Whelan v British Gas

Compensation — Easement to lay gas pipeline — Claim for injurious affection — Interference with no-scheme world proposal to tip and level land — Land let under agricultural tenancy — Whether tenancy to be ignored — Whether GDO permitted claimant’s schemes — Whether existing deed of easement prevented tipping proposal

Under the
British Gas Corporation (Tatsfield) (No SE1) Compulsory Purchase Order 1979,
and following the service of notices to treat and of entry on May 30 1980, the
compensating authority entered the claimant’s land on June 20 1980 (which
became the valuation date) and laid two gas pipelines through field OS 0084.
The rights acquired were in respect of a strip of land 124 yds long and 90 ft
wide for most of its length and extending to a splay of 300 ft at the southern
end. The order also permitted occupation for a term not exceeding 12 months of
an area of land 125 ft by 740 ft in fields OS 0084 and 0069. Compensation for
the rights taken and disturbance had been agreed. In respect of his claim for
severance and injurious affection, the claimant contended that by reason of the
exercise of the rights he was prevented from carrying out an agricultural
improvement of 1.5 acres of land by tipping, raising and levelling land to
permit its arable cultivation with adjoining land, which was permitted
development under the General Development Order 1977. Because of existing gas
pipeline easements, an above-ground installation and a deed of easement dated
September 21 1971, the compensation authority disputed the claimant’s right to
carry out the proposed tipping operations in the non-scheme world. Several
schemes and valuations were advanced on behalf of the claimant who claimed
£62,485. At the valuation date the land was the subject of an agricultural
tenancy held by W Ltd, a company wholly owned by the claimant and his wife.

Decision: Any tenancy held by W Ltd, whether protected by the Agricultural
Holdings Act 1986 or not, was to be ignored because the claimant and his wife
could have required the company to surrender the tenancy on or before the valuation
date; in any event the circumstances required the corporate veil to be lifted:
the claimant was entitled to sustain his claim. The proposal to tip and raise
the level of land was permitted by class VI of Schedule 1 to the General
Development Order 1977. The 1971 deed prevented tipping above an existing
pipeline and according the claimant suffered no loss; if that was wrong the
compensation was £62,052. It was not the function or duty of the Tribunal to
decide whether planning permission would be granted for schemes outside the GDO
save through the eyes of a purchaser.

The following
cases are referred to in this report.

Argyle
Motors (Birkenhead) Ltd v Birkenhead Corporation
[1975] AC 99; [1974] 2 WLR 71; [1974] 1 All ER 201; (1973) 27 P&CR 122; 72
LGR 147 HL; [1973] 2 WLR 487; [1973] 1 All ER 866; (1972) 71 LGR 205; 25
P&CR 32, CA

Bank of
Australasia v Palmer [1897] AC 540

Clark v Wareham and Purbeck Rural District Council (1972) 25
P&CR 423

Commissioners
of Inland Revenue v Glasgow & South-Western
Railway Co (1887) 12 App Cas 315

Cowper
Essex v Acton Local Board (1889) 14 App Cas
153; [1886-90] All ER Rep 901, HL

Cuthbert v Secretary of State for the Environment (1979) 252 EG 921,
1023, 1115 & 1176, LT

DHN Food
Distributors Ltd v Tower Hamlets London Borough
Council [1976] 1 WLR 852; [1976] 3 All ER 462; (1976) 32 P&CR 240;
[1976] EGD 477; 239 EG 719, [1976] 2 EGLR 7, CA

Fayrewood
Fish Farms v Secretary of State for the
Environment [1984] JPL 267

Horn v Sunderland Corporation [1941] 2 KB 26; [1941] 1 All ER
480; (1941) 39 LGR 367, CA

Jones v Stockport Metropolitan Borough Council (1983) 50 P&CR
299; [1984] EGD 1037; 269 EG 40, [1984] 1 EGLR 1028; 24 RVR 35; [1984] JPL 274,
CA

MacPherson v Secretary of State for Scotland 1985 SLT 134

Northavon
District Council v Secretary of State for the
Environment (1980) 40 P&CR 332; [1981] JPL 114, DC

Pepys v London Transport Executive [1975] 1 WLR 234; [1975] 1 All
ER 748, CA

RMC
Management Services Ltd v Secretary of State for
the Environment (1972) 222 EG 1593

Saint v Jenner [1973] Ch 275; [1972] 3 WLR 888; [1973] 1 All ER
127; (1972) 24 P&CR 365, CA

Stringer v Minister of Housing and Local Government [1970] 1 WLR
1281; [1971] 1 All ER 65; (1970) 68 LGR 788; 22 P&CR 255; [1971] JPL 114

Williamson
& Stevens (Executors of Walter Williamson, decd) v Cambridge County Council (1977) 34 P&CR 117; 232 EG
369; [1977] JPL 529

Woolfson v Strathclyde Regional Council (1978) 38 P&CR 521;
[1978] EGD 543; 248 EG 777, [1978] 2 EGLR 19; [1979] JPL 169, HL

This was the
hearing of a claim for compensation by John Patrick Whelan in respect of a gas
pipeline laid by the compensating authority, British Gas plc.

Robin Purchas
QC and Meyric Lewis (instructed by Merriman White) appeared for the claimant;
Michael Burke-Gaffney QC and Mark West (instructed by the regional solicitor to
British Gas plc) represented the compensating authority.

Giving their
decision, THE TRIBUNAL said: This is a reference by British Gas plc for
determination of the compensation to which Mr J P Whelan is entitled for
compulsory acquisition of an easement to construct, place and use below ground
two gas pipes each of an internal diameter not exceeding 30 ins through over
and upon part of field OS 0084 at Cheverells Farm, Chelsham, near Warlingham,
Surrey, and to make a connection therefrom with the existing 30 in-diameter
South London Ring Main and to inspect maintain repair provide cathodic
protection for sleeve disconnect remove and replace the said gas pipes. The
acquisition was made under the British Gas Corporation (Tatsfield) (No SE1)
Compulsory Purchase Order 1979, which was confirmed by the Secretary of State
for Energy on May 14 1980. Those rights were acquired over a strip of land,
part of the above-mentioned field, having an aggregate length of 124 yds or
thereabouts and a width throughout most of its length of 90 ft and extending in
a splay of 300 ft at its southerly end,244 where it meets with and adjoins the existing South London Ring Main. The order
also authorised British Gas to occupy for a term not exceeding 12 months a
parcel of land having a width of 125 ft or thereabouts and a length of 740 ft
or thereabouts forming part of fields OS 0084 and 0069, Cheverells Farm. That
right was stated in the order to be required to facilitate the connection of
the two new gas pipes with the South London Ring Main.

Notice to
treat and notice of entry were served on Mr Whelan by British Gas on May 30
1980. Possession was taken on June 20 1980 and that accordingly is the
valuation date.

Mr Whelan has
received compensation for the rights acquired under the compulsory purchase
order in the sum of £800. He has also received compensation for disturbance
(loss of crops) in the agreed sum of £1,000. There remains one outstanding
claim, namely Mr Whelan’s claim for compensation for injurious affection under
section 7 of the Compulsory Purchase Act 1965, as substituted by section 6(5)
of and para 13 of Schedule 2 to the Gas Act 1972. The substituted section
provides:

In assessing
the compensation to be paid by the acquiring authority under this Act regard
shall be had not only to the extent (if any) to which the value of the land
over which the right is to be acquired is depreciated by the acquisition of the
right but also to the damage (if any) to be sustained by the owner of the land
by reason of its severance from other land of his, or injuriously affecting
that other land by the exercise of the powers conferred by this or the special
Act.

The claim
under the above-mentioned section was formulated on behalf of the claimant in
particulars dated August 25 1987 as follows:

The claimant
claims compensation for the effect of the rights compulsorily acquired by the
compensating authority in preventing the agricultural improvement of the Order
land and the adjoining land in the ownership of the claimant; the proposed
improvement would have constituted permitted development under Article 3 of and
Class VI, paragraph 1 of Schedule 1 to the Town and Country Planning General
Development Order 1977 and/or would reasonably have expected to have been
permitted under Part III of the Town and Country Planning Act 1971; the
particular improvements would have consisted of raising the level of land in
accordance with an engineering scheme so as to enable its farming jointly with
adjacent land on a similar level for arable and other purposes; as a result of
the rights acquired it would not be possible to implement this scheme in full;
accordingly, about 1.5 acres of the land would not be able to be filled and
additional expense would be incurred in battering slopes on either side of that
area to enable so far as possible the adjoining land to be raised. In the
circumstances the prospect for the agricultural improvement of that land
together with the better and more efficient farming of the adjoining land would
be displaced together with the loss of prospective fees for tipping of
appropriate fill materials on the land to achieve the required level; in
assessing the relevant depreciation in land values credit would be given for the
saving in the costs of the restoration and improvement works and the relevant
consultant fees. As a consequence of the above the value of the claimant’s land
has suffered considerable depreciation by the exercise of the powers under the
Act.

A location
plan is annexed as appendix 1 (not reproduced here) and a plan of fields OS
0084 and 0069 and other parts of Cheverells Farm are annexed to this decision
as appendix 2 (not reproduced here).

As will be
seen, there is a fundamental dispute between the parties as to whether, as
contended by British Gas, it would not have been permissible for the claimant,
having regard to the 1971 deed and the general law relating to easements, in
any circumstances to place fill above the SLRM. In order to meet that contention,
the claimant’s advisers have prepared four schemes (not to be confused with
‘the scheme underlying the acquisition’) and four valuations to go with them.
In those schemes and valuations it is assumed that the relevant work would be
carried out by the claimant himself from resources available to him as a farmer
and builder. Four additional valuations have also been submitted on behalf of
the claimant which relate to the same schemes, but are based on the assumption
that the work would be carried out not by the claimant but by a contractor.
Plans of schemes A, B, C and D are attached at appendix 3 (not reproduced
here).

Scheme A
represents the ‘no-scheme world’ and assumes that the valley in field 0084
could be filled with class A waste without any restrictions due to the presence
of the gas pipelines. Scheme A would reduce the side slopes by filling the
valley to achieve gradients ranging between 1 in 8 (maximum) and 1 in 80
(minimum). The limit of filling across the valley would vary with between 130m
and 210m over a length of approximately 350m. Scheme A includes steps designed
to ensure the safety of the AGI, both during construction and afterwards, by
protecting it from the danger of landslip. The protection would take the form
of an embankment or batter at the north-eastern end of the new construction.
The gradient of the batter would be a maximum of 1 in 2 and the maximum depth
of fill would be 12.4m (at the top of the batter). The amount of fill envisaged
by scheme A would be 250,000m³ (this is an agreed figure).

Scheme B also
represents the ‘no-scheme world’, that is to say, it assumes that filling would
be permissible over the new interconnecting pipes but that it would not be
permissible over the SLRM. Filling would be carried out to the gradients and to
the batter specified in scheme A, but the assumed restriction on filling
imposed by the SLRM would create two areas of fill divided by a formed cutting.
The quantity of fill involved in scheme B would be 201,000m³ (an
agreed figure).

Scheme C
represents the ‘with-scheme world’, that is to say, scheme C assumes that
filling would not be permissible over the new interconnecting pipelines, that
batters on either side of them forming a cutting would be necessary (the
gradients and batters would be similar to those in scheme A). Filling over the
SLRM is assumed to be permissible. The quantity of material provided for in
scheme C would be 207,000m³ (agreed).

Scheme D is on
the basis that filling would not be permissible over either the new pipes or
the SLRM; these restrictions have the effect of dividing the filling area into
three subareas by requiring batters to the north-west and south-east of the new
pipes and to the north and south of the SLRM. The gradients and batters would
be similar to these envisaged in scheme A. The volume of fill assumed in scheme
D would be 160,000m³ (agreed).

Provision for
access for the schemes is the same in each case and is from Clark’s Lane.

