Homes and Communities Agency v JS Bloor (Wilmslow) Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Carnwath,Lord Neuberger,Lord Clarke,Lord Sumption,Lord Hughes |
| Judgment Date | 22 February 2017 |
| Neutral Citation | [2017] UKSC 12 |
| Date | 22 February 2017 |
| Court | Supreme Court |
[2017] UKSC 12
Lord Neuberger, President
Lord Clarke
Lord Sumption
Lord Carnwath
Lord Hughes
Appellant
Martin Kingston QC
Richard Kimblin QC
(Instructed by DWF LLP)
Respondent
Michael Humphries QC
Alexander Booth QC
(Instructed by Eversheds LLP)
Heard on 12 January 2017
( with whomLord Neuberger, Lord Clarke, Lord Sumption and Lord Hughesagree)
This appeal concerns the assessment of compensation for compulsory acquisition of two parcels of grazing land, amounting in all to 26.85 acres (10.86 ha) ("the reference land"), formerly owned by the present appellant ("the claimants"). They were part of a much larger area of some 420 acres (170ha) acquired under the North West Development Agency (Kingsway Business Park, Rochdale) Compulsory Purchase Order 2002 ("the CPO"), for the development of the so-called Kingsway Business Park ("KBP"). Responsibility for payment of compensation now rests with the Homes and Communities Agency, the respondent to this appeal ("the authority").
An initial claim was made for £2,593,000 compensation, on the basis that the land had significant hope value for residential development, independently of the scheme of acquisition. The authority contended that the claim should be limited to the existing use value, giving a figure (rounded) of £50,000. The Upper Tribunal agreed with the claimants in part, awarding compensation of £746,000. On the authority's appeal, the Court of Appeal declined to accept the argument of either party, and remitted the matter to the tribunal to re-determine compensation on what it considered to be the correct basis. The valuation date was 4 January 2006, being the date when the reference land vested in the acquiring authority under a general vesting declaration.
The facts are set out in detail in the Upper Tribunal's decision. A summary will suffice. The order lands lie about one mile east of Rochdale town centre, on the north-west side of the M62 motorway, close to Junction 21. The reference land, shown as Plots 13 & 14 on the CPO plan, comprises two adjoining parcels of land towards the north east part of the order lands, close to, but not immediately adjoining, a road to the south-east known as Buckley Hill Lane. The claimants relied on the prospect, in the absence of the scheme, of planning permission for residential development being permitted with access from Buckley Hill Lane through an intervening plot known as "the Nib" (also in their ownership but not subject to the CPO).
The area has a long planning history. Its potential for development of some form had been recognised since the 1960s. In 1999 developers published a "KBP Development Framework", in support of an application for planning permission. The framework included a master plan within which the reference land was shown for development of various kinds (including some residential) within phase 5. Planning consents linked to the master plan were granted on 19 December 1999. As the tribunal found (para 13) they had been commenced and were extant at the valuation date.
At the time the CPO was made (in 2002) the reference land was owned by members of the Nall family. A planning application had been submitted on their behalf for residential development on part of the reference land and the Nib, but it was refused on 18 January 2002 as piecemeal development. The land, together with the Nib, was acquired by the claimants in May 2003 for a total price of £1.3m (para 18). Their objection to the CPO was rejected, principally on the grounds that the land was needed for the comprehensive development of the KBP scheme (para 19).
The Statutory Development Plan at the valuation date comprised the regional guidance (RPG13) approved in March 2003 and the Rochdale Unitary Development Plan ("the 1999 UDP") adopted in March 1999. The KBP was listed in RPG 13 as one of 11 Strategic Regional Sites. The KBP site was allocated under policy EC/6 of the UDP, subject to certain criteria including provision for vehicular access to be obtained "from the A664 Kingsway and from Junction 21 of the M62 Motorway only"; for any individual development to be "compatible with the overall objective of a strategic business park development"; and for "limited residential development … provided it is part of a comprehensive development scheme for predominantly business uses …" (para 23). Similar policies were reproduced in policy EC/7 of the draft replacement UDP which was "well under way" by the valuation date, and was agreed to be material to a hypothetical planning application made at that time (paras 24–30). It was common ground that a limited residential development on the reference land with access from Buckley Hill Lane would not have been recommended for refusal on highway grounds (para 31).
