Davy v Leeds Corporation

JurisdictionEngland & Wales
CourtCourt of Appeal
JudgeThe Master Of The Rolls,LORD JUSTICE HARMAN,LORD JUSTICE DIPLOCK,THE MASTER OF THE ROLLS
Judgment Date29 June 1964
Judgment citation (vLex)[1964] EWCA Civ J0629-4
Date29 June 1964

[1964] EWCA Civ J0629-4

In The Supreme Court of Judicature

Court of Appeal

From the Lands Tribunal

Before:

The Master of the Rolls

(Lord Denning)

Lord Justice Harman and

Lord Justice Diplock

Davy
Claimant Respondent
and
The Lord Mayor, Aldermen and Citizens of the City of Leeds
Respondents Appellants
Central Freehold Estates (Leeds) Limited
Claimants Respondents
and
The Lord Mayor, Aldermen and Citizens of the City of Leeds
Respondents Appellants

Mr F. H. B. Layfield (instructed by Messrs Sharpe Pritchard & Co., Agents for Mr Robert Crute, Town Clerk, Leeds) appeared as Counsel for the Appellants.

Mr Nigel Bridge (instructed by Messrs Armitage, Speight & Ashworth, Leeds) appeared as Counsel for the Respondents.

The Master Of The Rolls
1

Until recently Leeds was disfigured by large areas of slums near the centre of the city. Many of the houses were back-to-back and unfit for human habitation. The Corporation of Leeds have taken steps to clear away these slums. They have since the war bought several areas by agreement and cleared them. They have also compulsorily acquired much of the property. This case raises a question about the compensation payable to the owners on compulsory acquisition. We are concerned with 12 back-to-back houses owned by Mr Davy. They were in Crimbles Place and Crimbles Street: and 14 back-to-hack houses owned by Central Freehold Estates (Leeds) Limited. They were in Elmwood Street and Albert Grove. The amount involved is snail but the decision is said to affect many cases all over the country.

2

On the 6th November, 1957, the Corporation of Leeds declared an area of £30 acres in the Albert Road area to be a clearance area and they followed it up on the 4th December, 19571 with a resolution to make a compulsory purchase order. In July 1958 they ma de the order and on the 27th July, 1959, it was confirmed by the Minister.

3

This clearance area of 30 acres contained properties which fell into three categories: (1) Houses which were unfit for human habitation. These included the 12 and 14 back-to-back houses with which this case is concerned. They had to come down. (2) Houses which were fit for human habitation. These were not so bad but it was necessary for the Corporation to acquire them and pull them down so as to get a cleared area of convenient shape and dimensions. (3) Sites which the Corporation had already cleared. These had been acquired by agreement between 1948 and 1957.

4

On the 2nd November, 1959? the Corporation served notice to treat in regard to these 12 and 14 unfit houses. On the 1st September, 1960, they entered. The houses have now all been cleared save one which was left for inspection.

5

In fixing the compensation for the unfit houses, several matters are common ground: (1) The value must he taken as at the date of the notice to treat, namely, 2nd November, 1959. (2) The value must be taken to be the amount which the land might be expected to realise if sold in the open market by a willing seller (see Section 2 of the Acquisition of Land Act, 1919). It will be remembered that between 1947 and 1959 compensation was assessed on the basis of the existing use of the land (for example, as agricultural land) and not upon its potential use (for example, as building land). But under Section 1 of the Town & Country Planning Act, 1959, the "existing use" basis was abolished and the "market value" basis restored. The land must be regarded as a site cleared of buildings and available for development (see Section 59(2) of the Housing Act 1957).

6

We thus reach this test, which is not in dispute: the value of these houses must be assessed as the value of the site, assuming they had been demolished, and the site cleared and put on the open market. But the point of difference is this. Is the valuer to ignore the fact that the houses are in the midst of a clearance area? or is he to take it into account? If he ignores the clearance area, then he looks upon it as a site in the midst of a mass of slums which are not likely to be cleared for a long time. (This is the "no clearance area" basis). If he takes the clearance area into account, then he looks upon it as a site in the midst of an area which is just about to be cleared and redeveloped. (This is the "clearance area" basis). There is all the difference in the world between the two. No one is likely to give much for a site which is encompassed by slums, but he would be ready to pay a good deal more if he knew they were just about to be cleared. The point can be illustrated by the figures found by the Tribunal. If the site is to be regarded as a site in the midst of slums not likely to be cleared for a long time (that is the "no clearance area"basis) the value of the site of the 12 houses would be £625. But if it is to be regarded as a site in the midst of 30 acres, which were themselves about to be cleared and the area redeveloped (that is the "clearance area" basis), the value would be £830. The corresponding figure for the site of the 14 houses would be £330 on the "no clearance area" basis, and £500 on the "clearance area" basis.

