England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE QBCOF 97/0919/4

(Mr Justice Dyson) Royal Courts of Justice

Strand, London WC2

Thursday, 11th June 1998

B e f o r e :

LORD JUSTICE NOURSE

LORD JUSTICE PETER GIBSON and

LORD JUSTICE BUXTON

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SECRETARY OF STATE FOR THE ENVIRONMENT Appellant

-v-

FLETCHER ESTATES (HARLESCOTT) LIMITED Respondents

AND

SECRETARY OF STATE FOR THE ENVIRONMENT Appellant

-v-

(1) JOSEPH NEWELL

(2) ELSPETH GEORGIA LONGMORE

(3) WILLIAM HUGH LONGMORE

(The executors of J V Longmore) Respondents

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Handed Down Judgment

Smith Bernal Reporting Limited

180 Fleet Street London EC4A 2HD

Tel: 0171 421 4040 Fax: 0171 831 8838

(Official Shorthand Writers to the Court)

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MR D OUSELEY QC and MR R SINGH (instructed by the Treasury Solicitor, London SW1) appeared on behalf of the Appellant.

MR R PURCHAS QC and MR T COMYN (instructed by Messrs Manby & Steward, Wolverhampton) appeared on behalf of the Respondents.

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J U D G M E N T

(As Approved by the Court)

Crown Copyright

Thursday, 11th June 1998

LORD JUSTICE BUXTON:

This appeal concerns two questions, which we were told were undecided but of considerable general importance, that arise in connexion with the determination by the Lands Tribunal of compensation for land compulsorily acquired, or proposed to be compulsorily acquired, under the Land Compensation Act 1961, as amended [the 1961 Act]. It will be convenient first to refer to the statutory framework.

By Part II of the 1961 Act the Lands Tribunal values the land in question at its open market value as sold by a willing seller, subject however to certain assumptions. Those assumptions include assumptions as to the planning permission that would be available in respect of the land, that clearly being a significant factor in its market value. By section 15(5), where a certificate has been issued by the local planning authority, or on appeal by the Secretary of State, as to the planning permission that would have been granted for the land, the Lands Tribunal in valuing the land shall assume that that planning permission would, indeed, be granted.

This process of certification is dealt with in Part III of the 1961 Act. Since the proper construction of the relevant provisions lies at the heart of this appeal they cannot be summarised, but must be set out in full:

17. Certification of appropriate alternative development

(1) Where an interest in land is proposed to be acquired by an authority possessing compulsory purchase powers, and that land or part thereof does not consist or form part of -

(a) an area defined in the development plan as an area of comprehensive development, or

(b) an area shown in the development plan as an area allocated primarily for a use which is of a residential, commercial or industrial character, or for a range of two or more uses any of which is of such a character,

then, subject to subsection (2) of this section, either of the parties directly concerned may apply to the local planning authority for a certificate under this section.

(3) An application for a certificate under this section-

(a) shall state whether or not there are, in the applicant's opinion, any classes of development which, either immediately or at a future time, would be appropriate for the land in question if it were not proposed to be acquired by any authority possessing compulsory purchase powers and, if so, shall specify the classes of development and the times at which they would be so appropriate;

(b) shall state the applicant's grounds for holding that opinion; and

(c) shall be accompanied by a statement specifying the date on which a copy of the application has been or will be served on the other party directly concerned.

(4) Where an application is made to the local planning authority for a certificate under this section in respect of an interest in land, the local planning authority shall, not earlier than 21 days after the date specified in the statement mentioned in paragraph (c) of subsection (3) of this section, issue to the applicant a certificate stating either of the following to be the opinion of the local planning authority regarding the grant of planning permission in respect of the land in question, if it were not proposed to be acquired by an authority possessing compulsory purchase powers, that is to say-

(a) that planning permission for development of one or more classes specified in the certificate (whether specified in the application or not) would have been granted; or

(b) that planning permission would not have been granted for any development 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.

