Secretary of State for Transport v Curzon Park Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Moylan |
| Judgment Date | 06 May 2021 |
| Neutral Citation | [2021] EWCA Civ 651 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: C3/2020/0976 |
| Date | 06 May 2021 |
[2021] EWCA Civ 651
Lord Justice Lewison
Sir Keith Lindblom, SENIOR PRESIDENT OF TRIBUNALS
and
Lord Justice Moylan
Case No: C3/2020/0976
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL (LANDS CHAMBER)
Mr Martin Rodger QC, Deputy Chamber President and Mr Andrew Trott FRICS
[2020] UKUT 0037 (LC)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Neil King QC & Mr Guy Williams (instructed by DLA Piper UK LLP) for the Appellant
Mr James Pereira QC & Ms Caroline Daly (instructed by Town Legal LLP) for the 1 st Respondent
Mr David Elvin QC & Mr Richard Moules (instructed by BCLP LLP) for the 2 nd Respondents
Mr David Elvin QC & Mr Richard Moules (instructed by Ashurst LLP) for the 3 rd Respondents
Mr Richard Glover QC (instructed by Mills & Reeve LLP) for the 4 th Respondents
Hearing dates: 21 st & 22 nd April 2021
Approved Judgment
Introduction
Where land is acquired compulsorily, compensation is assessed on the basis of a hypothetical sale in the open market. The legislation requires that hypothetical sale to be assessed on the basis of certain counter-factual assumptions; in particular assumptions about planning permission. The issue that arises on this appeal is how those assumptions mesh with the real world.
The context of the appeal is the determination by the Upper Tribunal (Martin Rodger QC, Deputy President and Mr Andrew Trott FRICS) of a preliminary issue formulated as follows:
“Whether, and if so how, in determining an application for a certificate of appropriate alternative development under section 17 [Land Compensation Act 1961] (“CAAD”) the decision-maker in determining the development for which planning permission could reasonably have been expected to be granted for the purposes of section 14 LCA 1961 may take into account the development of other land where such development is proposed as appropriate alternative development in other CAAD applications made or determined arising from the compulsory acquisition of land for the same underlying scheme.”
The UT answered that question at [66] of their decision as follows:
“ … our answer to the preliminary issue is that in determining the development for which planning permission could reasonably have been expected to be granted for the purposes of section 14(4)(b), the decision maker is not required to assume [that] CAAD applications or decisions arising from the compulsory acquisition of land for the same underlying scheme had never been made. The decision maker must treat such applications and decisions as what they are, and not as notional applications for, or grants of, planning permission. They are not material planning considerations. Subject to those boundaries, it is for the decision maker to give the applications and decisions such evidential weight as they think appropriate.”
Their decision is at [2020] UKUT 37 (LC), [2020] RVR 154.
The facts
In 2018 the Secretary of State for Transport compulsorily acquired four contiguous sites for the construction of a new terminus in Birmingham for the HS2 high speed railway. The four sites are close to the main campuses of both Aston University and Birmingham City University. The acquisition was implemented by separate general vesting declarations; and the valuation date for the purpose of compensation was the date on which each site vested in the Secretary of State. Those dates all fell in a period of approximately six months between 16 March 2018 and 26 September 2018.
Each site was a substantial potential development site in its own right. The sites were all cleared for development in anticipation of the eastward expansion of the city centre, but the emergence of HS2 saw them earmarked for the new station. They have been referred to as Sites 1, 2, 3 and 4.
Site 1 was known as City Park Gate; and until its acquisition on 17 July 2018 it was owned by the third Respondent, Quintain City Park Gate Birmingham Ltd (“Quintain”). It was the most westerly of the four sites. An outline planning permission had been granted for it and other land in 2007 for the construction of a major mixed-use development. Site 2 lies to the east of Site 1 and was held by Birmingham City University (“BCU”) on a long lease from Birmingham City Council, the freeholder, until its acquisition on 16 March 2018. Planning permission was granted in 2009 for the development of a new university campus on the site, phased over 11 years, and that permission remained extant at the valuation date. Site 3 was known as Curzon Park and was owned by Curzon Park Ltd until its acquisition on 30 August 2018. It was the largest of the four sites. Planning permission was granted in 2008 for a development on Site 3 of up to 130,000 sqm including offices, residential, a hotel, retail, a medical centre and leisure uses. Site 4, the most easterly of the sites, known as Curzon Gateway, was owned until 26 September 2018 by two nominee companies. In 2007 planning permission had been granted for a canal-side development providing 260 residential units and 748 student bed spaces with other ancillary uses.
