Compensation for the acquisition of land — Certificate of appropriate alternative development — Relevant date for identifying policies — Whether date of entry or date of making of compulsory purchase order — Whether only scheme of acquisition or additional underlying facts and policies to be disregarded
On January 30 1986 notices were published and
served of the making of a compulsory purchase order by the Secretary of State
for Transport to acquire land belonging to the respondent landowners for the
construction of a bypass; these were notices for the purposes of section 22(2)(a)
of the Land Compensation Act 1961. In 1992 the respondent landowners applied
for certificates of appropriate alternative development under section 17 of the
Act. Certificates for residential and industrial development were issued by the
local planning authority in 1993. On appeals by the Secretary of State for
Transport, the appellant Secretary of State for the Environment allowed the
appeals, substituting negative certificates. In the court below the judge held
that the relevant date for the purposes of section 17(4) was the date for the
purposes of section 22(2)(a), the date of the notices of the making of
the compulsory purchase order. He also found that, in issuing a certificate,
the facts and policies that underly the scheme should be discounted. The
Secretary of State appealed.
The judge was correct that the relevant date for
the determination of planning policies in issuing a certificate was decided in Jelson
Ltd v Minister of Housing and Local Government [1970] 1 QB 243; it
was the section 22(2)(a) date, the date of the notice of the making of
the compulsory purchase order. What has to be disregarded under section 17(4)
of the Act (‘if it were not proposed to be acquired’) is the proposal for
acquisition, and that alone, and not any fact or policy attributable, at any
date in the past, to the underlying scheme. When considering the grant of a
certificate under section 17(4) of the Act, in a case to which section 22(2)(a)
applies, the land shall be considered as at the date of the publication of
notice of the compulsory purchase order, discounting only that acquisition and
the proposal underlying it as it stood on the date of the notice: this can
conveniently be expressed as the valuation on the basis that the proposal had
been cancelled on the date of that notice: pp112–113.
Birmingham Corporation v West Midland Baptist (Trust) Association (Inc) [1970] AC
874; [1969] 3 WLR 389; [1969] 3 All ER 172; (1969) 67 LGR 571, HL
Fox v Secretary
of State for the Environment (1991) 62 P&CR 459; [1991] 2 EGLR 13;
[1991] 40 EG 116; [1991] RVR 171
Grampian Regional Council v Secretary of State for Scotland [1983] 1 WLR 1340; [1983]
3 All ER 673; (1983) 47 P&CR 540; 23 RVR 263; [1984] 2 EGLR 175; [1984] EGD
1073; 271 EG 625, HL
Jelson Ltd v Minister
of Housing and Local Government; George Wimpey & Co v Minister
of Housing and Local Government [1970] 1 QB 243; [1969] 3 WLR 282; [1969] 3
All ER 147; (1969) 67 LGR 543; 20 P&CR 663, CA
Margate Corporation v Devotwill Investments Ltd [1970] 3 All ER 864; (1970) 22
P&CR 328; 69 LGR 271; [1971] EGD 313; 218 EG 559, HL
Pointe Gourde Quarrying & Transport Co
Ltd v Sub-Intendent of Crown Lands [1947] AC
565, PC
Porter v Secretary
of State for Transport (1996) 3 All ER 693; [1996] 2 EGLR 10; [1996] 35 EG
89; [1996] 1 PLR 111, CA
Robert Hitchins Builders Ltd v Secretary of State for the Environment (1978) 37 P&CR
140; [1978] 2 EGLR 125; [1978] EGD 945; 248 EG 689; [1978] JPL 824
Wards Construction (Medway) Ltd v Barclays Bank plc (1994) 68 P&CR 391, CA
Wilson v Liverpool
Corporation [1971] 1 WLR 302; [1971] 1 All ER 628; (1971) 22 P&CR 282;
[1971] EGD 144; 217 EG 987, CA
Appeal against decision of Dyson J
This was an appeal by the Secretary of State for
the Environment from a decision of Dyson J, who had quashed decisions of the
Secretary of State who had allowed appeals by the Secretary of State for
Transport against certificates of appropriate alternative development applied
for by the respondent landowners.
by the Treasury Solicitor) appeared for the Secretary of State for the
Environment.
by Manby & Steward, of Wolverhampton) represented the landowners.
BUXTON LJ:
Issues and statutory framework
This appeal concerns two questions, which we were
told were undecided but of considerable general importance, that arise in
connection with the determination by the Lands Tribunal of compensation for
land compulsorily acquired, or proposed to be compulsorily acquired, under the
Land Compensation Act 1961, as amended (the 1961 Act). It will be convenient,
first, to refer to the statutory framework.
