Cabletel Surrey and Hampshire Ltd v Brookwood Cemetery Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ALDOUS,Lord Justice Mance,LORD JUSTICE MANCE,LORD JUSTICE LONGMORE |
| Judgment Date | 09 May 2002 |
| Neutral Citation | [2002] EWCA Civ 720 |
| Date | 09 May 2002 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | B2/2001/1672 |
[2002] EWCA Civ 720
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EPSOM COUNTY COURT
(His Honour Judge Hull QC)
Royal Courts of Justice
Strand
London WC2
Lord Justice Aldous
Lord Justice Mance
Lord Justice Longmore
B2/2001/1672
MISS C HUTTON (Instructed by Messrs Robbins Olivey, Woking, Surrey GU22 7UY) appeared on behalf of the Appellant
MR R SAHONTE (Instructed by Messrs Field Fisher Waterhouse, London EC3N 2AA) appeared on behalf of the Respondent
I invite Lord Justice Mance to give the first judgment.
Woking has several hundred private roads. Less well-known, perhaps, is the fact that they or many of them are owned by the appellants, Brookwood Cemetery Ltd. This appeal concerns two such roads, Lytton Road and The Ridge. These are cul-de-sacs serving a number of houses, in total 82. It is common ground that each frontager occupies owns and maintains the road in front of his or her house up to the middle. The appellants' ownership might, I hope not unfairly, be described as inactive, at least until this litigation.
During 1999 many of the house owners were keen to have and the respondent telecommunications company was interested in supplying an under-road cable facility enabling individual house owners, if they wished, to be connected up to and to receive cable television. The appellants objected that this could not be done without their consent as owners and initially obtained an injunction restraining the works. Thereafter, the present proceedings were begun to obtain an order entitling the respondents to execute the works and to keep and maintain their cabling system and to fix the terms. The works have, we were told, been suspended meanwhile.
The proceedings are brought under the Telecommunications Act 1984. Schedule 2 sets out a code, paragraph 2 of which provides that such works require the consent of the occupier of any affected land—that is of the frontager house owners. That consent was here obtained. But paragraph 2 also enables the consent of the landowners, where they differ from the occupiers, to be dispensed with by the court. The crucial provisions are paragraph 2(4) and paragraph 7, which read as follows:
"2(4) An order under this paragraph made in respect of a proposed right may, in conferring that right or providing it to bind any person or interest in land and in dispensing with the need for any person's agreement, direct that the right shall have effect with such modifications, be exercisable on such terms and be subject to such conditions as may be specified in the order.
7(1) The terms and conditions specified by virtue of sub-paragraph (4) of paragraph 5 above in an order under that paragraph dispensing with the need for a person's agreement shall include—
(a) such terms with respect to the payment of consideration in respect of the giving of the agreement, or the exercise of the right to which the order relates, as it appears to the court would have been fair and reasonable if the agreement had been given willingly and subject to the other provisions of the order; and
(b) such terms as appear to the court appropriate for ensuring that that person and persons from time to time bound by virtue of paragraph 2(4) above by the rights to which the order relates are adequately compensated (whether by the payment of such consideration or otherwise) for any loss or damage sustained by them in consequence of the exercise of those rights.
(2) In determining what terms should be specified in an order under paragraph 5 above for requiring an amount to be paid to any person in respect of—
(a) the provisions of that order conferring any right or providing for any right to bind any person or any interest in land, or
(b) the exercise of any right to which the order relates, the court shall take into account the prejudicial effect (if any) of the order or, as the case may be, of the exercise of the right on that person's enjoyment of, or on any interest of his in, land other than the land in relation to which the right is conferred.
(4) The terms specified by virtue of sub-paragraph (1) above in an order under paragraph 5 above may provide—
(a) for the making of payments from time to time to such persons as may be determined under those terms; and
(b) for questions arising in consequence of those terms (whether as to the amount of any loss or damage caused by the exercise of a right or otherwise) to be referred to arbitration or to be determined in such other manner as may be specified in the order."