(7) In determining, for the purposes of the issue of a certificate under this section, whether planning permission for any particular class of development would have been granted in respect of any land, the local planning authority shall not treat development of that class as development for which planning permission would have been refused by reason only that it would have involved development of the land in question ( or of that land together with other land) otherwise than in accordance with the provisions of the development plan relating thereto.

18 (2) On any appeal under this section against a certificate the Minister shall consider the matters to which the certificate relates as if the application for a certificate under section 17 of this Act had been made to him in the first instance, and shall either confirm the certificate, or vary it, or cancel it and issue a different certificate in its place, as he may consider appropriate.

22 (2) For the purposes of section 17 and 18 of this Act, an interest in land shall be taken to be an interest proposed to be acquired by an authority possessing compulsory purchase powers in the following (but no other) circumstances, that is to say-

(a) where, for the purpose of a compulsory acquisition by that authority of land consisting of or including land in which that interest subsists, a notice required to be published or served in connection with that acquisition, either by an Act or by any Standing Order of either House of Parliament relating to petitions for private bills, has been published or served in accordance with that Act or Order; or

(b) where a notice requiring the purchase of that interest has been served under any enactment, and in accordance with that enactment that authority are to be deemed to have served a notice to treat in respect of that interest; or

(c) where an offer in writing has been made by or on behalf of that authority to negotiate for the purchase of that interest.

In the present case, there were before the judge two applications under Section 21 of the 1961 Act to quash decisions of the now appellant [the Secretary of State] made under section 18 of the 1961 Act, whereby he allowed appeals by the Secretary of State for Transport against certificates of appropriate alternative development in respect of two parcels of land at Sundorne, Shrewsbury. The land was proposed for compulsory purchase by the Secretary of State for Transport for the purpose of constructing the A49 Shrewsbury by-pass. The date of the notice under section 22(2)(a) of the 1961 Act was the 30th January 1986. In late 1992 the applicants (now the respondents) applied for certificates of appropriate alternative development under section 17. The local authority issued certificates on 8th May 1993 for residential and industrial development. The Secretary of State for Transport appealed against the certificates under section 18. By his decision letter dated 4th July 1996 the Secretary of State allowed the appeals, substituting negative certificates under section 17(4)(b) of the 1961 Act.

Against this background, the issues in the appeal were:

I Is the relevant date at which the decision under s 17(4) has to be made

A. the section 22(2)(a) date (the notice date), as found by the judge? or

B the date of entry on the land, as contended for by the appellant Secretary of State?

II In making that decision, do the words "if it were not proposed to be acquired" in s 17(4) mean that there should be discounted

A the s 22(2)(a) compulsory acquisition, and the proposal underlying that acquisition as it stood at the relevant date, as the Secretary of State contends; or

B additionally the facts and policies that resulted from a/the underlying scheme that culminated in that compulsory acquisition, as the judge found.

This latter contest, on Issue II, was if I may say so neatly summarised by Dyson J in the judgment below:

[The respondents] contended that ...the policies and facts applicable at the relevant date should have been viewed as if the by-pass scheme 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.

It is convenient to take these issues separately although, as will become apparent, in my view the correct solution to issue I dictates the answer to issue II.

This issue is concluded as a matter of authority by the decision of this court in Jelson v MHLG [1970] 1 QB 243 [ Jelson]. In that case there had been long-standing proposals for the construction of a by-pass. Land abutting on to the site of the by-pass was developed for housing. When the plan for the by-pass was abandoned, the owners of the land on which it was to have been constructed applied for planning permission for the construction of housing, which permission was refused because housing on that site would adversely affect the existing housing. The owners thereupon applied under section 129(1) of the Town and Country Planning Act 1962, which provides that:

Where, on an application for planning permission to develop any land, permission is refused...then if any owner of the land claims - (a) that the land has become incapable of reasonably beneficial use in its existing state, and ...(c)... that the land cannot be rendered capable of reasonable beneficial use by the carrying out of any other development for which planning permission has been granted or for which the local planning authority or the Minister has undertaken to grant planning permission, he may... serve on the council...in which the land is situated a notice requiring that council to purchase his interest in the land...

