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Cite as: [2000] EWCA Civ 268
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Case No: LATRF 1999/0221
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE LANDS TRIBUNAL
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 26 October 2000
LORD JUSTICE OTTON
LORD JUSTICE WARD
and
MR JUSTICE EVANS-LOMBE
J A PYE (OXFORD) LIMITED |
Appellant | |
- and - |
||
SOUTH GLOUCESTERSHIRE DISTRICT COUNCIL |
Respondent |
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
- - - - - - - - - - - - - - - - - - - - -
MR ROBIN PURCHAS QC and MR JOHN HARVEY (instructed by Burroughs Day) appeared for the Appellant
MR TERENCE ETHERTON QC and MR JONATHAN SEITLER (instructed by Sharpe Pritchard) appeared for the Respondent
As Approved by the Court
LORD JUSTICE OTTON:
This is an Appeal (by way of Case Stated) from the decision on 9 October 1998
of the Lands Tribunal by the Appellant J.A. Pye (Oxford) Ltd whereby the
Respondent, South Gloucester District Council was awarded £428K being the
value of the reference land.
Background
The reference land comprises 276 sq.m. of land at North Common, Warmley which
originally was in the Borough of Kingswood, the County Of Avon. Following the
local government reorganisation both Kingswood and Avon no longer exist but for
convenience we retain and refer to `Kingswood' and `Avon'. In 1982 Kingswood
purchased 6 miles of former railway line with its bridges, including the
reference land from the British Railways Board.
By an agreement Kingswood agreed to sell to Avon the freehold interest in the reference land the purchase price to be determined by a reference by consent to the Lands Tribunal based on the assumption that Avon had made an unopposed Compulsory Purchase Order in respect of the land for highway purposes. The contract further provided that J.A Pye (Oxford) Ltd (Pye) should be permitted to act for and on behalf of Avon in relation to the reference. Pye wished to develop land adjacent to the reference land for residential and industrial purposes. After a protracted planning process an agreement pursuant to s.52 Town & Country Planning Act 1971 between Kingswood and Avon and Pye was entered into in July 1979 whereby Pye was to build a link road over the reference land thus joining the two parts of the land to be developed and that in return Pye would pay Avon the purchase price of the reference land.
In 1987 Pye took over Avon's part in the litigation to establish the purchase
price which had accrued between Kingswood and Avon, in return for Avon paying
Pye the sum awarded by the Lands Tribunal plus Avon's legal costs.
On 1 November 1996 Land Tribunal proceeding from a valuation date of 13
January 1988 set the purchase price at £756k and ordered Pye to pay
Kingswood's costs. Pye appealed to the Court of Appeal as they considered the
amount to be excessive. On 8 April the Court of Appeal confirmed the
correctness of the Lands Tribunal's approach, but remitted the award back to
the Lands Tribunal in respect of one particular issue.
Following the remission hearing the Lands Tribunal on 9 October 1998 reduced
the award to £428k. Pye now appeals by way of Case Stated against the
reduced award.
The Law
Sections 5 et seq Land Consolidation Act 1961 contain the basic rules for the
assessment of compensation in respect of the land compulsorily acquired. Rule
2 in s.5 is the fundamental rule as to the amount of compensation for the land
acquired, viz open market value "which depends upon what planning permission is
available, or is likely to be available, or is assumed to be available for the
land." Sections 14-16 require assumptions to be made as to planning permission
being available - none of which is relevant to this appeal. There are other
provisions in the 1961 Act which may affect the determination of market value
for compensation in particular circumstances notably s.6 which provides that
any increase or decrease in value due solely to the scheme under which the land
is acquired is to be discounted. The common law rule generally known as the
Pointe Gourde principle is to much the same effect but with wider
application. (See Pointe Gourde Quarrying & Transport Co. Ltd v.
Sub-Intendent of Crown Lands 1947 AC 565). The Land Tribunal Act 1949
established the Lands Tribunal to determine questions relating to compensation
for the compulsorily purchase of land. S.3(4) provides :
"(4) A decision of the Lands tribunal shall be final:
provided that any person aggrieved by the decision as being erroneous in point
of law may, within such time as may be limited by rules of court, require the
tribunal to state and sign a case for the decision of the court and, where the
decision of the Lands Tribunal is given on a review by way of appeal of the
previous decision of another person, that person if dissatisfied with the
decision Lands Tribunal shall be treated for this purpose as a person aggrieved
thereby."
Thus appeals are confined to matters of law. The Lands Tribunal decision on
valuation is a finding of fact. There is no right to appeal on findings of
fact. Where the aggrieved party seeks to establish that the findings of fact
is perverse or insupportable by the evidence or the failure to consider
material facts, this amounts to an error of law. It is not disputed that Pye,
the Appellant is a `person aggrieved.'
