UPPER TRIBUNAL (LANDS CHAMBER)
UT Neutral citation number:  UKUT 210 (LC)
LT Case Number: ACQ/506/2010
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
COMPENSATION – compulsory purchase – dwelling house in poor repair – valuation of freehold interest – disturbance – other issues outside Tribunal’s jurisdiction – Land Compensation Act 1961 section 5, rules (2) and (6) – compensation £5,000
IN THE MATTER OF A NOTICE OF REFERENCE
REDCAR AND CLEVELAND BOROUGH COUNCIL Acquiring
Re: 74 Granville Road, Grangetown, Middlesborough TS6 9DG
Before: P R Francis FRICS
Sitting at: Asylum & Immigration Tribunal, Kings Court, Earl Grey Way,
Royal Quays, North Shields NE29 6AR
10 May 2011
The claimant in person
Michael Hill, instructed by Eversheds LLP, solicitors of Newcastle upon Tyne for the acquiring authority
1. This is a decision, following a hearing under the simplified procedure, to determine the compensation payable to Mr NI (the claimant) in respect of the compulsory acquisition of the freehold interest in 74 Granville Road, Grangetown, Middlesborough (the subject property) by Redcar and Cleveland Council (the acquiring authority or council) pursuant to the Redcar and Cleveland (Alexandra Road, Grangetown) Compulsory Purchase Order 2004 (the CPO).
2. The claimant appeared in person. The acquiring authority was represented by Mr Michael Hill of counsel who called two witnesses of fact from Redcar and Cleveland Borough Council: Mrs Caroline Blackburn MRICS, Corporate Property Manager, Mr Gareth Burgess a team leader with the Housing and Information Advice Team. He also called Mr Jonathan Smith a solicitor with Eversheds, Newcastle upon Tyne and Mr Richard McIntosh Farr FRICS MCI Arb a partner in Sanderson Weatherall of Newcastle who gave expert valuation evidence.
3. A notice of reference was submitted by the claimant to the Tribunal on 9 August 2010 in which, under Part C, he claimed that he was the “freehold owner/occupier” and that the reference was made because “the main principle of compulsory purchase order: ‘Nobody should be better off or nobody should be worse off as a result of a compulsory purchase order.’” Although required in that section to tick one box stating the nature of his claim, he ticked three indicating that this was a claim for compensation following a compulsory purchase order, that it was a claim for other land compensation and was a reference by consent – which it was not. The claimant also replied “no” to the section that asked: “Where compensation is claimed for compulsory purchase, has the acquiring authority entered onto the land or has possession been given to the authority?”
4. Following a letter from the Tribunal dated 19 August 2010 seeking a statement of case within 28 days, the claimant sent an email dated 23 August 2010 seeking clarification of the Tribunal’s jurisdiction “to deal with all aspects of his case.” He asked:
“1. I will have human rights claims. Do the Tribunal consider this claim?
2. My case has got nothing to do [with] determining value of my house. I won’t have any claim regarding this issue.
3. I will claim that council did not follow correct CPO procedure before demolishing my house. Can the Tribunal consider this matter?
4. I will have other compensation claims for being left homeless and sufferings. Can Tribunal deal with these kind of matters? “
On 10 September 2010, before the Tribunal had responded to this email, the claimant made an interlocutory application for a 3 month extension of time for preparation of his case pending confirmation from the council that they would pay his legal fees.
5. On 14 September, the Tribunal wrote by email to the claimant seeking the appropriate fee for the application, and saying that before it could be considered, a response would be required to what followed. It went on:
“The Lands Tribunal (sic) does apply the provisions of the Human Rights Act 1998 when determining matters within its jurisdiction, where such provisions are relevant. However, the jurisdiction of the [Tribunal] in respect of compulsory purchase matters is limited to determining the value of the land compulsorily purchased. The [Tribunal] has no power to decide whether or not property should or should not have been compulsorily purchased, or whether the correct procedure was followed. Challenges in respect of such matters must be made to the Administrative Court…within 3 months of the CPO having been confirmed. It seems that as the CPO was made many years ago you are too late to make such a claim.