In August 2006 the claimants made an application to Rochdale MBC for a Certificate of Appropriate Alternative Development (see para 15 below) in respect of the reference land, for various classes of development including residential development of 74 dwellings. The officers' report recommended refusal on the grounds (inter alia) of non-compliance with policy EC/6 of the UDP. Following sight of the report, the application was withdrawn before formal determination.
The appeal raises questions concerning the so-called Pointe-Gourde rule ( Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565), or "no-scheme" rule: that is, the rule that compensation for compulsory acquisition is to be assessed disregarding any increase or decrease in value solely attributable to the underlying scheme of the acquiring authority. The law is to be found in the Land Compensation Act 1961 as explained and expanded by judicial interpretation. The particular issue concerns the relationship between the general provisions for the disregard of the scheme, and the more specific provisions relating to planning assumptions.
The rule has given rise to substantial controversy and difficulty in practice. In Waters v Welsh Development Agency [2004] 1 WLR 1304; [2004] UKHL 19, para 2 (" Waters"), Lord Nicholls of Birkenhead spoke of the law as "fraught with complexity and obscurity". In a report in 2003 the Law Commission conducted a detailed review of the history of the rule and the relevant jurisprudence, and made recommendations for the replacement of the existing rules by a comprehensive statutory code ( Towards a Compulsory Purchase Code (1) Compensation Law Com No 286 (Cm 6071)). Since that report aspects of the rule have been subject to authoritative exposition by the House of Lords in Waters itself, and more recently in Transport for London v Spirerose Ltd [2009] 1 WLR 1797; [2009] UKHL 44 (" Spirerose").
Although the Law Commission's recommendations for a complete new code were not adopted by government, limited amendments to the 1961 Act in line with their recommendations were made by the Localism Act 2011 section 232 (relating to planning assumptions) Further proposed amendments, dealing with the no-scheme principle more generally, are currently before Parliament in the Neighbourhood Planning Bill 2016–17. The purpose of the latter is said to be that of "clarify[ing] the principles and assumptions for the 'no-scheme world', taking into account the case law and judicial comment" (Explanatory Notes para 70). The present appeal falls to be decided by reference to the 1961 Act as it stood before the 2011 amendments.
Section 5 rule 2 established the general principle that the value of land is taken to be "the amount which the land if sold in the open market by a willing seller might be expected to realise". In applying this general principle, it is necessary for present purposes to take account of two other groups of provisions, relating first to "disregards" of actual or prospective development (section 6 and Schedule 1), and secondly to "planning assumptions" (sections 14–16).
Section 6 (headed "disregard of actual or prospective development in certain cases") has been treated by the courts as a statutory but not exhaustive embodiment of the Pointe Gourde principle (see Waters paras 49–54). So far as relevant to this appeal it provides:
"1 … no account shall be taken of any increase or diminution in the value of the relevant interest which, in the circumstances described in any of the paragraphs in the first column of Part I of the First Schedule to this Act, is attributable to the carrying out or the prospect of so much of the development mentioned in relation thereto in the second column of that Part as would not have been likely to be carried out if —
(a) (where the acquisition is for purposes involving development of any of the land authorised to be acquired) the acquiring authority had not acquired and did not propose to acquire any of the land; …"
Part I of the First Schedule sets out in tabular form a number of "cases" with the corresponding "development", the prospect of which is to be left out of account. The first case is:
"Where the acquisition is for purposes involving development of any of the land authorised to be acquired."
The corresponding development is:
"Development of any of the land authorised to be acquired, other than the relevant land, being development for any of the purposes for which any part of the first-mentioned land (including any part of the relevant land) is to be acquired." (emphasis added)
Although this paragraph in terms applies the statutory disregard to land "other than" the "relevant land", that is the land subject to acquisition, the Pointe Gourde rule has been treated by the court as requiring the same...
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...for these purposes is the land for which compensation for compulsory acquisition is to be assessed (see, e.g., J S Bloor (Wilmslow) Limited v Homes and Communities Agency [2017] UKSC 12 at [17] per Lord Carnwath of Notting Hill JSC). 13 Section 17(4) was considered by the House of Lords in ......