Compulsory purchase – Compensation – Certificate of appropriate alternative development (CAAD) – Freehold of site vested in appellant secretary of state for HS2 rail line – Respondent owners claiming compensation – Local authority granting respondents CAAD for residential development on site in strategic industrial location, contrary to development plan policies – Appellant appealing – Whether material consideration making residential development appropriate – Appeal allowed
The respondents owned various freehold and leasehold interests in the site of Rowan House, a two-storey brick building on the corner of Victoria Park Road and Atlas Road, Ealing, north London (the reference land). On 29 May 2018, the freehold interest in the reference land was vested in the appellant secretary of state for the purposes of the proposed HS2 rail line pursuant to the High Speed Rail (London to West Midlands) Act 2017.
Following an application by the respondents under section 17 of the Land Compensation Act 1961, on 27 July 2021, the local authority issued a certificate of appropriate alternative development (CAAD) in respect of a mixed-use development on the site including 116 residential units in a building of up to 19 storeys in height.
The effect of that certificate was that, under section 5 of the Land Compensation Act 1961, the reference land had to be valued for the purposes of compensation as if planning permission had been granted for that development. The appellant appealed contending that, in allowing a large residential element, the certificate was inconsistent with the development plan, as the reference land fell within a strategic industrial location (SIL).
The appellant contended that an alternative scheme was appropriate, limited to a mix of industrial uses with offices with an overall height of no more than 10 storeys, and provided an illustrative scheme.
The respondents agreed that the land was within a SIL but maintained that material considerations meant that residential development was appropriate; they asked the tribunal to issue a certificate for a development larger than that to which the existing certificate referred.
Held: The appeal was allowed.
(1) In assessing the amount of compensation payable under rule 2 of section 5 of the 1961 Act, section 14(2)(a) required account to be taken of any planning permission in force on the valuation date of development on the reference land or other land. Section 14(3) provided for an assumption that planning permission was in force on the valuation date for “appropriate alternative development”, as defined in section 14(4). That meant development for which, on the assumptions in section 14(5) but otherwise in the circumstances known to the market on the valuation date, planning permission could reasonably have been expected to be granted on an application determined on or after the valuation date.
Section 17 of the 1961 Act enabled the acquiring authority or the landowner to apply to the local planning authority for a CAAD stating that there was, or was not, appropriate alternative development in relation to the land acquired, and describing such development.
The certificate issued in the present case indicated that the authority would, in the cancelled-scheme world, have accepted a scheme comprising a mixed-use development of two blocks of nine and nineteen storeys with residential units and commercial space, with rooftop gardens and play provision and amenity space.
(2) Section 18 of the 1961 Act provided that either party might appeal such a certificate to the Upper Tribunal (UT). The UT had to consider the matters to which the certificate related as if the application had been made to it in the first place, and it might confirm, vary or cancel the certificate and issue a different certificate in its place. The UT was to consider the matter afresh, rather than reviewing the certificate.
It was common ground that the UT had to decide the appeal in accordance with ordinary planning principles. The determination had to be in accordance with the development plan unless material considerations indicated otherwise: section 38(6) of the Planning and Compulsory Purchase Act 2004 which embodied the presumption in favour of the development plan. Any consideration relating to the use and development of land was capable of being a planning consideration, but the question whether a particular matter was material would depend on the circumstances: Lisle-Mainwaring v Caroll [2017] EWCA Civ 1315 considered.
That reflected longstanding government policy that planning should be genuinely plan led. The development plan included the regional strategy (if there was one): section 38(3)(a). But the decision-maker had to correctly understand policies contained in the development plan. The interpretation of such policies was a question of law rather than planning judgment: Leech Homes Ltd v Northumberland County Council [2021] EWCA Civ 198; [2021] PLSCS 36 considered.
(3) In considering what would constitute appropriate alternative development in the cancelled-scheme world, some parts of the development plan and of emerging policy had to be disregarded. But that exercise required the UT to maintain as far as possible the background of the real world, except where specific assumptions demanded otherwise. It was, as far as possible, a real-world consideration: Secretary of State for Transport v Curzon Park Ltd [2021] EWCA Civ 651; [2021] EGLR 53 considered.
The protection given in the development plan to SILs was strong and unequivocal. The crucial issue between the parties arose from the conflict between the development plan and the protection it gave to SIL, and the matters which the respondents said were material considerations indicating that despite the reference land being within SIL a certificate should be issued for residential development. The parties were also in dispute about the appropriate height for the development.
(4) The UT was not satisfied that there were sufficient material considerations to outweigh the clear requirement of the development plan that permission for residential development should be refused in SILs and therefore on the reference land. Further, the development should be limited to 810 storeys.
It followed that the section 17 certificate issued by the local authority would be cancelled and substituted by a certificate for a mix of industrial uses with offices, together with retail and café/restaurant uses on the ground floor. Provision of uses which replicated the existing uses would be acceptable to be included in that mix. The development would not exceed the equivalent of 10 storeys in height; the form and height of any particular proposal that would be acceptable would depend on design considerations. The appellant’s illustrative scheme would comply with the replacement certificate.
Andrew Tait KC and Esther Drabkin-Reiter (instructed by Eversheds Sutherland) appeared for the appellant; David Elvin KC (instructed by Squire Patton Boggs, of Manchester) appeared for the respondents.
Eileen O’Grady, barrister
Click here to read a transcript of Secretary of State for Transport v Bleep UK plc and others