The issue between the parties concerns the proper terms to be fixed under paragraph 7(1)(a). No question arises of any loss or damage or, therefore, of any compensation under paragraph 7(1)(b).
So far as concerns the interpretation of these paragraphs, both parties were content before the judge (and before us) to adopt as correct the statements of principle in a judgment of His Honour Judge Hague QC in Mercury Communications Ltd v London and Indian Dock Investments Ltd (1993) 69 P&CR 135. We have not therefore heard argument on any point which might or might be thought to arise as to the proper approach, and we are not in the circumstances to be taken as expressing any concluded view on any such point. However, we can, we think, highlight certain aspects which emerge from the judgment in Mercury, since they are, as we say, common ground before us.
First, the exercise required by paragraph 7 is not one of ascertaining market terms or value, although any market terms or value are a relevant consideration to take into account. The test, when fixing terms with respect to either the payment of consideration or the exercise of the rights to which the order relates, is what "it appears to the court would have been fair and reasonable if the agreement had been given willingly". This formulation was no doubt chosen because of the public interest in enabling ordinary members of the public to be offered and to obtain new telecommunications services without individual landowners being able to insist on perhaps excessive sums, for example because of the need to use what might in some cases amount to no more than ransom strips.
However, as His Honour Judge Hague remarked at page 144G, this formulation does introduce an element of subjective judgment into the process of fixing of terms. His Honour Judge Hague found that assistance was to be obtained when making such a judgment from examining comparables, and so did the experts called in the present case. When considering comparables allowance should, however, be made if it could be shown that the paying party had, for whatever reason, been ready to concede a high value for pragmatic reasons: for example time constraints, the expense or uncertainty of litigation, or (I might add) the small size of the works and of any payment: see page 168.
His Honour Judge Hague further identified as relevant considerations "the importance and value of the proposed right to the grantee" and the parties' relative bargaining positions, although the last factor may, as already indicated, cut both ways: see pages 159 and 169.
The importance and value of the proposed right meant in the Mercury case that it was legitimate and indeed necessary to take into account that the proposed spur would "unlock the benefits that Mercury expects to gain from the Canary Wharf extension to its network". That was a relevant general consideration, but His Honour Judge Hague went on to reject emphatically any suggestion that the terms should entitle the grantor to a share of the anticipated profits that the grantee might thus make: see pages 160–163.
The judge in the present case heard expert evidence from two experts, Mr Sadler and Mr Walker. I would say at the outset that the latter's report suffered from the apparent problem that it was headed "compensation" and that it failed to distinguish between paragraph 7(1)(a) and (b) of the code, or to draw the distinction made in Mercury (and accepted as common ground before us) between the principles governing compensation for compulsory purchase and those governing terms fixed under paragraph 7(1)(a); and also that Mr Sadler appears to have considerably longer experience than Mr Walker and to have produced more relevant and better documented comparables. Indeed, Mr Walker singularly failed to address in his reports the Guildown comparable which had been disclosed by his own client since it related to them.
Mr Walker relied on "industrial rates of or in the region of £6 per metre, which had been agreed between an estates and way leaves committee formed by electricity companies and representatives of other bodies, such as the National Farmers Union (NFU) and the Country Landowners Association (CLA). The evidence, particularly in Mr Walker's cross-examination, suggests that these were agreed to avoid unnecessary litigation, and Mr Walker suggested that they should be adopted with a similar view to obviate any doubt or future disputes like the present. Mr Walker acknowledged that the vast majority of the private land affected in such cases was agricultural land, and that the issue whether such rates could apply to other land was "in dispute". That quote comes from his report. But he submitted that comparables showed that the use to which land was put was "rarely a factor taken into consideration by the telecommunications companies". Where there was a split, as here, of ownership and occupation he said that in some cases a 75/25 apportionment was made. I must confess that the...
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