Claims

Mr Whelan’s
claims are based upon Mr Clegg’s valuations, which understandably vary with the
assumptions which ought to be made. His valuation I is based upon the value of
scheme A less that of scheme C and is in the total sum of £62,485, which sum is
made up as follows:

	£
Value of tipping foregone	£59,236
Agricultural profitability in respect of field 0084 foregone	2,180
Additional savings on field amalgamation foregone	1,069

Mr Clegg’s valuation II represents the value of scheme B less that
of scheme D. The total claim is £41,250 made up of:

	£
Loss of value of tipping rights	40,395
Agricultural profitability foregone	855

Valuations III and IV provide for variations of scheme D. Valuation
IV is in the total sum of £115,244, made up of:

	£
Loss of value from tipping rights	113,517
Agricultural profitability foregone	1,727

Valuations I to IV all assume that the work would be carried out by
Mr Whelan from resources available to him as a builder and farmer. Mr Clegg’s
valuations V to VIII assume that, in the alternative, the relevant works would
be carried out by a contractor.245 These valuations vary between a total claimed entitlement of £17,355 and that
of £57,266. We understand that Mr Clegg’s preferred valuation is his valuation
IV.

Appearances

Mr Robin
Purchas QC and Mr Meyric Lewis appeared for Mr Whelan and called:

(1) Mr Barry Malcolm Cuming I ENG FWEM, an
associate in the Noble Lewis Partnership, consulting engineers, of Chiswick;

(2) Mr Thomas Ralph Worthington BSC (Hons) Agric
Sci, MIBiol, partner in the Reading Agricultural Consultants of Chelsey,
Wallingford, Oxon;

(3) Mr Jeremy Christopher Woolf MA DIP TP MRTPI,
a director of Chancellors, chartered town planning consultants;

(4) Mr Jonathan Pearson FRICS, a chartered land
agent;

(5) Mr Douglas Kean Symes ARSM, BSC (HONS), C
ENG, FGS, MIMM, FIQ, FRGS, who practises under the name of D K Symes
Associates, mineral planning and development consultants of Banbury, Oxon;

(6) Mr Clive James Holmes, a sales manager
employed by Direct Supplies Ltd of Erith, Kent, suppliers of spoil, rubble and
builders’ waste;

(7) Mr Philip John Conyers Stone FRICS, principal
of the firm of Philip Stone Associates;

(8) Mr John Patrick Whelan, the claimant;

(9) Mr Alan Pooley, surveying director of J P
Whelan Homes Ltd;

(10) Miss Susan Linda Cullum, a chartered
geologist (with a joint honours degree in geography/geology) and
hydrogeologist;

(11) Mr William Henry Clegg FRICS (agricultural
division), senior equity partner of Humberts, chartered surveyors.

Mr Michael
Burke-Gaffney QC and Mr Mark R West appeared for the compensating authority and
called:

(1) Mr Stephen Lawrenson BA DIP TP MRTPI,
principal planning officer for Surrey County Council;

(2) Mr James Angus Farquhar ARICS, fellow of the
Central Association of Agricultural Valuers, a partner in the firm of Henry
Smith & Son, chartered surveyors, auctioneers, valuers, land and estate
agents of Horsham, West Sussex;

(3) Mr Robin Norman Knott BSCC ENG, pipelines
construction manager of British Gas plc;

(4) Mr Kenneth Barry Hicks ARICS, ISVA, building
construction manager of British Gas plc;

(5) Mr Roy John Piggott MHPHIL (ENG), FIMM,
FIMINE, FRICS, FGS, MCONS(E) formerly senior partner in the firm of Wardell
Armstrong of Cardiff and now principal mining consultant of that firm.

Facts

There was no
agreed statement of facts and although some matters had been agreed there were
in some cases differences of opinion between the experts as to what had
actually been agreed. From the evidence, however, the following facts emerged:

(1) On the valuation date, the freehold of
Cheverells Farm, which consisted of approximately 358 acres, was owned by Mr J
P Whelan. On that date he also owned the freehold of Skid Hill Farm and Lusted
Hall Farm. All three farms, which had a total acreage of 994 acres, were farmed
as one unit under the name of Whelan Farms Ltd (to which company we refer
subsequently in this decision). Before the valuation date contracts had been
exchanged for the purchase by Mr Whelan of the freehold of a farm of 800 acres,
known as Norheads Farm. The combined acreage of the four farms was thus 1,794
acres.

(2) The line of the SLRM is shown on the plan as
proceeding from Croydon Road in a north-easterly direction to Beddlestead Lane
(it also proceeds north-eastwards from that lane and south-westwards from
Croydon Road). It conveys North Sea gas to distribution points around London.
The construction and use of the SLRM, in so far as it passes through Mr
Whelan’s land, is governed by a deed of easement dated September 21 1971 made
between Mr Whelan’s predecessor in title and the Gas Council (we will refer to
that deed later in this decision).

(3) In the late 1970s it became necessary for the
pressure in the SLRM, which then stood at 1,000 pounds per square inch, to be
reduced. For that purpose a gas pressure reducing station, known as the above
ground installation (or ‘AGI’ for short) was built on 14 acres of land to the
north of field 0084 sold to the Gas Council in 1978 by Mr Whelan for the price
of £30,000. The AGI is shown on the plan within a thick outline which comprises
other land owned by British Gas (a total of 40 acres).

(4) After the construction of the AGI and the two
new pipes authorised by the compulsory purchase order, gas proceeds from a
north-easterly direction through the SLRM at a pressure of 1,000 pounds per
square inch through one of the new pipes to the AGI, where the pressure is
reduced; thence, the gas at the reduced pressure (which varies between 300 and
500 pounds per square inch) returns to the SLRM and proceeds in a
south-westerly direction through the valve site (shown on the plan on field
6763) and onwards in a south-westerly direction.

(5) The earth or depth cover above the SLRM and
the new inter-connecting pipes is 1.1 m (3 ft 7 ins). That is the standard depth
cover applied by British Gas when laying its pipelines.

(6) The area of the following fields is:

(1) field 0084 is 10.12 acres;

(2) field 0069 is 26.9 acres;

(3) field 6763 is 10.64 acres;

(4) field 5000 is 32.63 acres;

(5) field 2900 is 29.51 acres;

(6) field 4931 is 55.12 acres.

(7) Field 0084 has very steep sides and for that
reason is suitable only for use for grazing. Because of the steepness of the
gradients modern farming machinery cannot be used in this field; at all events
since Mr Whelan has owned Cheverells Farm, no crop has been taken from this
field and it is not practicable to use it for any arable purpose. The other
fields referred to in fact no (6) were and are arable.

(8) Since purchase of Cheverells Farm, it had
been Mr Whelan’s intention, genuine and fixed, to raise the level of field 0084
by, first, removing top-soil, then replacing it with ‘class A’ waste, then
replacing top-soil and preparing the field, so filled and regraded, at the new
level for use as arable land in conjunction with the neighbouring fields.

(9) Mr Whelan was and is founder and chairman of
the Whelan group of companies, a group owned entirely by himself and his wife.
His wife was and is secretary of the group. At all material times the companies
included:

(a) J P Whelan Homes Ltd, a company building
executive houses and flats (about 50 housing units pa) in the Bromley,
Beckenham and Croydon areas.

(b) J P Whelan & Sons (Construction) Ltd, a
company specialising in farm-work construction and house building.

(c) J P Whelan (Investments) Ltd, a holding
company in which 50% of the issued capital was owned by Mr Whelan and 50% by
his wife;

(d) Whelan Farms Ltd in which J P Whelan
(Investments) Ltd own three shares and Mr Whelan one share.

(10) The total turnover of the group was
approximately £10,000,000 pa. The staff employed by the group included an
in-house design and drawing department as well as qualified engineers and
surveyors. Altogether there were 20 employees.

(11) At the valuation date, the whole of the 1,794
acres was farmed in the name of Whelan Farms Ltd, whose function was nominally
at least to act as a bailiff or farm manager.

(12) In practice the farms were farmed by Mr
Whelan himself. He made all the necessary decisions and decided questions as
they arose. No board meetings took place. Effectively he had control of the
group of companies and each member company of it.

(13) For the year ended January 31 1981, Whelan
Farms Ltd was246 debited in its profit and loss account with a rent of £30,200. For the
following year the rent was shown in the accounts as being £29,500 and for the
18 months to July 31 1983 the relevant sum was £44,000. The amount of the rent
for any year was decided by the auditors of the company. It was a book
transaction.

(14) The accounts for the year ended January 31
1981 and other periods included substantial figures in respect of fixed assets,
livestock and employees’ wages.

(15) At all material times Mr Whelan had at his
command experienced engineers and surveyors and adequate and appropriate
machinery to enable him to implement his intention to fill the valley in field
0084.

(16) Pitchers Wood is not scheduled as an ancient
woodland.

(17) At the time of exchanging contracts for the
purchase by Mr Whelan of Norheads Farm, the farmhouse was unoccupied,
semi-derelict, not watertight and uninhabitable.

(18) In 1977, an application was made on behalf of
Mr Whelan for planning permission to fill the valley in field 0084 (‘To raise
the level of unproductive land thus reclaiming for beneficial agricultural
use’). The application was withdrawn by Mr Whelan on July 29 1977 for the
reason that he received an opinion of counsel that planning permission for that
purpose was not required.

(19) Field 0084 is part of a ‘dry valley’ and is
part also of the North Downs escarpment. Field 0084 lies within the approved
metropolitan green belt and also is part of an area of great landscape value.

(20) The total purchase price for the AGI site in
1978 was £80,250, which price comprised £30,000 for the site and £50,250, which
sum was intended to enable Mr Whelan to build a new roadway through Pitchers
Wood in substitution for a track or cattle drive which formerly existed from
field 0084 up to the wood (it did not go beyond the wood). In 1978 or 1979 the
track was extended and improved with chalk from the AGI site and by the use of
farm labour of Cheverells Farm.

(21) Mr Whelan’s proposals for improving field
0084 by filling were discussed in 1977 between, on the one hand, Mr Whelan and
his agents, Crow, Watkin & Watkin, and on the other hand, officers of the
local planning authority, Tandridge District Council, and the division planning
officer of Surrey County Council. In the discussions, which took place partly
in correspondence and partly in personal meetings, the planning officers made
clear their view that Mr Whelan’s proposals to fill the valley of field 0084
were not covered by the deemed permission in Class VI of Schedule 1 to the Town
and Country Planning General Development Order 1977 (SI 1977 no 289). Upon two
occasions Mr Whelan was told in letters from the chief executive and clerk of
the local planning authority that if no planning application was made and the
tipping commenced, that the authority would have no alternative but to
institute enforcement proceedings against him. However, he was encouraged by
the officers of the two authorities to make a further application for planning
permission. He did not do so. On April 10 1978 the chief executive and clerk of
the local planning authority in a letter to Mr Whelan marked ‘Important’ at its
head, said that it was hoped that it would be possible to avoid the
unpleasantness of enforcement proceedings and that he would adopt the
suggestion made to his solicitors that he should ‘come in and discuss the
matter informally as soon as possible’. The letter continued:

in his
discussion with your Solicitors, my Assistant endeavoured to allay any
misplaced apprehensions which you may have that a planning application would
have little hope of success.

He even went
so far as to proffer the suggestion that no difficulty was likely to arise on
the pastureland adjacent to the gas board’s site (field 0084). In a letter
dated September 4 1978, the estates manager of British Gas told the local
planning authority that British Gas were extremely concerned at the proposed
tipping operations and invited the authority to make an article 4 direction
restricting this particular type of development in the area so as to impose
adequate control. He was told in a reply from the chief executive and clerk of
the local planning authority:

I can well
understand your concern but the position is that wayleaves and easements for
gas mains and the like are negotiated by the undertakers with the owners of the
land concerned and presumably are secured by agreements. The Council cannot use
their planning powers to protect such wayleaves and easements, and if a
planning application is submitted by Mr Whelan then it will have to be
considered strictly on its planning merits, due regard being had for all
representations, including any made by the water Authority and South Eastern
Gas.

