Greenweb Ltd v Wandsworth London Borough Council
| Jurisdiction | England & Wales |
| Judge | Lord Justice Stanley Burnton,Lord Justice Thomas,Lord Justice Buxton |
| Judgment Date | 31 July 2008 |
| Neutral Citation | [2008] EWCA Civ 910 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: C3/2007/2336 |
| Date | 31 July 2008 |
[2008] EWCA Civ 910
Lord Justice Buxton
Lord Justice Thomas and
Lord Justice Stanley Burnton
Case No: C3/2007/2336
David Elvin QC and Reuben Taylor (instructed by the Solicitor to the London Borough of Wandsworth) for the Compensating Authority / Appellant John Male QC (instructed by Lovells) for the Claimant / Respondent
Hearing date: 9 July 2008
Introduction
The issue in this appeal is whether the London Borough of Wandsworth is required by the provisions of the Land Compensation Act 1961 (“the Act”) to pay in compensation to the owner who served a purchase notice a sum that is more than one hundred times its market value.
The appeal is by the London Borough of Wandsworth against the decision of the Lands Tribunal (The President and Mr Francis) given on 17 September 2007 by which it assessed the compensation payable by the Council to Greenweb Limited, following the service of a purchase notice, pursuant to the Act, at £1.6 million.
The parties were agreed that the value of the land in question in the open market was £15,000. It is being used as a park, and has no subsisting planning permission for any other use, and it was unlikely that any such planning permission would be forthcoming in the future. Thus the compensation of £1.6 million bears no relationship to the actual market value of the land in question. Greenweb is the fortunate recipient of an enormous windfall, having paid only £30,000 for the land, about one fiftieth of the compensation it will receive as a result of the Tribunal's decision.
The Tribunal's assessment of compensation was made on the basis that the Act compels the assumption to be made that planning permission has been granted for a Victorian terrace which was present on the land but was destroyed by enemy action during the Second World War. In other words the Tribunal assessed compensation on the basis of an assumption that planning permission existed for a development which has not been present on the land for more than 60 years.
The facts
The facts relevant to the decision of the Tribunal and to this appeal were sensibly and helpfully agreed between the parties.
In the 1880's nine three-storey dwelling houses were constructed on the site, of agreed dimensions. There was also a commercial building. They were all severely bomb-damaged during the Second World War, and as a result all of the buildings were cleared from the site at some time before 1 July 1948. On that date four prefabricated houses were present on part of the site. They had been removed by about 1978. From about 1979 the site was used as public open space. Deemed planning permission for use as public open space was granted in June 1979, and that permission was implemented. The site was sold by the London Residuary Body in 1988 and came into private ownership.
In April 2000, since Wandsworth were then negotiating for the purchase of the land from the owner, he applied under section 17 of the Act for a certificate of alternative development, specifying as the development dwelling houses or a day nursery or a mix of the two. In June 2000 the owner of the land made an application for planning permission for the erection of 5 2-bedroom mews houses. Wandsworth failed to determine either application, and the owner appealed. The land was purchased by Greenweb on 31 January 2001 for £30,000. In February 2001 a public inquiry was held, and on 15 May 2001 the Secretary of State, accepting the recommendations of the inspector, dismissed both appeals. The effect, as far as the section 18 appeal was concerned, was that the deemed nil certificate stood: planning permission would be granted for any development for which the land was being acquired by Wandsworth but not for any other development.
On 10 May 2002 Greenweb served a purchase notice on Wandsworth, who accepted it by letter dated 23 October 2002. By section 139(3)(b) of the Town and Country Planning Act 1990 Wandsworth was deemed to have served a notice to treat in respect of the land. A claim for compensation pursuant to the Land Compensation Act 1961 therefore arose.
Before the Tribunal it was agreed that the compensation payable to Greenweb should be assessed on one of three bases:
i) with an assumed planning permission for the carrying out of the rebuilding of 9 dwelling houses and one commercial building (“Basis 1);
ii) with an assumed planning permission for the carrying out of the rebuilding of four prefabricated houses with additional “hope value” (Basis 2); or
iii) As public open space only (“Basis 3”).
The parties also agreed:
i) the amount of compensation to which Greenweb was entitled on Basis 1 was £1.6 million;
ii) the amount of compensation to which Greenweb was entitled on Basis 2 was £1.2 million; and
iii) the amount of compensation to which Greenweb was entitled on Basis 3 was £15,000.
Lastly, it was agreed that on any of the above bases the assumed planning permission was capable of implementation.
The statutory provisions
The provisions determining the amount of compensation payable by an acquiring authority are in Part II of the Act. Section 5 sets out a number of general rules or principles, of which rules (1) and (2) are fundamental:
Rules for assessing compensation
5. Compensation in respect of any compulsory acquisition shall be assessed in accordance with the following rules:
(1) No allowance shall be made on account of the acquisition being compulsory;
(2) The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise;
…..
and the following provisions of this Part of this Act shall have effect with respect to the assessment.
Sections 6 to 16 contain more specific provisions, all of which are drafted in terms that appear to make their application mandatory to cases to which they apply. Section 14(1) provides:
(1) For the purpose of assessing compensation in respect of any compulsory acquisition, such one or more of the assumptions mentioned in sections fifteen and sixteen of this Act as are applicable to the relevant land or any part thereof shall (subject to subsection (3A) of this section) be made in ascertaining the value of the relevant interest.
Subsection (3A) is irrelevant for the purposes of the present case.
Section 15 provides:
15. (1) In a case where—
(a) the relevant interest is to be acquired for purposes which involve the carrying out of proposals of the acquiring authority for development of the relevant land or part thereof, and
(b) on the date of service of the notice to treat there is not in force planning permission for that development,
it shall be assumed that planning permission would be granted, in respect of the relevant land or that part thereof, as the case may be, such as would permit development thereof in accordance with the proposals of the acquiring authority.
(2) For the purposes of paragraph (b) of the preceding subsection, no account shall be taken of any planning permission so granted as not to enure (while the permission remains in force) for the benefit of the land and of all persons for the time being interested therein.
(3) Subject to subsection (4) of this section, it shall be assumed that, in respect of the relevant land or any part of it, planning permission would be granted—
(a) subject to the condition set out in Schedule 10 to the Town and Country Planning Act 1990, for any development of a class specified in paragraph 1 of Schedule 3 to that Act; and
(b) for any development of a class specified in paragraph 2 of Schedule 3 to that Act.
(4) Notwithstanding anything in subsection (3) of this section—
(a), (b). . . . . . .
(c) where, at any time before the said date, an order was made under section 51 of the said Act of 1971, in respect of the relevant land or any part thereof, requiring the removal of any building or the discontinuance of any use, and compensation became payable in respect of that order under section 170 of that Act, it shall not by virtue of the said subsection (3) be assumed that planning permission would be granted, in respect of the relevant land or that part thereof, as the case may be, for the rebuilding of that building or the resumption of that use.
(5) 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, but, where any conditions are, in accordance with those provisions, specified in the certificate, only subject to those conditions and, if any future time is so specified, only at that time.
This case concerns section 15(3)(a). Paragraph 1 of Schedule 3 to the Town and Country Planning Act 1990, to which it refers, is as follows:
Development Not Ranking For Compensation under s. 114
1. The carrying out of—
(a) the rebuilding, as often as occasion may require, of any building which was in existence on 1st July 1948, or of any building which was in existence before that date but was destroyed or demolished after 7th January 1937, including the making good of war damage sustained...
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