Secretary of State for Transport v Curzon Park Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Lord Sales,Lord Hamblen,Lord Kitchin,Lord Leggatt,Lady Rose |
| Judgment Date | 10 August 2023 |
| Neutral Citation | [2023] UKSC 30 |
| Court | Supreme Court |
[2023] UKSC 30
Lord Kitchin
Lord Sales
Lord Hamblen
Lord Leggatt
Lady Rose
Supreme Court
On appeal from: [2021] EWCA Civ 651
Appellant
Timothy Corner KC
Guy Williams KC
(Instructed by DLA Piper UK LLP (Birmingham))
1 st Respondent
James Pereira KC
Caroline Daly
(Instructed by Town Legal LLP (London))
2 nd and 3 rd Respondents
David Elvin KC
Richard Moules
(Instructed by Bryan Cave Leighton Paisner LLP (London)/Ashurst LLP (London))
4 th Respondent
Richard Glover KC
(Instructed by Mills & Reeve LLP (Cambridge))
Respondents
1) Curzon Park Ltd
2) Quintain City Park Gate Birmingham Ltd
3) The Eastside Partnership Nominee Company Ltd
4) Birmingham City University
Heard on 19 and 20 April 2023
Lord Sales AND Lord Hamblen ( with whom Lord Kitchin, Lord Leggatt and Lady Rose agree):
When land is compulsorily purchased the landowner is entitled to compensation. The basic measure of compensation is the open market value of land if sold by a willing seller – see rule (2) of section 5 of the Land Compensation Act 1961 (“the LCA”).
The landowner is also entitled to be compensated for enhancement of the value of the land (which we will call “the land in issue”) resulting from actual or prospective planning permission for its development. This is addressed in section 14 of the LCA.
Under section 14 in assessing the value of the land in issue account may be taken of (i) planning permission which is in force in respect of it at the relevant valuation date (section 14(2)(a)); (ii) the prospect at the valuation date of planning permission being granted in respect of it on or after that date (section 14(2)(b)) (commonly referred to as “hope value”); and (iii) “appropriate alternative development” of the land (section 14(3) and (4)).
Development is appropriate alternative development if, on stated assumptions, at the relevant valuation date planning permission for the development could reasonably have been expected to be granted on an application decided either on that date or at a time after that date: section 14(4). If so, then it is assumed that planning permission is or will be in force in respect of the land in issue at those dates: section 14(3).
Under section 17 of the LCA the landowner may apply to the local planning authority for a certificate stating that there is development which is appropriate alternative development for the purposes of section 14 – a certificate of appropriate alternative development (“CAAD”). In practice, a landowner will often apply for a CAAD which identifies every description of development for which planning permission could reasonably have been expected to be granted if the land had not been compulsorily acquired. The landowner can then rely on whichever happens to be the most valuable form of hypothetical development covered by the CAAD for the purposes of seeking compensation for the land in issue.
The issue which arises on this appeal is whether in determining an application for a CAAD for a particular parcel of land the decision-maker may take into account CAAD applications or decisions which relate to the development of other land. The Court of Appeal held that the decision-maker was not entitled to do so.
The appellant, the Secretary of State for Transport, contends that the Court of Appeal's decision is wrong and that CAAD applications or decisions in respect of land other than the land in issue may be taken into account if they contain evidence bearing on the question to be addressed under section 14(4). In this respect, however, the Secretary of State's case has been substantially changed from that which was advanced in the Upper Tribunal and in the Court of Appeal.
The factual context in which the issue arises for decision is the valuation of four neighbouring sites which were compulsorily acquired by the Secretary of State in order to construct a railway terminus in Birmingham for Phase 1 of HS2 (the London to West Midlands high-speed railway). The four respondents were the owners of the sites and each of them applied for and was granted a CAAD in relation to their respective sites.
