of alternative development under section 17 of the Land Compensation Act 1961. It stated that the only alternative form of permissible development would have been the construction of a sports pitch and clubhouse. In the light of this, the Lands Tribunal determined compensation in the sum of £17,000.
The section of road on the appellants’ land was designed to be in a cutting, and the materials excavated were to be used elsewhere in the road construction. The appellants maintained that compensation should be determined on the basis of the mineral extraction. The tribunal stated that, had it accepted their case, it would have awarded compensation of £86,000.
It was common ground that the only possibility of exploiting the excavated minerals was derived from the road scheme, and that compensation for compulsory acquisition could not usually include an increase in value that was entirely due to the scheme underlying the acquisition: see Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565. The appellants argued that, inter alia: (i) the planning permission (as assumed under section 15 of the 1961 Act) contained no condition requiring that the mineral excavator and the road builder should be the same party; (ii) the permission did not specify that the excavated minerals should be used for any particular purpose; (iii) thus the permission for the extraction did not apply specifically to the local authority for the purpose of building the road; and (iv) since the mineral extraction could have been carried out by a third party, the value of the land should be assessed on the value of the mineral extraction to the third party.
Held: The appeal was dismissed.
Despite the ingenuity of the appellants’ argument, the question was simply whether the assumed permission would have permitted the owner, or the hypothetical purchaser, to carry out the extraction operation to complete the road. The answer was clearly “No”.
The 1961 Act allowed the owner of the land to benefit from any valuable development opportunities on his own land that were available to the acquiring authority at the time the owner was notified of the intention to purchase, but precluded any advantage that arose as a result of that authority’s own scheme. Compensation was therefore assessed on the market value of the land, which included the value of planning permission existing at the date of service of the notice to treat.
If no such planning permission existed, it was assumed that permission would have been granted for the purpose for which the land was being compulsorily acquired. It would have been in the same terms as the permission that was actually granted, and would have applied to the same area of land.
In the instant case, the assumed permission would have been for the construction of the same stretch of road, and, during that construction, certain minerals would have been extracted from the land; this was not the same as assuming that planning permission would have been granted to some other purchaser of the same parcel of land to extract those same minerals. Furthermore, the extraction of the minerals and the construction of the road were indivisible: West Bowers Farm Products v Essex County Council [1985] 1 EGLR 271 distinguished.
Nicholas Nardecchia (instructed by Burningham & Brown, of Bridgwater) appeared for the appellants; Frances Patterson QC and Robert Palmer (instructed by the solicitor to South Gloucestershire District Council) appeared for the respondents.
Vivienne Lane, barrister