By Part II of the 1961 Act, the Lands Tribunal
values the land in question at its open market value as sold by a willing
seller, subject, however, to certain assumptions. Those assumptions include
assumptions as to the planning permission that would be available in respect of
the land, that clearly being a significant factor in its market value. By
section 15(5), where
the Secretary of State, as to the planning permission that would have been
granted for the land, the Lands Tribunal, in valuing the land, shall assume
that that planning permission would, indeed, be granted.
This process of certification is dealt with in
Part III of the 1961 Act. Since the proper construction of the relevant
provisions lies at the heart of this appeal, they cannot be summarised, but
must be set out in full:
Certification of appropriate alternative
development
17.–(1) Where an
interest in land is proposed to be acquired by an authority possessing
compulsory purchase powers, either of the parties directly concerned may,
subject to subsection (2) of this section, apply to the local planning
authority for a certificate under this section …
(3) An application for a certificate under this
section —
(a) shall state whether or not there are, in the
applicant’s opinion, any classes of development which, either immediately or at
a future time, would be appropriate for the land in question if it were not
proposed to be acquired by any authority possessing compulsory purchase powers
and, if so, shall specify the classes of development and the times at which
they would be so appropriate;
(b) shall state the applicant’s grounds for
holding that opinion; and
(c) shall be accompanied by a statement
specifying the date on which a copy of the application has been or will be
served on the other party directly concerned.
(4) Where an application is made to the local
planning authority for a certificate under this section in respect of an
interest in land, the local planning authority shall, not earlier than 21 days
after the date specified in the statement mentioned in paragraph (c) of
subsection (3) of this section, issue to the applicant a certificate stating
either of the following to be the opinion of the local planning authority
regarding the grant of planning permission in respect of the land in question,
if it were not proposed to be acquired by an authority possessing compulsory
purchase powers, that is to say —
(a) that planning permission for development of
one or more classes specified in the certificate (whether specified in the
application or not) and for any development for which the land is to be
acquired, but would not have been granted for any other development; or
(b) that planning permission would have been
granted for any development of which the land is to be acquired, but would not
have been granted for any other development, …
and for the purposes of this subsection
development is development for which the land is to be acquired if the land is
to be acquired for purposes which involve the carrying out of proposals of the
acquiring authority for that development…
(7) In determining, for the purposes of the issue
of a certificate under this section, whether planning permission for any
particular class of development would have been granted in respect of any land,
the local planning authority shall not treat development of that class as
development for which planning permission would have been refused by reason
only that it would have involved development of the land in question (or of
that land together with other land) otherwise than in accordance with the
provisions of the development plan relating thereto…
18.–(2) On any
appeal under this section against a certificate the Minister shall consider the
matters to which the certificate relates as if the application for a
certificate under section seventeen of this Act had been made to him in the
first instance, and shall either confirm the certificate, or vary it, or cancel
it and issue a different certificate in its place, as he may consider
appropriate …
22.–(2) For the
purposes of section seventeen and eighteen of this Act, an interest in land
shall be taken to be an interest proposed to be acquired by an authority
possessing compulsory purchase powers in the following (but no other)
circumstances, that is to say —
(a) where, for the purposes of a compulsory
acquisition by that authority of land consisting of or including land in which
that interest subsists, a notice required to be published or served in
connection with that acquisition, either by an Act or by any Standing Order of
either House of Parliament relating to petitions for private bills, has been
published or served in accordance with that Act or Order; or
(b) where a notice requiring the purchase of that
interest has been served under any enactment, and in accordance with that
enactment that authority are to be deemed to have served a notice to treat in
respect of that interest; or
(c) where an offer in writing has been made by or
on behalf of that authority to negotiate for the purchase of that interest; …
In the present case there were before the judge two
applications under section 21 of the 1961 Act to quash decisions of the now
appellant Secretary of State, made under section 18 of the 1961 Act, whereby he
allowed appeals by the Secretary of State for Transport against certificates of
appropriate alternative development in respect of two parcels of land at
Sundorne, Shrewsbury. The land was proposed for compulsory purchase by the
Secretary of State for Transport for the purpose of constructing the A49
Shrewsbury bypass. The date of the notice under section 22(2)(a) of the
1961 Act was January 30 1986. In late 1992 the applicants (now the respondents)
applied for certificates of appropriate alternative development under section
17. The local authority issued certificates on May 8 1993 for residential and industrial
development. The Secretary of State for Transport appealed against the
certificates under section 18. By his decision letter, dated July 4 1996, the
Secretary of State allowed the appeals, substituting negative certificates
under section 17(4)(b) of the 1961 Act.
