Bridgend County Borough Council v Michael Boland and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Hickinbottom,Lord Justice Hamblen,Lord Justice Lloyd Jones |
| Judgment Date | 14 July 2017 |
| Neutral Citation | [2017] EWCA Civ 1004 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: C3/2016/4253 |
| Date | 14 July 2017 |
[2017] EWCA Civ 1004
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL (LANDS CHAMBER)
HIS HONOUR JUDGE JARMAN QC AND A J TROTT FRICS
[2016] UKUT 174 (LC)
Cardiff Civil and Family Justice Centre
2 Park Street, Cardiff, CF10 1ET
Lord Justice Lloyd Jones
Lord Justice Hamblen
and
Lord Justice Hickinbottom
Case No: C3/2016/4253
Wayne Beglan and Tara O'Leary (instructed by Legal and Regulatory Services, Bridgend County Borough Council) for the Appellant
George Newsom (instructed by Thomas Simon Solicitors) for the Respondent
Hearing date: 27 June 2017
Introduction
The Respondents ("Mr & Mrs Boland") owned 0.655 hectares of arable land adjacent to Pen-y-fai Church in Wales Primary School, Heol Eglwys, Pen-y-fai, Bridgend ("the Boland Land"), which the Appellant local authority ("the Council") acquired under a compulsory purchase order and subsequent general vesting declaration. A new school has now been built on land including the Boland Land.
Mr & Mrs Boland were entitled to compensation, calculated in accordance with the provisions of the Land Compensation Act 1961. The Council calculated that compensation on the basis that, if the replacement school had not proceeded, the Boland Land would have had no more than agricultural value. However, Mr & Mrs Boland considered that, in those circumstances, the land would have had a higher value because they would have been granted planning permission for residential development; and they applied to the Council under section 17 of the 1961 Act for a certificate to that effect.
The Council refused to grant a certificate in those terms, giving only a negative certificate that planning permission would not have been granted for any development other than for educational facilities for which the land had been acquired.
However, Mr & Mrs Boland appealed to the Lands Chamber of the Upper Tribunal ("the Upper Tribunal") where, on 7 July 2016, His Honour Judge Jarman QC and A J Trott FRICS allowed the appeal and varied the certificate to certify that, if the Council had not proposed to use its compulsory purchase powers to acquire the southernmost 0.46 hectares of the Boland Land ("the Reference Land"), planning permission would have been granted for the residential development of that land.
The Council, with the permission of the Upper Tribunal itself, now appeals against that decision.
Before us, Wayne Beglan and Tara O'Leary of Counsel appeared for the Council, and George Newsom of Counsel for Mr & Mrs Boland; and I thank them all for their assistance.
The Law
Statutory references in this judgment are to the 1961 Act, unless otherwise indicated.
The relevant provisions for determining the amount of compensation for the compulsory acquisition of interests in land are found in Part II of the 1961 Act, as amended. Section 5 sets out rules by which compensation is to be assessed, including, as section 5(2), the general rule that the interest is to be valued on an open market basis. That is, however, subject to various "disregards" of actual or prospective development (section 6 and Schedule 1). The assessment is based on various "planning assumptions" set out in sections 14–16, which recognise that a fair assessment of compensation should take into account, not only any planning permission already granted, but also grants in respect of the relevant land that might have been made but for the scheme proposed in the public interest. The relevant provisions have been substantially amended by section 232 of the Localism Act 2011, but this appeal concerns the assumptions as they stood before those amendments and this judgment is restricted to consideration of the provisions in that earlier form.
The assumptions set out in sections 14–16 have to be read together with section 17, which falls within Part III of the 1961 Act. It provides (so far as relevant to this appeal):
"(1) Where an interest in land is proposed to be acquired by an authority possessing compulsory purchase powers, either of the parties directly concerned may… apply to the local planning authority for a certificate under this section.