It is now necessary to consider how the litigation has progressed.
THE FIRST LANDS TRIBUNAL HEARING
Pye contended that the open market value should be assessed at £650. The
Tribunal rejected the assumptions on which the assessment was based and valued
the reference land at £765k. The valuation methodology of the Lands
Tribunal, in arriving at this figure can be summarised as follows.
(1). The Tribunal considered the development value released by the purchase of
the reference land. In respect of the industrial development land to the south
of Poplar Road the Tribunal took into account a period of 6 months to allow for
the construction and dedication of the high road across the reference land. The
existing use value (£30k) the cost of completing the high road (£50k)
and the deferment factor (12%) were agreed. In Appendix 7 to their decision
they set out their calculations to arrive at the figure of £477,000.
£
Value of industrial development land
4.258 acre @ £162,500 an acre 691,925
Defer 6 months @ 12% to allow for construction
and dedication of link road across the reference land 0.946
654,561
Less cost of completing link road 50,000
604,561
Less value of land without the benefit of the link road
4.258 acres @ £30,000 an acre 127,740
476,821
Say 477,000
(2) The Lands Tribunal then calculated the value of the residential designated
land (to the north of Poplar Road) released upon acquisition of the reference
land. They valued the 10.4 acres at £375k per acre (£3.9m), less an
agreed allowance for abnormal costs due to mining of £.25m
(£3.65m).
(3) They turned to consider whether there should be a reduction of the
£3.65m to reflect the deferment occasioned by the fact that the Poplar
Road bridge had not been closed. They found that there should be deferment on
that account and in respect of the period required to construct and dedicate to
the public the section of the link road crossing the reference land. They
concluded that a period of 18 months was adequate to cover these matters. They
also considered it reasonable to make a small allowance of 5% to reflect the
possibility that the delay relating to the Poplar Road bridge closure might
have exceeded 18 months. They arrived at a figure of £2.618m and set out
their calculations in Appendix 8 :
£
Value of residential development land
10.4. acres @ £375,000 an acre 3,900.000
Less allowance for abnormal costs due to mining 250,000
3,650,000
Defer 1½ years at 12% to allow for closure of
Poplar Road bridge and construction of link road 0.845
3,084,250
Less allowance for risk of further delay in closing
Poplar Road bridge - 5% 154,212
2,930,038
Less value of land without the benefit of the
link road 10.4 acres @ £30,000 an acre 312,000
2,618,038
Say 2,618,000
Accordingly they found that the total development value released by the
completion of the link road to have been £3.09m (£447k +
£2.618m.).
(4) The Lands Tribunal's basic approach was to consider the amount of the
purchase price in terms of a share in the released development value. The
Tribunal carried out an assessment of the strengths of the parties' respective
bargaining power and concluded that the starting point for the share in
released development value attributable to the reference land would be 50%.
(5) They then considered the question of what, if any, reduction fell to be
made because Pye had potential alternatives to paying the ransom price of 50%
of the development value released. They found that "the greatest potential
would have been a fresh planning application or applications seeking permission
free of a condition requiring the completion of the link road."- - - "Had a
fresh planning permission been obtained and the s.52 agreements amended Avon"
(i.e. Pye) "could then have acquired the reference land under their Highways
Act powers at a nominal price or completed the link road at a modest cost."
They declined to speculate whether Kingswood would have refused the planning
applications or the amendment but decided that as vendors they would have
accepted substantially less than the 50% ransom.
(6) The Lands Tribunal accepted that one of the factors that would have been
present in the minds of both parties to the negotiations was the delay costs
and uncertainties inherent in the pursuit of a revised planning permission and
amendment of the section 52 agreement. They concluded that the potential
purchaser (Pye) would probably have estimated that the time required to achieve
the alternative solution was two years. They calculated that the diminution in
development value due to this 2 year delay was £790k. The Tribunal added
a factor to reflect the purchaser's costs of pursuing the alternative solution
and the uncertainty of its success. This was assessed at 20%, making a final
figure of £950k. They set out the details of their calculation in
Appendix 9 which plays a critical part in this appeal :
£
Industrial development land value (per App.7) 691,925
Residential development land value net of abnormal
costs due to mining (per app.8) 3,650,000
4,341,925
Less existing use value
(£127,740 plus £312,000 - per apps 7-8 439,740
3,902,185
Defer 2 years at 12% 0,797
3,110,041
Diminution in value due to deferment
(£3,902,185 less £3,110,041) 792,144
add allowance for costs and uncertainty - 20% 158,429
950,573
Say 950,000
(7) The Tribunal then returned to the percentage share of the released
development value which the hypothetical vendor (Kingswood) would have been
satisfied with. This was assessed at 25% (of £3.095.000) say,
£775.000.0 They concluded that the purchaser would have been satisfied to
pay that amount, which was nearly 20% less than the £950k for the
alternative solution.