(22) In October 1978 an agreement was reached,
subject to contract, between Mr Whelan’s agents and the estates manager of
Segas for the grant of an easement across field 0084 for the new
inter-connecting pipes. The agreed price was £85,000, which included a sum in
satisfaction of Mr Whelan’s claims for compensation for loss of tipping rights
under a clause in the 1971 deed. The agreement was never completed because the
Gas Council did not approve it.

The following
cases were referred to during the hearing:

Northavon
District Council v Secretary of State for the
Environment (1980) 40 P&CR 332

Bank of
Australasia v Palmer [1897] AC 540

Stringer v Minister of Housing and Local Government [1971] 1 All ER
65

Jones v Stockport Metropolitan Borough Council (1983) 50 P&CR
299; 269 EG 40, [1984] 1 EGLR 1028

Fayrewood
Fish Farms Ltd v Secretary of State for the
Environment [1984] JPL 267

RMC
Management Services Ltd v Secretary of State for
the Environment (1972) 222 EG 1593

MacPherson v Secretary of State for Scotland 1985 SLT 134

Saint v Jenner [1973] Ch 275

Cuthbert v Secretary of State for the Environment (1979) 252 EG 921

Clark v Wareham and Purbeck Rural District Council (1972) 25
P&CR 423

Commissioners
of Inland Revenue v Glasgow & South-Western
Railway Co (1887) 12 App Cas 315

Horn v Sunderland Corporation [1941] 2 KB 26

Argyle
Motors (Birkenhead) Ltd v Birkenhead Corporation
[1974] 1 All ER 201

DHN Food
Distributors Ltd v Tower Hamlets London Borough
Council [1976] 1 WLR 852; (1976) 239 EG 719, [1976] 2 EGLR 7

Woolfson v Strathclyde Regional Council (1978) 38 P&CR 521; 248
EG 777, [1978] 2 EGLR 19

Cowper
Essex v Acton Local Board (1889) 14 App Cas
153

Subsequent to
the hearing we visited the subject site and the surrounding area.

In a hearing
lasting 28 days and involving 40 witnesses it is impossible for us to deal with
all the points raised in evidence. We would, however, record our views on the
major issues as follows:

Is Mr J P
Whelan the proper claimant?

Mr
Burke-Gaffney submitted that the freehold of Cheverells Farm at the valuation
date was subject to a tenancy of an agricultural holding within the meaning of
the Agricultural Holdings Act 1948 vested in Whelan Farms Ltd. Such a tenancy,
he said, was subject to the restrictions on notices to quit set out in sections
23, 24 and 25 of the Act of 1948 with the consequence that Mr Whelan is not the
proper claimant except in so far as he can show damage, if any, to his freehold
reversion to the agricultural tenancy and there was no evidence of any such
damage.

Mr Purchas
said that Whelan Farms Ltd was merely a manager; it was not a tenant; there was
merely the appearance of a tenancy for accountancy and taxation purposes. There
was not a true rent and no rent was in fact paid. If there were a tenancy he
submitted that the corporate veil should be lifted so as to enable Mr Whelan to
claim as though absolutely entitled: see the decision of the Court of Appeal in
DHN Food Distributors v Tower Hamlets London Borough Council
[1976] 1 WLR 852 and the decision of the House of Lords in Woolfson v Strathclyde
Regional Council (1978) 38 P&CR 521. Mr Purchas submitted further that
if there had been a247 tenancy, in the no-scheme world, Mr Whelan would have put himself in a position
to carry out his schemes by securing a surrender.

On the face of
things Whelan Farms Ltd appear to have had a tenancy of Cheverells Farm. We
doubt, however, whether it had exclusive possession thereof. To claim exclusive
possession it had to do so through Mr Whelan, but he was the freeholder as well
as being a director and shareholder of and in the company. If it were assumed
that Whelan Farms Ltd was tenant of Cheverells Farm at the valuation date, it
would not be possible to go further and assume the company had an agricultural
holding within the meaning of the Agricultural Holdings Act 1948, because,
having regard to our finding of fact (11), the contract of tenancy was one
under which the land was let to the tenant during his continuance in an office
or appointment under the landlord, and was so excluded from the statutory
protection by section 1(1) of the Act of 1948. If there were a tenancy, it
would seem to have been a tenancy from year to year at common law only and thus
terminable by six months’ notice to quit at the end of a year of the tenancy.

In our
judgment, any tenancy vested in the company or J P Whelan (Investments) Ltd,
whether protected under the Agricultural Holdings Act 1948 or not, is to be
ignored because Mr and Mrs Whelan and, in practice, Mr Whelan alone could have
required both companies to surrender their interest forthwith on or before the
valuation date: see facts (9) and (12). Moreover, alternatively, this is
eminently a case in which having regard to all the circumstances, the corporate
veil ought to be lifted enabling Mr Whelan to claim as though absolutely
entitled to the farms.

For these
reasons, we hold that Mr J P Whelan is the proper claimant.

Would the
GDO deemed permission have covered the claimant’s schemes?

Class VI in
Schedule 1 to the Town and Country Planning General Development Order 1977 at
the valuation date permitted the carrying out on agricultural land having an
area of more than one acre and comprised in an agricultural unit of building or
engineering operations requisite for the use of that land for the purposes of
agriculture (other than the placing on land of structures not designed for
those purposes or the provision and alteration of dwellings), so long as, inter
alia, the height of any buildings or works would not exceed 3m in the case
of a building or works within 3km of the perimeter of an aerodrome nor 12m in
any other case.

Field 0084 is,
of course, agricultural land which has an area of more than one acre and was
and is comprised in an agricultural unit. It is common ground that each of the
claimant’s schemes would constitute engineering operations. The word
‘requisite’ means ‘reasonably necessary’: see the decision of the Court of
Appeal in Jones v Stockport Metropolitan Borough Council (1983)
50 P&CR 229.

In Northavon
District Council v Secretary of State for the Environment (1980) 40
P&CR 332, a farmer, a Mr Osborne, sought to improve some 27 acres out of
some 33 acres of agricultural land owned by him by removing 18 inches of
topsoil, stacking it up, putting on the land a large amount of compacted
filling material (non-toxic material, builders’ rubble and the like) and then
putting back the topsoil, his unchallenged view being that that would provide
natural drainage for the land and upgrade it so that he might well be able to
grow ground crops although nothing that he or anyone else could do would make
it land of the quality obtainable in, for example, East Anglia. The local
planning authority was of the opinion that he required express planning permission
because, they said, the operation in which he proposed to engage was that of
the depositing of refuse or waste material on his land and that it was well
settled that a change in the use of land to make it a place for the deposit of
refuse or waste material was a change of use. After a public inquiry following
proceedings under section 53 of the Town and Country Planning Act 1971, the
Secretary of State, on the basis of facts found by his inspector said:

It is
considered from the evidence, that the purpose of the proposal is to raise the
level of the land to facilitate drainage and improve its agricultural quality,
rather than to deposit refuse or waste materials in order thereby to dispose of
them.

In the
Divisional Court, Donaldson LJ said, at p334:

For my part,
it seems to me that the inspector was entitled to reach his conclusion of fact
and that the Secretary of State was entitled to reach his conclusion of fact on
the basis of fact found by the inspector. Once the conclusion of fact is
accepted that the purpose of the proposal is to raise the level of the land to
facilitate drainage, and not to provide a large resting place for refuse and
waste material, it seems to me provided by section 22(1) of the Act and not a
‘change of use’.

As to the fear
of the council, expressed by counsel, that the Secretary of State’s decision
would lead to the entire countryside being covered by rubbish tips in the guise
of intending to improve agricultural land, Donaldson LJ said:

For my part, I
think that this fear is misconceived. It would be necessary to show, as Mr
Osborne has shown, that the object of the exercise is genuinely to improve the
quality of the land and not to make money out of providing a last resting place
for rubbish. In most cases, farmers will have great difficulty in discharging
that onus. At all events, a planning authority will be quite reasonably
sceptical of such a scheme, particularly if the operation is going to last a
long time. In Mr Osborne’s case, it is going to take four years. This is a long
time, but it may have something to do with the state of the soil. Any farmer
who suggests that he is improving the value of his land by allowing it to be
used for the deposit of refuse will have to explain to the planning authority
how long it will take and why. The answer will often throw light on what the
real object of the operation is.

I can see no
grounds for upsetting this decision.

Kilner Brown J
said that he would particularly like to emphasise that the case was essentially
a case on its special facts. He added:

As far as I
am concerned, nothing that has been said here should be taken as indicating
that people can go and dump their rubbish wholesale up and down the
countryside.

Mr
Burke-Gaffney contended that Mr Whelan’s primary object was to make money from
tipping waste material. The amount of money which he expected, or which Mr
Clegg expected, he would make from tipping would have been substantial and very
much more than the increase in value of the land which would be achieved by the
engineering operations. The amounts of fill which would be placed on field 0084
under the various schemes would themselves be very substantial, but in Northavon
the amounts which Mr Osborne sought to tip on his 27 acres were described by
Donaldson LJ as ‘a large amount’. We accept that the proposed operations would
have the effect, if carried out, of converting field 0084 into Class 3(a)
agricultural land, enabling it to be used as arable land in conjunction with
adjoining land belonging to Mr Whelan. We consider that at all material times
this was Mr Whelan’s primary purpose. Of course he hoped to obtain a revenue
from the tipping operation, but why not?

The final
question which arises under Class VI is whether the height of the works would
exceed 12 m. In Class VI there is no definition of the base from which the
height of buildings or works is to be measured. We conceive that the height in
question is intended to be measured from ordinary ground level at any
particular point. The measurements a, b and c on Mr Piggot’s drawing reproduced
in Appendix 11 (not reproduced here) to this decision were agreed by Mr Cuming,
but there was no agreement as to which of these should be applied. In our view
measurement c should be applied, so that in the case of scheme A the maximum
height of the works would be 11.5m. We conclude that planning permission would
be deemed under Class VI of the GDO to be granted for all the claimant’s
schemes.

Would it
have been permissible to place fill over the SLRM?

The deed of
September 21 1971 was made between a248 predecessor in title (called ‘the grantor’) of Mr Whelan and others of the
first and second parts and the Gas Council of the third part. In the operative
part, the consideration was stated to be £3035.25 and the grantor as beneficial
owner (and to the intent that the easements thereby granted should be
appurtenant to the statutory gas undertaking of the council) granted unto the
council:

the easements
to lay construct inspect maintain use replace remove or render unusable a main
or pipe for the transmission or storage of gas or other materials connected
with the exercise or performance of the functions of the council and all
necessary apparatus ancillary thereto (all hereinafter together called ‘the
said works’) in upon and over a strip of land 60 feet in width coloured pink
for identification purposes only on the plan annexed hereto (hereinafter called
‘the said strip of land’) and to pass over the said strip of land for the
purposes of the said works and of any works of the council contiguous therewith
whether or not with workmen vehicles machinery and apparatus TO HOLD the same
unto the council in fee simple.

Clause 2 of
the deed contains covenants on the part of the council to take all reasonable
precautions to avoid obstruction to or interference with the user of the said
land and damage and injury thereto, to make good all damage or injury to the
said land caused by the exercise by the council of the easements and to make
full compensation to the grantor in respect of any such damage or injury;
clause 2 also contains a covenant to keep the said works in repair and
covenants of indemnity.

Clause 3 is in
these terms:

The grantor
(to the intent and so as to bind the said land and every part thereof into
whosoever hands the same may come and to benefit and protect the easements
hereby granted) hereby covenants with the council as follows

(i) the grantor shall not do or cause or permit
to be done on the said land anything calculated or likely to cause damage or
injury to the said works and will take all reasonable precautions to prevent
such damage or injury

(ii) The grantor shall not without the prior
consent in writing of the council make or cause or permit to be made any
material alteration to or any deposit of any thing upon any part of the said
strip of land so as to interfere with the said works by the council or so as to
lessen or in any way interfere with the support afforded to the said works by
the surrounding soil including mineral also as materially to reduce the depth
of soil above the said works

(iii) the grantor shall not erect or instal or
cause or permit to be erected or installed any building or structure or
permanent apparatus in through upon or over the said strip of land provided that
nothing in this clause shall prevent the grantor from installing any necessary
service pipes drains wires or cables under the supervision and with the consent
(which shall not be unreasonably withheld) of the council or their agents or
carrying on normal agricultural operations or acts of good husbandry including
fencing hedging and ditching not causing such interference obstruction or
material reduction of the depth of soil as aforesaid.

