FRANCIS ANDREW SMITH VALERIE SMITH v SOUTH STAFFORDSHIRE DISTRICT COUNCIL LCA/119/2004

UPPER TRIBUNAL

LANDS CHAMBER

LCA/119/2004

Case No LCA/119/2004

Between

FRANCIS ANDREW SMITH VALERIE SMITHApplicant

SOUTH STAFFORDSHIRE DISTRICT COUNCILRespondent

Before

P R Francis FRICS

Niall Blackie for Claimant

solicitor- of Manby for Claimant

Steward for Claimant

solicitors of Telford for Claimant

Michael Morgan for Compensating Authority

solicitor for Compensating Authority

of South Staffordshire District Council for Compensating Authority

Venue Telford County Court, Telford Square

Date 20 July 2006

Property: Wilderhope, Tinkers Castle Road,, Seisden, Wolverhampton, WV5 7HF.

Catchwords: COMPENSATION – planning permission – revocation – Article 4 direction – Town and Country Planning General Development Order 1995 – whether indoor swimming pool and leisure block permitted development – estoppel – valuation – Town and Country Planning Act 1990, ss 107, 108 and 117 - compensation awarded £31,700

[1]This is a reference to determine what compensation (if any) should be paid to Mr and Mrs F A Smith (“the claimants”) by South Staffordshire District Council (“the council”) following a direction made under Article 4 of the Town and Country Planning General Development Order 1995 (“the GDO”) to remove permitted development rights in respect of Wilderhope, Tinkers Castle Road, Seisdon, Wolverhampton (“the subject property”).

[2]The claim is for alleged loss of value to the subject property (calculated on a residual basis to take account of building costs) resulting from the claimants’ inability to construct the substantial indoor swimming pool, leisure complex and garage block which they had proposed within the grounds of their property. In the event planning permission was obtained for a smaller garage, games room and leisure facility adjacent to the house, and it is the difference in value between the property with the addition as-built and what it would have been if the larger extension had been permitted that is being claimed. Mr Blackie called Francis Andrew Smith who gave factual and background evidence and David Berriman FRICS, who gave expert valuation evidence. The original claim was for £142,600 but following an agreement reached between the parties’ retained quantity surveying experts on the question of building costs, (who were not thus called), was revised to £116,066 and included a 30% allowance for the fact that the claimants had undertaken an element of the building works themselves.

[3]The council’s case was that due to the size and scale of the proposed development, it would never have enjoyed permitted development rights; the development for which planning consent was obtained and which had actually been completed was the most that could be expected and thus there was no loss to the claimants. Even if it was wrong on that point, no allowance should be made for the self-build element of the claim. Mr Morgan called Philip David Chapman MRICS of the Valuation Office Agency who gave valuation evidence on the council’s behalf. Facts

[4]The claimant had prepared a statement of facts and issues which, subject to minor amendments, was agreed during the course of the hearing. From this, together with my inspection of the subject property on the day before the hearing, the evidence and a subsequent external inspection of relevant comparables, I find the following facts.

[5]The subject property comprises a modern dormer style detached house with a gross external floor area (“GEA”) of 205 sq m, completed as a replacement for a small detached bungalow in November 2000, following the purchase of the site by the claimants in 1997. The house is situated towards the rear of the gently sloping plot which extends to approximately 0.78 acres (0.32 ha), and is in a rural location fronting Tinkers Castle Road, about ¼ mile to the west of the village of Seisden on the unclassified lane leading to Upper Aston and Claverley. It is surrounded on 3 sides by farmland, enjoys extensive rural views towards Seisden, and is about 6 miles from Wolverhampton. Constructed of brick under tiled 4 roofs, the accommodation comprises hall, cloakroom, 3 reception rooms, large kitchen and utility room on the ground floor with three bedrooms and two bathrooms on the first floor. LPG fired central heating is installed and there is a private drainage system and water supply. The gardens have been extensively landscaped, and the house is approached over a long drive leading through electrically operated gates from Tinkers Castle Road.

[6]Following completion of the main dwelling, the claimants commissioned an architect to prepare a scheme for a large (445 sq m GEA) single storey L-shaped complex comprising an indoor swimming pool with toilets and showers, a gymnasium, games room, snooker room, studio, kitchen and a triple garage. It would occupy a position within the rear garden immediately against the boundaries to the north-east corner of the plot, and would be of brick construction under shallow-pitched roofs giving it a total height of 3.95 metres. Following a site meeting with a planning officer from the council, at which plans were provided for further consideration, on 7 September 2000 the council made a direction under Article 4 to remove permitted development rights at the property. In a letter to the claimants’ architect dated 11 September 2000, W G Meredith, Head of Development and Building Control at the council said: “ I confirm that provided the Council has not taken action by an Article 4 Direction to remove the ‘permitted development’ rights contained in the General Development Order then the erection of the building shown on your drawing would not require planning permission”.

[7]The direction was confirmed by the Secretary of State on 7 March 2001, and its effect was to remove the permission granted by Article 3 [Permitted Development] in respect of:(1) The enlargement, improvement or other alteration of a dwelling house, being development comprised within Class A of Part 1 of Schedule 2 to the Order and not being development comprised within any other class.

(2) The provision within the curtilage of a dwellinghouse of any building or enclosure, swimming or other pool required for a purpose incidental to the enjoyment of the dwellinghouse as such, or the maintenance improvement or other alteration of such a building or enclosure, being development comprised within Class E of Part 1 of schedule 2 to the Order and not being development comprised within any other class.