Against this background, the issues in the appeal
were:
I. Is the relevant date at which the decision
under section 17(4) has to be made:
A the section 22(2)(a) date (the notice
date), as found by the judge?; or
B the date of entry on the land, as contended for
by the appellant Secretary of State?
II. In making that decision, do the words ‘if it
were not proposed to be acquired’ in section 17(4) mean that there should be
discounted:
A the section 22(2)(a) compulsory
acquisition, and the proposal underlying that acquisition as it stood at the
relevant date, as the Secretary of State contends?; or
B additionally, the facts and policies that
resulted from the underlying
This latter contest, on issue II, was, if I may
say so, neatly summarised by Dyson J in the judgment below:
[The respondents] contended that … the policies
and facts applicable at the relevant date should have been viewed as if the
bypass scheme had never been conceived at all. [The Secretary of State]
contended that the policies and facts should be taken on the relevant date as
if the scheme had been cancelled on that date, and not as if the scheme had
never been conceived at all.
It is convenient to take these issues separately
although, as will become apparent, in my view, the correct solution to issue I
dictates the answer to issue II.
Issue I
This issue is concluded as a matter of authority
by the decision of this court in Jelson Ltd v Minister of Housing and
Local Government [1970] 1 QB 243 (Jelson). In that case there had
been long-standing proposals for the construction of a bypass. Land abutting
the site of the bypass was developed for housing. When the plan for the bypass
was abandoned, the owners of the land on which it was to have been constructed
applied for planning permission for the construction of housing, which
permission was refused because housing on that site would adversely affect the
existing housing. The owners thereupon applied under section 129(1) of the Town
and Country Planning Act 1962, which provides that:
Where, on an application for planning permission
to develop any land, permission is refused … then if any owner of the land
claims —
(a) that the land has become incapable of
reasonably beneficial use in its existing state, and …
(c) … that the land cannot be rendered
capable of reasonable beneficial use by the carrying out of any other
development for which planning permission has been granted or for which the
local planning authority or the Minister has undertaken to grant planning
permission,
he may … serve on the council … in which the land
is situated a notice requiring that council to purchase his interest in the
land …
The issue in the appeal was specifically as to the
date at which the provisions of section 17(4) of the 1961 Act applied. I
mention as a preliminary footnote that, in his exposition of Part III of the
Act, Lord Denning MR assumed, as did everyone else in the case, that section
22(2)(a) referred to a notice to treat rather, than is in fact the case,
to publication of the notice of the compulsory purchase order. Subject to one
argument that I consider below, and by which I am not persuaded, this point
makes no difference either to the Court of Appeal’s analysis of the terms of
Part III or to the debate in our present case.
On that basis, Lord Denning MR at p250B, stated
the issue in Jelson as follows:
After the discussion we have had, I think the decision
depends on this one short point under section 17(4): what is the date at which
it must be decided whether planning permission ‘might reasonably have been
expected to be granted’? The Minister says it must be decided as at the date of
the deemed notice to treat, that is, on September 29, 1965. At that date there
was this long, narrow strip of land bordered by great housing estates on either
side. At that date planning permission would not be granted for any beneficial
purpose. So there should be a ‘nil certificate’. But Wimpeys and Jelsons say
that that is not that date at all. They say that the date should be some time
in the distant past before there was any proposal for a ring road. At that time
they might reasonably have expected planning permission to be granted, not only
for the housing estates, but also for this long, narrow strip for residential
development.
That issue was to be determined simply as a matter
of statutory construction:
The crucial word in [section 17(4)] is the word
‘proposed’, which is defined in section 22(2):
‘For the purposes of sections 17 and 18 of this
Act, an interest in land shall be taken to be an interest proposed to be
acquired by an authority possessing compulsory purchase powers in the following
(but no other) circumstances, that is to say —
(a) (put
shortly) where there is an actual notice to treat;
(b) (put
shortly) where there is a deemed notice to treat;
(c) (put
shortly) where there is an offer to negotiate to purchase.’
That definition shows that the word ‘proposed’
refers to the proposal contained in an actual or deemed notice to treat or in
an offer to purchase. That gives a good clue to the date of the
proposal. It is the date of the actual or deemed notice to treat or of the
offer to purchase, as the case may be.