The applications for CAADs
Under the legislation governing compensation for compulsory acquisition, a landowner is entitled to apply to the local planning authority for a certificate of appropriate alternative development (a “CAAD”). The function of a CAAD is to identify every description of development for which planning permission could reasonably have been expected to be granted (either on the valuation date or at a later date) if the land had not been acquired compulsorily. Where such a certificate is granted, it is to be assumed for the purposes of assessing compensation that planning permission for that development has been granted.
Each of the landowners in this case applied to the Birmingham City Council, as planning authority, for CAADs.
Quintain made a CAAD application to the Council on 12 February 2019 in relation to Site 1, and on 10 May it appealed to the Tribunal against non-determination. The Council subsequently purported to grant a CAAD for a mixed-use development of up to 99,490 sqm including residential, office, hotel and retail uses, together with student accommodation comprising up to 1,940 bedrooms. Because an appeal had already been begun the parties agreed that the Council had no power to grant that CAAD; but it was indicative of the Council's view. BCU made its CAAD application in relation to Site 2 on 28 December 2018; and on 31 July 2019 the Council granted a certificate for a flexible development of up to 88,829 sqm, including up to 895 dwellings, a maximum of 38,580 sqm of offices, a theatre and a concert hall, a hotel, car parking, and a maximum of 66,187 sqm of student accommodation providing 2,279 beds. Curzon Park made its CAAD application for Site 3 on 18 April 2019. The Council granted a CAAD on 18 June 2019 for a series of buildings of between 7 and 41 storeys comprising up to 181,260 sqm of residential, office, retail and educational uses, a hotel, and up to 37,013 sqm of purpose built student accommodation providing 1,716 beds. An application for a CAAD in relation to Site 4 was made on 22 February 2019, but it remained undetermined and the appeal was against non-determination. In their CAAD application for Site 4 the landowners proposed development of up to 44,000 sqm including retail, financial and professional uses, café and restaurant, office, residential and student accommodation (of 929 beds) including tall buildings of up to 25 residential storeys.
The UT described the approach that the Council took to the applications at [9]:
“Each of the CAAD applications was self-contained, in that it was restricted to development of the applicant's site alone and did not take into account development on the other three sites. If a local planning authority was faced with four contemporaneous applications for planning permission for sites close to each other the cumulative effects of the proposed development would be a material consideration in deciding whether to grant or refuse permission in each case. But the respondents contended, and the Council accepted, that in determining each of the four CAAD applications (which are not applications for planning permission) it should disregard the other applications. As a result, the Council considered each of the applications in isolation, and those which it determined before an appeal was lodged were granted in full.”
The Secretary of State's concern is that if applications for CAADs are considered in isolation one from another, the cumulative effect of the grant of such certificates may result in the assessment of compensation on the basis of the grant of planning permissions which would have been cumulatively unachievable in the real world. By way of illustration, take the case of student accommodation. The combined total of units of student accommodation proposed by the four landowners was 6,864 beds. But a planning policy contained in the development plan (Policy TP33) requires a demonstrated need for such development, where the development is to take place off campus. A need for that quantity of off-campus student accommodation might not have been demonstrated in the real world.
The legislation
The basic rules for assessing compensation are set out the LCA 1961, as amended by (among others) the Localism Act 2011. Further amendments have since been made by the Neighbourhood Planning Act 2017, but they are not relevant to our case. Section 5 sets out the basic rules. Rule (2) is that:
“The value of land shall, subject as hereinafter provided,...
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