The issue in the appeal was specifically as to the date at which the provisions of section 17(4) of the 1961 Act applied. I mention as a preliminary footnote that, in his exposition of Part III of the Act Lord Denning MR assumed, as did everyone else in the case, that section 22(2)(a) referred to a notice to treat rather, than is in fact the case, to publication of the notice of the compulsory purchase order. Subject to one argument that I consider below, and by which I am not persuaded, this point makes no difference either to the Court of Appeal's analysis of the terms of Part III or to the debate in our present case.

On that basis, Lord Denning MR, at p 250B, stated the issue in Jelson as follows:

After the discussion we have had, I think the decision depends on this one short point under section 17 (4): what is the date at which it must be decided whether planning permission "might reasonably have been expected to be granted"? The Minister says it must be decided as at the date of the deemed notice to treat, that is, on September 19, 1965. At that date there was this long, narrow strip of land bordered by great housing estates on either side. At that date planning permission would not be granted for any beneficial purpose. So there should be a "nil certificate." But Wimpeys and Jelsons say that that is not that date at all. They say that the date should be some time in the distant past before there was any proposal for a ring road. At that time they might reasonably have expected planning permission to be granted, not only for the housing estates, but also for this long, narrow strip for residential development.

That issue was to be determined simply as a matter of statutory construction:

The crucial word in [section 17 (4)] is the word "proposed," which is defined in section 22 (2):

"For the purposes of sections 17 and 18 of this Act, an interest in land shall be taken to be an interest proposed to be acquired by an authority possessing compulsory purchase powers in the following (but no other) circumstances, that is to say-"

(a) (put shortly) where there is an actual notice to treat; (b) (put shortly) where there is a deemed notice to treat; (c) (put shortly) where there is an offer to negotiate to purchase.

That definition shows that the word "proposed" refers to the proposal contained in an actual or deemed notice to treat or in an offer to purchase. That gives a good clue to the date of the proposal. It is the date of the actual or deemed notice to treat or of the offer to purchase, as the case may be.

In the light of that definition, section 17 (4) means that the planning authority must form an opinion as to what planning permission might reasonably have been expected to be granted at the date of the actual notice to treat, or the deemed notice to treat, or the offer to purchase, as the case may be. In the present case, therefore, which is a case of a deemed notice to treat, subsection 17 (4) must be read:"...that might have been expected to be granted [at the date of the service of the deemed notice to treat] in respect of the land in question, if it were not proposed [at that date] to be acquired..." The planning authority must form an opinion as to what planning permission might reasonably be expected at that date, namely, September 28, 1965. It must look at the position as at that date, and see, in the circumstances then existing, whether planning permission might reasonably be expected to be granted.

([1970] 1 QB 250G-251C, Lord Denning MR's emphasis).

That same analysis was adopted by Sachs LJ, at p 254D, and by Phillimore LJ at p 255C. Like Dyson J, I see no answer to the argument that that determines issue I in our case. I am fortified in that view by the fact that the same conclusion as to the effect of Jelson was reached, after a very careful review of arguments very similar to those advanced in our case, by Roch J in Fox v Secretary of State for the Environment (1991) 62 P&CR 459 at p 475.

The Secretary of State did however contend that there was an answer, or rather a series of related answers, which I should now address.

As his principal argument the Secretary of State said that it was necessary to construe Part III in a purposive manner, bearing in mind that the only role of a Part III certificate was to assist in valuation by the Lands Tribunal: see on the latter, undisputed, point Lord Bridge in Grampian Regional Council v Secretary of State for Scotland (1983) 67 P&CR 540 [ Grampian], at p574. It was established by analogy with the judgment of the House of Lords in Birmingham Corporation v West Midland Baptist (Trust) Association [1970] AC 874 [ West Midland ] that the date as at which the Lands Tribunal should assess compensation was the date of entry on the land. It was therefore rational that the certificate date should be that date, or at least a date as close as possible to that date. Mr Purchas QC for the respondents challenged even the necessary rationality of that claim. But, even leaving those considerations aside, the trouble with this argument is that it flies in the face of the way in which the court approached its task in Jelson. As we have seen, the court thought that the issue was concluded by construction of the 1961 Act. "Purposive" construction, whatever exactly it may import, is still nevertheless an exercise in construction, not an exercise in judicial law-making. The Court of Appeal in Jelson construed the 1961 Act in a manner contrary to that now contended for by the Secretary of State. That conclusion cannot be displaced, at least in this court, by appeal to an alternative theory of construction.