[8]Further discussions ensued with the council’s planning officer, following which an application was submitted for a revised scheme for a large detached double garage with a separate detached garden store and pump house, and planning consent was obtained on 26 September 2001 (ref: 01/00831). Subsequent amendments were made slightly increasing the footprint of the garage building and, by reducing the area occupied by the garage, providing a hallway, cloakroom with shower and wc and a games room on the ground floor. A staircase was incorporated to serve a snooker room, studio and gym built into the high-apex roof space, lit by Velux roof-lights. It is agreed that the GEA of this complex with separate pump room/garden store is 205 sq m as built and that the claimants, with family assistance, undertook a proportion of the construction works themselves. 5

[9]On 22 January 2002 the claimants submitted an application for permission to develop the complex that had originally been proposed, and this was refused on 12 March 2002 for the reason that “the proposed outbuilding due to its size, would be visually prominent and detract from the openness of the Green Belt, contrary to Policy GB1 of the adopted Local Plan” (ref:02/00084). It is agreed that the date of refusal is the valuation date for the purposes of this claim. A claim for compensation under sections 107 and 108 of the 1990 Act in the sum of £142,600 was made on the claimants’ behalf on 4 March 2003. The basis of the claim was stated (on page 2) to be “Value of land assuming PD rights implemented as per refusal 02/084” minus “Value of land assuming permission 01/00831 completed” with adjustments for construction costs, claim costs and abortive expenditure. Negotiations proceeded on the basis of this claim, and in a letter dated 9 December 2004, the Chief Executive of the council said:

“3. The basis of the claim is agreed as set out on page 2 of the claim”

No agreement was however reached, and a Notice of Reference to this Tribunal was submitted on 26 November 2004. In its reply, served in February 2005, the council said:

“3. It is not agreed that the development proposed by application 02/084 fell within the scope of the Town and Country Planning (General Development Order) 1995 permission withdrawn by the Article 4 Direction”

Up until then, the council had accepted the basis of the claimant’s claim. The Statutory Provisions

[10]The relevant parts of sections 107 and 108 of the 1990 Act provide:

“Compensation where planning permission revoked or modified 107 – (1) Subject to section 116, where planning permission is revoked or modified by an order under section 97, then if, on a claim made to the local planning authority within the prescribed time and in the prescribed manner, it is shown that a person interested in the land or in minerals in, on or under it – (a) has incurred expenditure in carrying out work which is rendered abortive by the revocation or modification; or (b) has otherwise sustained loss or damage which is directly attributable to the revocation or modification, the local planning authority shall pay that person compensation in respect of that expenditure, loss or damage. (2) For the purposes of this section, any expenditure incurred in the preparation of plans for any work, or upon other similar matters preparatory to it, shall be taken to be included in the expenditure incurred in carrying out that work. Compensation for refusal or conditional grant of planning permission formerly granted by development order 108 – (1) Where- 6 (a) planning permission granted by a development order is withdrawn (whether by the revocation or amendment of the order or the issue of directions under powers conferred by the order); and (b) on an application made under part III planning permission for development formerly permitted by that order is refused, or is granted subject to conditions other than those imposed by that order section 107 shall apply as if the planning permission granted by the development order- (i) had been granted by the local planning authority under part III (ii) had been revoked or modified by an order under section 97.”

Section 117 sets out the general provisions as to compensation for depreciation under this Part and provides:

“117 – (1) For the purpose of assessing any compensation to which this section applies, the rules set out in section 5 of the Land Compensation Act 1961 shall, so far as applicable and subject to any necessary modifications, have effect as they have effect for the purpose of assessing compensation for the compulsory acquisition of an interest in land.”

[11]It is agreed that the relevant section of the Town and Country Planning General Permitted Development Order 1995 is that set out in Schedule 2, Part I, Class E which provides:

“Permitted development: E. The provision within the curtilage of a dwellinghouse of any building or enclosure, swimming or other pool required for a purpose incidental to the enjoyment of the dwellinghouse as such, or the maintenance, improvement or other alteration of such building or enclosure.”

The section goes on to list 6 categories of development that are not permitted by Class E and it is agreed that the only one that may have any relevance to this case is (d) which provides:

“Development not permitted E.1 Development is not permitted by Class E if- (d) the height of that building or enclosure would exceed – (1) 4 metres, in the case of a building with a ridged roof; or (2) 3 metres, in any other case”

. Article 4 states: 7 “4. – (1) If the Secretary of State or the appropriate local planning authority is satisfied that it is expedient that development described in any Part, Class or paragraph in Schedule 2, other than Class B of Part 22 or Class B of Part 23, should not be carried out unless permission is granted for it on an application, he or they may give a direction under this paragraph that the permission granted by article 3 shall not apply to – (a) all or any development of the Part, Class or paragraph in question in an area specified in the direction; or (b) any particular development, falling within that Part, Class or paragraph, which is specified in the direction, and the direction shall specify that it is made under this paragraph”. The claimants’ case

[12]Mr Blackie said that the key issue for the Tribunal to decide was whether the scheme as originally proposed would have amounted to permitted development under the GDO, and if it did not, whether the council could be permitted to depart in these proceedings from its previous assertion (in the letter of 11 September 2000) that it would have been. It was the claimants’ case that under Schedule 2, Part 1, Class E of the GPDO it clearly was permitted development. The proposed building was incidental to the use of the dwelling house, and whilst it was acknowledged (by the architect in correspondence with the council) that it was more than twice the size of the main house in terms of GEA, it was less visually intrusive than what had since been built. From the date when the council wrote to the claimants stating that the development would have been permitted but for the Article 4 direction, to the date when it served its reply to the statement of claim, the parties had proceeded in negotiations on the basis that it would have been permitted, and it was unjust for the council to now argue that it was not. In that regard, Mr Blackie said, an estoppel by convention arose given the fees and costs incurred by the claimants in pursuing the proceedings in the intervening period – see R v Caradon District Council ex p Knott