In 2010, the Government announced (“High Speed Rail”: Command Paper 7827: March 2010) that it had accepted a recommendation that a high-speed rail network should be built between London, Birmingham, Manchester and Leeds, which has become known as “HS2”. Phase 1 of HS2 concerns the high-speed rail link from London to the West Midlands.
The respondents were the owners of four neighbouring sites at the eastern edge of Birmingham city centre, close to the main campuses of Aston University and Birmingham City University. The four sites are (1) Quintain City Park Gate (“Site 1” – owned by the second respondent); (2) Birmingham City University site (“Site 2” – owned by the fourth respondent); (3) Curzon Park (“Site 3” – owned by the first respondent) and (4) Curzon Gateway (“Site 4” – owned by the third respondent). Each site is a substantial development site in its own right. All of them had been cleared for development in anticipation of the eastward expansion of the city centre and various planning permissions had been obtained in respect of them.
On 9 July 2013, safeguarding directions were issued by the Secretary of State in relation to all four sites. The object of a safeguarding direction is to make land which might be required for an infrastructure project subject to additional requirements in relation to its development. Where such a direction is in place in respect of specified land, HS2 Ltd must be consulted by the local planning authority on any planning application that is submitted for determination.
In November 2013, the Government introduced the High Speed Rail (London-West Midlands) Bill (which ultimately became the High Speed Rail (London-West Midlands) Act 2017 – “the Phase 1 Act”) to seek powers for the construction and operation of Phase 1. The Phase 1 Act achieved Royal Assent on 23 February 2017. In 2018, the Secretary of State compulsorily acquired, pursuant to section 4(1) of the Phase 1 Act, each of the four sites. The acquisition was implemented by separate general vesting declarations made between March and September 2018. The vesting dates for each site were 16 March 2018 (Site 2); 17 July 2018 (Site 1); 30 August 2018 (Site 3); and 26 September 2018 (Site 4).
Each of the respondents applied to Birmingham City Council (“the Council”), as the local planning authority, for a CAAD.
In relation to Site 1, the second respondent made a CAAD application to the Council on 11 February 2019. On 29 May 2019 the Council 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 providing 1,940 beds (because an appeal had already been lodged against the Council's failure to determine the application within the statutory time limit, the parties agreed that the Council had no power to grant that CAAD, but it was indicative of the Council's view).
In relation to Site 2, the fourth respondent made a CAAD application on 21 December 2018. On 31 July 2019 the Council granted a CAAD for a mixed use 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.
In relation to Site 3, the first respondent made a CAAD application on 18 April 2019. On 18 June 2019 the Council granted a CAAD 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 student accommodation providing 1,716 beds.
In relation to Site 4, the third respondent made an initial application for a CAAD on 22 February 2019 and, following an appealed non-determination, a second application on 21 November 2019. On 16 January 2020 the Council granted a CAAD for a mixed-use development of up to 30,747 sqm and a maximum of 24,870 sqm of student accommodation providing 871 beds.
Each of the CAAD applications related to the development of each respondent's site alone and not in conjunction with other land. The Council rejected the Secretary of State's contention that the cumulative impacts of all the applications for CAADs should be considered. Its position on each application was that “the other current and consented applications for certificates are neither part of the policy context nor the planning position at the relevant valuation date. As the assumption has to be that the project is cancelled on its launch date no CAAD submissions by neighbouring landowners could have been submitted. There is therefore no requirement or basis for considering cumulative effects of these submissions”.
Given the inclusion within the various CAAD applications of purpose-built student accommodation, policy TP33 of the Birmingham Development Plan 2017 was relevant. It requires a demonstrated need for such development where the development is to take place off campus.
Section 5 of the LCA provides that compensation in respect of any compulsory acquisition shall be assessed in accordance with the rules set out therein. Rule (2) of section 5 sets out the basic measure of compensation. It provides that:
“The value of 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.”
Section 14 of the LCA makes provision for taking account of actual or prospective planning permission in the assessment of the value of land under rule (2) of section 5. The full...
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