Faced with that impasse, therefore, the Secretary of State sought to offset or distinguish the effect of Jelson on two, interrelated, grounds. First, the case had proceeded, as in particular had the judgment of Browne J at first instance which was approved by all the judges in the Court of Appeal, on the assumption that the valuation date was not the date of entry, as subsequently established by West Midland , but the date of the notice to treat. It was therefore wrongly assumed in Jelson that the decision did indeed create the rational relation between the date of the certificate and the date of the assessment that the Secretary of State urged. That analysis was supported by a passage from the judgment of Browne J, (1968) 19 P&CR 746 at p 765:

The general principle is that the value of land for the purposes of compensation for compulsory purchase is assessed as at the date of the notice to treat. The actual assessment of compensation in cases to which section 17 relates is carried out by the Lands Tribunal, and part of the material which will be before the Lands Tribunal may be a certificate under section 17 (see ss. 14 (3), 15 (5) and 17 (2). The time with which the Lands Tribunal is concerned is the date of the notice to treat and the facts and circumstances as they existed at that date, and I should expect, prima facie, that the certificate under section 17 would be dealing with the situation as at the same date.

Second, the communis error in Jelson, shared by Browne J, that the terms of section 22(2)(a) referred to a notice to treat, rather than to publication of a notice of the compulsory purchase order, had given a spurious appearance of unity to the three cases addressed in that sub-sub-section, and thus (I think the argument was) had wrongly led to the application to section 22(2)(a) of the solution that applied to section 22(2)(b); which, being a case of service of notice to purchase under section 129 of the 1962 Act, was the case directly addressed in Jelson. The Secretary of State argued that we should follow the reasoning of Sir Douglas Frank QC in Robert Hitchins Builders Ltd v Secretary of State for the Environment (1978) 37 P&CR 140, who had distinguished Jelson broadly on these grounds. He also submitted that his argument was supported by the reasoning of the Court of Session and of the House of Lords in Grampian, a case to which I shall in any event have to return when considering issue II.

The principal difficulty about these arguments is that they can only prevail if it can be established either that the judgment in Jelson was delivered per incuriam or that it is inconsistent with what was said by the House of Lords in Grampian. I dispose of the latter point immediately, since I do not understand how it came to be advanced. Lord Bridge in Grampian, at pp 573-574 of the report, made a reasoned, albeit confessedly obiter, finding that the relevant date was the date on which the land was proposed to be acquired. Insofar as that assists at all in the present case, it supports the case for the respondents. As to the status of the judgment in Jelson, the Secretary of State appeared to draw back from saying that it must be disregarded, but that in my view is what he has to argue in order to succeed.

There is no justification for any such argument. First, it is true that Browne J assumed a rule as to the date of assessment different from that provided in West Midland . But, as is apparent from the passage from his judgment already cited, he regarded the conjunction of the assessment date and the certificate date as only a starting point. Like the Court of Appeal, his actual decision was based on the terms of the 1961 Act. That is apparent from, amongst other things, a further passage that I cite below in connexion with issue II.

Second, although Browne J did not have the benefit of West Midland , by the time that Jelson reached the Court of Appeal that court had decided that case, and held, as subsequently did the House of Lords, that the assessment date should not be the date of the notice to treat: that is most conveniently seen from the headnote to the report of the case in the Court of Appeal, [1968] 2 QB at p 189. That case in the Court of Appeal was cited to the court in Jelson, it would seem by both sides: see [1970] 1 QB at p 248 A-C. Although it was not referred to in the court's judgments, it is impossible to contend that Jelson was decided in ignorance of it. Nor, since the issue before the court was one of construction, is it possible to say that either the Court of Appeal or Browne J would have decided the case differently had the present point about West Midland been put to them directly.

