Hughes v Doncaster Metropolitan Borough Council

JurisdictionEngland & Wales
JudgeLORD JUSTICE DILLON,LORD JUSTICE STAUGHTON,LORD JUSTICE MANN
Judgment Date10 November 1989
Judgment citation (vLex)[1989] EWCA Civ J1110-3
Docket Number89/1086
CourtCourt of Appeal (Civil Division)
Date10 November 1989
Between:
Charles Arthur Hughes

and

Nora Louisa Hughes
Respondents (Claimants)
and
Doncaster Metropolitan
Borough Council
Appellant (Acquiring Authority)

[1989] EWCA Civ J1110-3

Before:

Lord Justice Dillon

Lord Justice Staughton

and

Lord Justice Mann

89/1086

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE LANDS TRIBUNAL

Royal Courts of Justice

MR. R.M.K. GRAY, Q.C. and MR. R. CAMPBELL (instructed by Messrs Taylor Bracewell, Doncaster) appeared on behalf of the Respondents/Claimants.

MR. L. READ, Q.C., MR. S. PICKLES and MR. P. HARRISON (instructed by Messrs Sharpe Pritchard, London Agents for W. R. Bugler Esq.Doncaster Metropolitan Borough Council) appeared on behalf of the Appellant/Acquiring Authority.

LORD JUSTICE DILLON
1

This is an appeal from a decision of the Lands Tribunal given on 16th November 1987 on a reference by the respondents to the appeal ("the claimants") to determine the amount of compensation payable by the appellants, the Doncaster Metropolitan Borough Council ("the acquiring authority"), for the compulsory acquisition of certain lands and premises owned and occupied by the claimants. The appeal therefore takes the form of a Case Stated by the Member of the Lands Tribunal raising questions of law for the decision of this court. There are three questions put in the case, but in the event only the first two have been argued.

2

The lands and premises in question are at Black Bank, Doncaster Carr, Doncaster, and they were compulsorily acquired under a Compulsory Purchase Order made in 1973 by the former Doncaster Borough Council. Notice to treat was served by the acquiring authority on 23rd January 1976 and possession was taken on 1st November 1981.

3

The lands and premises in question—the reference land—have been identified by reference to a plan on which part is coloured blue and part is coloured green. These parts have been referred to as "the blue land" and "the green land" and for the purposes of this appeal it is unnecessary to identify them further.

4

The claimants purchased the blue land from a Mr. Brough under a Conveyance of 30th September 1969, and they purchased the adjoining green land under a Conveyance of 26th October 1972. At the time of the 1969 Conveyance they also acquired from Mr. Brough the goodwill of the business of scrap metal merchants and rag merchants carried on on the blue land under the name of William Brough & Sons and certain plant fixtures and fittings. That business had been commenced by Mr. Brough on the blue land in or about 1959. The business was continued and developed by the claimants after their 1969 purchase and was extended on to the green land after the 1972 purchase. The business was highly successful; the decision of the Lands Tribunal records that its turnover in the three years prior to 1981 was regularly nearly £2 million and in 1981 was £2,830,803. As a result of the compulsory purchase, the business, as carried on on the reference land, i.e. the blue and green lands, had to be closed down, as it was not possible, despite protracted search, to find an appropriate alternative site. The claimants claim to be compensated for the closing down of that business.

5

The crucial factor, which gives rise to the questions on this appeal, is that at no time was planning permission sought or obtained by Mr. Brough or by the claimants for the change of use of the blue land or of the green land to use for the purposes of the business which I have mentioned or for the erection on these lands of warehouses or other buildings used for the purposes of that business. The distinction between the blue land and the green lands lies in the dates when the development took place, whether by change of use or by erection of buildings. There was a dwelling house erected on the blue land in 1930 and another dwelling house erected on the reference land in 1936; nothing turns on these. The unauthorised development of the blue land began in or about 1959 in the time of Mr. Brough and was completed sufficiently long ago to have been immune from enforcement action under the Town and Country Planning Acts for the time being in force at all times relevant to the compulsory purchase of the blue land by the acquiring authority. By contrast the development of the green land took place later and was not so immune. Full details are set out in the decision of the Lands Tribunal, and it is unnecessary to set them out in this judgment which is only concerned with the questions of law raised by the Lands Tribunal.