(2000) 80 P&CR 154

[13]Mr Blackie produced the revised claim for £116,066 and explained how the figures had been calculated. He said that according to Mr Berriman, the freehold value of Wilderhope as at March 2002 would have been £550,000 if the originally proposed development had been constructed in accordance with the plans, but only £425,000 with the additions that were permitted in 2001, and have subsequently been built. The difference was £125,000 from which should be deducted the difference between the costs of building the larger proposal and the smaller one. The cost of materials and labour to construct the both the large and small extensions had been in dispute but were finally agreed by the experts on 24 April 2006. Lee Alexander Reynolds BSc (Hons) MRICS MCIOB ACIArb of Alexander and Associates of Wolverhampton (for the claimants) and John Frederick Russell MRICS of the Valuation Office Agency, District Valuer Services of Edgbaston, Birmingham (for the council) are both Chartered Quantity Surveyors and produced a signed statement confirming the agreement. The cost of the refused scheme would have been £126,591 and the scheme as built £95,364 giving a difference of £31,227. 8

[14]Although the question of a deduction for the self-build element as a principle of compensation was in dispute, the experts agreed that, if it were acceptable, 30% would be the appropriate figure based upon the work that the claimant had carried out himself. This would be £9,368 and the difference in actual costs between the two schemes would then become £21,859. Deducting this from the differences in market values leaves £103,141 and with the following additional costs, Mr Blackie said the claim could be summarised as: Loss of value to owner £103,141 Architects fees for drawings and calculations (inc VAT) £ 9,400 Architects fee for perspective drawing £ 588 Valuation of land £ 235 Quantity surveyor £ 1,410 Legal fees for advice and claim £ 1,293 Total £116,066 It was submitted that if the claimant succeeded on the question of permitted development rights, the extra costs in addition to the loss of value should be allowed, but if the Tribunal found for the council, those costs would fall away.

[15]It would be necessary, Mr Blackie said, for the Tribunal to determine the freehold valuations of the subject property at March 2002 with each of the two different forms of development, and whether any deduction should be made from the agreed costs of works to allow for the claimants’ self-build element.

[16]Mr Smith set out the history of his and his wife’s ownership of the property and the details and chronology relating to their attempts to secure the additional development that was the subject of the claim. He said that as far as the development that was eventually permitted was concerned, he personally organised the whole of the building project including the calculation of quantities and the ordering of materials. Along with his two sons and with help from a family friend, they undertook all the groundworks, much of the construction work, joinery and decoration. Subcontractors were employed for electrics, plumbing, heating and floor screeding. The self-build input was agreed at 30% for the purposes of the claim. He said that, as far as the original proposal was concerned, whilst he and his wife were not particularly frequent swimmers, they had built and enjoyed the use of a pool at their former home (which they had also built themselves) and felt that the family, including their children and grand-children, would derive considerable pleasure from such facilities, especially the pool.

[17]Mr Berriman is a Chartered Surveyor and a consultant to Berriman Eaton, estate agents and surveyors of Tettenhall, Wolverhampton, having recently merged the practice of David Berriman, of which he was formerly senior partner, with another firm. He has been an estate agent in Wolverhampton since 1953, and for the past 25 years has specialised in mid to upper value properties in the Wolverhampton to Bridgnorth area within which the subject property is located. He provided 3 valuations – one assuming that neither the permitted extension nor the larger, proposed one were constructed, leaving just the recently completed house without a 9 garage or other recreational facilities (£350,000); one with the scheme as built (£425,000), and one assuming the original proposal was completed (£550,000). He said that at the relevant valuation date, the market was strong but true comparables were hard to find, especially those that compared with the property assuming it had the large recreational facility that was originally proposed. Whilst to have the extensive facilities that would have been provided in the refused scheme would have been unusual, he said it would be by no means unique and although accepting that such a complex might more readily be found with a much larger property, he had come across many examples where similar arrangements existed with houses that were no better or larger than Wilderhope.

[18]He pointed out that the subject property had been constructed and fitted out to a very high standard, and in his view there were certainly buyers in the market, other than the Smiths, who would want to provide as many leisure facilities on the site as possible to complement a nicely finished house in such a sought after location. In his professional opinion, such a proposal as the one that was refused would not constitute over-development and it would have been an enhancement to the property. Indoor pools were likely, he said, to be in much higher demand than outdoor pools which he admitted could be considered a disadvantage in the marketplace, and whilst it was accepted that they are not to every purchaser’s taste, demand from those who did require such facilities was likely to be high. Wilderhope was, he said, the right type of property to support an indoor pool and extensive other leisure facilities. Mr Berriman also said that there were plenty of other people in the market who would be in the same position as the claimants, such as builders who would be prepared to undertake a percentage of the work themselves. Regarding the cost of the works, he said that was not directly relevant – it was what the property would be worth on the open market when the works were completed that was important.

[19]As to those comparables upon which he did rely, he referred firstly to Briarcroft House, Bridgnorth Road, Shipley, Wolverhampton. That was a dormer style modern house with 3 bedrooms and was not dissimilar to the subject property although it was not in such an isolated and truly rural position being close to a main A road and immediately behind a large garden centre (to which it formerly belonged). It stood in grounds of about 1.5 acres and had a two- storey self-contained annex with additional accommodation that could easily have been incorporated into the main dwelling. He understood the main dwelling to have a GEA of about 355 sq m. There were also two double garages and a stable block. The property had been marketed in early 2003, and an offer was received in the sum of £645,000 but the sale did not proceed at that time. It was subsequently sold at a later date, but the price was not known.