(8) Betterment was assessed at £18,500 producing the final figure of the
award of £756k.
THE FIRST COURT OF APPEAL HEARING
Pye's appealed the award and again contended that the purchase price should be
not more than £650. They advanced two grounds of appeal. The primary
ground asserted that the Lands Tribunal had incorrectly applied the Point
Gourde principle in that it had failed to exclude from the valuation any
increase in value entirely "due to the scheme", underlying the acquisition of
the land, and that in particular it had failed to identify the scheme for this
purpose. The Court of Appeal unanimously and firmly rejected this ground and
emphasised that the identification of the scheme was essentially an issue of
fact for the Tribunal to determine.
The secondary ground was that the Tribunal had erred in law in that it had
failed to take account of the proper construction of Clause 15 of the s.52
Agreement. This provided :
"15. The Company shall neither cause nor permit the development to
be carried out
on land to the north of Poplar Road until :
a. The dedication to the public of the Link Road as a
continuous through route from Victoria Road to Bath Road and __________
b. The closure of the railway bridge on Poplar Road to
all motor vehicular traffic save buses and emergency vehicles__________"
Pye contended that so far as concerns the residential designated land to the
north of Poplar Road, Clause 15 did not affect or restrict development under
any fresh planning consents that might be applied for and obtained after
January 1988. Accordingly, in valuing the northern land, the only obstacle to
the development of that land was the need to obtain fresh planning permission,
and there was no separate need to remove the restriction in Clause 15. By
contrast Clause 9 of the agreement provided that only 40% of the industrial
land could be developed at all before the link road was completed and so it
would in this case be necessary to obtain the release of the undertakings given
in Clause 9. The Court of Appeal upheld this submission and held that the
Lands Tribunal as a fact finding body, had not made a finding of fact
specifically on this point, and that it appeared to be at least possible that
the Tribunal had overlooked it.
Buxton L.J. said :
"......However, on the true construction of the section 52 agreement as set out
above, any difficulty in securing the release of that agreement would not
prevent Pye from developing the residential land, provided that it could obtain
a new planning permission, since all that was inhibited by the section 52
agreement was development of that land under the existing planning
permission.
The Tribunal did not distinguish in its reasoning between the limitations on
development of the residential land, which made up the major part of the
development value of the Pye land as a whole, and the limitations on
development of the industrial land. That difference may affect the outcome of
the Tribunal's valuation process, if inhibition imposed by the section 52
agreement were regarded as more likely to cause delay than inhibitions imposed
by the planning permission. We cannot however know from the Tribunal's
reasoning what assumption it made about the effect of Clause 15 of the section
52 agreement and whether that assumption affected its conclusion."
and Hobhouse L.J. said :
"The Lands Tribunal made no reference to this point in the critical part of its
reasoning on pages 59 and 60. The development value of the northern land was
financially important as is demonstrated by appendix 9 to the reasons.
How this factor would affect the valuation of the reference land is a question
of fact. Maybe it would not affect it at all. There are some indications in
the reasoning of the Tribunal that this was or would be their view. They were
seeking to arrive at a figure which a willing (hypothetical) vendor would be
likely to accept and the interested purchaser be willing to pay, rather than a
precise calculation. This was a proper approach. (Rule 2) Further they
clearly excluded any consideration which might arise from the fact that one or
other part might also be the relevant planning authority. (See the lower part
of page 59.) But it remains the position that the Lands Tribunal, as the fact
finding body, has not made a finding of fact specifically on this point and it
appears to be at least possible that they overlooked it."
The award was remitted to the Lands Tribunal with a direction that they
re-consider their award taking into account the limited effect of Cl.15 and
publish a fresh award either confirming or varying their previous
assessment.
THE SECOND LANDS TRIBUNAL HEARING
On this occasion Pye contended that the purchase price should be either
£19k (with a zero attribution to the residential development land) or,
alternatively, £25k (attributing £5,842 to the residential
element).
In advancing these figures Pye took as its starting point Appendix 9 to the
original decision and de-constructed it in their Appendix `A'. The valuations
of £19k and zero or £5482 were arrived at on the basis of a re-worked
Appendix 9 calculation but without reference to the methodology adopted by the
Lands Tribunal.
[It is a significant feature of this appeal that the arguments advanced on
this occasion included those which are now advanced on this appeal but which
were not taken when the matter was before the Court of Appeal previously. We
were told that these arguments did not occur to any of the lawyers or expert
witnesses until after the Court of Appeal hearing and the penny dropped before
the remitted hearing. I shall return to this aspect at a later stage.]