Clause 6 (i)
provides:

If at any time

(a) permission is granted under Part III of the
Town and Country Planning Act 1962 or any statutory modification or
re-enactment thereof for the time being in force (otherwise than by a
development order) for development which consists of or includes building
operation which the grantor is prevented by the covenants of Clause 3 hereof
from carrying out or it is shown that but for the said works such permission
might reasonably have been expected to be granted and

(b) the said development whether in the form for
which permission is granted as aforesaid or in any alternative form of
equivalent value for which permission might reasonably be expected to be
granted cannot reasonably be carried out elsewhere on the said land
consistently with the grantor’s covenants in Clause 3 hereof, and

(c) the principal amount of compensation which
would have been payable in respect of a compulsory acquisition by the council
of the easements hereby granted in pursuance of a notice to treat served on the
date hereof if such permission had previously been granted exceeds the sum set
out in Clause 1 hereof (which is calculated without reference to the prospect
of any such operations) then subject to the provisions of this clause the
council will pay to the grantor a sum equal to the excess.

Clause 6 also
contains ancillary provisions as does clause 7.

One question
which bothered us from the beginning of the hearing was: in what way did the
Gas Act 1972, the compulsory purchase order, or the scheme underlying the
acquisition or the existence of the pipes laid by virtue of the compulsory
purchase order or their use, prevent the claimant from improving field 0084 or
the adjoining land? Mr Purchas’ answer
to that question was that it was the rules as to common law nuisance which gave
rise to the claim for compensation because, if Mr Whelan filled the land over
the new pipes, he would be substantially interfering with the right of British
Gas to access to the new pipes for the purposes of inspection or repair, etc.
The position was not the same in respect of the deed, he said, because the
remedy of British Gas for interference with its right of access to the pipes of
the SLRM did not depend on the common law rules as to nuisance, but upon the
express terms of the deed upon its proper construction. The deed did not, he
said, in clause 3, provide at all for interference in respect of the right to
inspect the pipes of the SLRM.

Clause 3
(iii), of the deed, as stated above, prohibits deposit of any thing upon any
part of the strip of land so as to interfere with ‘the said works by the
Council’. According to Mr Burke Gaffney, the words ‘the said works’ as defined
in clause 1, embrace all the words: ‘to lay construct inspect maintain use
replace remove or render unusable a main or pipe . . . and all necessary
apparatus ancillary thereof’ which precede the definition of ‘the said works’.
We cannot accept that construction, because the word ‘works’ is not apt to
describe matters other than physical things so that, accordingly, clause 3 does
not inhibit the right of access to the pipes. Mr Purchas said that if there
were any ambiguity he would refer to a draft of the deed in which, in clause 3,
there is an express reference to obstruction of access to the pipes, but that
reference is struck out. The contention is, as we understand it, that the
failure in clause 3 of the deed to refer expressly to obstruction of the access
was deliberate, so that the position is governed by the deed, so construed, and
not by the common law. We regard the draft as inadmissible for the purpose of construing
the deed. Nevertheless, it is plain that in clause 3 there is no reference to
obstruction of access. That omission is not fatal to the case of British Gas
because, in our opinion, the common law rules as to interference with the
easement of access apply to the deed as much as they do to the statutory
easement. In our judgment, the depth of fill above the SLRM involved in schemes
A and C would constitute a substantial obstruction to the contractual right of
access and that obstruction would be actionable at common law as a nuisance:
see Gale on Easements 15th ed p388. Although it is our view that the
proposed development fell within Class VI of the general development order we
nevertheless think it likely that in view of the known views of the planning
authority regarding possible enforcement procedures that an owner or purchaser
would have considered it prudent to have applied for a section 17 certificate
or for planning permission. On the information available, however, in
particular the letter written to Mr Whelan by the local planning authority on
April 10 1978, potential purchasers would have had grounds for thinking that
even if planning consent were necessary it would have been readily forthcoming.

The question
whether schemes A or C would constitute the erection of a structure within the
meaning of clause 3 (iii) is more difficult. We conceive that ‘structure’ in
this context means, though not a building, something which is in the nature of
a building, that is to say, something which is put together out of related
parts. When the proposed operation is completed and the improved land in use as
arable land, it would not ordinarily be regarded as a structure. The batters
might be so regarded, but our preference is to say that the proposed works would
not constitute the erection or installation of a structure. Nevertheless,
having regard to the view which we have taken with regard to the common law
position, we determine that in filling field 0084 care would be necessary to
avoid interference with the right of access of British Gas to the SLRM.
Accordingly, schemes A and C must be discarded.

249

Mention was
made at the hearing of section 27 of the Pipe-Lines Act 1962, which gives to
the Secretary of State for Trade and Industry power to protect a pipeline which
is imperilled by a building or structure, but in view of the conclusions we
have reached we have not found it necessary to consider that provision.

Could the
grant of planning permission have been assumed for any of the claimant’s
schemes?

In the alternative
to the position under the GDO, the parties raised the question whether an
express grant of planning permission under Part III of the Town and Country
Planning Act 1971 could be assumed for any of the schemes had an application
under that Part been made. We echo the protest made by Sir Douglas Frank QC
(President of the Lands Tribunal, as he then was) in Williamson &
Stevens (Executors of Walter Williamson, decd) v Cambridgeshire County
Council (1977) 34 P&CR 117*, at p122, where he said:

I protest
that no application was made under section 17 for a certificate for appropriate
alternative development. It seems to me that where a claimant comes before this
Tribunal saying, as is said here, that permission could reasonably have been
expected to have been granted, on the date of notice of entry for a
development, then the appropriate course is to apply for a certificate.
Otherwise, the Tribunal is being asked to take on the mantle of the Secretary
of State and make what essentially is an administrative decision . . . What I
am being asked to do is to say what the Secretary of State would have done had
an appeal been made to him in 1974 against a refusal of permission for use as a
general caravan site.

*Editor’s
note: Also reported at (1977) 232 EG 369.

If the year
1980 is substituted for 1974 and the filling of field 0084 for the reference to
use as a general caravan site, those words are very applicable to the present
case. For that reason, we believe that it is not our function or duty to give
an answer to this planning question save through, as it were, the eyes of the
purchaser. That is how we propose to consider the matter.

General
conclusions

From Mr Holmes
evidence class A waste was readily available in 1980 and we accept Miss
Cullum’s evidence that class A waste would have been acceptable on the subject
site. It was not in dispute that 5% of the delivered material would have been
unacceptable, but adequate provision was made in both Mr Cuming’s and Mr
Whelan’s costs for the sorting of waste.

Both Mr
Piggott and Mr Farquhar argued that Mr Whelan’s personal position could not be
taken into account because of the provisions of the RICS Guidance Notes
regarding the valuation of assets. Their views hinge on the assumption that
valuations prepared for the Lands Tribunal are ‘published public documents’ and
that the definition of open market value accordingly excludes ‘any additional
bid by a purchaser with a special interest’. We would have thought it
self-evident that any chartered surveyor familiar with the Guidance Notes
would have realized that ‘public documents’ for the purpose of the Guidance
Notes are company accounts, prospectuses, offers for sale, etc, where
property asset values may need to exclude possible bids by special purchasers,
which may never be achieved in practice. The fact that both Mr Piggott and Mr
Farquhar, both of whom are chartered surveyors, have seized on the Guidance
Notes to exclude the very real possibility that Mr Whelan would have
undertaken the work himself must, in our view, raise serious doubts as to
whether their valuation approaches are correct.

Topsoil: We prefer the evidence of Mr Worthington, who had done an actual
site survey and had analysed samples. Mr Worthington concluded that although
the depth of the existing topsoil varied between 0.15m and 0.3m an overall
depth of 0.3m could have been stripped and re-used as topsoil without undue
dilution. Mr Cuming agreed that a depth of 0.3m was an adequate topsoil depth.
Although the evidence is not wholly conclusive we prefer the factual rather
than the opinion evidence and find that topsoil would not have needed to have
been imported.

There is no
dispute that some form of drainage scheme would have been necessary and both
parties provided for drainage in the costings of all four schemes. Initially
the cost differences between the parties was very considerable. Mr Piggott’s
drainage cost for scheme A was £32,758 against Mr Cuming’s £5,600. The finally
revised and agreed figure was £9,500. Such variations were also the pattern for
schemes B, C and D and leave us with the distinct impression that Mr Piggott
had provided for a more comprehensive scheme than was in fact necessary. We can
appreciate that Mr Piggott’s involvement in the aftermath of the Aberfan
disaster could justifiably lead him to err on the side of safety, but we do not
think that an unmanned AGI should be viewed in the same light as a colliery tip
situated above a residential area.

Norheads
Farm: There is substantial disagreement between the
parties as to the analysis of the sale of Norheads Farm. In Mr Farquhar’s rule
42 valuation he appended an incomplete set of particulars prepared for the sale
of Norheads Farm by Savills. He valued Norheads Farmhouse at £100,000 and other
residential buildings at £190,000 leaving the land at £707 per acre overall or
£848 per acre for the farmable land and £200 per acre for woodland and
wasteland. Mr Clegg considered the farmhouse to be derelict and valued it at
£50,000. He considered the farm buildings to be a liability with a minus value
of £50,000 and valued the cottages at £145,000. His resulting overall price per
acre was £1,113 although he valued the higher-grade land at £1,385 per acre. Mr
Whelan also described the farmhouse as derelict and since he appears to be the
only witness who saw the property in 1980 he may well be right. Subsequent to
the purchase, however, he applied for planning permission to develop the
farmhouse and part of the land for residential purposes and clearly did not
require the farmhouse as such. In the complete sale particulars appended to Mr
Farquhar’s supplementary proof the comment on Norheads farmhouse was:

part has been
used recently as an estate office. Renewal and refurbishment was commenced and
with further modernization and alteration it would easily return to its
original state as a solid and well appointed farmhouse.

In the absence
of an objective view of the state of the property in 1980 the actual condition
can only be the subject of conjecture, but the above description is
sufficiently guarded to suggest that the work which was necessary to restore
the farmhouse ‘to its original state’ was probably not insubstantial. The only
real conclusion we can come to, however, is that Norheads Farm is of little or
no assistance as a comparison.

Having reached
the conclusion that the claimant could not tip over the SLRM it follows that
neither scheme A nor scheme C were possible and that we must therefore reject
Mr Clegg’s associated valuations, ie valuations I and V.

