PENTREHOBYN TRUSTEES (Trustees of the Pentrehobyn Settlement) v NATIONAL ASSEMBLY FOR WALES ACQ/116/2000

UPPER TRIBUNAL
LANDS CHAMBER
ACQ/116/2000Case No ACQ/116/2000
Between
PENTREHOBYN TRUSTEES (Trustees of the Pentrehobyn Settlement)ApplicantNATIONAL ASSEMBLY FOR WALESRespondent
Before
The PresidentVenue Chester Magistrates’ Court, Grosvenor Street, CH1 2XADate 5 December 2002Hearing 3 and 4 September 2002Property: Land forming part of the, A494 Mold By-PassCatchwords: COMPENSATION – land acquired for bypass – 17 years between announcement of scheme and entry – no planning permission to be assumed under statutory assumptions – whether planning permission for B1 development would have been granted – whether hope value – approach to these questions – whether cancellation assumption or no-scheme world – negative section 17 certificate – effect of this – held correct approach no-scheme world assumption – claimants failing to show permission would have been granted or hope value
[1]In this reference the claimants seek compensation for the compulsory acquisition by the acquiring authority of 23,026 sq m (rather over 5 acres) of their land at Mold together with certain rights over a further 4,245 sq m. The land, consisting of two parcels to the north and to the south of the B5444, was acquired under the Dolgellau - South of Birkenhead Trunk Road (A494) (Mold Bypass) Compulsory Purchase Order 1990. Draft line and side roads orders for the bypass had been published by the Secretary of State for Wales, as trunk road authority, in 1974, and the orders were made in 1977. Further draft line and side roads orders and the compulsory purchase order were published in July and August 1989 and were followed by a public inquiry in December 1989. The orders were made by the Secretary of State for Wales in August 1990. Notice to treat and notice of entry were served on 18 December 1990. Entry was on 29 January 1991, which is thus the valuation date.[2]On 23 May 1996 Flintshire County Council, to whom the claimants had made application under section 17 of the Land Compensation Act 1961, issued a certificate of appropriate alternative development which stated that if the land were not proposed to be compulsorily acquired permission would have been granted for a golf course on the land south of the B5444 but that permission for all other development would have been refused. The claimants appealed against the council’s decision. An inspector held an inquiry in February 1997 and in his report to the Secretary of State for Wales he recommended that a positive certificate should be given: on the land north of the B5444 for B1 and B8 industrial development, and on most of the land south of the B5444 for industrial development classes B1 and B8, development as a golf course and associated facilities, and development associated with mineral extraction on adjoining land to the south. The section 18 appeal proceedings took place at the time that Fletcher Estates (Harlescott) Ltd v Secretary of State for the Environment [2000] 2 AC 307 was making its way through the courts and the decision on the appeal was only given, in July 2000, by the National Assembly for Wales (which had succeeded to the powers of the Secretary of State) after the decision of the House of Lords in February of that year. The National Assembly cancelled the certificate issued by the council and certified instead “that planning permission would not have been granted for any development of the land in question other than the development (if any) which is proposed to be carried out by the authority by whom the interest is proposed to be acquired.” (The case is thus one of those to which the Law Commission have drawn attention in the context of Human Rights: see paras 7.43 to 7.45 of their recent Consultative Report “Towards a Compulsory Purchase Code: (1) Compensation” (2002). The body that determines the certificate of alternative development, on which the value of the site is likely to depend, is the acquiring authority itself.)[3]The case for the claimants is that, in the absence of the compulsory acquisition, they could have expected planning permission for B1 industrial purposes on the subject land and that further adjoining land owned by them to the south of the bypass would have had prospects for such development. Alternatively, they say, that both the subject land and the adjoining land had hope value for this purpose. The acquiring authority’s case is that none of 3 the land would have had any value except existing use value. The parties have agreed the amount of compensation that would fall to be awarded on each of these three bases. The case appears to me to raise important questions as to the correct way in which, in the light of Fletcher Estates, the prospects of planning permission (other than planning permissions to be assumed under sections 14 to 17 of the Land Compensation 1961) are to be considered; the relationship between the provisions of sections 14 to 17 and the rule in Pointe Gourde Quarrying and Transport Co v Sub-Intendent of Crown Lands [1947] AC 565; and the burden of proof where Pointe Gourde is invoked. Following the hearing I invited further submissions on these matters and I received them from each party between 20 September and 17 October 2002. The subject land and its surroundings[4]Descriptions of the subject land and its surroundings were contained in the reports of the witnesses and in the inspector’s report following the section 18 inquiry. I carried out a view after the hearing. The bypass was constructed and opened to traffic some years ago. (Going east, the bypass curves from a generally east-west alignment to a south-north alignment. Land on the Mold side of the bypass is thus variously described as being to the north-west, north or west of the bypass; while the land outside the bypass is described as being to the south-east, south or east of it.) On the subject land, besides the carriageway itself, which includes a roundabout at the B5444 junction, there is a substantial width of landscaped ground containing trees and shrubs. A high voltage overhead electricity line on steel towers runs just to the south-east of the bypass. The land to the south-east of the bypass forms part of the Pentrehobyn Estate, which is 560 acres in extent. The estate includes Pentrehobyn Hall, which is reached along a drive running through a small area of parkland from an entrance lodge on the B5444 a short distance to the south of the bypass roundabout. Both the hall itself and a nearby terrace of residential cells (or llettyau) and an overseers house are listed buildings. The park and garden are listed in the Register of Landcapes, Parks and Gardens of Special Historic Interest in Wales prepared by CADW. A grassed tumulus, scheduled as an ancient monument, lies near the drive just south of the lodge.[5]The land acquired formerly comprised two linear areas of flat land to the north-east and south-west of the B5444 Wrexham Road, which runs south-east out of Mold. The northern part (parcel A) formed part of a 9.95 ha agricultural field (OS 7180) and the southern part (parcel B) formed part of an agricultural field of 6.16 ha (OS 4857), together with a small length of wooded former railway embankment. At the valuation date, 29 January 1991, development had been permitted, and had been substantially carried out, as phase 3 of the Bromfield Industrial Estate, on the area of land lying to the east of parcel A. The development contained a spine road, Queen’s Lane, extending from the earlier phases of the industrial estate on the north-east to the B5444 on the south. (The junction has now been moved so that it is on the bypass roundabout.) Eastwards from Queen’s Lane a spur road, Stephen Gray Road, extended up to the boundary of parcel A. To the north of phase 3 was a sewage works, and the western boundary was formed by a wooded former railway embankment. The south-western part of the phase 3 land had previously contained saw mill premises. To the north-west of parcel B were the premises and works of North Wales Newspapers, and, to the west of those, there was recent industrial development off Nercwys 4 Road. Thus at the valuation date development had been carried out or had been permitted up to the line of the bypass both to the north-east and to the south-west of the B5444. Agreed valuations[6]The parties have agreed values on alternative bases as follows:(i) Existing Use Value Agricultural value to reflect the land’s suitability as a pony paddock (£6,000/acre) £30,000 Total sum to include rights/licence etc and general disturbance, agreed at £35,000(ii) Industrial Development Value (a) 5 acres @ £27,000 £135,000 (b) Injurious affection upon adjoining land, say 7½ acres @ £13,500 £101,250 TOTAL £236,250 (c) Ancillary heads of claim to include rights/licence areas and Disturbance agreed at £3,160(iii) Hope Value (a) 5 acres @ £13,500 £67,500 (b) 7½ acres adjoining land @ £6,750 £50,625 £118,125 (c) Ancillary heads of claim to include rights/licence areas and disturbance agreed at £3,160[7]Valuation (ii) is said to be agreed “on the Without Prejudice assumption that Planning Permission would be granted in January 1991.” In relation to valuation (iii) the agreement records:
“The parties disagree as to the prospect of any potential purchaser paying more than the existing use value within the time scale stated. However, for the benefit of the Tribunal and assuming the ‘No Scheme World’ development boundary to extend as far as the By-Pass, also assuming prospect of planning permission being granted within seven or eight years.”
[8]In addition the parties are agreed that the claimants have benefited from the fact that a borrow pit on their retained land was made available to the bypass contractors for the extraction of gravel for the road. The betterment is agreed at £19,000. Taking this into account the total amount of compensation that would be payable on each of the alternative bases is as follows: 5(i) £16,000;(ii) £220,410;(iii) £102,285. The section 17 certificate[9]The application by the claimants for a section 17 certificate was made on 7 July 1994. It specified as the appropriate alternative forms of development: residential development; development as a golf course and associated facilities; development for industrial use; use as a landfill site as part of a reinstatement scheme following mineral extraction; and development for industrial purposes following landfill upon completion of mineral extraction. Flintshire County Council issued a certificate which was positive in respect of development as a golf course and associated facilities on that part of the application site to the south of the B5444, but which was negative in respect of all the other uses applied for. In relation to B1 and B8 development the reasons for the negative certificate were stated to be:
“The application site lies outside the defined settlement limits of Mold as shown on the 1983 adopted version of the Mold Local Plan and, as such, is contrary to Policy M9 of the Mold Local Plan and Policy 29 of the Clwyd County Structure Plan. At that time, adequate available land existed within the settlement boundary. However, had the Mold Bypass not been constructed, the County Council considers that the site may have been considered as suitable for the expansion of the industrial development situated on the eastern side of Mold.”