If you wish to continue your case within the [Tribunal] ….it will consider the evidence…only insofar as it relates to the value of the property acquired. The law relating to compulsory purchase compensation does not allow for compensation for you being made homeless or other suffering.
In the light of the above, please let me know what you want intend to do.”
6. The claimant responded on 14 September 2010 saying:
“Thank you for explaining the Lands Tribunal’s jurisdiction. In that case, the Lands Tribunal has got nothing to do with my application. Therefore I am going to start Judicial Review procedure today….the process may take many years. If I lose the case then I will come back to the Lands Tribunal to determine the value of the property at the relevant date.”
He then wrote a letter, also on 14 September, seeking an indefinite extension of time, and said that if that request was refused, he would withdraw the application [notice of reference] and would not proceed with the case. However, he complied with an earlier order, and submitted his statement of case on 16 September 2010.
7. The council’s solicitors, on 15 September 2010, sent in a letter giving 6 reasons why the application should be refused:
“1. Our client has now spent several years attempting to negotiate a settlement with the claimant and has been unable to proceed with its regeneration of the Grangetown area. A further indefinite delay would continue to frustrate the purpose of the compulsory purchase order.
2. If the claimant is correct that the Lands Tribunal cannot assist with his claim, on the grounds that it is unable to make an award of compensation for homelessness and suffering, then there is no prejudice to the claimant if the tribunal were to proceed to make a determination. Any compensation due to the claimant would be payable regardless of the outcome of these proceedings.
3. The claimant’s application to the Administrative Court is bound to fail in any event as it will only be in exceptional circumstances that the court would consider an application this long out of time.
4. If the claimant’s application were granted by the Tribunal and the proceedings were stayed indefinitely, then potentially this would give the claimant an unlimited amount of time to make his application to the Administrative Court given that he has already hugely delayed this matter.
5. The claimant has already accepted 90% 0f the compensation value that the respondent assigns to the property, being £4,500 which was paid to him in the form of a cheque on 3 September 2010. It would be inequitable to allow him to delay determination indefinitely now that he has received the vast majority of the compensation that he is likely to recover when this would be to the detriment of the respondent.”
8. On 21 September 2010, the Tribunal ordered that the claimant’s applications for a stay of the reference and for the withdrawal from the Tribunal’s register be refused. The reasons were stated to be:
“1. The claimant seeks a stay of proceedings to enable him to initiate proceedings for judicial review of the acquiring authority’s decision to compulsorily purchase the property subject of this reference. The compulsory purchase order was made on 6 February 2004 and confirmed by the Secretary of State on 19 April 2004. The acquiring authority took possession of the property in August 2004 and the house was demolished, it seems, shortly afterwards. Any application made now by the claimant would be years out of time and would be bound to fail.
2. The claimant seeks to withdraw his reference to the Tribunal for the same purpose set out in (1) above. Rule 45(1) requires the consent of all parties to the proceedings before a reference may be withdrawn. The acquiring authority has not consented to the reference’s withdrawal: In fact, it objects to its withdrawal and so the reference must proceed.”
9. A further application by the claimant dated 1 May 2011 for an adjournment of the hearing was objected to by the council, and was refused by an order of 6 May 2011.
10. At the commencement of the hearing, the claimant renewed that application orally before me. He said that the question of whether or not the notices relating to the CPO had been correctly served by the acquiring authority, and other issues, had to be resolved first. Until then (and in that regard he said that he had served on the council a pre-action protocol), there was no point in proceeding with the hearing. It was his case that the statutory notices had not been correctly served, and as a result the council had taken and subsequently demolished his property illegally. Mr NI insisted that the notice of reference was not for the determination of the open market value of the property [under the provisions of the Land Compensation Act 1961, section 5, rule (2)] but about the legality of the council’s actions, the re-instatement value of the house, loss of rental value and damages for loss (or theft) of his personal possessions from the house and damages for stress and suffering. The amount claimed was £135,000. He said that as the Tribunal had advised him that the issue of the notices and matters relating was without its jurisdiction, he said it was for the administrative court to resolve, and there was no point in proceeding further here.