This
immediately raises further problems for the claimant as although tipping to the
south of the SLRM would have produced a limited agricultural improvement to
that area, we are in no doubt from the evidence that tipping to the north of
the SLRM, even in the case of scheme B where at least there was a continuous
area of land to the north, unlike scheme D where the area to the north was
further divided by the ‘canyon’ over the AGI connection, would not have
produced any agricultural improvement as the filled area would then be a
triangle bounded on two sides, including the longer side along the SLRM, by
steep slopes and would not gain from amalgamation with fields adjoining to the
north. Mr Clegg’s valuations II, III, IV, VI, VII and VIII are all based on the
assumption that the loss would be the difference between being able to tip on
two separate parcels of land separated by the SLRM (scheme B) and being
restricted to tipping on the area to the south of the SLRM and on areas D1 and
D2 (scheme B-scheme D, ie Mr Clegg’s valuations II and V) or would be the
difference between tipping on both sides of the SLRM less one or both of those
areas of scheme D lying north of the SLRM and separated by the AGI connection
(scheme B-scheme (D1-D2), ie Mr Clegg’s valuations III and VII) or scheme
B-(D-(D1 + D2), ie Mr Clegg’s valuations IV and VIII). The difficulty we see
with this approach is that250 although scheme A minus scheme C (Mr Clegg’s valuations I and V) would appear
to produce an acceptable way of assessing the loss caused by the presence of
the AGI connection since, despite involving tipping to the south of the SLRM,
the difference can be seen to be caused wholly by the presence of the AGI
connection, the same cannot be said of schemes B and D. If it is accepted that
tipping cannot take place over the SLRM then the area to the south of the SLRM
cannot be included in any calculation as it cannot be said that tipping to the
south has been precluded by the presence of the AGI connection which lies in
the section of the valley to the north of the SLRM. Indeed, if Mr Whelan were
able to show that tipping to the south of the SLRM would produce an
agricultural improvement and that either planning permission was not necessary
or would be forthcoming there is in theory nothing to stop him tipping to the
south of the SLRM even today. We are also mindful of the fact that if Mr Whelan
could get an actual planning consent for tipping over the whole of the valley
he could still obtain compensation under clause 6 of the 1971 deed so that
effectively all he has lost under the present scheme is the right to tip over
the AGI connection, which for valuation purposes would be Mr Clegg’s valuation
I, ie scheme A-scheme C.

We have
considerable sympathy for Mr Whelan as he was clearly led, albeit on a ‘subject
to ratification’ basis, to believe that he had reached agreement with the Gas
Board in 1978 for the payment by the latter of £85,000, which included
compensation for the loss of tipping rights both in respect of the present
scheme and in respect of the 1971 deed and it is therefore with the greatest
reluctance that we have reached the conclusion that the acquisition of the
easement for the installation of the AGI connection has not produced any
recoverable compensation for loss of land improvement or tipping rights.

In the event,
however, that we are wrong in our conclusion that the 1971 deed effectively
prevented tipping over the SLRM we set out below what would otherwise have been
our conclusions on the valuation issues. For reference purposes the following
are included in the attached appendices:

Appendix 4
Summary of Mr Whelan’s evidence (not reproduced here).

Appendix 5
Summary of Mr Worthington’s evidence (not reproduced here).

Appendix 6
Summary of Mr Clegg’s evidence (reproduced here).

Appendix 7 Mr
Clegg’s valuations (reproduced here).

Appendix 8
Summary of Mr Piggott’s evidence (not reproduced here).

Appendix 9
Summary of Mr Farquhar’s evidence (reproduced here).

Appendix 10 Mr
Farquhar’s valuations (reproduced here).

1. Mr Clegg’s
valuations I to IV were prepared on the assumptions set out in the preface to
each valuation (see Schedule 7) the underlying assumption in each case being
that Mr Whelan would have himself undertaken the tipping operation.

2. Valuation I
represented the loss likely to be incurred if instead of being able to tip over
the whole of the valley (scheme A) the area of fill had to be restricted by the
exclusion of the area above the new connection to the AGI (scheme C).

For the loss
of tipping potential he had adopted the figure produced by Mr Whelan of
£59,236.

Mr Clegg then
valued the loss caused by the sterilisation of the strip of land occupied by
the batters and the easement using two alternative methods. He first took the
difference between the improved land value (£1,800 per acre) and the value of
the sterilised land (£225 per acre) which when applied to the area lost, 1.7
acres, gave a loss of £2,677.50. He deferred the latter figure for four years
at 4% which produced £2,289. His alternative and preferred valuation was to
assess the agricultural profitability foregone by taking an annual profit
figure of £120 pa per acre for the 1.7 acres ie £204 pa. He put the rental
element of the latter figure at 50% ie £102 pa, which he capitalised in
perpetuity at 4% deferred four years the resulting figure being £2,180.

Finally, he
estimated that there would have been a loss of £50 pa from the time the
reinstatement was concluded in respect of what would otherwise have been the
savings achieved by field amalgamation. He had capitalised this loss in
perpetuity at 4% deferred four years producing a figure of £1,069. His total
for valuation I was therefore £62,485.

Mr Farquhar
disputed that the presence of the easement for the inter-connecting pipeline
had any detrimental effect on adjacent fields or that the easement prevented
field amalgamation taking place. In his view the value of the land in an
improved state was £1,100 per acre not the £1,800 per acre adopted by Mr Clegg
and he did not agree that the value of the agricultural profitability foregone
was £120 per acre. Adopting Mr Piggott’s contention that a commercial filling operation
could not produce a profit his (Mr Farquhar’s) figure for the loss of tipping
was nil compared with Mr Clegg’s figure of £59,238. Substituting his value of
£1,800 per acre for the land in its improved state produced a loss in capital
value of £875 after deducting the agreed value of £225 per acre for the land
subject to the easement and embankments. Mr Farquhar then made a further
deduction of £155 which was his estimate of the capitalised value of the
agricultural income foregone during the tipping period. He capitalised the
resulting figure in perpetuity at 4% deferred 10 years (the latter being the
period before which in his opinion the land would return to full productivity)
producing a loss of £827. Unlike Mr Clegg however Mr Farquhar considered that
filling the valley would lead to a diminution in the capital value of the
shooting rights, which he put at £1,125. Since the latter figure was greater
than the value foregone his valuation of the area lost to agricultural
improvement was nil as against Mr Clegg’s valuation of £2,289.

Whereas Mr
Clegg in his preferred valuation valued the profitability foregone at £120 per
acre Mr Farquhar, having compared the revenue and costs for both pasture and
arable uses, was of the view that the latter produced an additional profit of
only £19 per acre, ie £32 pa on the 1.7 acres. Taking the rent element at the
same rate as Mr Clegg (ie 50%) gave £16 pa, which he capitalised at 4% in
perpetuity deferred 10 years and arrived at a figure of £270. As the latter was
again less than his estimate of the value of the loss of shooting rights his
value of the loss of profitability was nil compared with Mr Clegg’s valuation
of £2,180. Mr Farquhar saw no agricultural advantage in the field amalgamations
proposed by Mr Clegg and could not envisage any cost savings on adjoining land.
In his view any gain was therefore nil, Mr Clegg’s figure being £1,069.

Mr Clegg’s
overall total for valuation I was £62,485; Mr Farquhar’s figure was nil.

3. Valuation
II was an estimate of the loss likely to be incurred if instead of being able
to tip over the whole of the parts of the valley to the north and south of and
excluding the SLRM (scheme B) the area of fill had to be restricted to the area
excluding both the SLRM and the new connection to the AGI (scheme D). Mr
Clegg’s valuation approach was similar to that which he had adopted for
valuation I and for the loss of filling opportunity he accepted Mr Whelan’s
calculations and the resulting figure of £40,395.

His capital
value method of calculating the loss caused by the sterilisation of the land
occupied by the easement and batters produced a figure of £1,077. Mr Farquhar’s
equivalent figure was nil, the difference arising as in the same part of Mr
Clegg’s Valuation I from the use by Mr Farquhar of lower land values, a longer
deferment period and adjustment for agricultural income foregone during the
tipping period and for the loss of shooting rights. Mr Clegg’s preferred
valuation of the loss of agricultural profitability was £855; Mr Farquhar’s
value was nil.

The respective
total figures for valuation II were £41,250 and nil.

4. Valuation
III was a variation of valuation II, being based on the assumption that instead
of being able to tip over the whole of those parts of the valley lying both to
the north and south of and excluding the SLRM (scheme B) the area of fill would
be reduced251 by the area occupied by the AGI connection (scheme D) and further reduced by an
area referred to as D1 which was the isolated triangle of land lying to the
north of the SLRM and to the south-east of the AGI connection (scheme D-D1). As
both Mr Clegg’s valuation III and Mr Farquahar’s rebuttal comments on the
latter valuation incorporated the same approaches and values as in valuation II
we do not think it necessary to refer to the detailed figures, which appear in
appendix 7 other than to say that Mr Clegg’s total for valuation III was
£46,780 against Mr Farquhar’s total of nil.

5. Valuation
IV is a further variation of valuation II the assumption being that instead of
being able to carry out scheme (tipping both north and south of the SLRM) the
area of tip would be restricted not only by the exclusion of the area occupied
by the AGI connection and area D1, but also by the exclusion of the area known
as D2 which lies to the north of the SLRM and to the north-west of the AGI
connection (scheme D-(D1 + D2)). The effect of the exclusions would be to limit
tipping to the area south of the SLRM.

From Mr
Whelan’s calculations the loss of value of fill was £113,517. Mr Clegg’s
capital value approach for the assessment of the loss caused by restrictions on
agricultural improvement was based on the difference between 3.88 acres of
improved land at £1,800 per acre and the value of the pre-improvement land
divided into pasture at £800 per acre, woodland at £200 per acre and arable at
£1,800 per acre, resulting in a figure of £1,286. Mr Farquhar’s approach to
this valuation was simply to take the difference between the before and after
land values (£1,100 per acres and £800 per acre) capitalised as in his previous
valuation and then to deduct the loss of shooting rights producing a nil
valuation. Mr Farquhar took the view, however, that if there was no tipping on
D1 and D2 there would be an area of about 3.9 acres which could be farmed
profitably by using the access through Pitchers Wood and that the loss would,
therefore, in any event be nil. Mr Clegg’s agricultural profitability approach
produced a total rent element of £80.80 pa for the pasture, arable and woodland
areas lost which he capitalised at £1,727 giving a total loss of £115,244. Mr
Farquhar arrived at a rent element of £37 pa with a capital value of £625, but
taking into account his view that there was a loss of shooting rights, his
valuation was nil.

6. Mr Clegg’s
valuations V to VIII were effectively his valuations I to IV reworked on the
assumption that the tipping would be carried out not by Mr Whelan but by a
third-party operator paying a royalty to Mr Whelan, the other elements of loss
being calculated exactly as in Valuations I to IV and his resulting loss
figures being:

Valuation V	£27,249
Valuation VI	£17,355
Valuation VII	£22,561
Valuation VIII	£57,266

Mr Farquhar accepted the opinion expressed by Mr Piggott that
tipping on a royalty basis would not produce a profit to the claimant in
valuations V to VII and coupled with his (Mr Farquhar’s) views on the other
elements of the valuation he arrived at a nil value in each case.

7. Since we
have reached the conclusion that Mr Whelan was capable of carrying out from his
own resources a tipping operation of the size of any of the schemes put forward
and that compensation should be assessed on this assumption, we do not consider
it necessary to deal with valuations V to VIII in detail.

8. Our
conclusions on valuations I to IV are as follows:

(a) It is a feature of both Mr Clegg’s and Mr
Farquhar’s valuations that they have relied heavily on the evidence of other witnesses
for calculations of the value of tipping operations, Mr Clegg incorporating
those of Mr Cuming and Mr Whelan and Mr Farquhar incorporating those of Mr
Piggott. In Mr Clegg’s valuations I to IV the tipping loss constituted the
following proportion of the total loss in each case:

Valuation I	94.8%
Valuation II	97.9%
Valuation III	97.6%
Valuation IV	98.5%

The balance in each case was Mr Clegg’s assessment of the loss of
agricultural profitability plus in the case of valuation I the loss of field
amalgamation potential. Mr Farquhar arrived at positive, albeit lower, figures
for the loss of agricultural profitability in each case, but totally extinguished
these figures with his assessment of the loss of shooting rights. We are of the
view that the introduction of the shooting-rights argument was misconceived and
we accept the evidence of Mr Whelan and Mr Clegg that none of the schemes would
have adversely affected the shooting potential.

(b) As far as the underlying differences between
Mr Clegg and Mr Farquhar’s views as to agricultural profitability are concerned
the two major elements are the value of the improved land and the period of
deferment. Both valuers relied largely on publications and statistics for
evidence of land values at the relevant time. The purchase by Mr Whelan of
Norheads Farm in 1980 should at first sight have produced useful evidence of
land values at that time, but the widely different analyses of the sale price —
Mr Clegg’s and Mr Farquhar’s figures for the higher-grade land being £1,287 per
acre and £848 per acre respectively — and the differences of opinion as to the
state of the farmhouse and the usefulness of some of the farm buildings make it
difficult to draw any clear conclusions.