[20]Malvern View, Pattingham Road, Perton Ridge, Wolverhampton, a smaller dormer bungalow, but with 2 ground floor and 2 first floor bedrooms was sold in March 2003 at £550,000 and Far Park, in the same road, was sold for £900,000 in May 2003. That had 4 bedrooms and a leisure complex and was on a plot of just under 1 acre. Perton Ridge, he said, was “the” place to live on the outskirts of Wolverhampton and achieved prices reflected that fact. Finally, Mr Berriman mentioned The Croft, Snowdon Road, Beckbury, Shifnal, a 4 bedroom barn conversion with about 2.4 acres of land that was offered in May 2003 at £585,000. It was eventually withdrawn from the market but sold at a later date. In his view, Mr Berriman said, the properties he had referred to supported the valuations that he adopted for the subject property. 10

[21]As to Mr Chapman’s comparables, Mr Berriman did not consider them to be particularly helpful. Abbotswood at Long Common, Claverley was admittedly very close to Wilderhope but was a detached 1970’s house in a line of others and whilst having exceptional views and a semi-rural location, was on a tight plot of 0.43 acre (0.174 ha). There was no room there to incorporate further facilities. Lea Cottage in Seisden and Holloway Cottage, Claverley were wholly dissimilar as was Gracemere House, again at Perton Ridge, Wolverhampton which was a huge new 5 bedroom house with 5 acres of land. Whilst it had an indoor pool and leisure complex it was marketed at £950,000 and was therefore very different from the subject property.

[22]In Mr Berriman’s view, the garage and accommodation complex that was permitted and actually built at Wilderhope was somewhat overpowering due to its extremely high ridge-line, which did not, in any event, comply with the restrictions imposed in Class E of Schedule 2, Part 1 of the GPDO, being over 4 metres high, and the proposal that was refused, being all on one level and with shallow pitch roof, would have been altogether less dominant. Compensating authority’s case

[23]Mr Chapman is a Chartered Surveyor who has 16 years professional experience as a senior valuer with the Valuation Office Agency. He has been involved with the valuation of all types of property, including residential, throughout the West Midlands and his experience also includes handling sales of properties for the council and other government agencies. In May 2003 he received instructions from the council to negotiate compensation following the planning refusal in March 2002. He said that the issues included, in addition to the valuations under the different planning scenarios and the cost of works, such factual matters as are relevant for identifying whether the development as proposed, and subsequently refused, would have been permitted development but for the Article 4 Direction.

[24]He said that Mr Berriman was purporting to suggest that for a difference in building costs of only £21,589 the property would have an increased value of £125,000 over the as-built property if the refused development had been constructed. In his opinion this could not be the case for 3 reasons. Firstly, there should be no allowance for the self-build element. The rules for the calculation of compensation for claims made under sections 107 and 108 were clearly set out under section 117, and the value should be assessed in accordance with the provisions of section 5, rule (2) of the Land Compensation Act 1961. It was the open the market value of the property that was to be taken and not value to owner (see: Land and Property Ltd v Restormel Borough Council (2004) 44 RVR 12). The difference in costs was therefore £31,227 but that was still £90,000 less than the alleged increase in value. Secondly, in his view, properties with swimming pools had limited demand and many purchasers consider such facilities to be a liability rather than a benefit. Thirdly, Wilderhope was not the right type of house for such an extensive leisure complex as had been proposed. Such a scheme would be much more appropriate to large country houses or estates, and he gave the examples of Gracemere House at Pattingham and houses at Abberley and Bromsgrove which he had not seen but which boasted similar facilities. Whilst the subject property was an attractive house in an excellent location, the huge 445 sq m complex that the Smiths had wanted would have constituted an over-development of the site and would have seriously reduced the size of the rear garden. The fact that the neither of the valuers had been able to adduce true comparables 11 added weight, he said, to that view. Mr Chapman said that in his opinion the garage and games rooms that had been built were much more in keeping, and he did not agree with Mr Berriman that it was overbearing or dominant. At best, he said, any increase in value attributable to the larger development would recoup the additional construction costs, but would be unlikely to exceed them.

[25]Mr Chapman said that he had not been asked to provide a valuation assuming neither the as-built or proposed additions had been constructed. In his view, the value with the extension that had actually been constructed, as at March 2002, would have been £400,000 and assuming the larger complex had been built, it would have been £440,000. He cited Abbotswood at Long Common and cottages in Seisden and Claverley in support of his figures, although he accepted that none of them were directly comparable. There was absolutely no way, he said, that the difference in value between the property with neither extension and with the proposed complex could be £200,000 as suggested by Mr Berriman.

[26]As to Mr Berriman’s comparables, Mr Chapman pointed out that Briarcroft at an offer price of £645,000 in mid 2003 would index back, due to the rapidly rising market, to £480,000 at the agreed valuation date. Malvern View would be £433,000 (from £550,000) and The Croft would be £365,500 (from £530,000). The house that was closest to Wilderhope – Abbotswood at Long Common was sold for £385,000 in August 2002 and whilst it was slightly larger at 307 sq m GEA and probably has even better views, he accepted that it had other properties immediately adjacent to it and had smaller grounds.

[27]In cross-examination, Mr Chapman accepted that the question of permitted development rights would normally be addressed by a planning officer, and it was in his opinion perfectly reasonable for the claimants to have sought his opinion prior to proceeding with the proposed development. He also said that all elements of the proposals fell within Schedule 2, Part 1, Class E of the GDO and that that the terms of the council’s letter of 11 September 2000 gave a clear indication that the proposals would have constituted permitted development. Closing submissions

[28]For the council, Mr Morgan said that the real issue was whether, in determining if the proposals constituted permitted development, it was required for “purposes incidental to the enjoyment of the dwelling-house”. He referred to Harrods v Secretary of State for Environment, Transport and Regions [2002] JPL 1258, Wallington v Secretary of State for Wales

(1990) 62 P&CR 150

, Holding v FSS

[2003] EWHC 3138 (Admin)

and Emin v Secretary of State for the Environment

(1989) 58 P&CR 416

in concluding that, in this case, the claimants had not complied with the objective test of reasonableness.