[10]The claimants appealed, and an inspector held an inquiry in February 1997. At the inquiry the claimants amended their application so as to delete residential development, define the ancillary facilities in the golf course development, and specify Classes B1 and B8 as the industrial use. The inspector recommended that a certificate should be issued to the effect that planning permission would have been granted for industrial development in use classes B1 and B8 on Parcel A; and on Parcel B, excluding the western end shown as the embankment of the dismantled railway, industrial development in use classes B1 and B8, development of a golf course and associated facilities, and development associated with mineral extraction on adjoining land to the south.[11]In his conclusions the inspector said: “42. In respect of the industrial development, Class B1 and B8, either on the appeal site itself or in conjunction with immediately adjoining Estate land, the Certificate as issued was negative. However in the reasoning for this it was stated that ‘At the time [1983], adequate available land existed within the settlement boundary. However had the Mold bypass not been constructed, the County Council considers that the site may have been considered as suitable for the expansion of the industrial development situated on the eastern side of Mold.’ While the reference to the 1983 Mold Local Plan may be appropriate in so far as it formed part of the development plan at the time, by 6 the due date the situation had changed markedly and the Delyn Local Plan was at an advanced stage.[43]The Council may argue that in the absence of the bypass development in the south-eastern sector of Mold may have taken a different form, but it is clear that by early 1991 a considerable amount of industrial land had already been developed to the north-west of the bypass line, following Local Plan allocations, and that there was a requirement for a substantial amount of industrial land in the town, the greater part of which was allocated in the southern part of Mold. The line of the bypass itself was evidently not considered a totally firm boundary, despite the SLA designation to the south and south-east, as in 1989 the Council proposed that land for the relocation of the town’s cattle market.[44]With these points in mind, I am satisfied that, as the Certificate itself confirms, the appeal site, either by itself or in conjunction with immediately adjoining estate land, would have been considered suitable for the expansion of industrial development in the south-eastern sector of Mold. Such development would have been quite feasible with both access and infrastructure available from the adjoining industrial land. It would have accorded with the approved County Structure Plan policy 29 which states that industrial development will mainly be located on land either allocated or with planning permission for such development in major centres including Mold where adequate service and access facilities are or will be made available and the development is sited and designed to minimize any impact on the environment. There is one proviso to this conclusion which relates to the western end of parcel B where it forms the wooded railway embankment. For reasons already given I do not consider that this part of the site would be suitable for any form of development.”[12]The National Assembly did not accept the inspector’s conclusion that planning permission would have been granted for B1 and B8 development. In the decision letter the officer who had been given responsibility for the determination of the appeal, having quoted the paragraphs 42 to 44 of the inspector’s report, said this: “27. I have noted what the Council have said about the way in which industrial development may have extended had the bypass not been constructed. However, I attach no great weight to this as I have to have regard to the physical state of the land and the current and reasonably foreseeable policies at the relevant date, and those policies at August 1989 are identified in the existing development plan and emerging plans.[28]Policy 29 of the 1982 Structure Plan indicates that unless there are special site needs industrial development will mainly be located on land either allocated or with planning permission for such development in specified major centres where adequate service and access facilities are or will be made available and the development is sited and designed so as to minimise any impact on the environment. Mold was identified as a major centre. Policy 31 of the same Plan indicates that the expansion of existing industry on land adjacent to existing industrial premises will be permitted subject to appropriate safeguarding of amenity, public safety and the environment. Policy 34 indicates that the development of light industries and small firms on premises in towns and main villages, outside land either allocated or with planning permission for 7 industrial development, will be permitted except where there are conflicts with other policies on landscape, environment, agricultural land and access. Policy 35 indicates that except in areas where there is a short-term scarcity of industrial land, wholesale warehousing will be located on land allocated for industrial development within the terms of Policy 29, on sites with direct access to strategic and main distributor routes. I do not consider that these policies are materially different to those contained in the First Alteration to the Structure Plan and have retained the original Policy numbers for ease of reference.[29]Employment Proposal E1(5) and (7) of the Delyn Local Plan indicated the areas within Mold allocated for industrial development, and the appeal land is not within either of them. Nor is it within the areas referred to in Policy M9 of the Mold Local Plan.[30]As regards the appeal site (both parcel A and parcel B) and adjoining land, this is outside the settlement boundary of Mold and industrial development would extend into the open countryside, into the Special Landscape Area and onto land of high quality agricultural value. Development of this land would be contrary to the policies safeguarding the Special Landscape Area and high quality agricultural land as well as national and local policies presuming against development in the open countryside.[31]As the land is not within the settlement boundary of Mold I do not consider that Policy 29 can be relied upon in support of the development. Because the development of the land for industrial purposes would be contrary to the policies referred to in the previous paragraph, I also consider Policies 31 and 34 cannot be relied upon in support of the development. As the appeal land is not allocated for industrial purposes Policy 35 is not applicable either.[32]I acknowledge that in the 1989 draft Delyn Local Plan land outside the settlement boundary was allocated for development as a cattle market. Although that allocation was removed from the 1990 version of the Plan, I do not consider that the allocation should be regarded as an indication that development outside of the settlement boundary was generally acceptable.[33]As the development of the land would be contrary to the policies referred to in paragraph 30 above, I do not consider that planning permission would be granted for industrial use of the land. I take the view that objections to this form of development could not be overcome by the imposition of conditions nor do I consider that there is anything in the evidence to indicate that planning permission would be likely to have been granted some time in the future. These conclusions also apply to industrial development that may have been proposed following infilling of mineral workings.”[13]The decision letter also concluded that planning permission would not have been granted for golf course development or for mineral extraction and landfilling. Accordingly under the powers delegated to her the officer cancelled the certificate issued by Flintshire County Council and certified instead that “planning permission would not have been granted for any development of the land in question other than the development (if any) which is proposed to be carried out by the authority by whom the interest is proposed to be acquired.” 8 The case for the claimants[14]Evidence for the claimants was given by Roger Wilyman, FRICS and a Member of that Institution’s Governing Council, and a Fellow of the Central Association of Agricultural Valuers. Mr Wilyman is also an arbitrator. He is a partner in the firm of Jones Peckover, Chartered Surveyors, and has practised in North Wales for nearly 30 years since qualification. His fields of practice are rural estate management and general rural practice, including compensation for compulsory purchase involving agricultural land. Mr Wilyman was managing agent to the Pentrehobyn Estate from 1987 to the mid-1990s, and since then he has been retained to deal with specific cases, including the issues associated with the Mold by-pass.[15]Mr Wilyman said that the Pentrehobyn Estate was held in three separate trusts but was managed under a unified management policy adopted by the Trustees and the members of the Pennant-Lloyd family. In the 1980s the Trustees had established a policy of developing the estate to provide for its economic future whilst at the same time preserving its character and recognising its importance in the family history.[16]In the late 1980s the Trustees had had approaches from minerals operators expressing interest in coal and gravel extraction from their land to the south of the bypass line. They were granted planning permission to sink boreholes, including one in the field that parcel B formed part of, and discussions on possible extraction had been held with the County and District Councils. A water based recreational after-use was also discussed. In the event nothing came of these proposals, and it no longer formed part of the Trustees’ case that in the absence of the bypass planning permission might have been expected for mineral extraction or for recreational purposes.[17]In 1989 the Estate was approached by Delyn Borough Council about the possible purchase of land for the relocation of the Mold livestock market to enable the redevelopment of the existing town centre market site. The preferred choice was the northern corner of OS 7180, ie the land immediately south-east of parcel A. In June 1989 the Estate agreed with the council not to enter into negotiation for the sale of that land to any other party during the next 6 months without giving the council equal opportunity to negotiate for it. In the event negotiations for the sale of the site did not progress further as the owners of the existing market site decided not to co-operate in its redevelopment. In 1993 the council approached the Estate seeking to purchase land adjacent to Pentrehobyn Lodge for an unspecified purpose. The Estate said that it was prepared to agree in principle. When, however, the council revealed that the site was required for a civic amenity tip, the Estate suggested another site on its land, a former railway cutting, and this was now being used for that purpose by Flintshire County Council.[18]Mr Wilyman said that the claim was now being pursued only on the basis of B1 development. At the valuation date the Delyn Local Plan, which was in due course adopted on 20 October 1993, was at an advanced stage and the policies it contained were thus reasonably foreseeable. Employment policy E1 indicated the allocation as a high quality site E1(5) of 14 ha adjacent to the Mold bypass and 10 ha of land (E1(7)) at the Broncoed and 9 Nercwys Road Parks as local sites. Both these areas of land were immediately to the north of the bypass to the west of the North Wales Newspaper site. Land to the east and south of the bypass was shown as part of a special landscape area under policy N2 on the Mold Inset Plan.[19]Mr Wilyman said he believed that the existence of the proposed bypass was seen by the local planning authority as providing a firm and defensible settlement boundary which would not have existed in the absence of the scheme. Nevertheless he took the view that the interest shown by Delyn Council in land adjoining parcel A for a cattle market and civic amenity tip clearly demonstrated their willingness, even with the existence of the scheme, to have accepted development in that sector. In the absence of the scheme it would certainly have been more logical for any extension of the industrial site, at least initially, to have been on the land forming parcel A and the claimants’ land to the north west of the Estate, providing an extension to the existing infrastructure and access to the established road network, rather than to the much more remote and inaccessible sites shown as E1(5) and E1(7) on the inset plan. Irrespective of other policy considerations Mr Wilyman accepted that any such extension would be unlikely to extend beyond the south-eastern boundary of field OS 7180 as any such further extension would conflict with the need to protect the setting of Pentrehobyn.[20]As far as parcel B was concerned, Mr Wilyman said that, in view of the anticipated requirements for industrial land implicit in the local plan allocations, the obvious further extension to the industrial site would have taken in parcel B and the remainder of field OS[4857]The mineral workings that were in fact permitted could hardly have been less than would occur during the construction phase of industrial units prior to landscaping.[21]Under local plan policy N2 the land to the south-east of the subject land was shown as a special landscape area. That, said Mr Wilyman, was a broad brush designation which made use of convenient boundaries – in that case, the line of the bypass. The designation did not include the subject land and in the absence of the bypass there was no reason to assume that the boundaries of the SLA would not have been drawn so as to exclude fields 0S 4857 and 0S 7180 and to include part of the area now excluded under policies E1(5) and E1(7). The proposals map of the Special Landscape Area Local Plan had shown as excluded from the SLA the land proposed for the relocation of the livestock market.[22]In cross-examination Mr Wilyman said that he was a chartered surveyor and valuer rather than a planning expert. He had not considered the report of Mr Keyte, the acquiring authority’s planning witness, or the appendices to it. He accepted the agricultural classification shown on the Agricultural Land Classification Map produced by MAFF in 1966. This showed the entirety of parcel B and the vast majority of parcel A to be Grade 2, with the remainder of parcel A being Grade 3; while a survey undertaken by ADAS in September 1989 confirmed the classification of parcel B and land to the east and west, and showed parcel A as a combination of Grades 2 and 3b and land to the east as mainly Grade 3a and 3b with a pocket of Grade 2. Mr Wilyman said that, although a survey carried out for the Estate by Reading Agricultural Consultants had shown the land to be Grades 3a, 3b and 4, it was no part of his evidence that the MAFF classification was wrong. 10[23]Mr Wilyman agreed that, in a world in which there had been no scheme for the bypass, the existence of the railway embankment could have been taken as the physical boundary for development. However, he did not think it would have been, since that physical boundary had already been breached by the saw mill to the east of the embankment and the sewage works further to the north. Development would have proceeded outwards onto the Estate land. He thought that this would be within 5 to 10 years of the valuation date. He could see no other locations round Mold where such development could have taken place. The layout of the development had been designed so that Stephen Gray Road, which led up to the line of the bypass, could have been extended eastwards if the line of the bypass had changed.[24]Mr Litherland submitted that the Tribunal should approach the question of whether planning permission would have been granted on the cancellation assumption described in Fletcher Estates, ie that the road proposal was cancelled on the valuation date but that in all other respects things were as they actually were on that date. Any increase in value of the land due to the development of other land that would not have been carried out in the no- scheme world would have to be disregarded under Pointe Gourde but it was for the acquiring authority to show that there was such an increase. The determination under section 18, Mr Litherland submitted, was conclusive only in relation to the views of the National Assembly. If at the valuation date an application for planning permission had been determined on appeal, it would have been decided by an inspector, and there was no reason to suppose that an inspector in these circumstances would have reached a view different from that of the inspector who held the section 18 inquiry. The right conclusion, therefore, was that as at the valuation date permission would have been granted for B1 development. The case for the acquiring authority[25]For the acquiring authority Mr Rhodri Williams called David Edward Keyte BA, MRTPI, a member of the planning and consultancy team in GVA Grimley of Birmingham. Mr Keyte had produced a report, the purpose of which, he said, was to assist the Tribunal in determining whether, in the no-scheme world, the subject land and adjoining land would have been allocated or would have received planning permission for B1 development by the valuation date, or whether such an allocation or permission could reasonably have been expected thereafter. His conclusion was that neither allocation nor permission would have been forthcoming by or have been foreseeable at the valuation date. In order to reach this conclusion he had undertaken a chronological review of material planning considerations guiding development in and around Mold from around 1964 to 1993 in the scheme world. He catalogued the evolution of planning policy, looking specifically at the structure and local plans as they evolved and at central government policy, and he reviewed relevant planning decisions. The primary purpose of this was to identify the role played by the bypass in the formulation of planning policy and in the decision making process. Adopting the same method of analysis he had then sought to establish how planning policy and development in and around Mold would have been different in the no-scheme world, ie a world in which no such bypass had been proposed. Finally he said how he thought those no-scheme world policy considerations would have operated in relation to proposals for B1 development on the subject land and adjoining land. 11[26]Mr Keyte started his chronological review in 1964, when a draft Town Centre Map for Mold was published. It showed that at that stage there was concern about congestion in the town. The draft line and side roads orders for the bypass were published in 1974, and, following this, an application for planning permission had been made by the Pentrehobyn Estate for industrial development on land between the line of the bypass and the former railway embankment. It was refused on prematurity grounds. The Ministry of Agriculture had stated that they would not object to the proposed development if the bypass were to be built, but would do so otherwise. On 7 February 1977 Delyn Borough Council granted planning permission on its own application for phases 1 and 2 of the Bromfield Industrial Estate, on the town side of the railway embankment.