Mr Robin Purchas Q.C. on behalf of Pye submitted that in the light of the
Court of Appeal's ruling no allowance for delay would have been made by the
purchaser in respect of the residential developed land because ;
1. The period of two years would have reflected to a material extent the time
taken for the amendments of the s.52 agreement.
2. The purchaser would have recognised that, even if he acquired the reference
land, he would not have been able to commence the residential development for
18 months, and possibly more, because of the requirement to close the Poplar
Road bridge ; thereafter the residential development would have been further
deferred, whilst a necessary infrastructure was put in.
3. Moreover, there was evidence that the purchaser would have taken into
account that the effect of the delay would be offset by a rise in residential
land values."
Leading counsel further submitted that the prospects of a successful
application and absence of an appeal were so favourable that the purchaser
would not have attributed any additional value in the reference land.
Accordingly there should be a zero valuation. He produced a calculation for
the industrial development land based on an assumed fresh planning application
and s.52 agreement amendment of £37,470 which after deductions for
betterment (£18,500) resulted in a final figure of £19k.
Mr Purchas put forward a calculation to show that the diminution in value of
the industrial development land, on the assumption that the purchaser did not
purchase the reference land but sought a fresh planning permission and an
amendment to the Section 52 agreement was £37,470. On Mr Purchas'
submission there was no such diminution in value in the case of the residential
development land.
The figure of £37,470 was substantiality less than that of £775,000,
based on 25% of the overall increase in development value. Following the
Tribunal's approach the appropriate value would be say £37,500, less
betterment of £18,500, a final figure of £19,000.
Alternatively, if the Tribunal concluded that there should be some allowance
for the residential development land, it should be £5,842, based upon the
difference in value assuming a 23.5 months delay to achieve a fresh planning
permission, and a delay of 18 months, based on that likely to be occasioned by
the delay in the closure of the Poplar Road bridge, plus a 5% allowance for the
risk of further delay.
Thus the overall figure would be £19,000, in respect of the industrial
development land and £5,842, in respect of the residential development
land, producing a total of £24,842 say £25,000.
Not surprisingly Mr Christopher Cochrane Q.C. then appearing for the vendors
contended that Pye had not taken the point either before the Tribunal
originally or before the Court of Appeal that the development of the
residential development land was delayed in any event by the need to close the
Poplar Road bridge. Leading Counsel submitted that in view of the Court of
Appeal's terms of the remission it was not open to the Tribunal to make an
alternative award, but should simply say what difference there would have been
if the Tribunal had correctly appreciated the true effect of Clause 15 of the
s.52 agreement.
In its decision the Tribunal dealt firstly with the way they had to approach
the remission back to them in the light of the Court of Appeal's judgment.
They concluded that their task was limited to the consideration of the
following questions :
"(1) Was the effect of Clause 15 of the section 52 agreement taken into
account in our original decision in determining the amount the hypothetical
vendor and purchaser would have agreed upon in respect of the reference
land?
(2) If the effect of Clause 15 as agreed by the parties and determined by the
Court of Appeal) was not taken into account, would it have made any difference
to the outcome of the hypothetical negotiation?
(3) If it would have made a difference what is the effect in money terms?"
They acknowledged that the full effect of clause 15 had been overlooked. They
then considered whether taking into account the limited effect of clause 15
would have made any difference to their assessment of delay, costs and
uncertainty affecting the mind of the purchaser. They stated :
".... Nevertheless, in fairness to the purchasers, in retrospect we believe
that the full effect of Clause 15 was overlooked, in that we did not have
regard to the fact, which the parties agree to be the fact, that the owner of
the residential development land could, if he applied for and obtained
alternative planning permission, proceed with the development of that land
without having to obtain a variation or release of his obligations under Clause
15.
We therefore turn to consider whether taking account of the limited effect of
Clause 15, would have made any difference to our assessment of what we
described as the `delay, costs and uncertainty' affecting the mind of the
purchaser of the reference land, as owner of the restricted residential
land."
Although there was a strong case for granting a fresh planning application
there remained a significant element of uncertainty as to whether the
residential land could be developed and which would have affected the minds of
the parties. They concluded :
"However, given that, if a fresh planning permission had been obtained in
respect of the residential development, there was no need to take account of
any delay, costs or uncertainty in relation to an amendment of the Section 52
agreement, we consider that the purchaser would have calculated the price of
the reference land by reference to a significantly lower proportion of the
development value of the residential development land ; we find that the
bargain would have been struck on the basis of 12.5% or £327,250.
In the circumstances which we have to envisage, we would still determine the
price by reference to 25% of the development value of the industrial
development land i.e. £119,250.
We therefore find that, if we had correctly interpreted the provisions of
Clause 15 of the section 52 agreement, we should have arrived at a total of
£446,500, from which we should have deducted £18,500 in respect of
betterment, to produce a final figure of £428,000, which is the amount of
our revised award."
