Thomas and Others v Bridgend County Borough Council

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE CARNWATH,MR JUSTICE HEDLEY,LORD JUSTICE MUMMERY
Judgment Date26 Jul 2011
Neutral Citation[2011] EWCA Civ 862
Docket NumberCase No: C3/2010/2854

[2011] EWCA Civ 862

IN THE HIGH COURT OF JUSTICE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM LANDS CHAMBER, UPPER TRIBUNAL

HIS HONOUR JUDGE JARMAN QC

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Mummery

Lord Justice Carnwath

and

Mr Justice Hedley

Case No: C3/2010/2854

Lca/354/2009

Between:
Thomas & Ors
Appellants
and
Bridgend County Borough Council
Respondent

Robert Weir QC & Chris Stone (instructed by Hugh James Solicitors) for the Appellants

Paul Stinchcombe QC (instructed by Bridgend Borough Council) for the Respondent

Hearing date: Tuesday 21st June, 2011

LORD JUSTICE CARNWATH

The issue in the appeal

1

The appellants all own houses close to the new Hendre Relief Road ("the relief road") in Pencoed, Bridgend. They claim compensation under Part I of the Land Compensation Act 1973 (the "Act") for alleged depreciation in the value of their houses attributable to noise and other nuisance from the road. It is to be assumed for the purpose of this appeal that the use of the road has caused such depreciation in value, sufficient in principle to support a claim under the Act.

2

The Act created a new right of compensation for owners of properties affected by the use of public works but from whom no land was acquired. Section 1 provides such a right where the value of an interest in land is "depreciated by physical factors" caused by the use of public works, such as a new highway. Section 3(2) defines a "relevant date", which in the case of a highway is "the date on which it was first open to public traffic". Section 19(3) provides:

"In the application of this Part of this Act to a highway which has not always since 17 October 1969 been a highway maintainable at the public expense as defined above:

(a) references to its being open to public traffic shall be construed as references to it being so open whether or not as a highway so maintainable;

(b) for references to the highway authority who constructed it there shall be substituted references to the highway authority for the highway;

and no claim shall be made if the relevant date falls at a time when the highway was not so maintainable and the highway does not become so maintainable within three years of that date." (emphasis added)

3

The relief road was opened for public use on 9 th July 2002, but not adopted by the council until 29 th June 2006, that is more than three years later. On an ordinary reading of the Act the claim is excluded by section 19(3). The question for us is whether that result is compatible with the claimants' rights under the European Convention of Human Rights (the "Convention"), and if not, whether we can provide a remedy.

4

I note that the same issue has been before this court on a previous occasion. In O'Connor v Wiltshire County Council LCA/73/2005, the Lands Tribunal (HH Judge Michael Rich QC) had held that the provisions for compensation in the Act were not part of the rights safeguarded by Article 1 of the First Protocol to the Convention ("Article 1"). On appeal to this court ( O'Connor v Wiltshire County Council [2007] EWCA Civ 426), it was held that on the facts the highway authority had adopted the road at the date it was first open to the public, so that the issue of the effects of delay beyond the three years did not arise. The court declined to express any view on the point.

Contractual Background

5

To put the arguments in context it is necessary to say a little more about the contractual arrangements under which the road was provided.

6

The bypass was built by Redrow Homes South Wales Ltd ("the developer") in connection with a housing development for which planning permission was granted in 1999. We have been shown three relevant agreements governing its construction:

i) A planning agreement dated 16 th June 2000 (under section 106 of the Town and Country Planning Act 1990) provided that the residential development should not begin until construction had begun on the relief road, that the developers should construct the relief road at their own expense in accordance with a "highways agreement", and that no more than 50 dwellings should be occupied until it was open for use by the public.

ii) A "highways agreement" (of the same date) defined the developer's obligations in detail; specified the works to be completed to the satisfaction of the council by a date "no later than four months prior to the opening of the Relief Road for use by the public" (cl 3.7); and required the developer to enter into agreements under the Highways Act 1980 (the "Highways Act") before commencing work (cl 3.8).

iii) Finally, a Highways Act agreement dated 5 April 2002 (under sections 38 and 278 of the Highways Act 1980) set out the process which was expected to lead in due course to the road being adopted by the council as one maintainable at public expense.