Third, in his exposition at [1970] 1 QB pp 250G-251A Lord Denning MR did not say, nor can he be construed as thinking, that what he saw as the similarity of s 22(2)(a) and (b) as dealing with notices to treat dictated the construction that he put upon the section. Rather, he pointed out that the use of the word "proposed" in the common part of section 22(2) had to apply to, and was illuminated by, each of the cases to which it referred, which included sub-sub-section (c), which has nothing to do with notices to treat. That section 22(2) must apply equally to each of the three cases set out in it is a point of some importance when we come to consider issue II. Here, it simply demonstrates that Lord Denning MR's analysis was not dictated by, and indeed was not in any way affected by, his assumption that section 22(2)(a) related to a notice to treat.

I have discussed these arguments at some length because of the importance placed on them by the Secretary of State. They cannot however displace the plain conclusion that is to be drawn from Jelson. The Deputy Judge in Hitchins was wrong to distinguish Jelson on these grounds, and I would overrule that case. The appeal on issue I fails.

Here again there is in my view a short answer, though in this instance it is not that which appealed to the judge.

The issue is as to the meaning, or at least the reference or application, of the words "if it were not proposed to be acquired" in section 17(4) of the 1961 Act. I agree that it is not entirely clear that that issue, in its present connotation, was before the court in Jelson. The court concentrated on the relevant date, issue I, and therefore I do not hold in relation to issue II that the matter is concluded by authority. But in Jelson, as the passages already cited from Lord Denning MR's judgment demonstrate, this court held that the word "proposed" in section 17 refers, as the statute requires, to whichever of the cases in section 22(2) is appropriate to the facts; and the planning authority looks at the matter as at the date of that "proposal":

The planning authority must form an opinion as to what planning permission might reasonably be expected at that date....It must look at the position as at that date, and see, in the circumstances then existing, whether planning permission might reasonably be expected to be granted: [1970] 1 QB at p 251C.

In our case, therefore, what has to be disregarded under section 17 is the case described in section 22(2)(a): the proposal for compulsory acquisition. In making the assessment of whether planning permission would have been granted in that case, the planning authority otherwise looks at the circumstances existing at the relevant date: and not at the circumstances that would have existed at what Lord Denning MR described as some time in the distant past, before the scheme that underlay that acquisition was conceived.

I therefore see no escape from the conclusion that as a matter of statutory construction what has to be disregarded under section 17 is the proposal for acquisition and that alone; and not, as the respondents contended, any fact or policy attributable, at any date in the past, to the underlying scheme.

A number of further considerations support this analysis.

First, it seems an odd use of language to say that land is "proposed" to be acquired from the very first moment of a scheme that relates to it. In the present case, as the judge found, the by-pass was proposed in the Town Map in 1952, but a defined protected route was not formulated until 1970. The respondents' argument would require everything from 1952 onwards to be disregarded. Mr Purchas said that once a road scheme is formulated it is to be assumed that the land required will be acquired by public acquisition. That may well be so, but so to say would seem to fall short of being able to say that from 1952 onwards this land was "proposed to be acquired." Some force is added to that contention by a comparison with the language of section 9 of the 1961 Act, which in the valuation process excludes consideration of depreciation caused by the "prospect" of acquisition by an authority possessing compulsory purchase powers. That excludes any depreciation attributable to an "indication" that the powers will be or are likely to be exercised. That language seems more easily to describe the effect of inclusion of land in a town map. That it was not employed also in sections 17 and 22 would seem to be significant.

Second, section 17(4) requires the planning authority to form an opinion in respect of the land at the relevant date "if it were not proposed to be acquired". That is the language of present conditional: as if, at the relevant date, no proposal existed. Had it been intended to exclude any "proposal" dating back into time, the section would have had to say "if it had not been", or some similar use of the past tense.