6

The compensation to be paid by the acquiring authority to the claimants for the compulsory acquisition of the reference land falls to be assessed in accordance with the Rules set out in section 5 of the Land Compensation Act 1961, which provides as follows:

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 the 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:

  • (3) The special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the special needs of a particular purchaser or the requirements of any authority possessing compulsory purchase powers:

  • (4) Where the value of the land is increased by reason of the use thereof or of any premises thereon in a manner which could be restrained by any court, or is contrary to law, or is detrimental to the health of the occupants of the premises or to the public health, the amount of that increase shall not be taken into account:

  • (5) Where land is, and but for the compulsory acquisition would continue to be, devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, the compensation may, if the Lands Tribunal is satisfied that reinstatement in some other place is bona fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement:

  • (6) The provisions of rule (2) shall not affect the assessment of compensation for disturbance or any other matter not directly based on the value of land:

and the following provisions of this Part of this Act shall have effect with the respect to the assessment.

7

This section repeats provisions formerly contained in, and first introduced as, section 2 of the Aquisition of Land (Assessment of Compensation) Act 1919.

8

The 1919 Act was preceded by the Report of a Committee, presided over by Mr. Leslie Scott K.C., M.P., appointed by the Prime Minister of the day in July 1917 "To consider and report upon the defects in the existing system of law and practice involved in the acquisition and valuation of land for public purposes, and to recommend any changes that may be desirable in the public interest". In the course of the argument on this appeal we were invited by counsel for the claimants to look at the recommendations of the Scott Committee in this Report. We did so, de bene esse; but as we found nothing in the recommendations or in the report itself which was relevant to the questions which are before us, we found it unnecessary to rule on their admissibility, which was disputed. That there was nothing relevant in the report was not surprising since at the time the Scott Committee reported and the 1919 Act was passed there was no Town and Country Planning law.

9

The first question put to this court in the Case Stated by the Lands Tribunal is whether the member of the Tribunal erred in law in holding that Rule 4 in section 5 of the Land Compensation Act 1961 did not invalidate the claimants' claims for compensation for disturbance or other matters under Rule 6 of the said section because compensation for disturbance or such matters as aforesaid was not part of "the value of land" within the meaning of the said Rule 4.

10

The view of the Member was that as a matter of construction Rule 4 only applied to "the value of the land" as land to be assessed under Rule 2. Consequently the respondents were entitled under Rule 6 to compensation for the business they had lost by way of compensation for disturbance—in effect a separate heading—whether or not that business had been carried on "contrary to law" on the blue land or the green land.

11

In considering this question it is, in my judgment, important to keep in mind that in the leading case of Horn v. Sunderland Corporation [1941] 2 KB 26 the majority of the court firmly rejected the argument that under the Act of 1919, which as I have said was the statutory predecessor of section 5 and was in the same terms, the value of the land and compensation for disturbance must be considered as two distinct matters (so to speak in watertight compartments) in respect of each of which the landowner was entitled as a matter of law to have a sum awarded for compensation and that the question whether compensation for disturbance should be awarded could not in any way be affected by the nature and amount of the sum arrived at in respect of the value of the land.

12

In Horn's case Sir Wilfred Greene, M.R. said at page 34, in words that are equally applicable to section 5 of the 1961 Act:

"Now r.6 does not confer a right to claim compensation. It merely leaves unaffected the right which the owner would before the Act of 1919 have had in a proper case to claim that the compensation to be paid for the land should be increased on the ground that he had been disturbed."

13

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