7

In order to resolve this difference we have been taken through the provisions as to compensation in the Town & Country Planning Act, 1959. I must say that rarely have I come across such a mass of obscurity, even in a statute. I cannot conceive how any ordinary person can be expected to understand it. So deep is the thicket that, before the Lands Tribunal, both of the very experienced Counsel lost their way. Each of them missed the last 20 words of sub-section (8) of Section 9. So did this expert Tribunal itself. I do not blame them for this. It might happen to anyone in this jungle. I am only too grateful to Counsel for guiding us through it.

8

It would be tedious beyond measure for me to go through the various sections of the Acts of Parliament, to follow up the cross references, end then explain it in detail. We have done it all in the course of argument. I go straight to the crucial sections on which the decision depends and apply them to the circumstances of this case.

9

The first is Section 9(2), Case I, and sub-section 7(a) of the Town & Country Planning Act 1959. That section enacts that, in assessing compensation for compulsory acquisition, no account shall be taken of any increase or diminution in the value of the site of these 12 or 14 houses which is attributable to the clearing of the remainder of the 30 acres (that is the removal of buildings or materials from the land, levelling and so forth), if that clearing of the 30 acres "would not have been likely to be carried out if the acquiring authority had not acquired and did not propose to acquire any of" those 30acres. As I read that sub-section, the proper way of valuing the site of these 12 or 14 houses is to assume that the Corporation had not acquired the remainder of the 30 acres and did not propose to acquire them: and then ask: Was it likely in that event that the 30 acres would have been cleared? If it is likely that they would have been cleared in the near future (for example, by a private developer), then you have a site in the midst of an area just about to be developed, so you must increase the price accordingly. But if it is not likely that they would have been cleared by anyone other than the Corporation, then you must regard the area as not being cleared land, and you have a site in the midst of slums and you must decrease the price accordingly.

10

Applying that test, Mr Bridge said this: Even if the Corporation had not acquired the 30 acres and did not propose to acquire them, the area would in any case have been cleared; because the Corporation had already declared it to be a clearance area and were bound to see that it was cleared (for example, by ordering the owners to clear it) even though they did not acquire the land themselves. But Mr Layfield answered by saying this: If the Corporation had not acquired the 30 acres or proposed to acquire them, it is unlikely that anyone would have cleared the area for years. The Corporation declared it to be a clearance area with a view to making a compulsory purchase order immediately afterwards; and that is what they did. If the Corporation had not been minded to make a compulsory purchase order, they would not have declared it to be a clearance area.

11

On balancing these two arguments, I think Mr Layfield is right. I think that if the Corporation had not acquired or had not proposed to acquire these 30 acres, no one would have cleared this area for years. In order to assess the value, the area should be regarded as not being cleared at all. In my judgment, therefore, the site of the 12 housesshould be regarded as a cleared site in the midst of a mass of slum property which no one was likely to develop for years. That makes the value of the site of the 12 houses £625 and likewise the site of the 14 houses is of the value of £330.

12

The other section which needs consideration is Section 1(2) of the Second Schedule of the Town & Country Planning Act 1959. That provides a maximum or "ceiling" to the compensation which can be awarded. It enacts that the compensation payable in respect of the compulsory acquisition of unfit houses shall not in any event exceed the amount which would have been payable if (a) the 12 (or 14) houses had been left standing and not demolished, and (b) the 30 acres "had not been declared a clearance area". In short, the maximum compensation is the value of the 12 (or 14) houses as they stood back-to-back in the midst of a mass of slum property which no one was likely to develop for years.

13

Mr Bridge placed much reliance on that section. He said that the legislature, in providing a ceiling in the Second Schedule, had expressly specified that it should be on a "no clearance area" basis. And this impliedly meant that in assessing the actual value, it should be taken on a "clearance area"...

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