Decision Nº ACQ 447 2007. Upper Tribunal (Lands Chamber), 03-06-2009
| Jurisdiction | UK Non-devolved |
| Judge | Mr Paul Francis FRICSMr Andrew J Trott FRICS |
| Date | 03 June 2009 |
| Court | Upper Tribunal (Lands Chamber) |
| Judgement Number | ACQ 447 2007 |
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UPPER TRIBUNAL (LANDS CHAMBER) |
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UT Neutral Citation number: [2009] UKUT 102 (LC)
LT Case Number: ACQ/447/2007
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
COMPENSATION – Compulsory purchase – substantial former city-centre office building – development prospects – planning – hope value – costs – residual valuation – alternative schemes – compensation £4,500,000
IN THE MATTER of A NOTICE OF REFERENCE
BETWEEN RIDGELAND PROPERTIES LIMITED Claimant
Re: Tollgate House, Houlton Street, Bristol BS2 9DJ
Before: P R Francis FRICS and A J Trott FRICS
Sitting at: Procession House, 110 New Bridge Street, London EC4V 6JL
on
29 September - 3 October, 6 -10 and 13 -14 October 2008
Timothy Mould QC and Guy Williams, instructed by Brecher, solicitors of London W1 for the claimant
Neil King QC and Rupert Warren, instructed by Ashurst, solicitors of London EC2 for the acquiring authority
The following cases are referred to in this decision:
Jumbuk Ltd v West Midlands Passenger Transport Executive [2008] RVR 186
Spirerose Ltd v Transport for London [2008] RVR 12
Transport for London v Spirerose Limited (in Administration) [2008] EWCA Civ 1230
Gateley v Central Lancashire New Town Development Corporation [1984] 1 EGLR 195
Bwllfa and Merthyr Dare Steam Collieries Ltd v Pontypridd Waterworks Co [1903] AC 426
Purfleet Farms Limited v Secretary of State for Transport, Local Government and the Regions [2003] 1 P&CR 324
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This is a decision to determine the compensation payable to Ridgeland Properties Limited (the claimant) by Bristol City Council (the “council” or “acquiring authority”) in respect of the compulsory acquisition of Tollgate House, Houlton Street, Bristol BS2 9DJ (the subject property) under the Bristol City Council (Broadmead Expansion, Bristol) Compulsory Purchase Order 2003 (the CPO). The notice of reference was lodged with the Tribunal by the acquiring authority on 9 August 2007.
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Mr Timothy Mould QC and Mr Guy Williams of counsel appeared for the claimant and called David Napier FRICS, a director of G L Hearn, Property Consultants, of London W1 who gave planning evidence, Stewart Wallace MRICS, managing director of Kingfisher Associates of Teignmouth, Devon who gave evidence of conversion and development costs and James Edward Sydney Hewetson MRICS, a partner in Matthews & Goodman, Chartered Surveyors of London SW1 who gave valuation evidence.
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Mr Neil King QC and Mr Rupert Warren of counsel appeared for the acquiring authority, and called Michael Orr BA (Hons) B.Pl Dip UD MRTPI, founding partner of CSJ Planning Consultants Ltd of Bristol who gave planning evidence. Tim Martin BSc CEng MICE MRICS, Christopher Baldwin BSc MRICS and Richard Alexander Owen BA MRICS IRRV, all partners in Drivers Jonas LLP, Property Consultants, gave costs, residential property and valuation evidence respectively.
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Closing submissions were received from the parties by 4 November 2008; we undertook an accompanied inspection of one of the comparable sites, Ocean Views, Portland on 10 November 2008, and made an unaccompanied inspection of the former location of the subject property and its surroundings on 6 January 2009. A laptop computer containing the “Circle Developer” software upon which the valuation experts had constructed their residual appraisals (and containing their final versions of these) was provided to the Tribunal on 26 January 2009.
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The claimant, which had acquired the subject property in August 1999 with the intention of converting it principally to residential use with elements of leisure and office uses, sought, in its amended statement of case, compensation on two alternative bases. Firstly (its principal case) that, due to the CPO scheme, it had been unable to proceed with a development (“the amended claim scheme”) which would, on increasing the height of the existing building by six storeys, comprise 485 flats (including 145 affordable units), a health club/gym of 23,850 sq ft, 18,425 sq ft offices and 371 parking spaces. Planning consent for such a scheme could be assumed to have been forthcoming at the valuation date, and the residualised land value was in the region of £37,000,000. In the alternative, a scheme that did not involve raising the height of the existing block (“the amended baseline scheme”) and which would comprise 335 residential units, a 26,695 sq ft health club/gym, 18,425 sq ft offices and 317 parking spaces would, the claimant said, have obtained consent at the valuation date. The residualised value of that, including an element of hope value to reflect the likelihood or prospect of subsequently obtaining a revised consent for the amended claim scheme, was in the region of £26,000,000. On each basis, additional claims were made for loss of profits, together with reinvestment costs, but these were subsequently withdrawn. By the time the hearing commenced, some amendments and corrections were made to the claimant’s valuation of the amended claim scheme, which had the effect of reducing the principal claim to £36,500,000. The amended baseline scheme claim remained the same.
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In its reply, the acquiring authority, whilst acknowledging that planning consent could reasonably have been anticipated for a major mixed-use (C3/B1/D2) development, contended that there was no prospect whatsoever of the claimant obtaining consent for its proposed amended claim scheme. Following meetings in November 2007 between the parties’ planning experts, a scheme evolved that involved no increase in height to the main block and which would comprise 303 residential 1 and 2 bedroom units, 327 parking spaces and a new four storey block containing a health club and offices (“the November 2007 scheme”). Whilst in principle it was likely to have been considered favourably in planning terms, there were serious deficiencies in terms of the affordable housing element and section 106 obligations. The claimant’s amended baseline scheme subsequently followed but in the council’s expert’s view a residual valuation of such a scheme would produce a negative value for the land. The council then produced a scheme (“the Bristol scheme”) which was a variation of the claimant’s amended baseline scheme and which was considered by them to demonstrate a viable alternative that produced a positive site value. The Bristol scheme provided for 236 residential units (of which 30% were affordable housing, split 70/30 social rented/shared ownership), a 10,000 sq ft health and fitness centre and 11,250 sq ft of...
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