On the other
hand, Mr Farquhar’s £1,100 per acre for the improved land does not seem to us
to be consistent with the agreed value of £800 per acre for the subject land in
its unimproved state nor does his £848 per acre analysis for the better land at
Norheads Farm appear consistent with the £800 per acre he adopted for his
analysis of the lower quality land at Norheads Farm. We find statistics giving
average values over wide geographical areas in some cases covering the whole of
England and Wales of little assistance and although Mr Farquhar referred to
publications recording the sales of farms in Kent and neighbouring counties the
records did not in some cases include the actual sale prices and in most cases
the available details did not contain sufficient information to enable the land
values to be separated from the value of farm houses and other buildings nor
was the quality of the land referred to. Making the best we can of the evidence
and bearing in mind that the land values play only a minor part in the
assessment of compensation we put the improved value of the subject land at
£1,600 per acre.

(c) The deferment period adopted by the valuers
is of course related to their or other witnesses’ views as to the period before
the land will be back in full production (Mr Clegg four years, Mr Farquhar 10
years). Mr Farquhar takes no account of the possibility that Mr Whelan would
undertake the tipping himself and would combine both tipping and farming
expertise. It appears to be accepted that the filling operation would take
three years and although Mr Worthington thought that a crop such as winter
barley or winter rape could be grown possibly from the completion of the
filling operation we think a more realistic estimate would be a total of five
years would be required. Substituting £1,600 per acre and a five-year deferment
in Mr Clegg’s valuations would produce the following results for his capital
value approach:

Valuation I
	£
Improved land value	1,600	per acre
Less	225	per acre
Value foregone	1,375
Area lost	1.7	acre
	2,338
PV of £1 in 5 years of 4%	.822
	1,922

252

The corresponding figures for the remaining valuations would be:

	£
Valuation II	904
Valuation III	226
Valuation IV	510

These figures are, however, largely academic as Mr Clegg’s capital
value method was not his preferred method.

(d) Key elements in Mr Clegg’s preferred
agricultural profitability method were his assessment of the figures for the
profit foregone over the area of the land concerned which was £120 per acre in
valuations I, III and IV and £100 in valuation II the figures being derived
from Mr Worthington’s calculations. The latter had estimated the difference in
profitability between the use of the subject land for arable purposes and the
use of the land for grazing using published farming statistics and had arrived
at a difference of £130 pa per acre. Using Mr Cuming’s approach Mr Farquhar had
done a similar exercise and had arrived at a difference of £19 pa per acre.
Although we accept that in the absence of direct evidence valuers may have of
necessity to rely on published data, since the latter is largely a forecast of
likely average, rather than a record of actual financial returns, it seems to
us that it should really be used only to draw general conclusions. We regard Mr
Farquhar’s calculations to be more detailed than the circumstances warrant and
for the purpose of the present valuations we have adopted Mr Clegg’s lower
figure of £100 pa per acre for the loss of profitability. The effect of
substituting £100 pa per acre for £120 pa per acre and the deferment period of
five years instead of four years has the following effect in Mr Clegg’s
agricultural profitability calculations:

Valuation I				£
Rental element (50% of £100 X 1.7)				85 pa
YP in perpetuity deferred 5 years at 4%				20.55
	Total			1,747
Valuation II
Rental element (50% of £100 X 0.8)				40 pa
YP in perpetuity deferred 5 years at 4%				20.55
	Total			822
Valuation III
Loss of agricultural profitability from valuation II				822
Additional loss		£
Rental element (50% of £100 X 0.2)		10	pa
YP in perpetuity deferred 5 years @ 4%		20.55		205
	Total			1,027
Valuation IV
3.8 acres @ £100	£pa	380
less 4.81 acres pasture @ £40	192
0.88 acres woodland @ £0	0
0.93 acres woodland @ £60	56	248
		132 pa
Rental element (50% of £132)				66 pa
YP in perpetuity deferred 5 years @ 4%				20.55
	Total			1,356

(e) By far the major
difference between the parties is, of the estimates of the cost of the proposed
tipping operations, the respective figures being as follows:

	Mr Piggott	Mr Cuming	Mr Whelan
	£	£	£
Scheme A	490,659	275,154	167,013
Scheme B	475,896	234,036	147,034
Scheme C	444,481	234,604	145,609
Scheme D	433,494	206,816	131,989

Many of the individual items in the bills of quantities to which all
the witnesses have worked were agreed subsequent to the preparation of the
schedules, but were not retotalled and are not incorporated in the above
figures. We do not propose to attempt to produce new totals for Mr Piggott’s or
Mr Cuming’s estimates since neither of these witnesses prepared their costings
on the assumption that the work would be carried out by Mr Whelan himself.
Since our conclusion is that Mr Whelan could in fact have done the work we have
generally accepted his figures since having had a major involvement in the
building industry and accustomed to competitive tendering his approach is
likely to be nearer to market reality than that of engineers and surveyors
preparing standard bills of quantities. We are reinforced in this view by some
of the substantial changes which have been made to the figures appearing in the
original bills of quantities. We should perhaps add, however, that the major
differences between Mr Whelan’s and the other experts’ costings are largely in
respect of those items involving equipment which Mr Whelan already owned and
would not need to hire and the elimination of the site operator’s profit.

In theory, Mr
Whelan’s costings should be increased to allow for more comprehensive drainage
and support works to reflect some of the agreements reached between Mr Piggott
and Mr Cuming. Since the increased costs are greater for schemes C and D than
for schemes A and B the effect of incorporating these costs would be slightly
to increase the loss in valuations I to IV. In these circumstances, we have
thought it appropriate to leave Mr Whelan’s figures unchanged.

(f) Having concluded that the tipping operation
would be carried out by Mr Whelan we have not considered it necessary to deal
with the ‘royalty’ basis of assessing the income from tipping as this basis
would only have applied if a third-party operator had been involved paying a
royalty to Mr Whelan. We would comment in passing, however, that the evidence of
Mr Pearson showed quite clearly that the royalty from the Brookbank tip
referred to by the Gas Board’s experts could not be relied on as open market
evidence. The claimant’s valuers adopted an ‘at gate’ price for incoming
material of £1.12 per m³. This figure was not seriously disputed by
the Gas Board’s experts; indeed Mr Piggott used a figure of £1.20 per m³
for his own valuation of the claimant’s schemes albeit on the assumption that
the operator would not be the landowner and that the bulking factor would be
1.21. We therefore accept that the incoming material would have produced an
income of £1.12 per cubic m³.

(g) Although the actual volumes of material
necessary to fill the void created by each of the claimant’s schemes were
agreed, there was argument as to the gross amount of material which would be
necessary to produce after compaction the agreed volumes. Mr Piggott’s price of
£1.20 per m³ incorporated the assumption that the volume before
tipping would be about 1.21 times greater than the compacted volume. For the
claimant, Mr Cuming put the bulking factor at 1.5, but since Mr Piggott’s
bulking factor was based on an optimum mix of incoming material we think that
Mr Cuming’s figure is more realistic given the random nature of class A
material. It follows that we accept the income figures adopted by Mr Cuming and
Mr Whelan.

(h) Substituting the adjusted figures for
agricultural profitability in Mr Clegg’s valuations the resulting figures are:

Valuation I		£
Loss of profits from tipping		59,236
Loss of agricultural profitability		1,747
Savings on field amalgamation foregone		1,069
	Total	62,052
Valuation II
Loss of profitability from tipping		40,395
Loss of agricultural profitability		822
	Total	41,217
Valuation III
Loss of profitability from tipping		45,668
Loss of agricultural profitability		1,027
	Total	46,695
Valuation IV
Loss of profitability from tipping		113,517
Loss of agricultural profitability		1,356
	Total	114,873

253

We would comment that the profitability figures constitute such a
small proportion of the total value that the actual amounts are of little
significance other than to indicate that the end result is an agricultural
improvement. Even Mr Farquhar’s figures, once the loss of shooting rights is
eliminated from his calculations, produce positive profitability figures.

If the
claimant could in fact have tipped over the SLRM then the only loss is that
caused by the restrictions on tipping over the AGI connection and it must
follow that the correct valuation report is that contained in Mr Clegg’s
valuation I ie scheme A-scheme C. Our alternative valuation figure is therefore
£62,052. The latter figure would, in any event, be in our view the maximum
compensation payable.

If tipping
were allowed over the SLRM schemes B and D would not apply as they are based on
the opposite assumption. Valuation IV is Mr Clegg’s preferred valuation, which
is perhaps not surprising as it produces a substantially greater loss than any
of his other valuations. The reason for the greater loss is that the effect of
deducting scheme D-(D1 + D2) from scheme B is that the area lost to tipping
would be the whole of the area to the south of the SLRM. For the reasons we
have given earlier we think that if tipping was not allowed over the SLRM any
loss would be limited to the effect of the AGI connection on land to the north
of the SLRM.

Summary

We conclude
that as a matter of law the claimant could not have tipped over the land above
the SLRM and that for reasons which we have given no claim for compensation can
therefore arise. If we are wrong in our conclusion we would assess the
compensation at £62,052.

Costs: Application is made for orders for costs on behalf of both
parties. Mr West for British Gas asks for all the costs of the reference. Mr
Purchas for Mr Whelan resists that application and asks for all the costs of
the reference save those which were incurred prior to the date of the sealed
offer of £3,400 made by British Gas unconditionally on March 23 1987. Mr
Purchas concedes that British Gas is entitled to an order for the costs
incurred prior to that date because Mr Whelan received a nil award.

As the parties
have done, we will consider separately the costs thrown away by the adjournment
ordered on December 3 1990. Such costs were reserved by the order. The
reference had been fixed for hearing on that date which was a Monday. Mr
Purchas applied for the adjournment because the acquiring authority had
delivered on the previous Wednesday a large quantity of new documentary
material including reports of expert witnesses making it difficult or
impossible for Mr Purchas to open the case on that date. The submission of the
acquiring authority is that the late delivery of documents was attributable to
late delivery of documents on behalf of Mr Whelan. Further, Mr West says that
the adjournment was necessary because the claimant’s case was far from ready.
We suspect that that may have been the position and order that each party shall
bear their and his costs thrown away by the adjournment dated December 3 1990.

As to the
costs generally of the reference, Mr West claims them all, first on the ground
that the acquiring authority has succeeded in the litigation in that a nil
award has been made against them and, second by reference to section 4 of the
Land Compensation Act 1961. That section provides, inter alia, that
where the acquiring authority has made an unconditional offer in writing of any
sum as compensation and the sum awarded by the Lands Tribunal does not exceed
the sum offered, the Lands Tribunal shall, unless for special reasons it thinks
proper not to do so, order the claimant to bear his own costs and to pay the
costs of the acquiring authority so far as they were incurred after the offer was
made.

In his
skeleton argument, Mr Purchas lists a number of reasons alleged to be special
reasons within the meaning of section 4. These include assertions that the
evidence of the claimant’s witnesses was accepted and that of the acquiring
authority rejected. He says that on all issues other than the point of law
which we held defeated the claimant, he has succeeded. Mr Purchas says that the
appropriate order for costs would be an order in favour of the claimant,
alternatively for a partial award in his favour, alternatively that there
should be no order as to costs, alternatively an order in favour of the
acquiring authority, but limiting the award to that part of the costs properly
attributable to the points on which our decision turned.

Mr West’s
submission is that the claimant should bear his own costs incurred after the
date of the sealed offer and be ordered to pay all the costs incurred by the
acquiring authority thereafter.

We have been
referred to section 3 of the Lands Tribunal Act 1949, r56 of the Lands Tribunal
Rules 1975 and a number of authorities, including the decision of the Court of
Appeal in Pepys v London Transport Executive [1975] 1 WLR 234.