These points were indeed recognised by Browne J in his judgment in Jelson which, as we have seen, was mentioned with approval by all three members of the Court of Appeal in that case. Browne J said, 19 P&CR at p 767:

In my judgment, the fundamental fallacy in all the arguments for the applicants on this point is that they are really saying that the question is what planning permission might have been expected to be granted if these sites had not been reserved for a ring road. Although [counsel] disclaimed any such contention, it seems to me that their argument really involves reading the words of section 17 (4) "if it were not proposed to be acquired by any authority" as if those words read "if it had never been proposed to be acquired by any authority," and also reading "proposed" as including "intended." This is obviously impossible, both on the wording of section 17 (4) itself and in view of section 22 (2).

I respectfully agree.

There is a further such point. In seeking to distinguish Jelson before the judge the respondents argued that that case involved a purchase notice, provided for in section 22(2)(b). There was no scheme or other proposal underlying the acquisition, since the by-pass proposals in that case had been abandoned three years before the notice was served. That was why it was in any event impossible for the court in Jelson to go back to an original scheme or proposal, since there was no scheme to revert to: not so in a case, such as our case, that arises under section 22(2)(a). As a ground of distinction this would not seem to create a difference. As we have seen, the applicants in Jelson did seek to go back to the start of the original if now abandoned scheme, and the Court of Appeal dealt with that argument without in any way suggesting that it could not arise on the facts: to the citations already given I would add the words of Phillimore LJ at [1970] 1 QB p 255C. The argument is however revelatory in another way. If it is the case that the respondents' argument runs in respect of section 22(2)(a), but not in respect of section 22(2)(b), that can only be because "proposed to be acquired" has a different meaning in the one sub-sub-section from the other. But that cannot be right, because the phrase is used in the common part of section 22(2), and must therefore apply indifferently to each case that section 22(2) addresses. The same consideration, it will be recalled, applies to the similar argument adduced, by the opposite party, in relation to issue I.

The judge, although inclining to the view that the respondents' arguments were correct in any event on issue II, did not consider that issue in detail, because he thought that an answer to it was dictated by the judgments in the House of Lords in Grampian. That was because he thought that the argument advanced before him by the Secretary of State and repeated before us was the same argument as failed in Grampian. I cannot agree. In order to explain why that is so it is necessary to look in some detail at what was in issue in Grampian.

The contention advanced by the planning authority is accurately set out in the headnote, 67 P&CR 540:

The first appellants, the education authority, by agreement acquired land from the second respondents for sites for primary and secondary schools. The agreements provided that the second respondents should receive the same compensation, fixed as at the date of the offers to purchase, as if the land had been compulsorily acquired. ... The appellants contended that the only circumstance that the local planning authority, or the Secretary of State on appeal was required to ignore in answering the hypothetical question posed by section 25 of the Act of 1963 was the immediate event that had resulted in the applicant's interest in land becoming one that was "proposed to be acquired by an authority possessing compulsory purchase powers" under section 25(1), viz. in the present case the first appellants' written offers to purchase, and that the underlying requirement to devote the sites to fulfil the needs of public education remained and afforded a complete answer to the second respondents' claim for "positive certificates."

It will be seen that that is in fact a different argument from that advanced by the Secretary of State in our case. That latter argument, as formulated by the judge in the passage that I have already cited, is that the assessment has to be made as if on the relevant date the "scheme" had been cancelled. But in Grampian the argument, as understood by Lord Bridge, was that

the only circumstance which the planning authority...is required to ignore in answering the hypothetical question raised by an application under [section 17] is the immediate event which has resulted in the applicant's interest in land becoming one which it is "proposed to be acquired by an authority possessing compulsory purchase powers" under [section 22], in this case the education authority's written offers to purchase. Whilst those offers must be ignored, so runs the argument, the underlying requirement to devote these sites to fulfil the needs of public education remains and affords a complete answer to the claims for positive certificates (67 P&CR at p569, emphasis supplied).