11. In refusing the application, I explained the Tribunal’s role and that I would hear the evidence and make a determination on those of the issues that were covered under its relevant jurisdiction. I also advised the claimant that if he had not submitted the notice of reference the council was always at liberty to do so. Indeed it had. On 10 August 2010 a notice of reference had been submitted by the council and in the accompanying letter, it stated:
“We understand that you have received a notice of reference from the claimant and that this is currently in the process of being issued. As the claimant does not have legal representation, and because he will not have made such an application previously, we have also provided a claim form in the eventuality that his form is rejected for a procedural error or for not having sufficient attachments.”
The notice stated that this was solely a reference to determine compensation for the compulsory purchase, and valued the claim at £5,000. The Tribunal office advised Eversheds, the council’s solicitors, that a valid application had been received, returned the lodging fee and said the papers would be held on file.
12. I advised the parties that there was nothing to be gained by delaying matters further, would proceed to hear the evidence, and would make a determination upon those issues that fell within the Tribunal’s jurisdiction. At that point, the claimant advised that he did not intend to take part and whatever I said in my decision, he would appeal. However, he did briefly restate his case and asked some questions of the council’s witnesses when asked by me if he wished to do so.
13. No statement of agreed facts was provided, and in determining the facts I have relied upon the claimant’s statement of case and reply, the background as set out above, and the council’s evidence. The subject property comprised a late 19th or early 20th century two-storey mid-terrace house constructed of brick under slated roofs, located in a mature, heavily developed residential area within Grangetown, a suburb of Middlesborough about 4 miles from the town centre. The accommodation comprised two living rooms, a kitchen and wc at ground floor and three bedrooms and bathroom at first floor. To the front was a small garden separated from the pavement by a dwarf wall and iron fence, and to the rear was a small enclosed yard with access onto a pedestrian walkway.
14. Following the decline in many of the traditional local industries (iron, steel, chemical and shipbuilding), the resulting unemployment problems and general population reduction, considerable deprivation and environmental degradation occurred in the area during the 1980s and 1990s. Grangetown was identified by a local Strategic Partnership review in 1998 as the 9th most deprived ward in England. A planning and regeneration strategy for the Greater Eston area (of which Grangetown formed part) was commissioned in 2001 and published in September of that year. Of three broad options, it identified the need for the wholesale demolition of some 1,200 dwellings (of which the subject property was one) and redevelopment of 750 others.
15. The claimant purchased his property in March 2002 for £5,000. On 15 May 2002 a Notice of Intended Works pursuant to section 29 of the Local Government (Miscellaneous Provisions) Act 1982 was served on the premises stating that the property, which had appeared from an inspection to be both unoccupied and insecure, was to be boarded up.
16. The council appointed Sanderson Weatherall as its advisors in respect of the proposed regeneration of the area, the property was inspected both internally and externally by Ms Judith Smith of that firm on 3 July 2003, and an initial offer was made in September of 2003 but (eventually in August 2004) rejected by the claimant. The Redcar and Cleveland (Alexander Road, Grangetown) CPO was made on 6 February 2004 and confirmed by the Secretary of State on 19 April 2004. It covered a large number of properties, the subject being identified as Plot 146. Notice of the making of the CPO was posted at the property on 12 February 2004, and served by a process server on the claimant at his last known residential address: 103 East Hill, London SW18 2QB. Notice to Treat and Notice of Entry were then served on the claimant on 28 July 2004 (by the same process) and entry was taken on 8 March 2005. The property was demolished on about 11 March 2005.
17. Following a request from the claimant, an advance payment of compensation, under the provisions of section 52 of the Land Compensation Act 1973, was made by the council on 3 September 2010 in the sum of £4,500.