[27]In July 1979 Clwyd County Council submitted to the Secretary of State for Wales the County Structure Plan. This showed Mold as a main site for industrial development. Land to the west and south was included in the Special Landscape Area that covered about two-thirds of the county. Mr Keyte identified what he regarded as the relevant policies in the plan, in particular those dealing with industrial development, and policies for the protection of the natural and built environment and of agricultural land of grades 1, 2 and 3.[28]In December 1979 Delyn Borough Council published “A Position Statement on Present and Anticipated Unemployment and the Supply of Land and Buildings for Industrial Development in Delyn”. It noted that Delyn’s unemployment rate was nearly twice the national average, and quantified the need for further industrial floorspace. The statement noted a preference for the development of land for industrial purposes at Nercwys Road and Phase 3 of the Bromfield Estate.[29]Mr Keyte described the evolution of the Mold District Plan from the publication in 1980 of the Issues Report to the adoption of the Plan in 1983. The Issues Report noted that the A494(T) bypass was urgently needed to relieve congestion. It said that it would aid industrial development by providing direct access to the Bromfield Industrial Estate and Wrexham Road. The report considered alternative sites for future residential and/or industrial development and three alternative strategies for industrial development Sites at that time available or allocated included all three phases of Bromfield, 16.7 ha (41.4 acres) at Nercwys Road and 3.10 ha at Denbigh Road. The alternative strategies were firstly for continued development at Bromfield, some development at Nercwys Road, with other needs being met outside Mold; secondly, Bromfield plus the whole of Nercwys Road, which would provide sufficient land up to 1991; and, thirdly, Mold as a major growth centre.[30]The draft plan (September 1981) said that, while the expectation was that the road would be commenced during the plan period, there was a danger that it would not. The Written Statement noted that the county council had endorsed Mold as a strategic location for industrial development. In the draft plan policy M9 proposed that new industrial development and wholesale warehousing would take place primarily on land at the Bromfield Road Industrial Estate and Nercwys Road. The supporting text said that the 40 acres of land at Nercwys Road had been allocated after an extensive search throughout the plan area for alternative sites. However, substantial objection to the alternative locations had been received on the grounds of environmental impact, landscape quality, proximity to residential areas, drainage difficulties, past mining, agricultural land quality and highway access. In the 12 adopted version of the plan policy M9 said that new industrial development and wholesale warehousing would take place primarily on sites at Bromfield Industrial Estate, Nercwys Road / Broncoed Industrial Estate, Denbigh Road (Synthite Works) and Chester Road (Ponterwyl). Policy M10 said that there would be a strong presumption against new industrial, commercial and warehousing development on unallocated land.[31]Mr Keyte referred to the Clwyd County Special Landscape Area Local Plan, which had been adopted in January 1984, the draft Delyn Local Plan, Second Edition, issued in August 1986, and the First Alterations to the Clwyd County Structure Plan which proceeded from the consultation edition in February 1988 to approval by the Secretary of State for Wales in October 1991. The structure plan provided guidance on the location criteria to be fulfilled by all employment development, contained a strong policy presumption against the development of good quality agricultural land and other landscape and conservation policies.[32]In March 1989, said Mr Keyte, Delyn Borough Council published for consultation purposes the Draft Delyn Local Plan. The Mold Inset Plan showed the proposed route of the bypass, as well as Green Barrier, local landscape area and Special Landscape Area designations, employment allocations and possible locations for the relocation of the Mold livestock market. Employment Policy E1 proposed a 13 ha high quality employment site adjacent to the proposed bypass (E1(5)), together with local sites at Broncoed and Nercwys Parks (E1(7), 14 ha) and Denbigh Road (E1(8), 4 ha). There was a presumption, subject to certain exceptions, against new industrial development elsewhere, and policy provision for the expansion of existing industrial concerns. Proposal N1 dealt with the control of development in the SLA, and under policy A1 there was a presumption against the development of higher grade agricultural land.[33]Following a public participation exercise undertaken in 1989, Mr Keyte said, the draft plan was modified and a modified Deposit Draft was published for a further period of consultation in May 1990. The reference to the bypass remained unchanged. Policies and proposals relevant to Mold on industrial development, protection of the environment, agriculture and the built environment also remained broadly similar. Notable differences included the designation of two more local landscape areas and a further Green Barrier within the town. Previous draft proposal R2, the livestock market relocation, was omitted. Part of the former Bamford works was shown for residential development. A document published in October 1990 showed that the Land Authority for Wales had proposed the inclusion of land to the east of Woodlands Road, on the town side of the bypass, for industrial and residential use, but that the council had rejected the proposal because of poor access and smell from the sewage works.[34]In May and June 1991 (and thus after the valuation date) a public inquiry was held into objections to the plan, and following receipt of the inspector’s report the council’s Director of Development and Environmental Services presented a report to the planning committee in June 1992. The report accepted the inspector’s recommendation that the whole of the former Bamford works should be used for employment purposes, and that there was no compelling need for the business allocation of land to the east of Woodlands Road. 13[35]Mr Keyte identified the planning permissions that had been granted for industrial development on land to the east of the bypass since the publication of the first draft orders. He also referred to central government advice as contained in circulars and planning policy guidance notes. His conclusions, having carried out this review of past events, were that the bypass had had a bearing either directly or indirectly on the development of Mold since 1974; traffic congestion in Mold was severe; planning permissions and allocations for industrial development on land to the east of the embankment were only granted following the line and side-roads orders made in 1977; environmental considerations were a high priority throughout the period; and no industrial development had been permitted or applied for on land to the east of the bypass.[36]Mr Keyte then went through the evolution of the development plans again, expressing his views as to what differences there would have been in their contents in the no-scheme world, and which of the planning applications that had been made in the real world would have resulted in different decisions in the no-scheme world. He thought that the Clwyd County Structure Plan would have shown Mold as a major centre for strict control of future expansion and also as a main site for industrial development so long as the road system in the town could accommodate additional traffic. He thought that the Mold District Plan would have directed new industrial and warehouse development to Nercwys Road / Broncoed Industrial Estate, Denbigh Road (Synthite Works) and Chester Road (Ponterwyl). Bromfield Phase 3 would not have been allocated. The Special Landscape Area Local Plan would have drawn the boundary of the SLA at the embankment.[37]Mr Keyte said that planning decisions in the no-scheme world would have reflected the fact that development would have been restricted by the railway embankment and the traffic conditions in Mold. Strong restrictive policies on agriculture, landscape and other environmental matters would have applied. Industrial development would have taken place, and the only allocated sites that he would seek to exclude were Bromfield Phase 3 and area E1(5). If there was a need for other sites, some of those dismissed in the real world could have come forward.[38]In answer to me, Mr Keyte said that for alternative sites he would look for redundant sites in the urban area and also at other areas of land on the town side of the bypass. He had not looked at individual sites nor had he considered them in terms of area. As far as the requirement for industrial land was concerned, analysis was difficult because he did not know his starting position in terms of the area required. While he could safely say that the amount of land required would not have been more than in the scheme world, he could not say what it would have been. The amount could have varied throughout the period of the no-scheme world. In the absence of the bypass he thought that the SLA would have extended over E1(5) and the land to the north.[39]In his submissions Mr Williams relied on the provision contained in section 14(3A) of the 1961 Act which requires that, when determining whether any planning permission could reasonably have been expected to be granted for any development, regard must be had to any contrary opinion expressed in a section 17 certificate. He referred to a passage in the speech of Lord Bridge of Harwich in Grampian Regional Council v Secretary of State for Scotland [1983] 1 WLR 1340 at 1343H-1344B, in which this was said: 14 “The sole purpose of the certification procedure is to provide a basis for determining the development value, if any, to be taken into account in assessing the compensation payable on compulsory acquisition. If a positive certificate is issued, it is to be assumed that the certified permission would be granted, subject to such conditions and at such future time, if any, as may be specified in the certificate... If a negative certificate is issued, ‘regard is to be had’ to the negative opinion certified... Although this is not conclusive, it is difficult to envisage a situation in practice in which the Lands Tribunal, when assessing compensation, could be persuaded to act on a contrary opinion to that certified by the planning authority or the Secretary of State on appeal.” This passage was quoted by Lord Hope in Fletcher Estates [2002] 2 AC 307 at 316.[40]Mr Williams said that the correct approach for the Lands Tribunal was to act upon the opinion expressed in the negative certificate unless one of three circumstances applied. Firstly, in appropriate cases, said Mr Williams, the Lands Tribunal might make allowance for the possibility (a chance less than one arising on the balance of probabilities) of planning permission being granted for a particular development, if such possibility could be shown to have affected the value of the land in question. In such circumstances the Tribunal should give effect to the requirement to have regard to the negative certificate as treating it as establishing what would have happened if planning permission had been sought; but considering whether the market might reasonably have expected a different planning situation to emerge (the hope value). The authority’s case was that there would have been no development to the east of the embankment in the no-scheme world, so that the subject land would have had no hope value.[41]Secondly, said Mr Williams, a party might wish to establish that the opinion expressed in the section 17 certificate would have been different if the assumption had been that the scheme had never been proposed (as, he said, section 9 and Pointe Gourde required) rather than that it had been cancelled (as required by section 17 and Fletcher Estates). In such a case the Tribunal should give effect to the requirement to have regard to the negative certificate by treating it as establishing what would have happened if the scheme had been cancelled, and considering whether the evidence showed that a different result would have obtained if the scheme had never been proposed. The claimant’s case did not depend on the difference between the section 17 and the Pointe Gourde approaches. In any event, in a letter of 3 December 1997 inviting submissions from both parties the Secretary of State had expressed the view that, if the application were considered on the basis that acquisition scheme had never been proposed, a nil certificate should be issued.[42]Thirdly, said Mr Williams, the Tribunal might be persuaded to act on a contrary opinion from that expressed in the certificate in circumstances where new evidence had come to light, of a kind not reasonably obtainable at an earlier stage. The issues of law[43]The first issue that arises is how the provisions of section 14 of the 1961 Act operate following Fletcher Estates, and in particular what is the correct approach for addressing the 15 prospect of planning permission for development for which permission neither exists nor is to be assumed under sections 15 and 16. This important issue is raised for the first time in this case. Secondly it is necessary to decide how a negative section 17 certificate operates under section 14(3A). Thirdly it is necessary to decide, when Pointe Gourde is relied on, where the onus of proof lies in relation to the facts. Statutory planning assumptions[44]The statutory planning assumptions are contained in sections 14 to 17 of the 1961 Act, as amended by the Community Land Act 1975 and the Planning and Compensation Act 1991. In section 14 subsection (1) provides for the assumptions mentioned in sections 15 and 16 to be made; subsection (2) states that any planning permission in force at the date of notice to treat can be taken into account (provided that it is not personal to the acquiring authority); and subsection (3) provides that nothing in sections 15 and 16 is to be construed as requiring it to be assumed that planning permission would necessarily be refused for any development which is not development for which permission is to be assumed under those provisions.[45]Section 15(1) provides that where land is acquired for purposes that involve the carrying out of proposals of the acquiring authority for its development, planning permission for such development is to be assumed. Under section 16 it is to be assumed that planning permission would be granted for certain development that is in accordance with the development plan. If the land is allocated for development or is within a comprehensive development area, permission is to be assumed for development for an allocated purpose provided that planning permission might reasonably have been expected to be granted for that development if no part of the relevant land were proposed to be acquired by any authority possessing compulsory purchase powers (see subsections (2), (3), (4) and (7)). No such proviso applies in the case of development for which the land is defined in the development plan for development of a specified description: under subsection (1) permission for such development is to be assumed without qualification. (Since the system of defining sites and allocating land, which applied to development plans prepared in accordance with section 5(2) of the Town and Country Planning Act 1947, was abolished by the Town and Country Planning Act 1968, section 16 has for a long time badly needed bringing into conformity with new-style development plans: see Purfleet Farms Ltd v Secretary of State for the Environment, Transport and the Regions [2002] RVR 203 at paras 37 and 38.)[46]Under section 15(5) planning permission is to be assumed for development of any class specified in a certificate issued by the local planning authority under section 17. Section 17(1) enables either party to a proposed compulsory acquisition to apply to the local planning authority for a certificate of appropriate alternative development. The authority grants a certificate for those classes of development for which in its opinion planning permission would have been granted if no part of the relevant land were proposed to be acquired by any authority possessing compulsory purchase powers (section 17(4)). Alternatively it may certify that planning permission would not have been granted for any development other than that for which the land is to be acquired. Section 14(3A), already noted in relation to Mr Williams’s submissions, requires that, in assessing compensation, regard must be had to any opinion expressed in relation to the subject land in a negative, or partly negative, section 17 certificate. 16 Other rules[47]The basic rule of valuation is that the land is to be valued in the state in which it was and in the circumstances prevailing at the date of entry: Penny v Penny (1868) LR 5 Eq 227, as explained in West Midland Baptist (Trust) Associated (Inc) v Birmingham Corpn [1970] AC 874. The 1961 Act provides for particular departures from this rule. In addition judicial decision has held that, apart from the statutory provisions, there is the rule of general application, known as the Pointe Gourde rule after the dictum of Lord MacDermott in that case ( [1947] AC 565 at 572) that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition. The rule has been held to apply equally to decreases in value (see Melwood Units Pty v Commissioner for Main Roads [1979] AC 426), and section 9 of the 1961 Act has been treated as having the same effect. Application of the rule requires that the scheme should be disregarded from the time of its conception and that a notional no-scheme world should be envisaged. Pointe Gourde[48]The first significant appearance of the general Pointe Gourde proposition was in Davy v Leeds Corpn [1964] 1 WLR 1218 in the Court of Appeal where (at 1224) Lord Denning MR said in relation to the 1961 Act:
“I am inclined to think that this statute specifies the method of valuation in such detail that there is not much room for the application of general principles, but I am glad to find that the conclusion I have reached is in accordance with the general law which would have applied in the absence of express provision…” and he then quoted Lord MacDermott. In the House of Lords, Lord Dilhorne, having referred to Point Gourde, said ([1965] 1 WLR 445 at 453): “By section 9(2) of the Act of 1959 [now section 6 of and Schedule 1 to the 1961 Act] Parliament, it seems to me, has given statutory expression to the principle which Lord MacDermott said was well settled.”
