Secretary of State for the Environment v Fletcher Estates (Harlescott) Ltd ; Newell and Others v Secretary of State for the Environment
| Jurisdiction | UK Non-devolved |
| Judge | LORD BROWNE-WILKINSON,LORD HOPE OF CRAIGHEAD,LORD CLYDE,LORD HOBHOUSE OF WOODBOROUGH,LORD MILLETT |
| Judgment Date | 17 February 2000 |
| Judgment citation (vLex) | [2000] UKHL J0217-4 |
| Date | 17 February 2000 |
| Court | House of Lords |
And Others
And Another
And Another
[2000] UKHL J0217-4
Lord Browne-Wilkinson
Lord Hope of Craighead
Lord Clyde
Lord Hobhouse of Wood-borough
Lord Millett
HOUSE OF LORDS
My Lords,
I have read the speech prepared by my noble and learned friend, Lord Hope of Craighead. For the reasons which he gives I would dismiss the appeals.
My Lords,
The appellants in these conjoined appeals were at all material times the freehold owners of parcels of land at Sundorne to the east of Shrewsbury. I shall refer to them as "the landowners." It will be convenient to refer to the land owned by Joseph Newell, Elspeth Georgina Longmore and William Hugh Longmore, the Executors of J.V. Longmore, as "the Longmore land" and to the land owned by Fletcher Estates (Harlescott) Limited as "the Fletcher land." These parcels of land formed, in each case, part of larger areas of land in their respective ownerships.
On 30 January 1986 the Secretary of State for Transport gave notice of the making of draft compulsory purchase orders for the acquisition of land including the Fletcher land and the Longmore land for the purpose of constructing the A49 by-pass to the east of Shrewsbury. The date of entry in each case was 5 July 1990. The landowners then applied, on 19 October 1992 in respect of the Fletcher land and 4 December 1992 in respect of the Longmore land, under section 17(3) of the Land Compensation Act 1961 for certificates of appropriate development. On 8 May 1993 the Borough Council issued certificates under section 17(4)(a) of the Act. In the case of the Fletcher land the certificate was for residential development. In the case of the Longmore land it was for residential and industrial development. The Secretary of State for Transport appealed against those certificates under section 18 of the Act. On 4 July 1996, having considered the report by an Inspector following a public inquiry held under section 18(3) of the Act in Shrewsbury, the Secretary of State for the Environment allowed the appeals, cancelled the certificates which the Borough Council had issued and replaced them with certificates issued under section 17(4)(b). In the certificates which he issued the Secretary of State certified that, if the land were not proposed to be acquired by an authority possessing compulsory purchase powers, planning permission would have been granted for the road scheme for which the land was being acquired but that it would not have been granted for any other development.
The landowners applied to the High Court under section 21 of the 1961 Act to quash the decisions of the Secretary of State to issue certificates under section 17(4)(b) of the Act. On 10 June 1997 Dyson J. ordered that the applications be allowed and that the decisions of the Secretary of State be quashed. On 11 June 1998 the Court of Appeal (Nourse, Peter Gibson and Buxton L.JJ.) set aside the orders of Dyson J. and restored the decisions of the Secretary of State.
Two issues were argued before the Court of Appeal. The first issue related to the date at which the determination of the certificates of appropriate alternative development under section 17(4) had to be made. The question was whether this was the date when notice was given of the proposal to acquire the interest in land by the authority possessing compulsory purchase powers, as was held by Dyson J., or the date of entry to the land by the acquiring authority, as the Secretary of State had contended. The Court of Appeal affirmed the judgment of Dyson J. on this point. The second issue related to the assumption which has to be made by the local planning authority under section 17(4) when it is considering the question whether planning permission would have been granted for development if the land were not proposed to be acquired by an authority possessing compulsory purchase powers. The competing arguments on this issue were described by Dyson J. in the following passage in his judgment which, as Buxton L.J. observed in the Court of Appeal [1999] Q.B. 1144, 1150C, provides a neat summary of the competing arguments:
"[The landowners] contended that … the policies and facts applicable at the relevant date should have been viewed as if the bypass scheme had never been conceived at all. [The Secretary of State] contended that the policies and facts should be taken on the relevant date as if the scheme had been cancelled on that date, and not as if the scheme had never been conceived at all."