[29]Mr Morgan said that the question of determining whether a use was incidental to the principal use was rehearsed by Scheimann LJ at paras 4-11 of the Harrods case. In dismissing the appeal, the Court of Appeal had held that the facility for take-off and landing of a helicopter on the roof of the store was not an activity reasonably incidental to the running of a shop. The reasoning in that judgment noted that in the appeal from the Secretary of State’s 12 decision (that planning permission was needed), the judge at first instance (Sullivan J) expressly considered Wallington together with Millington v Secretary of State for the Environment Transport and the Regions

[1999] 3 PLR 118

where the courts had used the words “ordinarily”, “ancillary” and “incidental” in the context of section 55(2)(d) and (e).

[30]Similarly, Holding, a judgment that dealt with Class E considered and relied upon, amongst others, Emin (Class E), Wallington, and Harrods. Holding was an enforcement case where the development had already been carried out and identified the issue as “whether the provision [of the development] is required for a purpose incidental to the enjoyment of the dwelling-house as such”. The primary purpose of the building was to provide storage for three of Mr Holding’s four planes. Whilst the size and height of the building did not exceed the limitations set out in Class E, the inspector dealing with the enforcement notice had concluded that the barn housing the first of Mr Holding’s four aircraft (which was not the subject of enforcement) could be considered incidental to the use as a dwelling-house. However, he said the building for the other three “seems to me as a matter of fact and degree to go beyond what, on any objective test of reasonableness, could be considered incidental to the use of the dwellinghouse as such”. In dismissing the appeal, Harrison J referred to Emin, noting that, in introducing the concept of an objective test of reasonableness, it was in that case held that the nature and scale of the activity were important, and that the size and scale of the building were important but not conclusive considerations (at p 422). The relevant passage in Emin had subsequently been approved in Wallington.

[31]Having considered the above cases, Harrison J concluded (at para 44):

“At the end of the day, the question whether the hangar to accommodate 3 more aircraft was required for the purpose incidental to the enjoyment of the dwelling house as such was a question of fact and degree involving a judgment to be made by the inspector. He reached what many people may regard as a thoroughly sensible conclusion. The court should not interfere with a judgment made as a matter of fact and degree by the decision maker unless it can be shown to that an error of law was involved in the decision. Despite the very able arguments made to the contrary on behalf of the appellant, I am not persuaded that there was an error of law involved in this decision. In my judgment, the inspector was entitled to reach the conclusion that he did. I would therefore dismiss this appeal.”

[32]Mr Morgan said that whilst not determinative of itself, the sheer scale of the proposed scheme at the subject property was an important consideration, and it was the council’s case that it was out of all proportion with the dwelling-house and its curtilage. As the claimants’ architect had admitted, it would have been more than twice the size of the dwelling in terms of GEA. Although the issue was one of fact and degree for the decision maker, he said it stretched language beyond its normal meaning to describe the scheme as what might be ordinarily or normally expected. The fact that the valuers had been unable to find meaningful comparables was cogent and compelling evidence that the proposed development would not meet the objective test of reasonableness, and it could not therefore be permitted development according to the authorities. 13

[33]On the question of estoppel, Mr Morgan said that the claimants were relying on R v Caradon District Council ex p Knott

(2000) 80 P&CR 154

, a decision of Sullivan J in December 1999. One of the grounds upon which that case had proceeded was estoppel by convention. Since then, the House of Lords had decided R v East Sussex County Council ex p Reprotech (Pebsham) Ltd

[2003] 1 WLR 348

(“Reprotech”) and it was thus the council’s case that estoppel could not arise by virtue of the reliance being made upon it in this claim. In Reprotech Hoffman LJ said (at para 33):

“…I think that it is unhelpful to introduce private law concepts of estoppel into planning law. As Lord Scarman pointed out in Newbury District Council v Secretary of State for the Environment [1981] AC 578, 616, estoppels bind individuals on the ground that it would be unconscionable for them to deny what they have represented or agreed. But these concepts of private law should not be extended into “the public law of planning control, which binds everyone”. (See also Dyson J in R v Leicester City council, Ex p Powergen UK Ltd [2000] JPL 629, 637.)”

[34]Mr Morgan said there was extensive reasoning as to why estoppel has no place in planning law, but it was best summed up in the subsequent judgment of Sullivan J in R v Secretary of State for Transport Local Government and the Regions and 02 UK Ltd

[2003] EWHC 622 (Admin)

(“02”) where he said (at para 21):

“… In my judgment the House of Lords could not have made it more plain [in Reprotech] that estoppel no longer has any place in planning law. The observations of Lord Hoffman and Lord Mackay apply with equal force to a ‘kind of estoppel [that] is akin to res judicata’. If a matter is res judicata there is no need for an estoppel, if it is not there is no longer any scope for estoppels that are akin to res judicata. The inspector decided the matter on the basis of estoppel by representation, not res judicata. In any event he did not simply rely upon the first exception in Western Fish [a case cited in argument]. He relied also upon estoppel by convention and, perhaps more importantly, he relied upon what he saw as the basic principle of estoppel, namely that a person who, by some statement or representation of fact, causes another to act to his detriment in reliance on the truth of it is not allowed to deny it later even though it is wrong. It is readily understandable that as at 1 February 2002 the inspector should have thought that such a basic principle was of general application in the field of planning law: the House of Lords in its decision in Reprotech has made it plain that it is not”

. The letter of 11 September 2001 was a planning judgment, and, since Reprotech, any reliance placed upon it by the claimants is patently misplaced, Mr Morgan said.

[35]Finally, on the question of the self-build element, Mr Morgan submitted that Rule (2) of section 5 of the Land Compensation Act provided the basis of valuation as to what a willing buyer would pay to a willing seller in the open market. The cases of Richmond Gateways Ltd v Richmond Upon Thames L B C

[1989] 2 EGLR 182

and Hobbs (Quarries) Ltd v Somerset County Council

(1975) 30 P&CR 286

relied upon by the claimants in fact supported the council. Richmond Gateways was a Court of Appeal judgment upholding the decision of the Lands Tribunal (V G Wellings QC). It accepted the reasoning of the Member, who had said:

“As to the developers profit and risk, [in connection with the proposed development of a penthouse on top of an existing block of flats] I accept the evidence of Mr Phillips [the 14 claimant’s valuer]. It appears to me that the purchaser is likely to be a company very similar to the claimant company if not the claimant company itself (it is to be treated as the bidder for the flat). Such a company would not employ developers. The risk is comprehended in the sale price achieved. I therefore disallow the additional cost of £32,000 or any sum for developers’ profit and risk.”