[49]Thus in Davy the references to Pointe Gourde were made for no wider a purpose than of observing that the particular provisions of the 1959 Act then under consideration were consistent with the words of Lord MacDermott. In the next case, however, Pointe Gourde was relied on to produce a result that would not have flowed from the specific provisions of the Act. That case was Camrose v Basingstoke Corporation [1966] 1 WLR 1100. Land had been compulsorily acquired for development pursuant to an agreement under the Town Development Act 1952. Planning permission was to be assumed for the development under section 15(1). Under section 6 and Case 4 of Schedule 1 any increase or diminution in value due to the development of land, other than that acquired, in the course of town development was to be disregarded. The problem on the merits (as they were seen by the Lands Tribunal and the Court of Appeal) was that there was no provision for disregarding the TDA agreement itself, and the landholding of the claimant was so large that disregarding the prospect of developing the other town development land had no effect on value, given the 17 demand created by the TDA. Such demand was, however, to be discounted, the court said, under Pointe Gourde. At [1966] 1 WLR 1107 D-G Lord Denning MR said:
“The explanation of section 6(1) is, I think, this: The legislature was aware of the general principle that, in assessing compensation for compulsory acquisition of a defined parcel of land, you do not take into account an increase in value of that parcel of land if the increase is entirely due to the scheme involving the acquisition. That was settled by Pointe Gourde Quarrying and Transport Co. v Sub-Intendent of Crown Lands, where the Privy Council disallowed the $15,000 increase in value of the quarry (which was compulsorily acquired) which was due to the scheme for a naval base. That decision has since been approved by the House of Lords in Davy v Leeds Corporation. It is left untouched by section 6(1). But there might be some doubt as to its scope. So the legislature passed section 6(1) and the First Schedule in order to make it clear that you were not to take into account any increase due to the development of the other land, namely, land other than the claimed parcel. I think that the decision in the Pointe Gourde case covers one aspect: and section 6(1) covers the other: with the result that the tribunal is to ignore any increase in value due to the Town Development Act, both on the relevant land and on the other land.”
[50]In Myers v Milton Keynes Development Corporation [1974] 1 WLR 696 the Court of Appeal reversed a decision of the Tribunal (R C Walmsley FRICS) in which it had been held that on the facts of the case there was a conflict between section 15(1), which created an assumption of planning permission for the authority’s development proposals, and the Pointe Gourde rule, since in the no-scheme world permission would not have been granted for such development. The court held that there was no such conflict in practice because the assumption and the rule could be applied successively. At 702C-F Lord Denning MR said:
“Furthermore, both counsel agreed that there was no conflict, as the member thought, between the Pointe Gourde principle and section 15. The two can and should be reconciled by tackling the valuation in this way:- (1) Determine what was the nature of the property to be valued. In this case it was the freehold of the Walton Manor Estate. (2) Determine the extent of the interest to be valued. In this case it was the freehold of the Walton Manor estate, with the benefit of the planning permission assumed under section 15. (3) Ascertain the value of that interest. It is at this stage, in evaluating the interest, that the Pointe Gourde principle applies. ‘That principle’, said Lord Cross of Chelsea, ‘does not affect the interest to be valued, but only its value when ascertained’: see Rugby Joint Water Board v Shaw- Fox [1973] AC 202, 253. It applies so as to ensure that any increase in value due to the scheme is to be left out of account. The result is that the assumed planning permission is to be taken into account. It is not to be ignored, as the Lands Tribunal thought. It is a way in which the landowner can be compensated for the potentialities of his land.”
[51]In Wilson v Liverpool Corporation [1971] 1 WLR 302 the Court of Appeal upheld a decision of the Lands Tribunal that in valuing the claimants’ 73 acres, compulsorily acquired for housing development, Pointe Gourde required that there must be left out of account any increase in value arising from the development by the authority for housing purposes of a further area of 318 acres (305 of which had been acquired by agreement) since there was a single scheme for the development of the total area. 18[52]The final decision in this sequence is Jelson v Blaby District Council [1977] 1 WLR[1020]It is of central importance to the issues in the present case. It concerned the compensation for the acquisition of land that had been acquired pursuant to a purchase notice. Together with other land it had been defined as the site of a ring road in a 1951 development plan, but the proposal was later abandoned. The land had earlier been the subject of the proceedings about a section 17 certificate in Jelson Ltd. v. Minister of Housing and Local Government [1970] 1 QB 243. The land on either side of the strip of land defined as the site of the proposed road was allocated for housing, and between 1954 and 1958 it was developed. In 1961 the ring road was abandoned. It was agreed that if the land had been developed for housing at the same time as the land on either side it would have produced 69 houses. Values were agreed on alternative bases. The Tribunal (V G Wellings QC, (1974) 28 P & CR 450) found in favour of the basis contended for by the claimants, a valuation “on the assumption that any decrease in value due to the effect of the road scheme underlying the acquisition must be ignored and consequently that the reference land would have been developed as part of the neighbouring estate.” The claimants founded their case on Pointe Gourde and on section 9 of the 1961 Act. The Member said:
“It appears to me that if the Pointe Gourde principle does not require a diminution in value entirely due to the scheme underlying the acquisition to be left out of account, section 9 of the Act of 1961 provides the analogous principle … in rather wider terms than the Pointe Gourde principle is usually expressed.”
He concluded that the scheme underlying the acquisition (which, as I have said, was pursuant to a purchase notice) was the road proposal, notwithstanding its abandonment, but he did not consider it necessary to base his decision on Pointe Gourde.[53]The Court of Appeal held that the depreciation reflected in the valuation accepted by the Tribunal was covered both by Pointe Gourde and section 9. Lord Denning MR (at [1977] 1 WLR 1020), having quoted section 9, said simply:
“There is no doubt this section applies here.”
An indication had been given by particulars contained in the current development plan of 1951, and thereafter there were many indications that the land was to be acquired by the highway authority. Lord Denning went on:
“The question then is: was there any depreciation in value by reason of the indication? The history plainly shows that there was. I need not go through it.”
[54]The effect of this sequence of decisions is that Pointe Gourde has come to be applied as an all-embracing general rule notwithstanding the specific provisions of the 1961 Act. Similarly section 9 has been given a wide general effect in relation to the no-scheme world. Fletcher Estates[55]Fletcher Estates, like the present case, concerned the compulsory purchase of land for a bypass, the scheme for which had originated in 1952, with a protected route being defined in 1970. The Secretary of State for Transport gave notice of the compulsory purchase order in 1986, and the order was in due course made and entry was effected in 1990. The giving of notice of the CPO is one of the circumstances identified in section 22(2) that enables a party 19 to apply for a certificate under section 17. The landowners applied for section 17 certificates; certificates were issued by the local planning authority; the Secretary of State for Transport appealed under section 18; and the Secretary of State for the Environment allowed the appeal, cancelled the certificates and issued replacement certificates. The issue in the House of Lords related to the assumption that has to be made by the local planning authority under section 17(4) of the 1961 Act when it is considering the question whether planning permission would have been granted for development of the subject land “if it were not proposed to be acquired by any authority possessing compulsory purchase powers.” The landowners contended that the policies and facts applicable at the relevant date (the date of notice of the proposal to acquire) should have been viewed as if the bypass 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. The House of Lords decided that it was the latter approach that was correct.[56]Lord Hope of Craighead (with whom the other Law Lords agreed) said this ([2000] 2 AC 307 at 322D-323A): “It is necessary in these circumstances to examine the wording of section 17(4) more closely in order to see whether the assumption which it directs can accommodate the wider effects for which Mr Purchas contended on behalf of the landowners. The critical words in the subsection to which attention must be directed are to be found in the phrase ‘if it were not proposed to be acquired.’ Those words must be examined in the light of the agreed fact that the relevant date, as at which the local planning authority is required by the subsection to issue its opinion regarding the grant of planning permission, is the date of the section 22(2)(a) notice. The language is, as Buxton L.J. observed [1999] QB 1144, 1155F, not of the past but of the present conditional. The assumption which has to be made is that the land is not ‘proposed to be acquired’ at the relevant date. The words ‘proposed to be acquired’ are given a particular meaning by the statute. They appear in section 17(1) which identifies the time when the parties may apply for a certificate of alternative development, and they appear again in section 17(3) which describes the contents of the application for a certificate. The circumstances in which an interest in land shall be taken to be an interest proposed to be acquired are defined in section 22(2). It is by reference to the circumstances defined in section 22(2) that the relevant date for the determination of the issue about planning permission is identified. The effect of that subsection is that an interest in land cannot be taken to be an interest proposed to be acquired for the purposes of section 17 until one or other of the circumstances which it describes has occurred. The position appears therefore to be quite straightforward upon a consideration of the ordinary meaning of the words used in the statute. The assumption which the local planning authority must make relates to the situation as at the relevant date. The scheme for which the land is proposed to be acquired, together with the underlying proposal which may appear in any of the planning documents, must be assumed on that date to have been cancelled. No assumption has to be made as to [what] may or may not have happened in the past.” 20[57]Under the heading “Wider considerations” Lord Hope went on (at 323A-D):
“This conclusion as to the meaning of the words used in section 17(4) is consistent with the nature of the exercise which the local planning authority is required to perform. The system of planning control which requires planning permission to be obtained for the development of land brings into account a variety of facts and circumstances. Factors such as predictions of population growth and the availability of suitable land for development affect the need for more land to be released for housing in the area. These factors need to be reassessed at regular intervals. A need which was identified 10 or five years ago may have disappeared. The predicted growth on which it was based may have been reduced. The need may have been fully met by the building of the required number of houses in the given area. Or other factors may have changed, leading to the conclusion that the need must be met elsewhere. It is one thing to examine these factors, on the assumption that the proposal has been cancelled on the relevant date, in the light of existing circumstances. It is quite another to look back into the past and to try to reconstruct the planning history of the area on the assumption that the proposal had never come into existence at all. The further back in time one goes, the more likely it is that one assumption as to what would have happened must follow on another and the more difficult it is likely to be to reach a conclusion in which anybody can have confidence.”
