Jelson Ltd v Blaby District Council

REVISED JUDGMENT

In 1951 there was a plan to make a ring road round Leicester City. Everyone thought that it would be implemented. But ten years later, in 1961, the plan was abandoned because it would not fit in with the new M.1. So the strip of land has remained unused as a road. Now it is just an open space. It is a very long narrow strip of land about one-third of a mile long and about 140 feet wide. Only about six acres in all.

The owners have required the local council to purchase this long strip of land. They ask for £60,000 compensation. But the council say it should be only £6,000.

The history starts in 1951. The whole of this neighbourhood was open land. This strip was planned to be part of the ring road. Both the strip itself, and all the land on both sides of the strip, were owned at that time by the Jelson family, and afterwards by Jelson Ltd. This strip went right through their land. Jelsons applied for planning permission to build houses on all aprts of their land: (1) Their land on the east of the strip: (2) their land on the west of the strip: and (3) this strip of land. In 1966, after an inquiry, planning permission was given for the land on the east and west: but not for this strip of land. It was not to be used for houses. It was to be a ring road.

The Jelsons family developed the land on the east in 1954. They later developed the land on the west. In making their plans, they took into account the reservation for the ring road. They planned their development accordingly. Believing that the strip would be tur4ned into a ring road, they build the houses to face on the proposed ring road and made service roads for these at the backs. They finished that development by about 1958. But then in 1961 everything was altered. The proposalfor the ring road was abandoned. It was because the new M.1 was to be built.

Jelsons then wondered what was to be done about this ring road. In 1963 they made another application for planning permission for this strip. They again suggested that they should put up 60 houses on it. They got quite a long way with the proposal. They had discussions with the county planning officer and the district council. All of those agreed upon a lay-out for the 60 houses on the strip. But then the local residents there objected. They had their houses facing on to the strip: and they objected very much to having houses built on it to block their view and disturb their amenities. The Minister held another inquiry. He supported the objectors. He refused to let houses be built on this strip. So there it was. This strip of land was made sterile and incapable of development.

The Jelsons then asked the local council to purchase the strip. They made the necessary application under section 129 of the Town and Country Planning Act 1962. There was another inquiry by the Minister. It was held that the land was incapable of being of any beneficial use and that the council ought to purchase it. So a compulsory purchase order was made. By the provisions of the Act, there was a "deemed" notice to treat. Compensation was to be given on the basis that there was a compulsory purchase by a notice to treat deemed to be given in 1965. In point of fact the council did not enter until 1971. But nothing now turns on the date.

The compensation falls to be assessed under the Land Compensation Act, 1961 section 5(2). which says: "The value of the land shall… be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise(at the date of the notice of entry)". Viewed as a strip of land, with no building potential, the value would only be £6,000. But Jelsons say that the strip would have been worth £60,000 if it had not been subjected to the scheme for the ring road. They say it was that scheme which prevented the site from being developed for houses. They rely on the Pointe Gourde principle enunciated by Lord McDermott in Pointe Gourde Quarrying and Transport Co. Ltd. v. Sub-Intendent of Crown Lands (1947) Appeal Cases 565. That principle is that, if land is compulsorily acquired in pursuance of a statutory scheme, the compensation is to be assessed without regard to any enhancement of value due to the scheme itself. That principle applies not only to appreciation of value but also to depreciation of value. It has been so held in one or two cases. Jelsons say that the land was depreciated by reason of the scheme for a ring road,...