Compulsory purchase — Compensation – Human rights – Appellants seeking compensation for diminution in value of properties caused by noise and other nuisance from new road – Road not adopted by respondent highway authority within three years of being opened to public traffic – Section 19(3) of Land Compensation Act 1973 barring compensation claim accordingly – Whether section 19(3) incompatible with Article 1 of First Protocol to and Article 6 of European Convention on Human Rights – Appeal allowed
The appellants owned and lived in properties near a relief road built by a developer pursuant to various agreements with the respondent council. These included an agreement under section 278 of the Highways Act 1980, by which the respondents agreed to adopt the road as a highway maintainable at public expense. Adoption was to take place when the respondents’ inspector issued a letter of acceptance, which he was to do once the developer had, during a 12-month maintenance period running from the date of substantial completion of the road, made good any defects to the inspector’s satisfaction. The road was first opened for public use in July 2002, but the developer took three years to complete the works necessary for a letter of acceptance to be issued and the respondents did not adopt the road until 2006.
The appellants claimed compensation from the respondents, under the Land Compensation Act 1973, for an alleged diminution in the value of their homes attributable to noise and other nuisance from the road. However, section 19(3) of the Act barred such claims where the road in question had not been adopted within three years of being open to public traffic.
On references to the Lands Chamber of the Upper Tribunal, the appellants contended that section 19(3) represented an unlawful interference with their right to the peaceful enjoyment of their properties, under Article 1 of the First Protocol to the European Convention on Human Rights, and breached their right under Article 6 to a fair and public hearing to determine their civil rights. They submitted that the statutory provisions designed by parliament to protect the peaceful enjoyment of people’s homes unintentionally failed to do so because they could be defeated by the unilateral action or inaction on the part of those responsible for paying compensation. Determining a preliminary issue, the Lands Chamber held that section 19(3) was not incompatible with the appellants’ Convention rights: see [2010] UKUT 268 (LC); [2010] PLSCS 244. The appellants appealed.
Held: The appeal was allowed.
Article 6 was concerned with procedural rights and did not assist the appellants, since the issue was whether they had a substantive right, not the fairness of the procedure by which it was determined. Article 1 of the First Protocol, on the other hand, was relevant. Article 1 involved three distinct rules. The first was of a general nature and enunciated the principle of the peaceful enjoyment of property. The second covered deprivation of possessions and subjected it to certain conditions. The third recognised that contracting states were entitled to control the use of property in accordance with the general interest: Sporrong & Lonroth A-52 v Sweden (1983) 5 EHRR 35 applied. Any claim under Article 1 needed to examine whether there was an interference with the peaceful enjoyment of possessions; and, if so, whether that interference was (i) in the general interest; (ii) provided for by law; and (iii) proportional: Bugajny v Poland [2007] ECHR 891 applied. Loss of a quiet and pleasant environment was not sufficient to engage Article 1 evidence had to show of loss of value: Rayner v United Kingdom (1987) 9 EHRR CD375 applied. However, a diminution in value caused by the interference was sufficient to engage Article 1 and it was unnecessary also to show that the interference had been unlawful, or that it was sufficiently serious as to amount to a partial taking of the property: Antonetto v Italy (2003) EHRR 10, Rayner, Marcic v Thames Water Utilities Ltd [2003] UKHL 66; [2004] 2 AC 42 and Lough v First Secretary of State [2004] EWCA Civ 905; [2004] 1 WLR 2557 considered. Assuming, for the purpose of the preliminary issue, that the appellants could show depreciation in value sufficient in principle to give rise to a claim for compensation, that was an interference with their peaceful enjoyment of their property sufficient to engage Article 1.
Although that interference was in the general interest and was provided for by law, it did not meet the requirement of proportionality. The general purpose of the provisions of the 1973 Act was to strike a balance between public and private interests. Once an interference with Article 1 rights was accepted, the presence or absence of compensation was not a separate issue but was an important element in deciding whether, in authorising the interference in the general interest, the balance struck by the state was fair. Where a class of potential claimants was excluded from compensation rights, the court was entitled to inquire into the reasons for the exclusion and ask whether it served any legitimate purpose or, on the other hand, led to results that were so anomalous as to render the legislation unacceptable: JA Pye (Oxford) Ltd v United Kingdom 44302/02 (2008) 46 EHRR 45; [2008] 1 EGLR 111 applied. The operation of section 19(3), in circumstances such as the present, was bizarre and led to a situation where a diligent road-builder that completed its project in time was penalised by the liability for compensation whereas an inefficient road-builder was rewarded by evading liability. The affected householders were disadvantaged twice since they suffered the inconvenience and disturbance of a protracted maintenance period and the loss of any right to compensation for the effects of the road’s use. That result was so absurd as to undermine the fairness of the balance intended by parliament and necessary to satisfy Article 1: Bugajny applied.
A breach of Article 1 had been established. This could be corrected by reading section 19(3), pursuant to section 3 of the Human Rights Act 1998, so as to entitle the appellants to compensation. The proposed interpretation did not depart from any fundamental features of the 1973 Act but rather gave effect to its intention that those adversely affected by noise from new roads should be compensated. Logic and common sense suggested that parliament would not have left open the loophole that had arisen in the instant case had it been alerted to the problem.
Robert Weir QC and Christopher Stone (instructed by Hugh James Solicitors, of Cardiff) appeared for the appellants; Paul Stinchcombe QC (instructed by the legal department of Bridgend County Borough Council) appeared for the respondents.
Sally Dobson, barrister