[58]Lord Hope then referred to Jelson Ltd. v. Minister of Housing and Local Government [1970] 1 QB 243 which concerned a section 17 certificate in relation to land acquired pursuant to a purchase notice. The Court of Appeal decided that the local planning authority had to determine the question of planning permission as at the date of the notice, in the circumstances then existing, and not by looking at events in the past. Lord Hope quoted with approval this passage from the judgment of Phillimore LJ at p. 255:
“An important factor is that, apart from the question of construction, once you start looking back, the whole exercise becomes hopelessly uncertain. Did it all result from the designation of this strip as required for the ring road? How far was the state of the land due to the appellants' own action in building right up to the strip? Could they have avoided loss by serving notice to purchase in 1959 when the provisions of the Act of 1961 were first [enacted]? Have they really suffered any loss, or did they pay for the strip on the basis that it was blighted land? At any rate, when they acquired it they knew this to be the case. It seems to me that to look back beyond the date of the deemed notice to treat would open up a considerable field for guesswork which would often make it impossible to give firm advice to any member of the public as to his rights. Accordingly, both as a matter of construction and on wider grounds, I would dismiss these appeals.”
[59]Lord Hope then went on (at 324B-D):
“Some of Phillimore L.J.'s observations in that passage relate to issues which are for consideration by the Lands Tribunal and not by the local planning authority. None of his questions as to the actions of the landowners have been raised in the present case. But there is much force in his point that once one starts looking back in time the exercise becomes clouded in uncertainty. The questions which are likely to arise will be complex and difficult. They will involve matters of evidence as to past events, the assessment of which 21 is likely to lie outside the expertise of the local planning authority. Its normal function is to examine planning issues in the light of existing circumstances. The fact that applications for certificates of appropriate alternative development are made to the local planning authority lies at the heart of the matter. It supports the view that the determination as to the contents of the certificate should be arrived at by applying ordinary planning principles to the existing circumstances, not by assessing what may or may not have happened in the past.”
[60]Finally Lord Hope raised, and appeared to leave open for later consideration, the question whether Jelson v Blaby was correctly decided. At 325A-D he said:
“I can find nothing in the overall scheme of the Act which requires the question whether planning permission would have been granted for any classes of alternative development to be determined by reference to events which may or may not have happened in the past if the proposal had not come into existence. It may be, as Mr. Ouseley suggested, that these wider issues can be raised under section 9 of the Act when the amount of the compensation which is to be paid for land which is to be taken compulsorily is being assessed by the Lands Tribunal: see Jelson Ltd. v. Blaby District Council [1977] 1 W.L.R. 1020, in which Jelsons were held to be entitled to the full economic value of the land which had been taken from them disregarding the effects of the scheme under section 9. But that is not a matter which your Lordships need to resolve in this case.”
Pointe Gourde difficulties[61]In the words of Lord Denning MR in Myers ([1974] 1 WLR 696 at 704G-H), Pointe Gourde requires the valuation “to be done in an imaginary state of affairs in which there is no scheme. The valuer…must let his imagination take flight to the clouds. He must conjure up a land of make believe…” The requirement to create a fictitious world, the no-scheme world, and to determine what planning permissions would have been granted in it and what development would have been carried out, can give rise to considerable difficulties, which inevitably increase the longer the period that has to be considered. The passages I have quoted from Phillimore LJ and Lord Hope identify the nature of some of these difficulties. I would add these further observations.[62]Firstly, the determination of a planning application is something that takes place at a particular point in time, in the light of the planning policies that apply and the other material considerations that exist at that point in time. To ask whether planning permission would have been granted during an earlier period of a decade or more runs the risk, if the question is capable of answer at all, of a response that permission might have been expected at certain times during that period but not at others. (As Lord Hope said in a passage that I have quoted above, factors affecting the need for land for development have to be reassessed at regular intervals.) How such a response should affect the process of valuation is, it has to be said, not clear. Moreover, if the conclusion is that planning permission on the subject land could have been expected at a particular time, it may well be the necessary consequence of this, in the circumstances of the no-scheme world, that the land would already have been developed at the valuation date. That was indeed the case in Jelson v Blaby. In the no-scheme world the strip of land that had been reserved for the ring road would have been developed at the 22 same time as the adjoining land, since it was only in conjunction with such development that its potential for 69 houses could have been realised. (The valuation problem that would have arisen was avoided because values had been agreed on the different assumptions.) It could indeed only be a matter of chance if the subject land should have become “dead ripe” (as valuers used to say) at the valuation date but not before or if it would have remained undeveloped at that date but with the benefit of an operative planning permission granted at some earlier time.[63]Secondly there are the unrealities that may arise when the assumption of the no-scheme world is superimposed on the statutory assumptions. For instance it may be that a section 17 certificate will have been granted (on the cancellation basis) but that, in the no-scheme world, permission would not have been granted because the land would have been in open countryside. The land would receive the benefit of an assumed planning permission because at the date relevant for the purposes of the section 17 determination it was not in the open countryside but adjoined existing development. To value it nevertheless as though it was in the open countryside is self-evidently unreal and may give rise, haphazardly, to a range of outcomes and problems. For example, the land might be landlocked in the no-scheme world and would thus be of no value for the assumed permitted development unless some access could be obtained. How might access have been obtained in the no-scheme world? Would planning permission have been granted for an access, which might or might not be open to objection, in order to serve a development that would not in the no-scheme world have been permitted? An example of this sort of problem is to be found in Stayley Developments Ltd v Secretary of State for the Environment, Transport and the Regions [2001] 1 EGLR 167 at 184D-M. Alternatively, if the land was not landlocked but was capable of development, its very position in the open countryside of the no-scheme world could give it a much higher value for the assumed permitted development than it would command in the real world, where it abutted or was surrounded by other development.[64]Thirdly there are the difficulties that face a claimant in terms of his ability to obtain firm advice or to find the resources required to pursue a complex claim. The present case, in which land was acquired for a road scheme many years after the scheme’s first public appearance, is a typical one. Many CPOs for road schemes are made, and a large number of claims arise from persons whose land is acquired. A number of such claims each year are referred to this Tribunal. Some claimants are major development companies, but others are individuals and small businesses. There is a real risk of unfairness arising if, to quantify his compensation, a claimant has to show what would have happened in terms of planning policies and development over many years in the no-scheme world. In the present case Mr Keyte on behalf of the acquiring authority carried out a study in which he reviewed the provisions and genesis of past development plans and sought to analyse how different they would have been in the no-scheme world and what different decisions would have been taken on planning applications made over a period of 17 years. Even this professional study is, as I shall say, materially incomplete, but it is the sort of exercise that may well be beyond the means of the smaller claimant. 23 Section 14(3) and prospects of planning permission[65]The first, the most important and by far the most difficult question that arises in this case is what is the correct approach for the Tribunal to adopt when addressing the prospect of development for which planning permission neither exists nor is to be assumed under sections 15 and 16. The claimants say that it should do so on the cancellation assumption identified in Fletcher Estates. The acquiring authority say that it must do so on the no- scheme basis of Pointe Gourde. What is the correct approach? There are obvious attractions in saying that the Tribunal ought, consistently with section 17, to apply the cancellation assumption. It would be surprising if the local planning authority, when considering the question of what planning permission would have been granted on the subject land if it were not proposed for compulsory acquisition must do so on one basis and the Lands Tribunal, considering the same question, must do so on a different basis. Consistency might be thought to be implied in the requirement in section 14(3A) to have regard to the negative certificate. Moreover subsections (2) and (3) of section 16, which create assumptions of planning permission for an allocated use where planning permission could reasonably have been expected, are evidently to be applied on the basis of the cancellation assumption, since subsection (7) uses the same present conditional language as section 17(4). There is also a more general point. In his recent judgment in Roberts v South Gloucestershire District Council [2002] EWCA Civ 1568 at para 16 Carnwath LJ states that the Act draws a distinction between the planning status of the subject land and its valuation. To be able to hold that Pointe Gourde was not relevant to planning status but only to valuation would be attractive.[66]However, attractive though the conclusion would be that it is the cancellation assumption that is to be applied, I do not think that this is what the Act, in its present form, provides. The distinction that the Act draws between planning status and valuation was, I believe, clear when it was in its original form, but the distinction has become obscured as the result of judicial decisions since 1961 and the amendments made by the 1975 and 1991 Acts. The clear distinction that did exist is most readily to be seen from the provisions as they were originally enacted in the Town and Country Planning Act 1959. (The 1961 Act is a consolidating Act which has altered the arrangement of the sections in a way that does not assist the difficult process of construction.)[67]Sections 14 to 17 of the 1961 Act were previously sections 2 to 5 of the 1959 Act, and those sections came immediately after the provision in section 1 that removed existing use value as the basis of compensation (as provided by section 51(2), (4)-(6) of the Town and Country Planning Act 1947). It was section 9 of the 1959 Act, with the sidenote “Modification of rules for the assessment of compensation”, that contained the provisions now to be found in the 1961 Act at section 6 and Schedule 1 (disregard of scheme development on land other than the subject land) and sections 7 to 9. (I will have to refer later to section 9 of the 1961 Act (previously section 9(6) of the 1959 Act).) The concept, evidently, was that the valuer should first establish the planning status of the land before moving on to value it on the basis of the rules contained in section 2 of the Acquisition of Land (Assessment of Compensation) Act 1919 (now section 5 of the 1961 Act) and the modification of those rules effected by section 9. 24[68]In their original form sections 14 to 17 of the 1961 Act were, I believe, designed to give a firm planning basis on which valuation could then take place. Section 14(1) provided that the assumptions in sections 15 and 16 should be made. Section 15(1) gave the assumption of planning permission for the development of the acquiring authority. Subsection (3) provided for the minor matter of Third Schedule development. Subsection (5) gave the assumption of permission for development certified under section 17. Before the 1975 Act amendments section 17 required the local planning authority to certify the classes of development for which planning permission “might reasonably have been expected to be granted” (or “could not reasonably have been expected to be granted”) in the absence of any proposal for compulsory acquisition. Section 15(5) converted this expression of opinion into an assumed planning permission.[69]Section 16(1) related to land defined in the development plan as the site of proposed development. It gave an unqualified assumption of planning permission for such development. Subsections (2) and (3) related to land allocated in the development plan for a use or a range of uses, and subsection (4) related to land within a CDA. In such cases planning permission was to be assumed for such development, for the purposes of an allocated or CDA use, as “might reasonably have been expected to be granted” in the absence of any proposal to acquire. Like section 15(5) in the case of development certified under section 17, subsections (2), (3) and (4) of section 16 converted the reasonable expectation into an assumed planning permission.[70]Before section 17 was amended by the 1991 Act, application for a certificate could not be made if the subject land was in a CDA or was allocated primarily for a use “which is of a residential, commercial or industrial character.” This restriction (which was contained in subsection (1) of section 17) is in my view important when one is seeking to understand how sections 14 to 17 were designed to operate. If the subject land was allocated for a valuable use (residential, commercial or industrial), the claimant got the benefit of the permission to be assumed under section 16 for any development for which permission could reasonably have been expected in the absence of any proposal to acquire. If it was not so allocated, he had the opportunity to seek an alternative use certificate and to achieve through this an assumed permission for a valuable use.