In the light of that definition, section 17(4)
means that the planning authority must form an opinion as to what planning
permission might reasonably have been expected to be granted at the date of the
actual notice to treat, or the deemed notice to treat, or the offer
to purchase, as the case may be. In the present case, therefore, which is a
case of a deemed notice to treat, subsection 17(4) must be read: ‘… that
might have been expected to be granted [at the date of the service of the
deemed notice to treat] in respect of the land in question, if it were not
proposed [at that date] to be acquired …’. The planning authority must form an
opinion as to what planning permission might reasonably be expected at that
date, namely, September 28, 1965. It must look at the position as at that date,
and see, in the circumstances then existing, whether planning permission might
reasonably be expected to be granted. ([1970] 1 QB 243 at pp250G–251C, Lord
Denning MR’s emphasis.)
That same analysis was adopted by Sachs LJ at
p254D, and by Phillimore LJ at p255C. Like Dyson J, I see no answer to the
argument that that determines issue I in our case. I am fortified in that view
by the fact that the same conclusion as to the effect of Jelson was
reached, after a very careful review of arguments very similar to those
advanced in our case, by Roch J in Fox v Secretary of State for the
Environment (1991) 62 P&CR 459 at p475.
The Secretary of State did, however, contend that
there was an answer,
As his principal argument the Secretary of State
said that it was necessary to construe Part III in a purposive manner, bearing
in mind that the only role of a Part III certificate was to assist in valuation
by the Lands Tribunal: see, on the latter, undisputed, point Lord Bridge in Grampian
Regional Council v Secretary of State for Scotland (1983) 47
P&CR 540 (Grampian) at p574. It was established by analogy with the
judgment of the House of Lords in Birmingham Corporation v West
Midland Baptist (Trust) Association (Inc) [1970] AC 874 (West Midland)
that the date as at which the Lands Tribunal should assess compensation was the
date of entry on the land. It was therefore rational that the certificate date
should be that date, or at least a date as close as possible to that date. Mr
Robin Purchas QC, for the respondents, challenged even the necessary
rationality of that claim. But, even leaving those considerations aside, the
trouble with this argument is that it flies in the face of the way in which the
court approached its task in Jelson. As we have seen, the court thought
that the issue was concluded by construction of the 1961 Act. ‘Purposive’
construction, whatever exactly it may import, is still nevertheless an exercise
in construction, not an exercise in judicial law-making. The Court of Appeal in
Jelson construed the 1961 Act in a manner contrary to that now contended
for by the Secretary of State. That conclusion cannot be displaced, at least in
this court, by appeal to an alternative theory of construction.
Faced with that impasse, therefore, the Secretary
of State sought to offset or distinguish the effect of Jelson on two,
interrelated, grounds. First, the case had proceeded, as in particular had the
judgment of Browne J at first instance, which was approved by all the judges in
the Court of Appeal, on the assumption that the valuation date was not the date
of entry, as subsequently established by West Midland, but the date of
the notice to treat. It was therefore wrongly assumed in Jelson that the
decision did indeed create the rational relation between the date of the
certificate and the date of the assessment that the Secretary of State urged.
That analysis was supported by a passage from the judgment of Browne J:
The general principle is that the value of land
for the purposes of compensation for compulsory purchase is assessed as at the
date of the notice to treat. The actual assessment of compensation in cases to
which section 17 relates is carried out by the Lands Tribunal, and part of the
material which will be before the Lands Tribunal may be a certificate under
section 17 (see ss 14(3), 15(5) and 17(2)). The time with which the Lands
Tribunal is concerned is the date of the notice to treat and the facts and
circumstances as they existed at that date, and I should expect, prima facie,
that the certificate under section 17 would be dealing with the situation as at
the same date [(1968) 19 P&CR 746 at p765].
Second, the communis error in Jelson,
shared by Browne J, that the terms of section 22(2)(a) referred to a
notice to treat, rather than to publication of a notice of the compulsory
purchase order, had given a spurious appearance of unity to the three cases
addressed in that sub-subsection,
section 22(2)(a) of the solution that applied to section 22(2)(b);
which, being a case of service of notice to purchase under section 129 of the
1962 Act, was the case directly addressed in Jelson. The Secretary of
State argued that we should follow the reasoning of Sir Douglas Frank QC in Robert
Hitchins Builders Ltd v Secretary of State for the Environment
(1978) 37 P&CR 140 (Hitchens), who had distinguished Jelson
broadly on these grounds. He also submitted that his argument was supported by
the reasoning of the Court of Session and of the House of Lords in Grampian,
a case to which I shall, in any event, have to return when considering issue
II.