In our
judgment, we ought to make an order in favour of the acquiring authority for
payment of their costs, or at the least, a portion of their costs incurred
after the date of the sealed offer, in addition to those conceded to be payable
as being incurred before that date, but not including the costs thrown away by
the adjournment on December 3 1990. Such an order is justified not only under
section 4, but indeed by the principle that costs should follow the event.

However, we
regard two features of the case as being important. They are: (1) that an
attack on Mr Whelan’s credit was made at the hearing and failed; (2) that but
for our decision on the point of law we would undoubtedly have made an award in
Mr Whelan’s favour of £62,052. Indeed, if our decision on the point of law were
overturned, our alternative award would become an effective award.

These features
make it fair and just (to use an expression used in one of the cases cited to
us by Mr Purchas) that the acquiring authority should not receive all their
costs of the reference. We hold that those features are special reasons
justifying us in limiting the amount of the costs which otherwise we would be
bound to order under section 4.

We thus make
the following orders: that save as to costs, which are the subject of orders
already made:

(1) by consent, that the claimant do pay to the
acquiring authority their costs of the reference incurred before the date of
the sealed offer;

(2) that the claimant do pay his own costs
incurred after the date of the sealed offer;

(3) that the claimant do pay to the acquiring
authority one-half of their costs of the reference incurred after the date of
the sealed offer other than the costs thrown away by the adjournment on
December 3 1990, but including the costs reserved under the order dated
February 7 1992, all such costs (other than those thrown away as aforesaid and
the claimant’s own costs), if not agreed, to be taxed by the Registrar of the
Lands Tribunal on the High Court standard basis.

We wish to
record our indebtedness to counsel for their assistance to us throughout this
long case.

APPENDIX 6

Summary of Mr
Clegg’s evidence

Mr Clegg said
that in June 1980 Mr Whelan was farming Skid Hill Farm, Cheverells Farm and
Lusted Hall Farm, with a total area of 994 acres, as one unit. He had also
exchanged contracts for the purchase of a further 800 acres known as Norheads
Farm. A policy of mixed farming was maintained with a balance between livestock
and arable. The best-quality land was used for arable purposes and in June 1980
approximately 780 acres was under cultivation. The subject site was isolated
from the remainder of the pasture acreage of the farm and could only have been
used for occasional grazing. The proposed improvement would have allowed a
single field of 84 acres to be farmed in arable rotation.

He had
prepared a total of eight valuations each based on different assumptions.
Valuations I to IV assumed that the tipping operation would be undertaken by Mr
Whelan himself. Valuations V to VIII were similar to valuations I to IV except
that the tipping would be done by a third party operator and not by Mr Whelan
himself. In each valuation all the volumes254 and profitability figures in relation to the tipping operation had been
provided by Mr Cuming and all the agricultural profitability figures and
timings of reinstatement had been provided by Mr Worthington. In each valuation
he had calculated the loss of income from tipping and the loss caused by the
restriction on agricultural improvement to the land. To arrive at the latter
loss he had looked both at the capital value and the agricultural profitability
of the land which could not be filled or used for agricultural purposes. Where
appropriate, he had also calculated the effect on adjacent agricultural land
which could not be filled or used for agricultural purposes and had also
calculated the effect on adjacent agricultural land of restrictions on filling.
His detailed assumptions and valuations are set out in appendix 7, but his
conclusions can be summarised as follows:

	Tipping loss	Agricultural Profitability foregone	Increased agricultural profit foregone on adjacent land	Total loss
	£	£	£	£
Valuation IC	50,236	2,180	1,069	62,485
(scheme A-C)
Valuation II	40,395	855	—	41,250
(scheme B-D)
Valuation III	45,668	1,111	—	46,780
(scheme B-D-D1)
Valuation IV	113,517	1,727	—	115,244
(scheme B-(D-D1+D2))
Valuation V	24,000	2,180	1,069	27,249
Valuation VI	16,500	855	—	17,355
Valuation VII	21,450	1,111	—	22,561
Valuation VIII	55,539	1,727	—	57,266


APPENDIX 7
Mr Clegg’s valuations
Summary of valuations and breakdown of claim amended valuations: valuations I to VIII
Valuations I to IV calculated as if worked directly by Mr Whelan. Valuations V to VIII are the same schemes, but assume an operator worked the site in return for a royalty payment.
	Tipping	Agricultural Profitability foregone	Increased agricultural profit foregone on adjacent land	Total
	£	£	£	£
Valuation I	59,236	2,180	1,069	62,485
(scheme A-C)
Valuation II	40,395	855	—	41,250
(scheme B-D)
Valuation III	45,668	1,111	—	46,780
(scheme B-D-D1)
Valuation IV	113,517	1,727	—	115,244
(scheme B-(D-D1+D2))
Valuation V	24,000	2,180	1,069	27,249
Valuation VI	16,500	855	—	17,355
Valuation VII	21,450	1,111	—	22,561
Valuation VIII	55,539	1,727	—	57,266

Valuation I: valuation I and assumptions

For the
purpose of this valuation, it is assumed:

(i) The British Gas pipeline easement (the old
easement) granted in September 1971 does not prohibit filling thereon.

(ii) The work proposed would have been permitted
under Class VI of Schedule I to the Town and Country Planning General
Development Order 1977.

(iii) Should the work not fall within the ambit of
the 1977 order, then planning permission would have been forthcoming for the
proposed tipping.

(iv) A waste disposal licence for Class A waste
(builders rubble, etc) would have been readily forthcoming from the county
council.

(v) The amount of fill required to infill the
whole site would have been 255,000 m³.

(vi) The profit from the whole site would have been
£261,387.

(vii) The site would have been worked directly by
Mr J P Whelan.

(viii) There was a detrimental effect on the
adjacent fields which are in arable production, due to the shape of the fields
and consequent increased costs of working the land.

(ix) The potential increased profit over the field
would have reflected a number of different factors which are detailed in the
valuation.

(x) The potential increased profit derived from
the surrounding land (five acres) would have been £100/annum. This value has
been advised by Mr Worthington.

(xi) The value of the subject land in an improved
agricultural state would have been £1,800/acre.

(xiii) The value of the subject land as it existed
in 1980 would have been £800/acre. This is agreed.

(xiii) A reasonable yield for good-quality
agricultural land in June 1980 would have been 4%. This should apply to rental
figures. This is agreed.

(xiv) The appropriate rental figure would be
represented by 50% of the increase in profit to which an agricultural yield has
been applied to give a capital value. This is agreed.

(xv) The area of land lost to reasonable
beneficial farming use being part of the batters is 1.7 acres. This is agreed.

(xvi) The whole reinstated land would show full
production after approximately four years from the relevant date.

(xvii) The work is carried out up to, but not over,
the line of the new gas pipeline.

(xviii) The amount of fill required subject to the new
gas pipeline easement is 207,000 m³.

(xix) The profit from filling the site subject to
the new gas pipeline easement would have been £202.151.

(xx) There is no short or medium-term opportunity
for any development and no obvious alternative use on 1.7 acres.

(xxi) The value of the 1.7 acres subject to the
easement is £225/acre. This is agreed. (There is no possible profitable use to
which this land can be put.)

(xxii) Agricultural profitability foregone over 1.7
acres would have been £120/acre.

(xxiii) The benefits to adjacent land would be
available after four years.

Note:

1. All
volumes and profitability figures in relation to tipping have been provided by
Mr Cuming.

2. All
agricultural profitability figures and timings of reinstatement have been provided
by Mr Worthington.

VALUATION I
1. Loss of income from tipping		£
Volume of fill required for whole site	255,000 m³
Profit		261,387
Volume of fill required for whole site subject to constraints of tipping of the new gas pipeline easement	207,000 m³
Profit		202,151
Loss of value of fill		59,236
2. Loss occasioned by the restrictions on agricultural improvement to the land
Sterilised strip of land which cannot be filled, nor used for agricultural purposes.
Method 1 – capital values
Improved land value (xi)	£1,800/acre
Land value (xxi)	£225/acre
Value foregone	£1,575/acre
Area lost (xv)	1.7 acre
Therefore value foregone on 1.7 acres @ £1,575/acre	£2,677.50
Deferred 4 years (xvi) @ 4% (xiii), 0.855
		2,289
Method 2 – agricultural profitability
Profitability foregone @ £120/acre (xxii) over 1.7 acres	£204
Rental element	£102
Years purchase of £1 into perpetuity @ 4% deferred 4 years	21.37
Agricultural profitability foregone		2,180

255

Clearly,
method 2 is more relevant to the circumstances of this case as the very reason
for making the improvement is to increase the profitability of the farm as a
whole. The economics of scale of farming on areas of land immediately adjacent
to an existing farm operation must be the overriding consideration.

3. The effect on adjacent agricultural land of restriction on infill operations
Net increased profit from cost saving £100/annum (x), from year 4 (xxiii) to perpetuity
Rental element	£50/year
YP of £1 in perpetuity, deferred for 4 years @ 4%	21.37
Net gain		1,069
Summary of valuation I
1. Value of tipping foregone		59,236
2. Agricultural profitability foregone		2,180
3. Additional savings on field amalgamation foregone			1,069
Valuation I			62,485

Alternative
basis of valuation: valuation II — amended assumptions

For the
purposes of this valuation, again in addition to the assumptions in 5.1 (ii),
(iii), (iv), (vii), (xi), (xiii), (xvi), (xxi), assume

(i) The British Gas pipeline easement granted in
September 1971 (the old gas-pipeline easement) prohibited filling thereon.

(ii) The volume of fill which was required subject
to the old gas pipeline easement was 201,000 m³.

(iii) The profit derived from 6.1 (ii) would have
been £190,646.

(iv) The volume of fill required subject to
restriction of old and new gas pipeline easements was 168,000 m³.

(v) The profit derived from 6.1 (iv) would have
been £150,251.

(vi) The area which as a result could not be used
for any beneficial agricultural use is 0.8 acre, although the shape would have
been partially reduced the benefit of this area.

(vii) Agricultural profitability foregone would
have been £100/acre.

VALUATION II
1. Loss of income from tipping
		£
Volume of fill required subject to restriction regarding old gas pipeline easement	201,000 m³
Profit		190,646
Volume of fill required for whole site subject to restriction regarding old and new gas pipeline easements
Profit		150,251
Loss of value of fill		40,395
2. Loss occasioned by the restrictions on agricultural improvement to the land
Sterilised strip of land which cannot be filled nor used for agricultural purposes.
Method 1 – capital values
Improved land value	£1,800/acre
Less land value	£225/acre
Loss on 1 acre	£1,575
Area lost 0.8 acre
PV of £1 in approx 4 years @ 4%, 0.855
Loss of land value		1,077
Method 2 – agricultural profitability
Profitability foregone @ £100/acre over 1.5 acres, 0.8	£80
Rental element	£40
YP of £1 in perpetuity in 6 1/2 years @ 4%	21.37
Agricultural profitability foregone		855

Clearly method 2 is more relevant to the circumstances of this case
as the very reason for making the improvement is to increase the profitability
of the farm as a whole. The economics of scale of farming on areas of land
immediately adjacent to an existing farm operation must be the overriding
consideration.

Summary of valuation II
Loss of value of tipping rights	40,395
Agricultural profitability foregone	855
Valuation II	41,250

Alternative basis of valuation: valuation III amended assumptions

For the
purpose of this valuation again in addition to the assumptions in 5.1 (ii),
(iii), (iv), (vii), (xi), (xii), (xiii), (xiv), (xvi) and 6.1 (i), (ii), (iii),
(vi), (vii) assume:

(i) No fill would have been tipped in the apex to
the east of the old and new gas pipeline easements (area D(1)).

(ii) The volume of fill required subject to
restriction of old and new gas pipeline easements, not tipping on area D(1) was
158,000 m³.

(iii) The profit derived from 7.1 (ii) would have
been £144,978.

(iv) The additional loss of net croppable area is
0.2 acres.