This Appeal
The questions posed in the Case Stated for the determination of this appeal are
:
(a) Did the Tribunal err in determining compensation on the basis of 12.5% of
the residential development value?
(b) Did the Tribunal err in restricting its reconsideration of its original
determination to the questions set out in lines 34 to 45 at the foot of page 3
of its decision dated 9 October 1998 ; in particular, did it err in determining
its award by reference to a development value of £119,250 in respect of
the industrial development land?
(c) Further or alternatively, were the Tribunal's conclusions in respect of
(a) and (b) above perverse and/or in conflict with the Tribunal's original
findings and/or the evidence?
(d) Further or alternatively, did the Tribunal fail to give any, or any
adequate, reasons for its decision?
The First Ground
Mr Purchas submitted that the Tribunal erred in determining compensation on
the basis of 12.5% of the residential developed land value.
The Tribunal had originally found that the potential purchaser would have
estimated about two years to achieve the alternative solution enabling
development of the residential land and would have allowed 20% for cost and
uncertainty. In its remitted decision the Tribunal accepted that it had
`overlooked' the fact that the s.52 agreement would not bind development of the
residential land pursuant to a fresh application and that the Planning
Authority would have difficulty in refusing such permission. Moreover the
Tribunal had originally found that the residential development would have been
deferred in any event because of the requirement to close Poplar Road bridge,
allowing 18 months with a 5% risk factor, followed by the installation of
infrastructure. Even assuming the same 20% allowance for cost and uncertainty,
the Tribunal's figure of £372k would imply a delay of 2½ years
(i.e.25%) longer and well in excess of the two years originally found on its
flawed assumption. Accordingly, given the absence of the need to secure
amendment, it would be perverse to conclude that the delay would be longer and
unreasonable not to allow some reduction in the allowance for risk.
Leading Counsel recognised the difficulty in advancing this ground before this
Court. He suggested that the point was not entirely novel and was first
ventilated at the original hearing before the Tribunal but not adjudicated
upon. The point was not raised before the Court of Appeal on the last occasion
due to oversight. Neither experts nor lawyers appreciated its full
significance until the interval before the remission hearing. Once raised it
was incumbent upon the Tribunal to consider, and in the light of its obvious
merit, to determine the point in the Appellants' favour. In order to do
justice between the parties this Court should exercise its discretion,
entertain the argument and decide the issue even if it meant a further
remission to the Lands Tribunal.
I have no hesitation in rejecting this argument or refusing to allow the point
to be taken. In Henderson v. Henderson (1843) 3 Hare 100 Sir James Wigram V-C stated the law as follows (at pp114-115).
"Where a given matter becomes the subject of litigation in, and of adjudication
by, a court of competent jurisdiction, the court requires the parties to that
litigation to bring forward their whole case, and will not (except under
special circumstances) permit the same parties to open the same subject
of litigation in respect of matter which might have been brought forward as
part of the subject in contest, but which was not brought forward, only because
they have, from negligence, inadvertence, or even accident, omitted part of
their case. The plea of res judicata applies, except in special cases,
not only to points upon which the court was actually required by the parties to
form an opinion and pronounce judgment, but to every point which properly
belonged to the subject of litigation, and which the parties, exercising
reasonable diligence, might have brought forward at the time."
The rule is thus in two parts. The first concerns issues which were actually
decided by the Court, this is `res judicata' in the strict sense. Secondly,
those which might have been brought forward at the appropriate time, but were
not. The latter is not strictly res judicata but is founded on the principle
of public policy in preventing multiplicity of actions, it being in the public
interest that there should be an end to litigation in which event the Court
will stay or strike out the subsequent action as an abuse of process.
Mr Purchas sought to rely on dicta of Auld L.J. in Bradford & Bingley
B.S. v. Seddon 1999 1WLR 1482. These suggest that the party raising the
issue of abuse should be required to establish prejudice and that it was not
upon the claimant to persuade the Court that there are special circumstances
for re-litigation. These observations were made in a case where there was an
unsatisfied judgment on a claim by a defendant in an earlier action against a
third party. In a subsequent action against the defendant the latter issued
third party proceedings against the original and different third parties. The
Court of Appeal held that since the pleadings and judgment in the first action
were arguably equivocal and since not all the differences in the plaintiffs
claims in the second action were unequivocal the third parties had failed to
establish abuse of process and there were no grounds for striking out. Thus
that case turned on its own special facts which were far removed from those in
the present case and I have not been greatly assisted by the observations
relied upon.
