Canterbury City Council v Colley and Another
| Jurisdiction | England & Wales |
| Judge | Lord Templeman,Lord Ackner,Lord Oliver of Aylmerton,Lord Mustill,Lord Woolf |
| Judgment Date | 21 January 1993 |
| Judgment citation (vLex) | [1993] UKHL J0121-2 |
| Date | 21 January 1993 |
| Court | House of Lords |
[1993] UKHL J0121-2
House of Lords
Lord Templeman
Lord Ackner
Lord Oliver of Aylmerton
Lord Mustill
Lord Woolf
My Lords,
For the reasons to be given by my noble and learned friend Lord Oliver of Aylmerton I would dismiss this appeal.
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Oliver of Aylmerton. I agree with it and for the reasons he gives I too would dismiss this appeal.
My Lords,
Section 45 of the Town and Country Planning Act 1971 (re-enacting provisions which first appeared in section 21 of the Town and Country Planning Act of 1947) empowers a local planning authority, subject to certain conditions and subject, in the absence of consent from persons affected, to confirmation by the Secretary of State, to order the revocation or modification of a planning permission which has been granted. Where such an order (other than one made with the consent of the person affected) has been made and confirmed, a person interested in the land who has incurred expenditure rendered abortive by the order or who has otherwise sustained loss directly attributable to the revocation or modification is entitled, under section 164 of the Act, to claim and receive compensation for the expenditure or loss so incurred or sustained. Subsection (4) of section 164, however, contains a provision limiting the amount of any loss capable of being claimed for depreciation of the value of an interest in the land affected by the revocation or modification. It is in these terms:—
"In calculating, for the purposes of this section, the amount of any loss or damage consisting of depreciation of the value of an interest in land, it shall be assumed that planning permission would be granted for development of the land of any class specified in Schedule 8 to this Act."
Schedule 8 (which is headed "development not constituting new development") is primarily related to the provisions of section 169 of the Act, which applies not to a revocation of an existing planning permission but to the refusal by the Secretary of State, either on an appeal or on a reference, of an application for planning permission. If the application is for development of a class specified in Part II of Schedule 8, that section confers a right to compensation. Part I of the schedule relates to development not ranking under section 169 for compensation for a refusal for planning permission and it embraces, for relevant purposes, the rebuilding of buildings in existence on 1 January 1948 or coming into existence thereafter so long as the cubic content of the original building is not exceeded by certain defined limits.
The present appeal, which is brought with the leave of the Court of Appeal, relates to a property at Whitstable known as Marley House for which, subject to conditions and detailed approval, an outline planning permission had been granted on 15 November 1961 by the Kent County Council, then the local planning authority, for "the demolition of house and erection of new dwelling". Following that permission, the house originally standing on the property was demolished in September 1963 but no new dwelling was ever in fact erected. On 31 January 1986 the appellants purchased the site at a price of £14,500 and there thereafter ensued a lengthy dispute between the appellants and the respondents, now the planning authority for the area, relating to the continuing validity of the 1961 planning permission. That dispute was finally resolved in the appellants' favour. In the interim the appellants had made a new application for the erection of a house within the same curtilage as the original Marley House although not in precisely the same position. That application was refused but in June 1987 the respondents told the appellants that the original permission was regarded as valid and that they would consider proposals for implementing it. The appellants sought to follow this up and expended moneys in abortive design expenditure. That sum is not now in dispute. On 12 November 1987, however, the respondents notified the appellants that they had made an order revoking the 1961 permission and had submitted it to the Secretary of State for confirmation. Following a public inquiry the order was confirmed on 17 August 1989. The appellants then made a claim for compensation under section 164 which was referred to the Lands Tribunal. On 27 March 1991 the Tribunal made an interim award of £108,626.84 consisting of £106,750 depreciation in value of the land and £1,876.84 abortive design expenditure. The only question currently in issue is the correctness of the Member's assessment of the depreciation in value of the land at the sum of £106,750 which was arrived at by, in effect, disregarding the assumption required to be made by section 164(4). The Member valued the land with the benefit of the 1961 permission at £115,000. Without that permission, and disregarding the statutory assumption, the valuation was £8,250. On the basis of making the statutory assumption, however, the Member found that the post-revocation value of the land was £70,000, thus reducing the compensation on this footing to £45,000.
In reaching the conclusion that he did in apparent defiance of the express requirement of section 164(4) the Member was much influenced by the fact that the development to which the revoked permission related was, in substance at least, the very permission which the subsection required to be assumed to be still subsisting. As it happened, the evidence satisfied him that the 1961 permission would have enabled the appellants to build a considerably larger house than the original Marley House, with the result that the actual post-revocation value of the site was greater than that which resulted from the simple application of the statutory assumption. The statutory assumption would, however, result, on any analysis, in the appellants being deprived of a substantial part of their real loss by the attribution of a notional planning permission which was in fact incapable of implementation. Indeed, as Mr Keene, Q.C., has forcefully argued, if one supposes a planning permission covering merely the erection of a building of the same size and on the same site as the building demolished, the effect of the statutory assumption is to eliminate any compensation at all for the undoubted depreciation of the land value occasioned by the revocation. The Member's view was that this could not possibly have been the intention of Parliament in enacting a provision designed to provide compensation. "It seems to me", he said, "that in revocation order cases section 164 will only operate as Parliament intended it to operate if the development resulting from the Schedule 8 assumption, although a hypothetical one, is not that which also corresponds with the subject of the associated revocation order. This could be achieved by notionally adding at the end of subsection (4) of section 164 words such as 'unless such...
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