In this case, Mr Morgan said that the claimants had the capability of carrying out various building works, and were not therefore typical purchasers as was the case in Richmond. Typical purchasers would not have Mr Smith’s expertise, and as such the application of rule 2 did not result in the building costs deduction sought. The claim for a self-build deduction had nothing to do with the value of the land, and nothing to do with the market – it was solely reliant upon the unique expertise of the claimants who were neither typical buyers nor typical sellers.

[36]In closing for the claimant, Mr Blackie referred to the legal position relating to the council’s argument that the proposed development would not have been permitted development under the GPDO. He said the letter from Mr Meredith of the council’s planning department was a matter of fact and degree. It expressed a clear planning judgment and correctly stated the position. It was important to note that the council did not demur from it until February 2005; Mr Meredith was not called, and no evidence other than legal argument was adduced before this Tribunal. There was also no evidence that the development envisaged by the claimants went beyond that provided for in Class E. It did not take up more than 50% of the available curtilage and its roof height would not have exceeded the stated limit.

[37]Mr Smith had stated in his evidence that the building was required for the enjoyment of himself, his wife, and their immediate family. The question of the scale of the building was a matter for the decision-maker – as had been stated in Emin. Sir Graham Eyre QC, sitting as a deputy High Court judge in that case, had allowed an appeal from a section 53 determination that a proposed development within the curtilage of a residential dwelling required planning permission due to the substantial size of the buildings. He said that the Secretary of State had misdirected himself in having regard to 5 grounds, the principal ones being the size of the proposed buildings (ground 1) and the relative size of the dwelling-house (ground 2). He remitted the case back to him in order that he could apply the test, having regard to all the relevant circumstances. As to grounds 1 and 2 he said that in so far as the decision rested on a consideration of the physical size of the proposed building alone, and the size by itself in relation to the sheer physical size of the dwelling-house, that, it was acknowledged on behalf of the Secretary of State, would not suffice to deprive the appellant of his permission under the order. Mr Blackie said that that case showed it was not size alone that was the determinant factor, that being only one element in the overall decision making process.

[38]There was no evidence to suggest that Mr Smith’s proposals were anything other than for his own use and such a use – as a swimming pool, gymnasium and leisure facilities were entirely consistent as adjuncts to a private family dwelling. Wallington, he said, related to a requirement to house 44 dogs, Holding was for the extraordinary alleged need for an aircraft hangar and Harrods application for a helipad and landing/take-off rights on top of a shop was neither usual or reasonably incidental. Mr Blackie said the right approach was to consider the 15 circumstances of each individual case and, in this one, what the claimants wanted was clearly normal, incidental and ancillary to the use of a private dwelling.

[39]On estoppel, he said the council had established a convention between it and Mr Smith and it had been relied upon to the claimants’ financial detriment. He referred to Amalgamated Investment and Property Co Ltd v Texas Commerce International Bank Ltd

[1982] 1 QB 84

where it was held, per curiam, that when parties in the course of their dealing in a transaction had acted upon an agreed assumption that a particular state of facts between them was to be accepted as true, each is to be regarded as estopped as against the other from questioning as regards that transaction the truth of the statement of facts so assumed. Mr Blackie said that in Reprotech the House of Lords decided that estoppel had no place in planning law, but this was not a planning case. It concerned the determination of compensation arising out of the making of an Article 4 Direction, and the decision affected no one other than the claimants.

[40]Finally, on the self-build allowance, Mr Blackie said that purchasers in the position of the claimants, who were in a position to undertake an element of the construction work themselves, would be prepared to pay more than a buyer who did not have the same skills or abilities. That was a fact, and should be taken into account. Conclusions There are four issues for my determination:

[1]Would the scheme as proposed have enjoyed permitted development rights under the GPDO?

[2]If not, can the council now depart in these proceedings from their previous assertion that the scheme would have been permitted development (the estoppel argument)?

[3]The valuation of the subject property with the development as built, and with the one proposed and refused.

[4]Should there be a deduction (from the building costs) to reflect the self-build element?

[42]In respect of the first issue, development is permitted under Schedule 2, Part 1, Class E if it consists of “a building or enclosure, swimming or other pool required for a purpose incidental to the dwellinghouse as such”. The question that has to be determined, therefore, is whether the scheme building, as proposed in application 02/084, was required for purposes incidental to the dwellinghouse as such. In my view, the correct approach can be most helpfully derived from Emin. That concerned the application of the predecessor provision in the 1977 GDO which was in different terms, but not materially different for the purposes of the point now in issue, to two proposals – proposal A for the erection of two buildings for use as a pottery and utility room, and proposal B for the erection of two buildings for use for archery, 16 billiards and a pottery. In his judgment, Sir Graham Eyre QC, sitting as a Deputy High Court

Judge said, at 422 (the passage referred to in submissions by Mr Morgan):