In other words, the scheme was to be taken as still in place: all that was to be ignored was the notices issued under that scheme.

Lord Bridge rejected that argument, pointing to its obvious fallacy:

the overriding consideration which impels me to reject the argument for the appellants is that it would, in my opinion, if accepted, defeat the essential purpose of the procedure for obtaining certificates of appropriate alternative development, as part of the overall scheme of the Act to secure the payment of fair compensation to landowners who are compulsorily expropriated, or, expressed more specifically, to ensure that, when urban land, otherwise available for some form of urban building development, is acquired for a necessary public purpose, the compensation will reflect its urban development value. Assuming, as I do, that every compulsory purchase of land can be justified by reference to the public purpose for which the land is required, to allow reliance on that public requirement to determine the question raised by an application under section 25 would lead to the issue of a negative certificate in every case. (67 P&CR at p570).

That passage seems to me to demonstrate two things. First, Lord Bridge was meeting and rejecting the very narrow argument advanced by the acquiring authority that while the acquisition itself must be discounted the underlying policy should not be. Second, he was confirming what was in fact the submission of the Secretary of State in our case, that there should be ignored not only the acquisition proposal itself, but also the planning policies that underlay that proposal at the relevant date. His judgment was understood in that sense, in my respectful judgement correctly, by Roch J in Fox v Secretary of State for the Environment (1991) 62 P&CR 459 at p477, a passage in fact cited by the judge in our case. And there is certainly no suggestion in any of this authority that it supports the much wider contention advanced by the respondents, that there should also be disregarded the effect of the underlying proposals, if they can be characterised as such, at any time before the relevant date.

I am not therefore able to agree with the judge that Grampian concludes the present case in the respondents' favour. I do not find Grampian of relevance in solving the very different problem that our case presents. Insofar as it assists, it supports the arguments of the Secretary of State.

I am similarly not assisted by another case shown us by the respondents, Margate Corporation v Devotwill [1970] 3 All ER 864. In that case planning permission for residential development was originally refused because the land would be required for road development. When that particular development was not proceeded with, the owners served a purchase notice. The assessment of compensation, on the basis of a hypothetical planning permission, was affected by the difficulty of access to the site, which the road development had been intended to alleviate. The Lands Tribunal assumed that because of the underlying planning policies some other access would be provided. The House of Lords held, and held no more than, that the likelihood of there being services to the site in the future must be decided on evidence and not by assumption. The case has nothing to do with any assumptions as to policies affecting the land itself. That was recognised in Grampian, Lord Bridge, 67 P&CR at 573, dealing with the case thus:

It is to be noted that in the Margate case it was never suggested that the underlying requirement to use part of the claimant's land for the construction of a by-pass road provided any ground for restricting the extent of the residential development for which it ought to be assumed that permission would be granted if the land were not to be acquired. The restriction on the extent of the notional development for which the acquiring authority contended arose solely from the undoubted problems of access to the site due to the existing traffic congestion on the main road from which access would have to be obtained. A by-pass road, if provided elsewhere than on the claimant's land, would relieve the traffic congestion and substantially diminish the problems of access. Hence the relevance of considering, in the hypothetical situation predicated by the statute, the prospect of a by-pass being provided elsewhere than on the claimant's land was not and could not be disputed. The decision of your Lordships' House that the strength of that prospect fell to be decided as a matter of evidence and could not be founded on any assumption does not seem to me to be of the least help to the present appellants, or indeed to be relevant to any issue arising in these appeals.

There is therefore in my view no authority that stands in the way of the solution to issue II that I find to follow from construction of the 1961 Act. Further, although I am prepared to accept that Jelson does not bind us on this point, the approach of this court in that case, and in particular the assumption on the part of Lord Denning MR and Phillimore LJ that it could not be appropriate to take the enquiry back to a distant time, possibly years before the relevant date, gives strong rational support to the contentions of the Secretary of State. As I have already indicated, attempts on the part of the respondents to distinguish Jelson, although they attracted the judge, do not seem to be well-founded.