I take as my starting point the statement of principle of Lord Bingham C.J.
in Barrow v. Bankside Agency Ltd [1996] 1 W.L.R. 257, 260
when he said :
"The rule is not based on the doctrine of res judicata in a narrow sense, nor
even on any strict doctrine of issue or cause of action estoppel. It is a rule
of public policy based on the desirability, in the general interest as well as
that of the parties themselves, that litigation should not drag on for ever and
that a defendant should not be oppressed by successive suits when one would do.
That is the abuse at which the rule is directed."
I accept Mr. Terence Etherton QC's submission that the issue between the
parties and for the Lands Tribunal exclusively to determine was one of
valuation. That was substantially determined at the first hearing. In so far
as Pye succeeded in the Court of Appeal it did so on an issue of law, viz. the
correct construction of Cl.15. In my judgment the effect of the Court of
Appeal's decision and direction was to constrain or limit the Tribunal to
considering whether the correct interpretation had been taken into account, and
if not, what adjustment was required. Subject to this one discrete point it
was not open to the Tribunal to re-visit the valuation, or the methodology it
had employed in order to reach its original conclusion. The reason was quite
simply that the issue of fact had already been determined between these parties
and both the notional vendor and purchaser were and are estopped as a matter of
public policy from raising the issues again.
Alternatively, if issue estoppel did not apply and assuming for the purposes
of this case that the burden lay on the respondent, it would have been an abuse
of process to allow the Appellants to re-litigate the matter either on the
second hearing and would be so before this Court, or on a further re-mission to
the Lands Tribunal. The point sought to be made is one of detailed valuation
methodology and analysis which could have been made by Pye in the original
valuation process before the Tribunal. It may be, as Mr Purchas suggested,
that the argument was raised on that occasion but was not determined. Assuming
this to be so I consider it safe to infer that the argument was given
prominence and that it did not find favour with the Tribunal. One might then
reasonably have expected an attempt to raise it in the Court of Appeal. Even
accepting that this was due to oversight it is highly unlikely that the Court
would have entertained the point. They would probably have considered (as I
do) that the point was one of fact and not of law. It is not without
significance that Mr Purchas acknowledged (correctly) that if this argument had
been the sole ground in the first Notice of Appeal he would have faced a
formidable (if not impossible) task of then persuading the Court that, as a
matter of law, it fatally flawed the original adjudication.
I accept Mr Etherton's submission that to permit the point to be taken now
would, in effect, enable an appeal to be made without leave and well out of
time and to ignore or outweigh the prejudice to the Respondent in the waste of
time, cost and effort which could have been saved if the point had been taken
and determined on that appeal, prior to the second Tribunal hearing.
I have come to the conclusion, therefore, that this appeal is misconceived as
a matter of law, and amounts to an abuse of process. If we were to entertain
the point and if it were to find favour with this Court, it would inevitably
lead to a further remission to the Lands Tribunal, delay in the payment of
compensation and disproportionate prejudice to the Respondents.
The Second Ground
The Appellants Asserts that the Tribunal erred in restricting its task to the
question it asked itself. On the reference the Tribunal's task was to
determine the sum that should be paid on the deemed compulsory acquisition of
the reference land. Having decided the proper effect of the s.52 agreement had
not been taken in to account the Tribunal in effect determined that its
original award could not be sustained. The Tribunal should then have
determined the appropriate sum on the basis of its findings as set out in the
original decision. Had it done so, it could not have based the determination
in part upon the value of £119,250 for the industrial element when on its
own findings the advantage in acquiring the reference land for that purpose
was, at its highest, £40,877. This figure constituted the difference
between deferment for 2 years as against deferment for 6 months but with the
cost of constructing the link road plus 20% for cost and uncertainty. Not to
have done so was perverse, and/or in conflict with its original findings and/or
the evidence.
I am unable to accept this argument. The Court of Appeal remitted the case
solely on the basis of the s.52 Agreement. Once the Tribunal acknowledged that
it had not taken the Cl.15 effect as construed by the Court of Appeal into
account its sole task was to determine what the result would have been if it
had. This task did not require the Tribunal to re-determine the whole question
of what sum should be paid on the deemed compulsory acquisition. The Court of
Appeal made it abundantly clear that it was not to do so.
The ground is nothing more than an attempt to impugn the methodology of the
Tribunal and to bring into the domain of the Court of Appeal issues of fact to
persuade us to substitute the Appellants own methodology. There was nothing
perverse in the Tribunal adopting and applying its own methodology and
rejecting the Appellants' nor can it be said that the end result was one which
no reasonable tribunal properly addressing the evidence on both occasions could
reasonably have reached.