“The arbiter of the facts in a case such as this will need to concern himself with the nature of the activities carried on in the proposed buildings so as to ensure that they are incidental or conducive to the very condition of living in the dwelling-house and, in that sense, further that condition. In that connection, the scale of those activities is obviously an important matter because there must be a prospect that the nature and scale of those activities could go beyond a purpose merely incidental to the enjoyment of the dwelling- house as such and constitute something greater than a requirement related solely to that purpose. In that context the physical sizes of buildings could be a relevant consideration in that they might represent some indicia as to the nature and scale of the activities. The fact that such a building has to be required for a purpose associated with the enjoyment of a dwelling-house cannot rest solely on the unrestrained whim of him who dwells there but connotes some sense of reasonableness in all the circumstances of the particular case. That is not to say that the arbiter can impose some hard objective test so as to frustrate the reasonable aspirations of a particular owner or occupier so long as they are sensibly related to his enjoyment of the swelling. The word ‘incidental’ connotes an element of subordination in land use terms in relation to the enjoyment of the dwelling- house itself. I would endorse the general approach adopted by the Secretary of State in the present case. He is correct in stating that the overriding factor in deciding the question as to whether uses of the proposed buildings can properly be regarded as incidental to the enjoyment of the dwelling-house must concern the incidental use, which, in that context, must be a use which occurs together with something else but nevertheless remains at all times subordinate to it. The view is also taken by the Secretary of State, and I agree, that the test to be applied is whether the uses of the proposed buildings, when considered in the context of the planning unit, are intended and will remain ancillary or subordinate to the main use of the property as a dwelling-house. It is noteworthy that, in identifying the correct approach and the test itself, regard is being had to the use to which it is proposed to put the building and to considering the nature and scale of that use in the context of whether it is a purpose incidental to the enjoyment of the dwelling-house. That reflects a correct approach.”

The first two sentences of the second paragraph of this extract were quoted with approval in Wallington by both Slade LJ (at 158) and Farquarson (at 162), and Nicholls LJ agreed with both judgments.

[43]In the instant case, it was the sheer size of the proposed building in relation to a modest 3 bedroom house that was the council’s principal concern. It was also to contain toilets, showers and a kitchen. However, applying the objective test of reasonableness set out in Emin, and looking at the whole picture in context, the proposed complex was, despite these features, clearly in my judgment ancillary and subordinate to the main house. I am satisfied from the evidence that it was proposed to be used purely for the enjoyment of the claimants and their family as an adjunct to the main dwelling. In the light of this, I conclude that the proposals would have been permitted development within the meaning of the GPDO. 17

[44]I would add that both parties to this reference had assumed that, for the purposes of assessing compensation, it was for the Tribunal to decide whether the proposed building would have been permitted development rather than to determine what the local planning authority would have decided at the valuation date if, in the absence of the Article 4 direction, application had been made to them under section 192 for a determination of the lawfulness of the proposed development. In my judgment, that assumption was correct. Nevertheless, it is to be noted that the advice that the council would have received from their officers at the valuation date would clearly have been that the development was permitted development under the GPDO. The actions of the council over the past 5 years have clearly reflected their understanding (until the reply to the claimants’ statement of case was filed) that the original proposals would have constituted permitted development, and, as I have concluded, I consider that understanding to have been correct.

[45]In the light of my conclusion above, the estoppel point does not arise for a decision.

[46]Turning now to valuations, the relevant figures are those that apply with the development as built, and what the figure would have been if the Smiths’ original proposal had been constructed. The valuations produced were: Claimant Compensating Authority As built £425,000 £400,000 As proposed £550,000 £440,000 In addition, Mr Berriman said that he considered the value of the property, assuming neither of the permitted or refused developments had proceeded, to be £350,000 but Mr Chapman had not been asked to provide a valuation on this basis. The cost of works for the as built scheme (ignoring any allowance for the self-build element) was agreed at £95,364 and for the proposed scheme was £126,591 – a difference of £31,227.

[47]The valuation date was agreed at 12 March 2002 but although Mr Berriman produced as an appendix the Halifax House Price Indices, I note that he did not appear to have factored back the figures referred to in respect of his comparables to take account of the movement in house prices which, in 2002 and 2003, were agreed to be rising rapidly. This was pointed out by Mr Chapman who produced figures for Mr Berriman’s comparables taking account of that factoring, and I have found that information to be helpful. Both valuers admitted that direct comparables were difficult to find, but they both have considerable experience of values in the area (Mr Berriman perhaps more so), and in providing their professional opinions have had to apply a certain amount of “gut feel” in arriving at their conclusions. Although residual valuations are not encouraged as the principal method of arriving at a value of property (usually development sites) they are often used as a back-up or check against an opinion that has been formed. In this case, the residual element relates to the cost of building of the actual and refused schemes and I consider the agreed figures to be helpful in forming a view particularly as to the development that did not proceed. 18

[48]Mr Berriman thinks that the value of the property with the refused scheme would have been £125,000 more than its value with the development as permitted. The actual additional cost of the refused scheme was agreed at a little over £30,000 and I find it difficult to accept that what in effect is an indoor swimming pool (because the scheme as built has garaging and the other leisure facilities, although somewhat smaller, and the pump house/garden store) would enhance the value by such a large amount. Mr Chapman said that it is unusual for such types of development to add anything over and above the cost of providing the facility to value in the market, and in certain circumstances (especially with outdoor pools) construction costs were often not recouped. I agree, and whilst I am certain that the facility as proposed would show some enhancement to the overall value, its size and scale as an addition to what is a relatively small dwelling would not, in my view, be attractive to every potential purchaser. Having said that, I do agree with Mr Berriman that whilst the market for such facilities will be limited, the demand from those to which it did appeal would be high.

[49]The valuers were not far apart as regards the value of the property as it exists – certainly well within the 10% margin for error normally accepted by valuers, and whilst a range of £400,000 to £425,000 seems to me to fit with the comparables that were provided, £550,000 assuming the larger scheme does not. Mr Berriman referred to Briarcroft House off the Bridgnorth Road at Shipley and said that it bore many similarities to the subject property. Although it was not sold when marketed in 2003 an offer was received at £645,000. I was able to see that property from the driveway that leads to it past a large garden centre, and although in terms of style it does seem similar to Wilderhope it is somewhat larger, and the annexe and stabling facilities will give it, in my view, a GEA substantially greater than would have been the case even with the larger development proposal, and it has much more land. However, Wilderhope is in a significantly better position and Briarcroft’s proximity to the garden centre and the busy trunk road would, in my judgment, weigh against it. As Mr Chapman pointed out, the offer figure, if the property had been sold, would have factored back to £480,000 at the valuation date.