18. The issues between the claimant and the council can be summarised as:
1. The open market value of the subject property at the valuation date (which the claimant described as cost of rebuilding)
2. Compensation for alleged loss of opportunity to obtain rent
3. Compensation for alleged damage/destruction/theft of personal possessions
4. Compensation for distress and suffering
5. Service of notices and decision to demolish the property.
19. I deal with issue (1, 2 & 3) below, the only matters that could conceivably fall within the jurisdiction of the Upper Tribunal (Lands Chamber) (to be determined in accordance with section 5, rule (2) and (6) of the Land Compensation Act 1961). I also comment on (4 & 5).
20. The claimant said that due to the fact that the notice to treat and notice of entry had not been properly served, the council had illegally entered his property and demolished it. The cost of rebuilding he assessed at £65,000. He said he only discovered that the house was no longer there when he returned one weekend as a result of having been evicted from his London address where he had been living as a student. He said that, since he bought the subject property in 2002, he had often stayed in it and that it was his main residence. Although he was a full time student in London, he said he could elect 74 Granville Road as his main residence, and he did not have to pay council tax on it. The property had contained many of his personal possessions which had all been lost, stolen or destroyed and he claimed £35,000 for them. He also said that he could have let the property at £100 per week “since the notice to treat was served.” This stood at another £35,000 and was rising. This amounted to £135,000 and he said that that sum had not been disputed by the council – indeed, there was a “verbal agreement” with the council’s solicitor when the advance payment was made. He also sought undisclosed sums for distress and inconvenience and for the effects the council’s actions had had on his health.
21. As to the notices, the claimant said that they were fake. He had asked for the council’s officers who dealt with them, and for the process server to be called, but the council had refused to bring them to the hearing. The statement by the process server that he had “posted the notice to treat and notice of entry through the letter box of the subject property” was a lie, he said as it was boarded up, and had no letterbox. Mr NI insisted that he had not received the notices at his London address either.
22. Although Redcar and Cleveland Borough Council had made him homeless, the claimant said, they refused to give him another house. He accepted that he had been offered rented accommodation, but had refused this. He said he also had claims under the Human Rights Act, Article 8: Right to Respect, Private and Family Life” and Article 6 “Right to a Fair Trial.”
23. Asked by counsel for the acquiring authority if he had actually lived in the property, despite it being uninhabitable with a hole in the roof and no services connected, the claimant said he had stayed overnight on occasions. He had repaired the hole to make the property watertight, but the sheet he had used was subsequently stolen. He said he had stayed in the house even after it had been boarded up. Despite accepting that he had previously indicated that £5,000 would be acceptable compensation (as evidenced by an email to the council dated 12 October 2009 (bundle p65), another to Erica Grunert of the council on 8 November 2005 (p149) and in a letter to Eversheds dated 1 February 2006 (p151), Mr NI said that he had only initially been offered £3,000. In any event, £5,000 would not even cover a years rent on the hosing that he had been offered, so that was hardly fair compensation.
24. Mr Farr said that his firm, Sanderson Weatherall, had been instructed as the council’s nominated valuers in 2002, and had negotiated the purchase of the vast majority of the properties the eventual subject of the CPO between 2003 and 2006. There were only three claims outstanding, of which this was one and the other two were absent and untraceable owners. He set out the chronology relating to the subject property and said that despite early indications that £5,000 would be acceptable to the claimant, he had claimed £35,000 on 29 October 2004, that increasing to £35,000 on 13 December 2004. A colleague of his, Mr Andy Tubbs had been carrying out negotiations with the claimant, but to no avail.
25. Mr Farr said that when his colleague inspected the subject property in 2003, it had appeared uninhabited, was boarded up and was in significant disrepair. The property had remained in that condition, and when possession was taken in March 2005, it was signed off by the council’s demolition contractors as “ok” which meant that it was empty and that there were no personal possessions within.