Dyson J. upheld the landowners' argument, but the Court of Appeal disagreed with him on this issue. It held that, in making its determination, the local planning authority had to disregard the proposal for acquisition only and not any fact or policy attributable at any time in the past to the underlying scheme.
The Court of Appeal gave leave to appeal to the landowners against its decision that the orders of Dyson J. should be set aside. It granted leave to the Secretary of State to cross-appeal on the first issue as to the relevant date for the determination of the certificates. The Secretary of State presented cross-appeals on this issue, and they were conjoined with the appeals which had been presented on the second issue by the landowners. But in his written case the Secretary of State intimated that he no longer wished to pursue his cross-appeals on the first issue. In the result it was common ground before your Lordships that the relevant date for the determination of a certificate of alternative development under section 17(4) of the Act of 1961 is the date of the notice that the interest in land is proposed to be acquired by an authority possessing powers of compulsory acquisition. That is the date which is described in section 22(2) of the Act. The issue on which your Lordships heard argument was the second issue, as to the assumption which has to be made by the local planning authority when it is determining the application for a certificate.
The statutory framework
The certification by planning authorities of appropriate alternative development is an important part of the law relating to the assessment of compensation for the compulsory acquisition of interests in land which was consolidated by the Land Compensation Act 1961. Section 1 of that Act provides that questions of disputed compensation are to be determined by the Lands Tribunal. The provisions for determining the amount of compensation are set out in Part II of the Act. The basic rules are laid down in section 5. Among these rules are rule (1) which states that no allowance shall be made on account of the acquisition being compulsory, and rule (2) which states that the value of land shall, subject to the qualifications in the remaining rules, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise. Section 9 adds to these basic rules another rule which is expressed in these terms (as amended by section 108 of and Schedule 11 to the Town and Country Planning Act 1968):
"No account shall be taken of any depreciation of the value of the relevant interest which is attributable to the fact that (whether by way of allocation or other particulars contained in the current development plan, or by any other means) an indication has been given that the relevant land is, or is likely, to be acquired by an authority possessing compulsory purchase powers."
Applying the Pointe Gourde principle ( Pointe Gourde Quarrying and Transport Co. Ltd. v. Sub-Intendent of Crown Lands [1947] A.C. 565), the reverse situation is regulated by the common law. The compensation cannot include an increase in value which is due to the scheme underlying the acquisition. So the whole question must be approached upon a consideration of the state of affairs which would have existed if there had been no scheme.
But the value of land cannot be determined under these rules without making assumptions about the planning permission, if any, which would have been granted for the development of the land if it were not proposed to be acquired compulsorily. Section 14 provides that the assumptions which are to be made for the purpose of assessing compensation are those set out in sections 15 and 16, and that any planning permission which is to be assumed in accordance with any of the provisions of those sections is in addition to any planning permission which may be in force at the date of service of the notice to treat. These provisions must be read together with those in Part III of the Act relating to certificates of appropriate alternative development, with which they are linked in two ways. Section 14(3) provides that, in determining whether planning permission for any development could reasonably have been expected to be granted in any particular circumstances, regard shall be had to any contrary opinion expressed in relation to that land in any certificate issued under Part III. This is a reference to a certificate issued under section 17(4)(b), which is conveniently referred to as a negative certificate. Section 15(5) provides that, where a certificate has been issued under Part III, it shall be assumed that any planning permission which, according to the certificate, might reasonably have been expected to be granted in respect of the land or part thereof would be so granted. This is a reference to a certificate issued under section 17(4)(a), referred to as a positive certificate.
As Lord Bridge of Harwich explained in Grampian...
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