[50]The other local comparable, Abbotswood, is within about ½ mile of the subject property and in a similarly rural position with possibly even better views, but it is a fairly ordinary detached two storey house wedged in very tightly between other properties with a much less imposing entrance and none of the additional facilities that Wilderhope boasts, and no room to install them. That was sold not too long after the valuation date at £385,000. In my view, it is these two comparables that are the most helpful in forming a view, and I do not think that those on Perton Ridge in Wolverhampton, or the cottages in Seisden or Claverley have enough similarities to make them of any significant assistance. Likewise, Gracemere House, that does have a similar pool and leisure complex to that proposed at Wilderhope is altogether a much more substantial property, and, it is clear that Perton Ridge has a significant premium element also.

[51]Doing the best that I can in the light of the comparables and the evidence and opinions that I heard, I conclude that the subject property as it is currently built, as at March 2002, would have been worth £425,000 and assuming the proposed scheme had been built, would have been worth £475,000. That increase of £50,000 would represent a small profit on cost when considering the additional expense of constructing the scheme, and the figure sits, in my 19 judgment, more comfortably with the factored back value of Briarcroft taking into account that property’s more extensive accommodation balanced by its less slightly cramped position.

[52]This leaves the question of whether an allowance should be made for the element of works that the claimants undertook themselves. In my judgment, it should not. Compensation is to be assessed under rule (2) of section 5 of the LCA 1961. That is the open market value determined by reference to the price that a willing buyer would pay to a willing seller, and Mr Morgan’s submissions are in my view correct. The question was dealt with at length and conclusively in Ryde International Plc v London Regional Transport [2004] RVR 60.

[53]Finally, in the light of my findings above, I conclude that the additional fees as claimed are payable, and therefore determine that the council shall pay compensation in the sum of £31,700 calculated as follows: Loss of value to owner (£50,000 - £31,227) £18,773 Architects fees for drawings and calculations (inc VAT) £ 9,400 Architects fee for perspective drawing £ 588 Valuation of land £ 235 Quantity surveyor £ 1,410 Legal fees for advice and claim £ 1,293 Total £31,699 Say £31,700.

[54]This decision determines the substantive issues in this reference and will become final when, and not before, the question of costs is decided. A letter in that regard accompanies this decision. Dated 27 June 2006 (Signed) P R Francis FRICS 20 Addendum

[55]I have received submissions on costs. The claimants say that they have succeeded in recovering £31,700 and, as no sealed offer has at any time been made by the council, they should have their costs. There was no question that they had not acted reasonably throughout the proceedings and there was no reason, therefore, to determine against the normal provision that costs should follow the event. They should also have interest at the statutory rate from the date that planning permission was refused.

[56]The council said that it made no submission in respect of its own costs, but objected to the claimants’ application for their costs to be paid. The approach previously adopted by the Tribunal that the successful claimant is entitled to his costs in the absence of special reason to the contrary was acknowledged (see Purfleet Farms Ltd v Secretary of State for Transport, Local Government and the Regions [2002] RVR 368). However, in that case, they said the approach derived from reasoning based upon the threat of compulsory acquisition and as no such threat arose in this instance, the Purfleet decision was inapplicable. In the instant case, they said the permitted development rights could have been taken away not only by an Article 4 direction, but alternatively by a planning condition attached to the permission relating to the dwelling. Had that been done, there would have been no entitlement to compensation at all and as such the circumstances here were entirely different to those applicable to the compulsory acquisition of land. In that case, the council said, the Tribunal should be unfettered by past decisions, and that there is no need to show special reason why the claimants should be deprived of their costs.

[57]They went on to say that of the total amount awarded, the loss of value to owner was only £18,773, this being only one-fifth of the amount claimed under that head. If the claim had been for a sum closer to that which had actually been awarded, the council might have made more serious attempts to settle the matter by agreement, or through a sealed offer. The claim was, they said, exaggerated within the meaning of Purfleet (should I accept its applicability in determining costs).

[58]As to the council’s first point, section 117(1) of the 1990 Act (as set out at para 10 above) makes it clear that there should be no distinction, in assessing compensation, between a claim for depreciation in value under these circumstances and a claim relating to compulsory acquisition of land. The alleged inapplicability of the Purfleet decision is not, therefore, accepted. I turn now to the suggestion that the claim was exaggerated, and therefore any award of costs should be tempered by that in the light of Purfleet. In that case there were serious doubts about the quality or reliability of the in expert evidence, particularly in respect of comparables used to determine a price per acre. In this case, I am satisfied that whilst the claimants’ expert arrived at much higher figures than those promulgated by the council’s valuer, and his values might have been somewhat less if he had adjusted them to take account of the indices that he had mentioned, there is no question in my view of his opinions being exaggerated. I do not accept the council’s assertion that it would have settled if the claim had been for less, because the whole of its case was built on the argument that due to the size and scale of the claimants’ proposed development, it would never have enjoyed permitted development rights. They also advanced the estoppel argument, which leads me to the conclusion that, as a matter of principle, the council was not willing to negotiate a settlement. 21

[59]In my judgment, there is nothing about this case that supports the councils submissions, and I can find no reason to deprive the claimants of any of their costs. I therefore determine that the council should pay those costs, such to be agreed, or, failing which, to be determined in a detailed assessment by the Registrar. The council shall also pay interest at the statutory rate from the date of the council’s refusal of planning permission in respect of the claimants’ application number 02/00084 (12 March 2002) (see Planning and Compensation Act 1991 s.80 and SI 1991/2067 Schedule 2 para 25). DATED 20 July 2006 (Signed) P R Francis FRICS