26. As to value, Mr Farr produced a schedule of comparable settlements in the street and surrounding area, all of which had been agreed with local firms of chartered surveyors who had been retained by homeowners. These showed a range of prices from £3,250 for those in the worst condition to one at £16,500 that was an owner-occupied end terrace and had been fully modernised. In his view the value at the date of possession was £5,000, this being particularly supported by the settlements on 2, 8, 10, 42 & 80 Granville Street which were all in similar condition. His opinion was also supported by the price that the claimant had paid for the property in 2002 when it was in broadly the same condition.
27. What I am required to do here is determine, upon the evidence, the open market value of the subject property at the valuation date (8 March 2005) in accordance with section 5, rule (2) of the Land Compensation Act 1961. Rule (2) provides:
“The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise.”
I am entirely satisfied that the evidence produced by Mr Farr supports his opinion of value, and I accept it. The claimant produced no evidence. The claim for rebuilding cost is not the appropriate methodology to adopt, and it is clear that the reason the claimant uses it relates to his allegations that the notices were not properly served, and the demolition was his property rather than one whose ownership had passed to the council.
28. As has already been indicated to the claimant, it is not for this Tribunal to decide whether or not the correct procedures relating to the CPO have been followed. However, whilst the council acknowledged that the statement by the process server that he had posted the notices through the letterbox of the subject property must have been incorrect as it, along with the others in the street, were boarded up, that is unlikely to have been the case at the London address. I note that the claimant was in correspondence with Sanderson Weatherall in 2004 from the London SW18 address. In an undated letter received by Sanderson Weatherall on 27 August 2004 (bundle p146), the claimant says that he received their letter of 7 July 2004 and “that I got your previous letters as well.” It does seem to me rather odd that the claimant is denying having received important documentation relating to the CPO when he has received and acknowledged correspondence from the council’s appointed agents at around the same time.
29. It does appear to me that the council has produced sufficient evidence to demonstrate that the proper procedures were followed and in this regard I am cognisant of Mrs Blackburn’s evidence on this issue, but, as I have said, that is not for me to decide. In the light of the above, I determine the open market value of the subject property at 8 March 2005 at £5,000.
30. Turning to the other elements of the claimant’s claim (disturbance), section 5, rule (6) of the 1961 Act states:
“The provisions of rule (2) shall not affect the assessment of compensation for disturbance or any other matter not directly based on the value of the land.”
The claim for loss of rent and loss of possessions could fall within this provision. However, it was not clear whether the claim for loss of rent was for a lost opportunity to let the subject property out to third parties, or if it related to what the claimant had to pay out for alternative accommodation.
31. As the acquiring authority’s counsel pointed out, correctly in my view, if it was the former there was no evidence that the property had at any time been let, or of the claimant’s efforts to find a tenant. In any event, I am satisfied that the property was uninhabitable and being boarded up, leaking and with no services connected, I think it highly unlikely a tenant could have been found, let alone the claimant occupying it himself. Whilst in law, on the alternative scenario pursuant to section 10A of the 1961 Act, an owner not in occupation is entitled to costs incurred in acquiring an interest in other land, in the UK within 1 year from the date of entry, it does not cover rent payable.
32. The council said that the claimant was not resident at the property (despite his protestations that he was) and thus the need to rent somewhere else already existed, and was not caused by the CPO. I agree.
33. Regarding the claimant’s possessions, no evidence was produced as to what they were (in terms of an inventory or itemised assessment of value) and I accept the evidence that the property was insecure, and was in an area rife with crime and theft. Thus I conclude that not only was there no proof of the alleged losses, but there was nothing to suggest to me that, even if they were covered under the statutory provisions (which they could be), they could be attributed to the CPO.
34. Finally, the claim (unquantified) for distress and inconvenience is not something covered by the legislation.
35. This determines the issues before me, and I conclude that compensation is payable in the sum of £5,000.
36. Although the provisions of section 4 of the 1961 Act are not precluded from applying when a reference is heard under the simplified procedure, it is in general a no costs regime. I infer, therefore, that by agreeing to it, the parties intended that no order for costs should be made. I therefore make no such order.
DATE 25 May 2011
P R Francis FRICS