[71]These very specific provisions quite clearly did not provide that planning permission was to be assumed for any development for which permission would have been granted if there had never been any proposal for the scheme for the purpose of which the land was acquired. A provision to this effect was not made, and in my view it is not surprising that it was not when the matter is understood in a proper historical context. The principal planning Acts before the Town and Country Planning Act 1947 (the Housing, Town Planning etc Act 1909, the Town Planning Act 1925 and the Town and Country Planning Act 1932) had contained provision for compensation where land was injuriously affected by development plan provisions. That was because planning restrictions were seen as depriving an owner of the freedom that he had previously enjoyed to use his land how he wished (subject only to the private rights of others and the requirements of public health legislation). The 1947 Act removed this right to compensation. Part VI made once-and-for-all provision for payment for depreciation in land values out of a central fund. Since then no compensation has been payable for the injurious effects of development plans. An owner receives no compensation if his land is shown in the 25 development plan as green belt while his neighbour’s land is shown for residential development. If a development plan shows land for a less valuable use than that in the plan it replaces, again this does not give rise to an entitlement to compensation. Equally if land is increased, or decreased, in value by the fact that adjoining land is shown in the development plan for a particular purpose, this carries no consequences for the owner in terms of any entitlement to compensation.[72]With the abolition of development charges, a landowner became able to enjoy such value as the development plan and the exercise of development control might give to his land, but, of course, he was not entitled to compensation for any adverse effects on value that the development plan provisions might have. Under the 1947 Act compulsory purchase had been an instrument through which the planning authority could achieve the development of land in accordance with the development plan, and subsequent statutes have made similar provision. When a landowner sold land to a private purchaser he was able to obtain a price that reflected the development plan provisions and existing and potential planning permissions. There was no reason in principle, therefore, when he sold the land under compulsion to a public authority, why compensation should be assessed on the basis of development plan provisions that would have applied and planning permissions that would have been granted in the no-scheme world. The provisions of sections 14 to 17 are, in my view, properly to be seen as the embodiment of a policy judgment as to what assumptions as to planning permission ought reasonably to be made for the purposes of assessing compensation. In essence the judgment was that the landowner should get the benefit of permission for the scheme development and for development in accordance with the current development plan, provided that, in the case of allocated land, the permission was one that could reasonably have been expected. In addition, if the land was not allocated for a valuable use in the development plan, he should get the benefit of an assumed permission for such alternative development as might reasonably have been expected if it were not proposed to be acquired.[73]At the time of the enactment of the 1959 Act the Pointe Gourde rule had not achieved the recognition that it has since been given as the result of the series of judicial decisions to which I have referred. The Law Commission Report at paragraphs 6.19 to 6.21 identifies the different formulations of the no-scheme rule to be found in the authorities and says that underlying them “is a tension between three entirely different interpretations of the scope of the rule.” In particular, as the report says, it is hard to reconcile the formulation in the Indian case (Vyricherla Narayana Gajapatiraju v District Revenue Officer, Vizagapatam [1939] AC 302) – which said that what has to be left out of account is the fact that compulsory powers have been obtained – with the Pointe Gourde formulation, although in a recent detailed analysis Carnwath LJ has shown that there is no conflict between the two decisions (see Waters v Welsh Development Agency [2002] RVR 298 at paras 82 to 95). At the time of the 1959 Act it is probable that the Indian case was more generally regarded as the leading authority on the no-scheme rule, while Pointe Gourde was almost exclusively referred to for what it said about rule (3) (in what is now section 5 of the 1961 Act): see for example Cripps on Compensation 10th edn (1955). It is therefore not surprising, for this, if for no other, reason, that sections 2 to 5 of the 1959 Act were not an embodiment of the Pointe Gourde rule. 26[74]I have said that sections 14 to 17 (in their original form) were designed to provide a clear foundation for the assessment of compensation consisting of any planning permission required to be assumed and any planning permission actually in force. This is what subsections (1) and (2) of section 14 provided, and no other planning permission was to be assumed. It was then necessary to make clear that any other prospect of planning permission that existed in the real world and gave value to the land (hope value) could be taken into account. This is what subsection (3) did. It did not confer a right to have such prospect taken into account but said that the assumption provisions should not be construed as requiring it to be assumed that planning permission would be refused for other development. The reason that the subsection did not confer a right in this respect, I think, was that hope value was simply part of the market value of the land, to which the claimant was entitled under rule (2).[75]Thus far the analysis I have made of sections 14 to 17 in their original form shows an explicable and workable set of provisions. However, I have omitted from consideration the second part of section 14(3) as it existed before the 1991 Act. In its entirety the subsection provided:
“(3) Nothing in those provisions [ie sections 15 and 16] shall be construed as requiring it to be assumed that planning permission would necessarily be refused for any development which is not development for which, in accordance with those provisions, planning permission is to be assumed; but in determining whether planning permission could in any particular circumstances reasonably have been expected to be granted in respect of any land, regard shall be had to any contrary opinion expressed in relation to that land in any certificate issued under Part III of this Act.”
[76]I have to say that, in contrast to the rest of the original provisions of sections 14 to 17, which I find to be clear, I am simply unable to understand the purpose and function of the second part of this subsection. (I will refer to it as the proviso.) The only provisions of the Act requiring it to be determined whether planning permission could reasonably have been expected to be granted were sections 16(2), (3) and (4) and 17(4), and they each used the verb “might” rather than “could”. It is possible, but extremely unlikely, that the proviso was intended to have a function in relation to section 17(4), by requiring that regard should be had to a negative certificate in the event of a further application under section 17. It is hard to see that it could have had any significant function in relation to section 16(2), (3) and (4) since, as I have said, a section 17 certificate could not have been applied for where the land was allocated for a valuable purpose. If, however, it was intended to have effect in relation to section 16, perhaps where land was allocated but not for a valuable purpose, one would have expected it to have been included in that section. The proviso was, however, there in section 14(3), apparently qualifying the first part of the subsection that makes clear that hope value is not excluded. Hope value may derive from a spectrum of prospects – from a certainty in the mind of the market that permission would be forthcoming, down to the slightest possibility that it might be granted. A reasonable expectation of permission is merely one point in the spectrum. Moreover, in addressing hope value the Tribunal must, I think, do so in the light of what the market makes of the prospects (since, as I have said, it is under rule (2) that hope value falls to be taken into account) rather than on the basis of an objective assessment of whether planning permission could reasonably have been expected to be granted. All these things make the proviso a very obscure provision. 27[77]In the event it is not essential that I should reach a view on the purpose and function of the proviso since the 1991 Act has replaced it with subsection (3A). This provides:
“(3A) In determining – (a) for the purpose referred to in subsection (1) of this section whether planning permission for any development could in any particular circumstances reasonably have been expected to be granted in respect of any land; or (b) whether any of the assumptions mentioned in section 16 of this Act (but not section 15) are applicable to the relevant land or any part thereof, regard shall be had to any contrary opinion expressed in relation to that land in any certificate issued under Part III of this Act.”
[78]The purpose referred to in subsection (1) is the purpose of assessing compensation in respect of a compulsory acquisition. Thus(a) is of general effect for such a purpose, while(b) relates to section 16. (There is no doubt that the provision now has a function in relation to section 16 since the 1991 Act removed the restriction in section 17(1). A section 17 certificate can now be sought even though the land is allocated for a valuable use.) It is to be noted that paragraph (a) retained the words “whether planning permission for any development could in any particular circumstances reasonably have been expected to be granted.” It did not say, as it might have done, instead of the italicised words, “if no part of the relevant land were proposed to be acquired,” the formula used in section 16(7) and section 17(4) and also in the new subsection (7)(a) (which was part of the provision added by the 1991 Act to reverse the effect of the decision in Margate Corpn v Devotwill Investments Ltd [1970] 3 All ER 864).[79]In my judgment subsection (3A), along with other provisions amended by the 1991 Act, must be taken to be an implied statutory acceptance of the decision in Jelson v Blaby. In that decision the Court of Appeal held that, by virtue of the Pointe Gourde rule and section 9, a claimant could rely on such planning permission as would have been granted in the no- scheme world. It was no doubt in the light of this decision that the restriction in section 17(1) was removed. Clearly there was no point in continuing the restriction if, in pursuing his claim for compensation, the claimant could rely on any planning permission that would have been granted in the no-scheme world. Since Jelson v Blaby claimants had been pursuing claims on this basis, and it seems to me that subsection (3A) has an obvious function in ensuring that when such a claim is being advanced any negative certificate is taken into account.[80]The result is that I cannot find in sections 14 to 17 anything that enables a claimant to rely on a planning permission that would, or indeed might, have been granted if cancellation of the scheme was to be assumed. On the other hand there is authority, which has been relied on for many years and is by implication accepted in the 1991 amendments, that he can rely on any planning permission that would have been granted if the scheme had never been conceived. 28 Section 14(3A): the effect of a negative certificate[81]Under section 17(4) the local planning authority must issue to an applicant a certificate stating that, if the land were not proposed to be acquired, either planning permission for development of one or more classes specified in the certificate would have been granted but would not have been granted for any other development or planning permission would have been granted for any development for which the land is to be acquired but would not have been granted for any other development. Subsection (5) provides that, where, in the opinion of the authority, permission would have been granted but only at a future time, the certificate must specify that future time. Thus section 17(4), read with subsection (5), requires an expression of opinion from the local planning authority that covers all possible developments and both the present and the future. Furthermore the opinion must be expressed in terms of certainty. Either development would have been permitted or it would not. The authority must say which.[82]Section 15(5) then creates the assumption that any planning permission that, according to the certificate would have been granted, would be so granted. There is, however, no corresponding assumption that planning permission would be refused for development which the certificate says would not have been permitted. It would obviously have been possible to create an assumption of refusal, but this was not done. Indeed section 14(3) expressly provides that nothing in sections 15 and 16 is to be construed as requiring it to be assumed that planning permission would necessarily be refused for development which is not development for which permission is to be assumed. The result is that section 14(3) expressly keeps alive the possibility of planning permission for development that a section 17 certificate says would not be permitted, and section 14(3A) requires only that regard should be had to the opinion expressed and not that it should be treated as conclusive.[83]Mr Williams on behalf of the acquiring authority submitted, as I have noted earlier, that the Tribunal should act upon an opinion expressed in a negative certificate unless one of three circumstances applied. The first circumstance was where there was a possibility (but not, he said, a probability) of planning permission being granted. In such a case the Tribunal ought, he said, to treat the certificate as establishing what would have happened if planning permission had been sought but should consider whether the market might reasonably have expected a different planning situation to emerge. Since the authority are required, and are only permitted, to say whether permission would or would not be granted, the possibility, or hope, of permission being granted is not a matter for them; but the opinion that permission would not be granted excludes any such possibility or hope. I have no difficulty, therefore, in accepting Mr Williams’s submission that the Tribunal must be able to determine that there was a possibility of permission being granted despite the opinion in a negative certificate, because otherwise the claimant would never be able to have the matter addressed. I cannot accept, however, for reasons I set out in relation to Mr Williams’s third circumstance, that the Tribunal is restricted to considering whether there is the possibility or hope of permission.[84]Mr Williams’s second circumstance arises where a party is seeking to establish what planning permission would or might have been granted in the no-scheme world. The certificate, having been issued on the different cancellation assumption, should, he said, be treated as establishing what would have happened on the cancellation basis and the Tribunal 29 should then go on to consider whether a different result would have obtained in the no- scheme world. Clearly the Tribunal must have regard to the certificate in this circumstance – that is the effect of section 14(3A) – but I can see nothing that requires that it should be treated as establishing anything, other than the opinion of the certifying authority. Its utility in shedding light on what would have happened in the no-scheme world will necessarily depend on the circumstances, including in particular the differences between the no-scheme world and the world of the cancelled scheme.