The principal difficulty about these arguments is
that they can only prevail if it can be established either that the judgment in
Jelson was delivered per incuriam or that it is inconsistent with
what was said by the House of Lords in Grampian. I dispose of the latter
point immediately, since I do not understand how it came to be advanced. Lord
Bridge in Grampian, at pp573–574 of the report, made a reasoned, albeit
confessedly obiter, finding that the relevant date was the date on which
the land was proposed to be acquired. In so far as that assists at all in the
present case, it supports the case for the respondents. As to the status of the
judgment in Jelson, the Secretary of State appeared to draw back from
saying that it must be disregarded, but that, in my view, is what he has to
argue in order to succeed.
There is no justification for any such argument.
First, it is true that Browne J assumed a rule as to the date of assessment
different from that provided in West Midland. But, as is apparent from
the passage from his judgment already cited, he regarded the conjunction of the
assessment date and the certificate date as only a starting point. Like the
Court of Appeal, his actual decision was based on the terms of the 1961 Act.
That is apparent from, among other things, a further passage that I cite below in
connection with issue II.
Second, although Browne J did not have the benefit
of West Midland, by the time that Jelson reached the Court of
Appeal that court had decided that case, and held, as subsequently did the
House of Lords, that the assessment date should not be the date of the notice
to treat: that is most conveniently seen from the headnote to the report of the
case in the Court of Appeal: see [1968] 2 QB 188 at p189. That case in the
Court of Appeal was cited to the court in Jelson, it would seem, by both
sides: see [1970] 1 QB 243 at p248A–C. Although it was not referred to in the
court’s judgments, it is impossible to contend that Jelson was decided
in ignorance of it. Nor, since the issue before the court was one of
construction, is it possible to say that either the Court of Appeal or Browne J
would have decided the case differently had the present point about West
Midland been put to them directly.
Third, in his exposition at [1970] 1 QB 243 at
pp250G–251A, Lord Denning MR did not say, nor can he be construed as thinking,
that what he saw as the similarity of section 22(2)(a) and (b) as
dealing with notices to treat dictated the construction that he put upon the
section. Rather, he pointed out that the use of the word ‘proposed’ in the
common part of
which it referred, which included sub-subsection (c), which has nothing
to do with notices to treat. That section 22(2) must apply equally to each of
the three cases set out in it is a point of some importance when we come to
consider issue II. Here, it simply demonstrates that Lord Denning MR’s analysis
was not dictated by, and indeed was not in any way affected by, his assumption
that section 22(2)(a) related to a notice to treat.
I have discussed these arguments at some length
because of the importance placed on them by the Secretary of State. They
cannot, however, displace the plain conclusion that is to be drawn from Jelson.
The deputy judge in Hitchins was wrong to distinguish Jelson on
these grounds, and I would overrule that case. The appeal on issue I fails.
Issue II
Here again there is, in my view, a short answer,
though in this instance it is not that which appealed to the judge.
The issue is as to the meaning, or at least the
reference or application, of the words ‘if it were not proposed to be acquired’
in section 17(4) of the 1961 Act. I agree that it is not entirely clear that
that issue, in its present connotation, was before the court in Jelson.
The court concentrated on the relevant date, issue I, and therefore I do not
hold in relation to issue II that the matter is concluded by authority. But, in
Jelson, as the passages already cited from Lord Denning MR’s judgment
demonstrate, this court held that the word ‘proposed’ in section 17 refers, as
the statute requires, to whichever of the cases in section 22(2) is appropriate
to the facts; and the planning authority look at the matter as at the date of
that ‘proposal’:
The planning authority must form an opinion as to
what planning permission might reasonably be expected at that date … It must
look at the position as at that date, and see, in the circumstances then
existing, whether planning permission might reasonably be expected to be
granted. ([1970] 1 QB at p251C.)
In our case, therefore, what has to be disregarded
under section 17 is the case described in section 22(2)(a): the proposal
for compulsory acquisition. In making the assessment of whether planning
permission would have been granted in that case, the planning authority
otherwise look at the circumstances existing at the relevant date, and not at
the circumstances that would have existed at what Lord Denning MR described as
some time in the distant past, before the scheme that underlay that acquisition
was conceived.
I therefore see no escape from the conclusion
that, as a matter of statutory construction, what has to be disregarded under
section 17 is the proposal for acquisition and that alone; and not, as the
respondents contended, any fact or policy attributable, at any date in the
past, to the underlying scheme.
A number of further considerations support this
analysis.