7

The Highways Act agreement included the following steps:

i) Having commenced construction of the relief road, the developer was required "diligently and expeditiously (to) proceed with and substantially complete the works within 14 weeks…" (cl 3(c));

ii) The developer would enter into a Bond with the National House Building Council as surety in the sum of £554,270 to reimburse the costs of the council carrying out works on default by the developer (cl 3(m));

iii) The developer indemnified the council against claims arising out of the works including claims for compensation under the Land Compensation Acts (cl 3(r));

iv) A "letter of substantial completion" would be issued by the council's inspector when the works had been substantially completed to his reasonable satisfaction; following which the Bond would be reduced by 90% (2 nd sched. para 11);

v) On the issue of the letter of substantial completion, any additional land required to be brought within the highway boundary as a consequence of the works would become "dedicated as part of the public highway" and conveyed to the council at no cost (cl 3(l));

vi) During a 12 month maintenance period following the letter of substantial completion, the developer would make good any defects identified by the inspector as due to defective materials or workmanship (2 nd sched para 12);

vii) A "letter of acceptance" would be issued by the inspector at the end of the maintenance period, after any defects had been made good to his reasonable satisfaction, upon which the Bond would be released in full, and the works would become maintainable at public expense (ibid para 13; cl 4(c)).

8

As has been seen, the road was opened for public use on 9 July 2002. It seems clear (and is not as I understand in dispute) that if the developer had performed his obligations under the agreements as intended, it would have been accepted by the council for adoption long before the end of the three year period. In the event the letter of acceptance was not issued until 29 th June 2006.

9

As to the reasons for the delay, the claimant's witness, Mr Stockdale, simply refers us to a bundle of correspondence and memoranda between April 2002 and August 2006 (running to some 120 pages). In his skeleton argument Mr Weir summarises the position:

"The delay in the adoption of the road was a result of wholesale delay by the Developer in completing many minor works, audits and so forth. The Developer was regularly chased by the Council and pressed to carry out the necessary remedial work so that the letter of substantial completion could be produced by the Council."

10

Although it would have been more usual and more helpful to have had the witness' own summary of the material in his exhibit, I do not understand this assessment to be materially challenged by Mr Stinchcombe.

11

I note for example a letter of 18 th August 2005 (picked at random) from the council to the developer complaining of "unacceptable" delay since a meeting in early June in the production of a programme of work, and referring to "numerous complaints from different sources regarding this road". The council threatened action under the section 278 agreement. In spite of that threat, and further exchanges, it was not until 17 th May 2006 that the council was able to report that the road works inspector was now satisfied with the completion of the works.

12

It is fair to record that we have not been referred to any direct evidence, and it is not in terms alleged, that the delay was motivated by a deliberate intention to avoid compensation claims. Mr Stockdale does, however, give evidence of a number of other road schemes, in Wales and elsewhere in the country, in relation to which delays in adoption have resulted in the barring of claims for compensation for depreciation for which the developer would otherwise have been liable.

13

On any view, the practical effect of these arrangements, in their statutory context, is remarkable. On the one hand, under the highways agreement, the opening of the road to traffic could not take place before completion of works as there specified; and, under the planning agreement, there was a limit on the number of houses which could be occupied before that date. However, neither the opening of the road nor the sale and occupation of houses was dependent on completion of the steps required (under the Highways Act agreement) before adoption by the council as a road maintainable at public expense. Thus, once the road was opened, there was little commercial incentive for the developers to hasten progress towards adoption, but rather, on the face of it, good reason to delay it until the expiry of the three year period for claims under section 19(3).

14

As I understand it, there is nothing unusual about these particular agreements. The judge...

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