[85]Thirdly, said Mr Williams, the Tribunal might be persuaded to act on a contrary opinion from that expressed in the certificate in circumstances where new evidence had come to light, of a kind not reasonably obtainable at an earlier stage. If the suggestion is that the Tribunal may only act on a different conclusion if there is new evidence that was not reasonably obtainable earlier, I cannot accept this. I do not think that the duty to have regard to the opinion in the certificate is to be treated as making the opinion binding on the Tribunal to this extent or at all. It may well be that in the great majority of cases the Tribunal will see no reason to reach a different opinion, but the matters it may take into account in deciding whether to do so cannot, in my judgment, be confined in the way that Mr Williams suggests. Moreover, where, as here, the certifying authority is the same body as the acquiring authority, fairness to the claimant in my view requires that the Tribunal should reach its own view.[86]The correct approach for the Tribunal to adopt when considering the prospect of planning permission in the light of a negative certificate, in my judgment, is that it should have regard to the opinion expressed, attaching weight to it that takes account of the position of the authority as a planning authority (and, in the case of the Secretary of State or the National Assembly, as an appellate planning authority), the process which has resulted in the certificate being issued (including, as here, the fact that there was a public inquiry), the reasons for the opinion, and the totality of the evidence that is before it. The Tribunal must then reach its own view in the light of these considerations. Pointe Gourde and the burden of proof[87]The case for the claimants was that the Tribunal should approach the question of whether planning permission would have been granted on the cancellation assumption described in Fletcher Estates, ie that the road proposal was cancelled on the valuation date but that in all other respects things were as they actually were on that date. Any increase in value of the land due to the development of other land that would not have been carried out in the no-scheme world would have to be disregarded under Pointe Gourde, but it was for the acquiring authority to show that there was such an increase in value. The case for the acquiring authority was that, under the Pointe Gourde rule, the basis for deciding compensation is that the no-scheme world is one in which the underlying scheme had never been proposed rather than one in which the scheme had been cancelled. That, they said, was a matter of law. The Tribunal must determine compensation on this basis, and no issue of the burden of proof arose.[88]The answer to this particular matter of dispute, in my view, is that it is for each party to make out its case to the extent that is necessary to produce the result that it seeks. It cannot, 30 in my judgment, be the case that, before he is able to satisfy the Tribunal on the quantum of compensation, a claimant always has to show that the value that he contends for is no greater than the value that the land would have had in the no-scheme world. A claimant is entitled to advance a case based on the statutory rules and assumptions as to planning permission without having to embark on what may be a complex and ultimately inconclusive attempt to construct the no-scheme world and the value that would have prevailed in it. If the acquiring authority, relying on Pointe Gourde, seek to contend that the land would have been worth less on the no-scheme world assumption than on an application of the statutory rules and assumptions, it must be for them to make out their case on this.[89]On the basis of the conclusions of law that I have reached, however, it is for the claimants, if they wish to rely on a B1 development value for the land, to establish the prospect of obtaining permission for such development on a no-scheme world assumption. If, on the other hand, I had concluded that the proper basis of approach was on the cancellation assumption, it would have been for the claimants to make out their case on that basis. A conclusion that the cancellation basis was the proper approach would have been reached as a matter of construction on the provisions of sections 14 to 17 and a conclusion that Pointe Gourde had no relevance to the planning status of the land. It may be that a party could nevertheless rely on Pointe Gourde in order to contend that, in the no-scheme world, the land would have been worth more or less than in the real world on the cancellation assumption. If so, it would be for the party relying on such a contention to make good its case. Injurious affection[90]Compensation is claimed and, on the alternative bases I have referred to earlier, it is agreed, both for the value of the land compulsorily acquired and also for injurious affection to the land retained. The entitlement of compensation for injurious affection arises under section 7 of the Compulsory Purchase Act 1965 which provides:
“In assessing the compensation to be paid by the acquiring authority under this Act regard shall be had not only to the value of the land to be purchased by the acquiring authority, but also to the damage, if any, to be sustained by the owner of the other land by reason of severing of the land purchased from the other land of the owner, or otherwise injuriously affecting that other land by the exercise of the powers conferred by this or the special Act.”
The “exercise of the powers contained by this or the special Act” would, in the present case, mean the construction of the bypass and the associated works: see Wagstaff v Highways Agency [1999] RVR 325 at 329-330. Sections 6, 9 and 14-17 of the 1961 Act have no application to the assessment of compensation for injurious affection since they relate expressly to the relevant land, which, as defined by section 39(2), excludes the retained land; and, although this Tribunal (R C Walmsley FRICS) has held that the Pointe Gourde rule applies to the valuation of the retained land (see Clarke v Wareham and Purbeck RDC (1972) 25 P & CR 423), there is recent Court of Appeal authority that suggests that it may not do so: see English Property Corporation v Kingston LBC (1998) 77 P & CR 1, per Morritt LJ at 10-11. 31[91]I heard no argument on the question whether the Pointe Gourde rule applies to the valuation of the retained land; and, in view of the conclusion I set out below on the authority’s factual contentions on the no-scheme world, there is no need for me to reach a conclusion on the question. Section 9 and planning assumptions[92]In Fletcher Estates [2000] 2 AC 307 at 325, in a passage I have earlier quoted, Lord Hope reserved for later consideration the question whether Jelson v Blaby was correctly decided. This Tribunal is, however, bound by that decision, and I have reached the conclusion, for the reasons set out above, that it has in the 1991 Act achieved statutory recognition. In case, however, the present case goes further, I should just say this about section 9, which, together with Pointe Gourde, was the foundation of that decision.[93]Section 9 provides for the disregarding of any depreciation in value attributable to an indication that the land is likely to be compulsorily acquired. As I have noted previously, it formerly appeared as section 9(6) in the Town and Country Planning Act 1959. As originally enacted it said:
“No account shall be taken of any depreciation in the value of the relevant interest which is attributable to the fact that (whether by way of designation, 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.”
The word “designation” was deleted by the Town and Country Planning Act 1968.[94]The statutory forebear of section 9(6) of the 1959 Act was section 51(3) of the 1947 Act. Section 51(3) was in these terms:
“Without prejudice to any rule of law affecting the assessment of compensation in respect of the compulsory acquisition of land in pursuance of any enactment, no account shall be taken, in calculating the value of an interest in land designated by a development plan under this Act as subject to compulsory acquisition, of any depreciation in the value of that interest which is attributable to that designation.”
That provision had the role simply of excluding the blighting effect on value of the designation of land as subject to compulsory acquisition. It had no wider purpose, because under the 1947 Act compensation was at existing use value. The successor provision certainly provides this protection against blight: see for instance London Borough of Hackney v MacFarlane (1970) 21 P & CR 342, where it enabled the depreciation in value due to the prospect of a slum clearance CPO to be left out of account. The question, however, is whether it also has the much wider function attributed to it in Jelson v Blaby and enables a claimant to rely on any planning permission that would have been granted in the no-scheme world. 32[95]In the 1959 Act the provision omitted the introductory words of section 51(3) (“Without prejudice to any rule of law affecting the assessment of compensation in respect of the compulsory acquisition of land in pursuance of any enactment”) and it expanded the reference to designation so as to include any indication of the likelihood of compulsory acquisition. It was otherwise recognisably the same provision as section 51(3). It was located in section 9, which, as I have said, had the sidenote “Modification of rules for the assessment of compensation”, and it came after the sections dealing with planning assumptions. As I have noted earlier, the provisions showed a clear distinction between the planning status of the land and its valuation. In section 9 the provision appeared as subsection (6), after the provisions that are now section 6 of and Schedule 1 to the 1961 Act and which provide in detail for the disregard of increases or decreases in value arising from the scheme development. In contrast to those provisions it was expressed to relate to decreases in value but not to increases. Had it been intended to have a wide general effect one might have expected it to have been located before those specific provisions and to refer to increases as well as decreases in value. In the light of these features, which appear not to have been addressed in any of the cases that have accepted section 9 of the 1961 Act as having a wider effect than the disregard of the blighting effects of prospective compulsory acquisition, it seems to me improbable that the provision was intended to enable a claimant to assert that in the no-scheme world planning permission would have been granted for a particular development and to found his valuation upon this. Conclusions on the evidence: no-scheme world assumption[96]Mr Litherland said that the claimants’ case was that the prospect of planning permission should be considered on the cancellation assumption. I have concluded that this is not in law the right basis on which to consider such prospect, which can only be considered on the no-scheme assumption. Mr Wilyman’s evidence was not expressed to be on one basis rather than the other, but it was impliedly on the cancellation assumption. He did not accept the acquiring authority’s contention that, in a world in which there had been no bypass scheme the railway embankment would have been taken as the limit of development; but he did not seek to construct the no-scheme world from the inception of the scheme in 1974 to the date of entry in 1991 and to assess the prospect of planning permission in such a context. I am unable to find, on the basis of his evidence, that, if there had never been a bypass scheme, planning permission would have been granted for B1 development or that there would have been a hope of such permission being granted.[97]To make out a case based on the no-scheme world would have been a formidable undertaking. The parties are agreed that the bypass scheme came into existence in 1974. The valuation date is in 1991, some 17 years later. Over that period the factors bearing upon the development of planning policy would have changed considerably - national economic pressures, the local economy, the demand for minerals, the need to deal with unemployment, the types of employment that might be generated, population trends and the housing market, the scope for public expenditure on social and infrastructure developments. The way in which Mold developed over those 17 years, as with any other town, would have depended on the inter-action of such factors as these, and the planning policies to which they gave rise, and a multiplicity of decisions on the part of those interested in developing land and on the part of the local planning authority. Individual projects would have been conceived, 33 progressed, altered, implemented, abandoned. Numerous individual sites could have been developed or not developed for various purposes, and there would be a range of possibilities as to how they could have been developed and when. The interrelationship of these matters and the 17-year timeframe would produce a vast range of permutations in the way that the development of Mold might have proceeded.[98]It seems to me that notionally to reconstruct the development of Mold over this 17 year period, so as to establish as probable that the land would have received permission for industrial development is a virtually impossible task. The converse also applies, and, despite the evidence of Mr Keyte, I am unable to conclude that the acquiring authority has shown that in the no-scheme world planning permission would not have been granted for B1 development. In case it should become material that the authority have not made out a case in this respect, I will say why I have reached this conclusion.[99]Mr Keyte in a report extending to 60 pages, and with numerous appendices, had traced the development of planning policy as it had occurred over the 17-year period. He sought, in the light of this, to postulate how development would have taken place and how it would have been restricted in this part of Mold. His conclusion - that industrial development would not have extended to Bromfield Phase 3 - was based on two considerations. The first was that, in the absence of the bypass, the demand for industrial land in Mold would have been less, because the promise of the new road made the town more attractive than it would otherwise have been as a location for industry. The second consideration was that the line of the bypass became the natural termination for development, and that, in its absence, the planning authority would have sought to confine development to the west of the railway embankment and would have succeeded in doing this.[100]Mr Keyte told me that he had not sought to quantify the requirement for industrial land that would have existed in the absence of the bypass proposal. He felt sure that it would not have been more than in the no-scheme world. He agreed that the amount of land needed could have varied throughout the 17-year period. There is thus simply no evidence before me that enables any quantification of demand for industrial land to be made by reference to any time during the period. As for the supply side, Mr Keyte had not considered what alternative sites might have been made available to meet whatever the requirement of industrial land might have been, although he thought that previously-developed sites within the urban area would have been put forward and that the land to the east of Woodlands Road would have been considered for industrial development. There is, however, no evidence before me to suggest that brownfield sites would have produced any significant supply of industrial land. The council had rejected the land east of Woodlands Road in 1990, and the 1992 report on the inspector’s report stated that industrial development there would be close to and overlooked by housing. At the time of the draft Mold District plan in 1981, which allocated the whole of the Nercwys Road site, the council said that there were substantial objections to all the alternatives; and the allocations would only be sufficient for the period to 1991. The Denbigh Road (Synthite Works) site was a site allocated for the expansion of that particular works, and Chester Road (Ponterwyl) was stated to be suitable for small users. In addition most of the area allocated for industrial development in the Delyn Local Plan would not have been available. It was Mr Keyte’s view that in the absence of the bypass not only would Phase 3 of the Bromfield Estate not have received permission but the whole of E1(5) would 34 not have been allocated. It is clear that other sectors of Mold than the south-east would have been severely constrained.