First, it seems an odd use of language to say that
land is ‘proposed’ to be acquired from the very first moment of a scheme that
relates to it. In the
1952, but a defined protected route was not formulated until 1970. The
respondents’ argument would require everything from 1952 onwards to be
disregarded. Mr Purchas said that once a road scheme is formulated it is to be
assumed that the land required will be acquired by public acquisition. That may
well be so, but to say so would seem to fall short of being able to say that
from 1952 onwards this land was ‘proposed to be acquired’. Some force is added
to that contention by a comparison with the language of section 9 of the 1961
Act, which in the valuation process excludes consideration of depreciation
caused by the ‘prospect’ of acquisition by an authority possessing compulsory
purchase powers. That excludes any depreciation attributable to an ‘indication’
that the powers will be or are likely to be exercised. That language seems more
easily to describe the effect of inclusion of land in a town map. That it was
not employed also in sections 17 and 22 would seem to be significant.
Second, section 17(4) requires the planning
authority to form an opinion in respect of the land at the relevant date ‘if it
were not proposed to be acquired’. That is the language of present conditional:
as if, at the relevant date, no proposal existed. Had it been intended to
exclude any ‘proposal’ dating back into time, the section would have had to say
‘if it had not been’, or some similar use of the past tense.
These points were indeed recognised by Browne J in
his judgment in Jelson which, as we have seen, was mentioned with
approval by all three members of the Court of Appeal in that case. Browne J
said:
In my judgment, the fundamental fallacy in all
the arguments for the applicants on this point is that they are really saying
that the question is what planning permission might have been expected to be
granted if these sites had not been reserved for a ring road. Although
[counsel] disclaimed any such contention, it seems to me that their argument
really involves reading the words of section 17(4) ‘if it were not proposed to
be acquired by any authority’ as if those words read ‘if it had never been
proposed to be acquired by any authority’, and also reading ‘proposed’ as
including ‘intended’. This is obviously impossible, both on the wording of
section 17(4) itself and in view of section 22(2). [(1968) 19 P&CR 74 at
p767]
I respectfully agree.
There is a further such point. In seeking to
distinguish Jelson before the judge, the respondents argued that that
case involved a purchase notice, provided for in section 22(2)(b). There
was no scheme or other proposal underlying the acquisition, since the bypass
proposals in that case had been abandoned three years before the notice was served.
That was why it was, in any event, impossible for the court in Jelson to
go back to an original scheme or proposal, since there was no scheme to revert
to: not so in a case, such as our case, that arises under section 22(2)(a).
As a ground of distinction this would not seem to create a difference. As we
have seen, the applicants in Jelson did seek to go back to the start of
the original, if now abandoned, scheme, and the Court of Appeal dealt with that
argument without in any way suggesting that it could not arise on the
facts: to the citations already given I would add the words of Phillimore LJ at
[1970] 1 QB 243 at p255C. The argument is, however, revelatory in another way.
If it is the case that the respondents’ argument runs in respect of section 22(2)(a),
but not in respect of section 22(2)(b), that can only be because
‘proposed to be acquired’ has a different meaning in the one sub-subsection
from the other. But that cannot be right, because the phrase is used in the
common part of section 22(2) and must therefore apply indifferently to each
case that section 22(2) addresses. The same consideration, it will be recalled,
applies to the similar argument adduced, by the opposite party, in relation to
issue I.
The judge, although inclining to the view that the
respondents’ arguments were correct, in any event, on issue II, did not
consider that issue in detail, because he thought that an answer to it was
dictated by the judgments in the House of Lords in Grampian. That was
because he thought that the argument advanced before him by the Secretary of
State, and repeated before us, was the same argument as failed in Grampian. I
cannot agree. In order to explain why that is so it is necessary to look in
some detail at what was in issue in Grampian.