The Third Ground
Finally it is said that on the remission the Tribunal failed to give any or
any adequate reasons for its decision and as a result the Appellants has been
prejudiced
The Lands Tribunal's function was to arrive at a figure which (hypothetically)
a willing vendor would be likely to accept and a purchaser would be willing to
pay, rather than a precise calculation. The Lands Tribunal is a specialist and
expert statutory tribunal whose very function is to understand and reflect the
realities of a complicated transaction based on a deemed compulsory purchase.
The valuation exercise is a matter for the expertise of the Tribunal in which
the Courts will not interfere. The Tribunal has to reach `broad and robust'
conclusions about hypothetical events in a setting long in the past. The
methodology to be adopted was exclusively for them to decide, and in the
absence of exceptional circumstances is not subject to review by this Court.
Given this analysis and the methodology revealed by the Tribunal at both its
hearings there can be no room for doubt as to how the Tribunal went about its
task and the basis upon which it reached its conclusions. No further
elaboration was called for and the Appellants cannot realistically claim that
they do not know how the valuation was arrived at or, that they are in any
sense prejudiced.
Conclusion
It follows that in any event I would respond to each of the four questions
raised in the Case stated in the negative and dismiss this appeal.
Lord Justice Ward:
When this matter was last before this court the main part of the appeal centred
upon the application of the Pointe Gourde principle as it has been
developed from Pointe Gourde Quarrying & Transport Co. Ltd. v
Sub-Intendent of Crown Lands [1947] AC 565. At the heart of it lay the
identification of the scheme underlying the compulsory acquisition. There was,
however, another point. At the beginning of his judgment Buxton L.J. stated it
as follows:-
"Pye have a further and subsidiary ground of appeal, to the effect that if they
fail on their main ground, and it is held that the Lands Tribunal adopted the
correct approach, nevertheless the Tribunal erred in applying that approach in
one particular respect, or alternatively did not sufficiently explain their
reasoning on that point."
Having dismissed the Pointe Gourde challenge, Buxton L.J. then
characterised the subsidiary point in this way:-
"I turn to consider Pye's complaint about the Tribunal's application of the
method of valuation adopted by it."
It is clear from that statement that the method of valuation was directly in
issue. Buxton L.J. considered it. He accepted the submissions of Mr Cochrane
Q.C.:-
"first, the actual valuation exercise is a matter for the expertise of the
Tribunal, in which this court will not interfere; and second that in
conducting the valuation in this case the Tribunal had of necessity to reach
broad and robust conclusions about hypothetical events in a setting now long in
the past. The difficulty that I now address however exists despite the
adoption of both those principles or assumptions.
The Tribunal approached its task, on the basis of the general assumptions that
I have held to be correct, by asking, first what was the development value of
the Pye land; and then considering what the owner of the reference land could
have obtained for that land from a developer of the Pye land who wanted to
unlock that development value. The Tribunal concluded that the starting point
for calculating that, "ransom", price for the reference land would have been
50% of the development value of the Pye land. However the Tribunal
acknowledged that there were alternative solutions for the developer of the Pye
land other than the completion of the link road. He could apply for fresh
planning permission ... Further, as the Tribunal found, an amendment to the
section 52 agreements would also have been required. ... The successful
achievement of those alternatives would have robbed the reference land of its
premium value, and the threat to do that would have been present to the mind of
the hypothetical owner of the reference land: to the extent as the Tribunal
found that he would have accepted substantially less than the starting figure
of 50% of the development value of the Pye land.
The Tribunal continued:-
"One of the factors which would clearly be present in the minds of both parties
to the negotiations would have been the delay, costs and uncertainty inherent
in the pursuit of a revised planning permission and amended section 52
agreements by the purchaser. In this context we have carefully considered the
alternative valuation. We think that a potential purchaser would be likely to
have estimated that the time taken to achieve the potential alternative
solutions would have been about two years."
On that basis the Tribunal calculated a cost to the developer imposed by that
necessary delay in realising the development value of his land. ... That
reduced cost led the Tribunal to conclude that a vendor of the reference land,
realising that there was an alternative available to the purchaser, would have
accepted substantially less than the starting hypothesis of 50% of the full
development value of the Pye land. The Tribunal therefore reduced that figure
from 50% to 25%.
All of the foregoing turns on the judgment and expertise of the Tribunal, and
is not and cannot be challenged before us."
One of the valuation exercises which the Tribunal had conducted and which was
therefore before the Court of Appeal and which the Court of Appeal held was not
and could not be challenged was the cost to the developer imposed by the
necessary delay in releasing the development value of his land. That was the
assessment carried out by the Tribunal in Appendix 9 in which the Tribunal sets
out how it arrives at the figure of £950,000. On one analysis, that
aspect of the Tribunal's judgment and so that issue has already been approved
by the earlier judgment of this court and on that basis the appellant is
estopped from re-litigating that issue.