…
(4) Where an application is made to the local planning authority for a certificate under this section in respect of an interest in land, the local planning authority shall… issue to the applicant a certificate stating either of the following to be the opinion of the local planning authority regarding the grant of planning permission in respect of the land in question, if it were not proposed to be acquired by any authority possessing compulsory purchase powers, that is to say –
(a) that planning permission would have been granted for development of one or more classes specified in the certificate (whether specified in the application or not) and for any development for which the land is to be acquired, but would not have been granted for any other development;
(b) that planning permission would have been granted for any development for which the land is to be acquired, but would not have been granted for any other development; …".
Section 17(4) lies at the heart of this appeal.
Section 17(7) is also worth noting. It provides:
"In determining, for the purposes of the issue of a certificate under this section, whether planning permission for any particular class of development would have been granted in respect of any land, the local planning authority shall not treat development of that class as development for which planning permission would have been refused by reason only that it would have involved development of the land in question (or of that land together with other land) otherwise than in accordance with the provisions of the development plan relating thereto."
Consequently, a certificate must not be refused solely on the ground that the relevant hypothetical development would be contrary to the relevant development plan. As the learned authors of the Encyclopaedia of Compulsory Purchase and Compensation properly say (at paragraph D-1313–13), this provision is to avoid the whole purpose of the certificate system being defeated where the grant of planning permission is pursuant to a specific policy in the development plan, e.g. a policy allocating the relevant land for the use for which it is being acquired.
A certificate under section 17(4) is referred to as a "certificate of appropriate alternative development" ("CAAD"). A certificate issued under section 17(4)(a) is known as a "positive certificate"; and one issued under section 17(4)(b) as a "negative certificate". The effect of such certificates is dealt with in sections 14–16. When it comes to assessing compensation, a negative certificate does not require the assumption to be made that planning permission would necessarily be refused for any other development: it simply has to be taken into account (section 14(3)). However, where there is a positive certificate, section 15(5) provides for a mandatory assumption, in the following terms:
"Where a certificate is issued under the provisions of Part III of this Act, it shall be assumed that any planning permission which, according to the certificate, would have been granted in respect of the relevant land or part thereof if it were not proposed to be acquired by any authority possessing compulsory purchase powers would be so granted…".
Two matters in relation to section 17(4) were common ground before us.
i) The relevant date for the determination of an application for CAAD is the date of the notice that the interest in land is proposed to be acquired by an authority possessing powers of compulsory acquisition as defined in section 22(2), i.e. in this case 30 September 2005, the date the notice of the relevant compulsory purchase order was published.
ii) "Relevant land" for these purposes is the land for which compensation for compulsory acquisition is to be assessed (see, e.g., J S Bloor (Wilmslow) Limited v Homes and Communities Agency [2017] UKSC 12 at [17] per Lord Carnwath of Notting Hill JSC).
Section 17(4) was considered by the House of Lords in Fletcher Estates (Harlescott) Limited v Secretary of State for the Environment; Newell v Secretary of State for the Environment [2000] 2 AC 307 ("Fletcher Estates"), in which Lord Hope of Craighead gave the only substantive speech with which the rest of the House agreed. The appeal concerned a scheme for the improvement of the A49 trunk road east of Shrewsbury. The appellant developers owned land on the proposed route which, from the adoption of the Shrewsbury Urban Area Local Plan in June 1985, was protected and thus shown as unavailable for any other development. The notice of the proposed compulsory purchase order was published on 30 January 1986.
The appeal focused on the requirement of section 17(4) that the planning authority must issue its opinion regarding planning permission in respect of the land in question as "if it were not proposed to be acquired by the authority possessing the compulsory purchase powers." It was common ground between the developers and the Secretary of State that this required the authority to disregard the publication of the notice of the proposed compulsory purchase order. Lord Hope agreed (see page 319B-C). The issue for the House, he said, was "how much else must the local planning authority disregard when making its assumption?" (page 319C-D).
The Secretary of State accepted that, if the planning status of the land has to be considered on the basis of an assumption that there is no proposal to acquire the land compulsorily, the proposal underlying that acquisition must also be disregarded. The assumption must extend to the whole of the "underlying proposal" for these...
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