The contention advanced by the planning authority
is accurately set out in the headnote:
The first appellants, the education authority, by
agreement acquired land from the second respondents for sites for primary and
secondary schools. The agreements provided that the second respondents should
receive the same compensation, fixed as at the date of the offers to purchase,
as if the land had been compulsorily acquired … The appellants contended that
the only circumstance that the local planning authority, or the Secretary of
State on appeal was required to ignore in answering the hypothetical question
posed by section 25 of the Act of 1963 was the immediate event that had
resulted in the applicant’s interest in land becoming one that was ‘proposed to
be acquired by an authority possessing compulsory purchase powers’ under
section 25(1), viz in the present case the first appellants’ written
offers to purchase, and that the underlying requirement to devote the sites to
fulfil the needs of public education remained and afforded a complete answer to
the second respondents’ claim for ‘positive certificates’. [(1983) 47 P&CR
540]
It will be seen that that is in fact a different
argument from that advanced by the Secretary of State in our case. That latter
argument, as formulated by the judge in the passage that I have already cited,
is that the assessment has to be made as if on the relevant date the ‘scheme’
had been cancelled. But in Grampian the argument, as understood by Lord
Bridge, was that:
the only circumstance which the planning
authority … is required to ignore in answering the hypothetical question raised
by an application under [section 17] is the immediate event which has
resulted in the applicant’s interest in land becoming one which it is ‘proposed
to be acquired by an authority possessing compulsory purchase powers’ under
[section 22], in this case the education authority’s written offers to
purchase. Whilst those offers must be ignored, so runs the argument, the
underlying requirement to
a complete answer to the claims for positive certificates. ((1983) 47 P&CR
540 at p569, emphasis supplied.)
In other words, the scheme was to be taken as
still in place; all that was to be ignored was the notices issued under that
scheme.
Lord Bridge rejected that argument, pointing to
its obvious fallacy:
the overriding consideration which impels me to
reject the argument for the appellants is that it would, in my opinion, if
accepted, defeat the essential purpose of the procedure for obtaining
certificates of appropriate alternative development, as part of the overall
scheme of the Act to secure the payment of fair compensation to landowners who
are compulsorily expropriated, or, expressed more specifically, to ensure that,
when urban land, otherwise available for some form of urban building
development, is acquired for a necessary public purpose, the compensation will
reflect its urban development value. Assuming, as I do, that every compulsory
purchase of land can be justified by reference to the public purpose for which
the land is required, to allow reliance on that public requirement to determine
the question raised by an application under section 25 would lead to the issue
of a negative certificate in every case. ((1983) 47 P&CR 540 at p570.)
That passage seems to me to demonstrate two
things. First, Lord Bridge was meeting and rejecting the very narrow argument
advanced by the acquiring authority that, while the acquisition itself must be
discounted, the underlying policy should not be. Second, he was confirming what
was in fact the submission of the Secretary of State in our case, that there
should be ignored not only the acquisition proposal itself but also the
planning policies that underlay that proposal at the relevant date. His
judgment was understood in that sense, in my respectful judgment correctly, by
Roch J in Fox v Secretary of State for the Environment (1991) 62
P&CR 459 at p477, a passage in fact cited by the judge in our case. And there
is certainly no suggestion in any of this authority that it supports the much
wider contention advanced by the respondents, that there should also be
disregarded the effect of the underlying proposals, if they can be
characterised as such, at any time before the relevant date.
I am not therefore able to agree with the judge
that Grampian concludes the present case in the respondents’ favour. I
do not find Grampian of relevance in solving the very different problem
that our case presents. In so far as it assists, it supports the arguments of
the Secretary of State.
I am similarly not assisted by another case shown
to us by the respondents; Margate Corporation v Devotwill Investments
Ltd [1970] 3 All ER 864. In that case planning permission for residential development
was originally refused because the land would be required for road development.
When that particular development was not proceeded with the owners served a
purchase notice. The assessment of compensation, on the basis of a hypothetical
planning permission, was affected by the difficulty of access to the site,
which the road development had been intended to alleviate. The Lands Tribunal
assumed that because of the underlying planning policies some other access
would be provided. The
services to the site in the future must be decided on evidence and not by
assumption. The case has nothing to do with any assumptions as to policies
affecting the land itself. That was recognised in Grampian, Lord Bridge,
(1983) 47 P&CR 540 at p573, dealing with the case thus:
It is to be noted that in the Margate case
it was never suggested that the underlying requirement to use part of the
claimant’s land for the construction of a bypass road provided any ground for
restricting the extent of the residential development for which it ought to be
assumed that permission would be granted if the land were not to be acquired.
The restriction on the extent of the notional development for which the
acquiring authority contended arose solely from the undoubted problems of
access to the site due to the existing traffic congestion on the main road from
which access would have to be obtained. A by-pass road, if provided elsewhere
than on the claimant’s land, would relieve the traffic congestion and
substantially diminish the problems of access. Hence the relevance of
considering, in the hypothetical situation predicated by the statute, the
prospect of a by-pass being provided elsewhere than on the claimant’s land was
not and could not be disputed. The decision of your Lordships’ House that the
strength of that prospect fell to be decided as a matter of evidence and could
not be founded on any assumption does not seem to me to be of the least help to
the present appellants, or indeed to be relevant to any issue arising in these
appeals.