Mr Purchas however advanced a further argument. He reminded us that in performing its valuation task the Lands Tribunal was bound by the " Pointe Gourde " principle, Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565, to disregard any increase (or decrease) in value of the land that is entirely due to the scheme underlying the acquisition. How that principle applies in practice was explained by this court in Wards Construction (Medway) Ltd v Barclays Bank plc (1994) 68 PC&R 391 at p 396:

In order correctly to apply the Pointe Gourde principle it is necessary, first, to identify the scheme and, secondly, its consequences. The valuer must then value the land by imagining the state of affairs, usually called "the no-scheme world", which would have existed if there had been no scheme.

Mr Purchas submitted that since it was accepted that the only purpose of a Part III certificate was to assist in the valuation exercise of the Lands Tribunal under Part II; and since Parliament in formulating Part III must have been aware of the Pointe Gourde rule; therefore the same approach should be applied by the Secretary of State to his certification task as the Lands Tribunal applied to the subsequent valuation. From that it followed that what had to be disregarded in our case could not simply be the immediate proposal that underlay the acquisition, but rather the whole long-term policy that would be regarded as the "scheme" under Pointe Gourde, and all the consequences of that scheme. Mr Purchas drew our attention to some remarks of Stuart-Smith LJ in Porter v Secretary of State for Transport [1996] 1 PLR 112 at p 114B, where it is suggested that section 17 of the 1961 Act is indeed an application of the Point Gourde principle. However, that was not the issue in that case; it does not seem to have been argued, and certainly not argued with the care with which the point has been considered before us; and the point was not addressed by the other Lords Justices. Mr Purchas very fairly agreed that we were not constrained by that case.

I could not find the present argument compelling if, as is the case, it conflicts with the plain wording of the statute. But, in any event, I am not persuaded that it has force even taken on its own. First, as a matter of policy, if the Lands Tribunal has in its valuation exercise to have regard to Pointe Gourde that would if anything seem a lesser rather than a greater reason for straining to introduce that principle at an earlier stage. Second, however, it is far from clear that adoption of this approach would lead to the simplicity and clarity that the respondents urged. It is trite law that identification of the "scheme" for the purposes of Pointe Gourde is a question of fact for the Lands Tribunal: see for instance per Widgery LJ in Wilson v Liverpool Corporation [1971] 1 WLR at p 310A. If the Secretary of State engages in that exercise in advance of its being considered by the Lands Tribunal his assessment cannot bind the Lands Tribunal, and may be different from that of the Tribunal. It can hardly be right that the Lands Tribunal should become bound, by section 15(5) of the 1961 Act, to give effect to a certificate based on an assumption as to the factual application of Pointe Gourde that the Lands Tribunal itself has rejected.

I add, finally, that various arguments were addressed to us by both parties as to the potential inconvenience, or even injustice, of the solutions proposed by their opponents. I did not find these contentions of assistance. They again cannot be compelling in the face of plain statutory language. Insofar as it is helpful to comment, I bear in mind the point made by the Secretary of State that issues of this nature would in any event be reviewed by the Lands Tribunal in the eventual valuation; and in particular that a negative certificate could be there reopened.

I would therefore find in favour of the respondents on issue I but in favour of the Secretary of State on issue II, and thus allow the appeals. The effect of so holding is that when considering the grant of a certificate under section 17(4) of the 1961 Act in a case to which section 22(2)(a) applies, the land shall be valued as at the date of the publication of notice of the compulsory purchase order, discounting only that acquisition and the proposal underlying it as it stood on the date of the notice: which can be conveniently expressed as a valuation on the basis that the proposal had been cancelled on the date of that notice.

LORD JUSTICE PETER GIBSON: I agree.

LORD JUSTICE NOURSE: I also agree.

Order: appealed allowed with costs and the Secretary of State's decision restored; no order as to costs below; leave to appeal to the House of Lords granted. [Not part of approved judgment]