[101]As far as possible limits to development are concerned, I accept that the railway embankment was a feature that would have been considered as a possible suitable boundary. But since an industrial operation already existed immediately beyond it – the saw-mill – there would always have been an argument of some force both for permitting the redevelopment of that site and for further development extending from it. While the bypass was evidently seen as a factor that would assist the development of the Bromfield Road site, it does not appear that its development was dependent on the bypass.[102]The conclusion I have come to, therefore, is that, although the claimants have failed to make out a case for B1 planning permission in the no-scheme world, the acquiring authority have equally failed, despite their efforts to do so, to show that such permission would not have been forthcoming.[103]I should add that the opinion expressed in the National Assembly’s section 17 certificate, being expressed by reference to an assumed cancellation of the scheme in 1989, is of no real assistance in constructing the no-scheme world from 1974 onwards and forming a conclusion of whether planning permission would have been forthcoming in such a world. In any event, for reasons that I set out below, I arrive, on the basis of the evidence before me, at a different conclusion from the one expressed in the section 17 certificate.[104]My conclusion that the prospect of planning permission must, as a matter of law, be approached on a no-scheme basis and that the claimants have failed to show that permission for B1 development would have been given in the no-scheme world produces the result that compensation must be awarded on the basis of existing use value. The agreed amount on this basis, after allowing for betterment, is £16,000. Under rule 50(4) of the Lands Tribunal Rules 1996, however, I need to ascertain whether a different amount would have been awarded if I had accepted the claimants’ contention that the prospect of planning permission is to be approached on the cancellation assumption. For this purpose I must determine whether, on such an assumption, planning permission would have been granted, and, if it would not have been, whether there was nevertheless a hope that it would have been. Conclusions on the evidence: cancellation assumption[105]The National Assembly’s negative certificate is of central importance to my consideration of the question whether planning permission would have been granted on the cancellation assumption, since it was based on the same assumption. The fact that the opinion in the certificate was expressed by reference to the state of affairs that existed on 18 August 1989 whereas I am concerned with things as they were at the valuation date, 29 January 1991, does not affect matters since there is nothing to suggest that there was any material difference in the state of affairs at the two dates. The opinion expressed was based on the policies in the 1982 Structure Plan and the emerging Delyn Local Plan. It is a matter of some moment, in my judgment, that both at the relevant date for the purposes of the 35 certificate and at the valuation date the local plan was at a draft stage. The decision letter said that employment proposal E1(5) and (7) of the Delyn Local Plan indicated the areas within Mold allocated for industrial development, “and the appeal land is not within either of them.” It went on to say that both parcel A and parcel B and the adjoining land as well were outside the settlement boundary for Mold. That was the settlement boundary as drawn on the draft local plan. However, it is essential to bear in mind, in my judgment, that the settlement boundary was drawn along the line of the bypass, so that, if the bypass scheme had been cancelled, the council would, in advancing its draft plan, inevitably have had to review the boundary and to have reconsidered the appropriateness of notations associated with it. If cancellation is to be assumed, one must also assume the consequences and incidents that must inevitably have flowed from or accompanied such cancellation: see East End Dwellings Co Ltd v Finsbury Borough Council [1952] AC 109 per Lord Asquith of Bishopstone at 132- 133; Margate Corpn v Devotwill Investments Ltd [1970] 3 All ER 864 per Lord Morris of Borth-y-Gest at 869b-d.[106]The statutory development plan included the Clwyd County Special Landscape Area Local Plan (1984), which had been adopted in 1985. This defined the boundary of the SLA. In the vicinity of the subject land the boundary was drawn so that it excluded from the SLA almost all of OS 7180. This is not a matter that the section 18 decision letter addresses. No doubt the reason for the exclusion from the SLA was the proposal, then current, to re-locate the cattle market on this land. Policy R2 in the consultation draft of the Delyn Local Plan said that proposals for the relocation of the market to a site adjacent to the proposed bypass as defined on the proposals map would be acceptable to the council, and that two areas of land were allocated adjacent to the bypass, with the proviso that only one of them would be developed. The two sites were on the claimants’ land to the north and south of the B5444. That to the north was shown as being excluded from the SLA. The section 18 decision letter says that the cattle market allocation should not be regarded as an indication that development outside the settlement boundary was generally acceptable. What it does show, however, is that Delyn Borough Council considered that development of that land was acceptable if the need for it was there, despite the land being outside the developed area of Mold and of high agricultural quality and indeed beyond the bypass. In my view, if the bypass had been cancelled, particular needs would have been perceived to arise as a result in the change of circumstances. The following considerations in particular seem to me to be important.[107]In the 1988 consultation edition of the First Alteration to the Structure Plan, Policy A1 provided for the allocation of 120 ha of industrial land in Delyn. The deposit version of the Delyn Local Plan (June 1990) showed a total allocation of 128.95 ha, of which 105.25 ha was estimated to be available in the plan period. Of this 105 ha 24 ha were at Mold, 14 ha on site E1(5) and 10 ha on site E1(7). It is, I believe, clear that the 14 ha of E1(5) would certainly not have been considered for development in the absence of the bypass. That area extended westwards north of the bypass from the Broncoed Industrial Estate, which was part of area E1(7) and was located on and to the immediate south of former coal workings. To the north of E1(5), south-west of Alun School and its playing fields, is an attractive area of open land, now visible from the bypass and not proposed for development in the local plan. Mr Wilyman said, and I accept, that the land to the west of the B5444, including therefore this land, was of a higher landscape quality than that to the east; and Mr Keyte accepted that in the absence of the bypass both E1(5) and the open area to its north would have been included 36 in the special landscape area. While Mr Keyte was addressing himself to the no-scheme world rather than to the consequences of cancellation, his conclusion is equally applicable, in my view, to each set of circumstances. I have no doubt that, if the bypass had been cancelled, area E1(5) would have been included in the SLA. The loss of these 14 ha (out of the 24 ha in Mold and the 105 ha in Delyn) would inevitably have concentrated attention on the potential of the subject land and the land adjoining it to make good part of this loss. Moreover, as was particularly clear to me from my site inspection, the cancellation of the bypass would have left the industrial development north and south of the B5444 with a raw edge to the open countryside. A substantial amount of landscaping was carried out as part of the bypass works, and the strip of land acquired from the claimants was up to 50m in width to enable landscaping to be carried out. The development is thus enclosed within the bypass and its landscaping. It was, however, laid out in a way that would readily have permitted its extension. It seems to me probable that with the bypass cancelled the council would have looked favourably on a modest extension of the industrial development that could have incorporated appropriate landscaping in order to form a suitable boundary to the SLA.[108]Mr Litherland’s contention was that the best evidence of what would have been decided in the absence of the proposal to acquire the land for the road was to be found in the report of the inspector who held the inquiry into the section 18 appeal in 1997. Any appeal against the refusal of planning permission, he said, could be expected to be determined by an inspector rather than the National Assembly, and an inspector could be expected to view things as the 1997 inspector had done. I would hesitate before basing a conclusion on the different decisions that might be reached by the National Assembly and an inspector exercising the powers of the National Assembly. What seems to me important, however, is that a decision on whether at the valuation date planning permission should be granted for B1 development would have taken account of the considerations I have mentioned, which were not addressed in the section 18 decision letter. Those considerations – the fact that the council would have had to reconsider the settlement boundary and the notations associated with it in taking forward the draft local plan, the likely deletion of area E1(5) and the consequences of that for industrial land availability in Mold, the boundary of the SLA as shown on the statutory plan, and the need to soften the raw edge of the existing industrial development – would have been seen as constituting a case of substance for the allocation for B1 purposes of the subject land and the land adjoining in the local plan, then still at its draft stage. While, therefore, I have had regard to the contrary opinion expressed in the section 17 certificate, and I bear in mind the body by whom it was given and the procedure that led to it, my conclusion is that there was a reasonable prospect of planning permission being granted for B1 development within the 7 or 8 years referred to in the agreement between the parties; and, on the basis of Mr Wilyman’s evidence as a local surveyor, I further find that the market would have taken this view.[109]I do not think that planning permission would have been granted at the valuation date on the cancellation assumption. There is no evidence that there was a pressing need for the release of land for B1 development at that time. It would have been necessary for the local plan to take its course and for the allocations in the draft plan to be reconsidered in the light of the cancellation. Planning permission could only have followed at a later date. 37[110]If it was potentially relevant for me, having reached this conclusion on the cancellation assumption, to consider in addition whether the land would have been worth more or worth less on no-scheme world assumptions, it would be for the party relying on such a contention to make good its case. It was no part of the claimants’ case that it would have been worth more; and I have concluded that the acquiring authority have failed to show that in the no- scheme world development would not have been permitted beyond the former railway embankment. The result is that, if I am wrong in my conclusion that the prospect of planning permission must be approached on the assumption that the scheme had never been proposed and it is the cancellation approach that is to be applied, the claimants would be entitled to compensation on the second of the two bases agreed between the parties, the hope value basis, and the amount of the award would be £102,285. Determination[111]Having concluded that the prospect of planning permission is to be approached on a no- scheme world assumption and that the claimants have failed to show on such assumption either that planning permission would have been granted for B1 development or that there was a hope that it would be granted, I determine that compensation should be assessed on the basis of existing use value. The agreed amount on this basis, after allowing for betterment, is £16,000.[112]This determination will take effect as a decision when the question of costs has been decided and at that point, but not before, the right of appeal will come into operation. The parties are invited to make submissions as to the costs of this reference and a letter accompanying this decision sets out the procedure for submissions in writing. Postscript[113]I would add this observation. The extreme complexity of the issues that I have had to consider, the uncertainty in the law, the obscurity of the statutory provisions, and the difficulties of looking back over a long period of time in order to decide what would have happened in the no-scheme world demonstrate, in my view, that legislation is badly needed in order to produce a simpler and clearer compensation regime. I believe that fairness, both to claimants and to acquiring authorities, requires this. Dated 14 November 2002 George Bartlett QC, President 38 ADDENDUM ON COSTS[114]I have received written submissions on costs from the parties. The claimants say that the finding of the Tribunal was that both parties had failed to make out a case and therefore in equity each party should bear its own costs. If, however, costs were to be awarded they should be calculated from the date of the unconditional offers by the parties in accordance with section 4(1) and (3) of the Land Compensation Act 1961 and the costs of counsel should be disallowed under subsection (4). The acquiring authority made an offer dated 19 February 2002, which was stated to be made for the purposes of section 4(1) and of Rule 44 of the Lands Tribunal Rules 1996. The amount of compensation awarded was less the amount offered. The claimants made an offer pursuant to section 4(3) and rule 44 on 1 March 2002, but it exceeded the compensation awarded. The acquiring authority rely on the offer that they made. They submit that the claimants should have their costs up to 20 February 2002 but that the claimants should bear their own costs and pay those of the authority after that date.[115]I agree that the claimants should have their costs up to the date of the offer and I can see no special reason for not ordering them to bear their own costs and pay the authority’s costs after that date. It was for the claimants to establish their claim, and they failed to do so on the basis of the law as I found it to be. Although I concluded that the authority’s evidence failed to establish that in the no-scheme world development would have been confined to the north-west of the railway embankment, it was not unreasonable for such evidence to be adduced. The evidence itself was of a good professional quality.[116]No reasons are advanced in support of the contention that the costs of the authority’s counsel should be disallowed, and I can see no reason for disallowing them. In view of the issues involved and the amount in dispute this was clearly a case for representation by counsel if a party wished to be so represented.[117]The acquiring authority must pay the claimants’ costs up to 20 February 2002, and the claimants must pay the authority’s costs after that date, such costs if not agreed to be the subject of a detailed assessment by the Registrar on the standard basis. Dated 5 December 2002 George Bartlett QC, President 39