VALUATION III
1. Loss of income from tipping
Volume of fill required subject to restriction regarding old gas pipeline easement	201,000 m³
Profit		190,646
Volume of fill required for whole site subject to restriction regarding old and new gas pipeline easements, not filling over area D(1)	158,100 m³
Profit		144,978
Loss of value of fill		45,668
2. Loss occasioned by the restrictions on agricultural improvement to the land
Loss of agricultural profitability from
valuation II, plus additional loss		855
Method I – capital values
Improved land value	£1,800/acre
Less value of unimproved land	£225/acre
Difference	£1,575/acre
Loss on 0.2 acre	£315
PV of £1 in approx 4 years @ 4%	0.855	269
		(not used)
Method 2 – agricultural profitability
Profitability foregone @ £120/acre over 0.2 acre	£24
Rental element	£12
YP of £1 into perpetuity in 4 years @ 4%	21.37
Agricultural profitability foregone		256
Total loss from restrictions to agricultural improvement		1,111
Summary of valuation III
Loss of value of tipping rights		45,668
Agricultural profitability foregone		1,111
Valuation III		46,780

Alternative
basis of valuation: valuation IV — amended assumptions

For the
purposes of this valuation again in addition to the assumptions in 5.1 (ii),
(iii), (iv), (vii), (xi), (xii), (xiii), (xiv), (xvi) and 6.1 (i), (ii), (iii),
assume:

(i) No fill at all would have been tipped to the
north of the old gas pipeline easement (areas D(1) and D(2)).

(ii) The value of fill required subject to
restriction of old and new gas pipeline easements, not tipping on area D(1) or
D(2), was 89,923 m³.

(iii) The profit derived from 8.1 (ii) would have
been £77,129.

(iv) The area over which loss of profit is derived
breaks down as follows:

(a) area available for improvement, 3.88 acres.

(b) area no longer available for existing use,

4.81 acres	pasture
0.88 acre	woodland
0.93 acre	arable

256

(v) Agricultural profitability would have been as follows:
£120/acre for arable cropping
£40/acre for pasture land
£0/acre for woodland
(vi) Capital values would have been as follows:
£1,800/acre for arable land
£800/acre for pasture land
£200/acre for woodland
VALUATION IV
1. Loss of income from tipping
		£
Volume of fill required subject to restriction regarding old gas pipeline easement	201,000 m³
Profit		190,646
Volume of fill required for whole site subject to restriction regarding old and new gas pipeline easements, not filling over areas D(1) or D(2)	89,923 m³
Profit		77,129
Loss of value of fill		113,517
2. Loss occasioned by the restrictions on agricultural improvement to the land
Method 1 – capital values
3.88 arable acres @ £1,800	6,984
less 4.81 pasture acres @ £800, £3,848
0.88 woodland acre @ £200, £176
0.93 arable acre @ £1,800, £1,674	5,698
		1,286
Method 2 – agricultural profitability
3.88 arable acres @ £120	465.60
less 4.81 pasture acres @ £40, £192,40
0.88 woodland acre @ £0, £0
0.93 arable acre @ £120, £111.60	304.00
		161.60
Rental element	80.80
YP of £1 into perpetuity deferred 4 years @ 4%, 21.37
Total loss from restrictions to agricultural improvement		1,727
Summary of valuation IV
Loss of value from tipping rights		113,517
Agricultural profitability foregone		1,727
Valuation IV		115.244
Alternative basis of valuation: valuations V-VIII
These valuations have been undertaken to assist the tribunal on an alternative basis as if an operator had taken the site and paid by way of a royalty. Valuations V-VIII correspond directly to Valuations I-IV.
VALUATION V
In addition to all the assumptions of valuation I, assume an operator was paying an agreed rate of return calculated on a cubic metre basis net of all costs (a royalty) of 50p/m³.
VALUATION V
1. Loss of income from tipping
Volume of fill required for the whole site	255,000 m³
Volume of fill required for the whole site subject to constraints of tipping of the new gas pipeline easement	207,000 m³
Difference	48,000 m³
Loss of infill at 50p/m³	24,000
2. Loss occasioned by the restrictions on agricultural improvement to the land
As valuation I	2,180
3. The effect on adjacent agricultural land of restriction of infill operations
As valuation I	1,069
Summary of valuation V
Value of tipping foregone		24,000
Agricultural profitability foregone		2,180
Additional saving on field amalgamation foregone		1,069
Valuation V		27,249
VALUATION VI
Taking the assumptions in valuation II, and assuming a royalty payment of 50p/m³.
1. Loss of income from tipping
Volume of fill required subject to restriction regarding old gas pipeline easement	201,000 m³
Volume of fill required for whole site subject to restriction regarding old and new gas pipeline easements	168,000 m³
Difference		33,000 m³
Loss of value of fill @ 50p/m³		16,500
2. Loss occasioned by the restrictions on agricultural improvement to the land
As valuation II		855
Valuation VI		17,355
VALUATION VII
Taking assumptions as in valuation III and assuming a royalty of 50p/m³.
1. Loss of income from tipping
Volume of fill required subject to restriction regarding old gas pipeline easement	201,000 m³
Volume of fill required for whole site subject to restriction regarding old and new gas pipeline easements (area D(1))	158,000 m³
Difference	42,900 m³
Loss of value of fill @ 50p/m³		21,450
2. Loss occasioned by the restrictions on agricultural improvement to the land
As valuation III		1,111
Valuation VII		22,561
VALUATION VIII
Taking assumptions as in valuation IV, and assuming a royalty of 50p/m³
1. Loss of income from tipping
Volume of fill required subject to restriction regarding old gas pipeline easement	201,000 m³
Volume of fill required for whole site subject to restriction regarding old and new gas pipeline easements (area D(1) and D(2)).	89,923 m³
Difference	111,077 m³
Loss of value of fill @ 50p/m³		55,539
2. Loss occasioned by the restrictions on agricultural improvement to the land
As valuation IV		1,727
Valuation VII		57,266

APPENDIX 9

Summary of Mr Farquhar’s evidence

Mr Farquhar
said that he had considered Mr Cuming’s report, but was of the opinion that the
amalgamation of fields suggested by Mr Cuming would still be affected by the
existing access to the AGI. To achieve significant economies of scale from the
amalgamation of the fields adjoining the valley after the latter had been
filled he would have expected to find large open fields elsewhere on Mr
Whelan’s farm but such fields did not exist. The loss of the valley, hedgerow
and part of Pitcher’s Wood would depreciate the value of the shooting rights as
currently game bird were driven eastwards from Pitcher’s Wood and field no 5000
over the valley so that high-flying birds would be presented. The latter
important feature of the shoot would be lost if the valley was filled.

Having regard
to the criteria set out in MAFF Leaflet 510 (Farming Restored Opencast Land)
he was of the view that it would be five years from the completion of filling
before a possible crop could be grown. By reference to the Wye College Farm
Management Pocketbook (11th ed) he had calculated that the average gross
margin likely to be achieved from farming the subject land for arable purposes
would be £158 pa per acre. From the same source he estimated that the gross
margin from the use of the land for sheep grazing would be £70 pa. He had
reduced the gross257 margin in the first year of reclamation to allow for the need for extra seed
and fertiliser during those years; he had also allowed £10 per acre pa up to
year nine to allow for any additional field cultivations, and labour. His gross
margin basis, ignoring fixed costs and cultivations suggested that the capital
value of the improvement would be £286 per acre.

He had
analysed the sale of Norheads Farm and having made allowances for the value of
the farm house, the farm buildings and cottages, he ascribed £848 per acre to
the better quality land. In his view the value of arable land in the vicinity
of the subject land in June 1980 was no more than £1,100 per acre and that the
latter figure was supported by published figures for farm sales in Kent during
1980. Although he did not agree with many of Mr Clegg’s assumptions and values
he had for comparative purposes only prepared his own versions of Mr Clegg’s
valuations I to IV substituting his own valuation figures for those of Mr
Clegg.

His
valuations are attached at appendix 10.

APPENDIX 10
Mr Farquhars valuations
VALUATION I
1. Loss of income from tipping (per Mr Piggott)		Nil
2. Loss of agricultural improvement
(a) Method 1		£
Value of raised land		1,100 per acre
Less: agreed value of unusable land		225 per acre
		875
Less: loss during construction		155 per acre*
		720 per acre
	£
Value foregone on 1.7 acres @ £720 per acre	1224
PV £1 in 10 years @ 4%	.6756	827
Less: reduction in value of shooting rights		1,125**
		Nil
(*Year 1: 0.9 acre @ gross margin of £70 per acre (sheep)	63
Gross margin on 9 acres @ £70 per acre	630
	693
PV £1 in 1 year @ 15%	.87	603
Year 2: as year 1	693
PV £1 in 2 years @ 15%	.756	524
Year 3: as year 1	693
PV £1 in 3 years @ 15%	.688	456
		1,583
\ income foregone per acre		155
(b) Method 2:
	£
Additional profit: 9 acres @ £19/acre	173	*
loss on 1.7 acre £32
Rental element 50%	16
YP prep @ 4% def’d 10 years	16.889
	270
Less: shooting loss as above	1,125	**
	Nil
(* revenue difference between arable and sheep calculated from Wye College Farm Management Handbook (11th ed))
(** British Gas and Mr. Whelan agreed £8,000 for loss of shooting over 36.21 acres in 1978, ie £221 per acre.Say 50% reduction: £110/acre on 10.23 acres		1,125)
Valuation I summary:
Loss of value of tipping	Nil
Loss of agricultural improvement: method 1	Nil
Loss of agricultural improvement: method 2	Nil
VALUATION II:
1. Loss of income for tipping (Mr Figgott)	Nil
2. Loss of agricultural improvement
(a) Method I
	£
Value per acre foregone as valuation I	720
Value foregone on 0.8 acre	576
PV £1 in 10 years @ 4%	.6756
	389
Less: shooting loss as above	1,125
	Nil
(b) Method 2
Additional profit as valuation I	173
Loss on 0.8 acre £15.20
Rental element 50%	7.60
YP prep @ 4% def’d 10 years	16.889
	128
Less shooting loss as above	1,125
	Nil
Valuation II summary:
Loss of value of tipping	Nil
Loss of agricultural improvement: method 1	Nil
Loss of agricultural improvement: method 2	Nil
VALUATION III
1. Loss of income from tipping (Mr Piggott)
2. Loss of agriculatural improvement
(a) Method I
	£
Value of raised land	1,100		per acre
Less: agreed existing use value	800 300		per acre
	300		per acre
Less: loss during construction as (Val I)	155		per acre
Loss on 1.0 acre	145		per acre
PV £ in 10 years @ 4%	.6756
	98
Less: shooting loss as above	1,125
	Nil
(b) Method 2
	£
Additional profit as Vol. I (9 acres)	173
Loss on 1 acre £19
Rental element 50%	9.50
YP prep @ 4% def’d 10 yrs	16.889
	160
Less: shooting loss as above	1,125
	Nil
Valuation III summary:
Loss of value of tipping	Nil
Loss of agricultural improvement: method 1		Nil
Loss of agricultural improvement: method 2		Nil
VALUATION IV
1. Loss of income from tipping (Mr Piggott)	Nil
2. Loss of agricultural improvement:
(a) Method I
	£
Loss per acre as valuation III	300
Loss on 3.9 acres	1,170
PV £1 in 10 years @ 4%	.6756
	790
Less: shooting loss as above	1,125
	Nil

258

(b) Method 2
	£
Addition profit as valuation I (9 acres)	173
Loss on 3.9 acres £74
Rental element 50%	37
YP prep @ 4% def’d 10 years	16.889
	625
Less: shooting loss as above	1,125
	Nil
Summary of valuation IV
Loss of value of tipping	Nil
Loss of agricultural improvement: method 1	Nil
Loss of agricultural improvement: method 2	Nil
VALUATIONS V, VI, VII & VIII
As the values Mr Farquhar used for valuations V to VIII were the same as he had used in valuations I to IV he again arrived at nil value for each of the later valuations. We have not therefore considered it necessary to append valuations V to VIII.