There is therefore, in my view, no authority that
stands in the way of the solution to issue II that I find to follow from
construction of the 1961 Act. Further, although I am prepared to accept that Jelson
does not bind us on this point, the approach of this court in that case, and in
particular the assumption on the part of Lord Denning MR and Phillimore LJ that
it could not be appropriate to take the inquiry back to a distant time,
possibly years before the relevant date, gives strong rational support to the
contentions of the Secretary of State. As I have already indicated, attempts on
the part of the respondents to distinguish Jelson, although they
attracted the judge, do not seem to be well founded.
Mr Purchas, however, advanced a further argument.
He reminded us that in performing its valuation task the Lands Tribunal was
bound by the Pointe Gourde principle, Pointe Gourde Quarrying &
Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565, to
disregard any increase (or decrease) in value of the land that is entirely due
to the scheme underlying the acquisition. How that principle applies in
practice was explained by this court in Wards Construction (Medway) Ltd
v Barclays Bank plc (1994) 68 P&CR 391 at p396:
In order correctly to apply the Pointe Gourde
principle it is necessary, first, to identify the scheme and, secondly, its
consequences. The valuer must then value the land by imagining the state of
affairs, usually called ‘the no-scheme world’, which would have existed if
there had been no scheme.
Mr Purchas submitted that since it was accepted
that the only purpose of a Part III certificate was to assist in the valuation exercise
of the Lands
been aware of the Pointe Gourde rule; therefore, the same approach
should be applied by the Secretary of State to his certification task as the
Lands Tribunal applied to the subsequent valuation. From that it followed that
what had to be disregarded in our case could not simply be the immediate
proposal that underlay the acquisition, but rather the whole long term policy
that would be regarded as the ‘scheme’ under Pointe Gourde, and all the
consequences of that scheme. Mr Purchas drew our attention to some remarks of
Stuart-Smith LJ in Porter v Secretary of State for Transport
[1996] 1 PLR 111 at p114B, where it is suggested that section 17 of the 1961
Act is indeed an application of the Point Gourde principle. However,
that was not the issue in that case; it does not seem to have been argued, and
certainly not argued with the care with which the point has been considered
before us; and the point was not addressed by the other lord justices. Mr
Purchas very fairly agreed that we were not constrained by that case.
I could not find the present argument compelling
if, as is the case, it conflicts with the plain wording of the statute. But, in
any event, I am not persuaded that it has force even taken on its own. First,
as a matter of policy, if the Lands Tribunal has in its valuation exercise to
have regard to Pointe Gourde, that would, if anything, seem a lesser
rather than a greater reason for straining to introduce that principle at an
earlier stage. Second, however, it is far from clear that adoption of this
approach would lead to the simplicity and clarity that the respondents urged.
It is trite law that identification of the ‘scheme’ for the purposes of Pointe
Gourde is a question of fact for the Lands Tribunal: see for instance per
Widgery LJ in Wilson v Liverpool Corporation [1971] 1 WLR 302 at
p310A. If the Secretary of State engages in that exercise in advance of its
being considered by the Lands Tribunal, his assessment cannot bind the Lands
Tribunal and may be different from that of the tribunal. It can hardly be right
that the Lands Tribunal should become bound, by section 15(5) of the 1961 Act,
to give effect to a certificate based on an assumption as to the factual
application of Pointe Gourde that the Lands Tribunal itself has
rejected.
I add, finally, that various arguments were
addressed to us by both parties as to the potential inconvenience, or even
injustice, of the solutions proposed by their opponents. I did not find these
contentions of assistance. They again cannot be compelling in the face of plain
statutory language. In so far as it is helpful to comment, I bear in mind the
point made by the Secretary of State that issues of this nature would, in any
event, be reviewed by the Lands Tribunal in the eventual valuation; and in
particular that a negative certificate could be there reopened.
Conclusion
I would therefore find in favour of the
respondents on issue I, but in favour of the Secretary of State on issue II,
and thus allow the appeals. The effect of so holding is that when considering
the grant of a certificate under section 17(4) of the 1961 Act in a case to
which section 22(2)(a) applies, the land shall be valued as at the date
of the publication of notice of the
underlying it as it stood on the date of the notice, which can be conveniently
expressed as a valuation on the basis that the proposal had been cancelled on
the date of that notice.
PETER GIBSON LJ: I
agree.
NOURSE LJ: I also
agree.
Appeals allowed with
costs.