Even if that conclusion is wrong, and this is not a case of true issue
estoppel, then the rule in Henderson v Henderson (1843) 3 Hare 100, 115
comes into play. Pithily expressed in the opinion of the Privy Council in
Yat Tun Investment Co. Ltd. v Dao Heng Bank Ltd. [1975] AC 581,
590:-
"...it becomes an abuse of process to raise in subsequent proceedings matters
which could and therefore should have been litigated in earlier
proceedings."
Mr Purchas Q.C. does not plead special circumstances excusing the appellant
from compliance with the duty to bring forward his whole case at the outset.
He frankly acknowledges that the arguments now advanced were not advanced to
the Lands Tribunal when first they heard the matter. It is, therefore, no
surprise that the case stated makes no mention of a challenge to the exercise
culminating in Appendix 9. Assuming - for I am not at all sure that it raises
a point of law - that the Court of Appeal could or would have permitted the
point to be taken, the fact is that it was not taken. If the penny had dropped
in time, then an attempt could have been made to mount the challenge. That was
the time to do it. The rule is: if the point could have been taken, it should
have been taken.
Mr Purchas is, therefore, thrown back to a submission that a huge injustice
would be done to the appellants if they were saddled with a liability of
£428,000 when, if his current submissions are correct (and I am very far
from convinced that they are), liability would have been £19,000 at most.
I see the force of the submission taken at face value. Nevertheless a greater
injustice would be done if the respondents were to be sent back to the Lands
Tribunal for the third time three and a half years after the first decision.
In balancing the justice of the case the court is entitled to have regard to
the affront to the administration of justice as a whole which these days
demands that the emphasis be on the prevention of prolixity in litigation and
the encouragement of the earliest resolution of disputes. It is now too late
for the appellants to mount another challenge to the Tribunal's first decision.
Mr Purchas submits that since the second Tribunal were bound by this court's
order "to reconsider their award", they were obliged to carry out a proper
valuation as soon as they acknowledged their first attempt had been flawed by
their mistake and their new approach to their valuation can be subject to fresh
challenge in this court if it was wrong. It is to be noted that all the points
Pye wished to advance to support its new arguments were advanced but they found
little favour with an expert tribunal which can be relied upon to understand
their significance and whose judgment should be final. Moreover, so far as
this court is now concerned, all we can do on this further appeal, as I
understand our position, is answer the questions of law in the case stated to
us. Those questions are:-
"(a) Did the Tribunal err in determining compensation on the basis of 12.5% of
the residential development value?
(b) Did the Tribunal err in restricting its reconsideration of its original
determination to the questions set out in lines 34-45 at the foot of page 3 of
its decision dated 9th October 1999; in particular, did it err in determining
its award by reference to a development value of £119,250 in respect of
the industrial development land?"
[Those questions were:
"(1) Was the effect of Clause 15 of the section 52 agreement taken into account
in our original decision in determining the amount the hypothetical vendor and
purchaser would have agreed upon in respect of the reference land?
(2) If the effect of Clause 15 (as agreed by the parties and determined by the
Court of Appeal) was not taken into account, would it have made any difference
to the outcome of the hypothetical negotiation?
(3) If it would have made a difference what is the effect in money terms?"]
"(c) Further or alternatively, were the Tribunal's conclusions in respect of
(a) and (b) above perverse and/or in conflict with the Tribunal's original
findings and/or the evidence?
(d) Further or alternatively, did the Tribunal fail to give any, or any
adequate, reasons for its decision?"
To answer the first question, the Tribunal did not, in my judgment, err in
determining compensation on the basis of 12.5% of the residential development
value. This court has already approved the approach the Tribunal adopted in
its first decision of first assessing the development value of the land and
then, from the starting point of calculating the price at 50% of the
development value, reducing the percentage to 25% to take into account the
alternative solutions open to the purchaser. In its second decision, a further
reduction from 25% to 12.5% was made to allow for the error of fact the
Tribunal acknowledged it made on the first occasion. The Tribunal did what it
was required by the judgment of this court to do and the further reduction to
12.5% was within their judgment and expertise. It cannot be challenged before
us.
As to the second question, the Tribunal did not err in its analysis of what
Buxton and Hobhouse L.JJ. required it to do nor in formulating the questions it
did. In particular it was entitled to determine its award by confining the
impact of its error to the valuation of the land which was affected by that
error, i. e. the residential land to which Clause 15 related, and it follows
that in my judgment it did not err in leaving its original valuation of the
industrial land intact. That part of their valuation was not affected by the
reference back to them following this court's first appeal.
As for the remaining questions, in my judgment their conclusions were not
perverse but a wholly logical reworking of the figures to eliminate the effect
of their error. Their decision is encapsulated in this paragraph which in
itself provides an adequate reason for their judgment:-
"It is important in this context to bear in mind that the reference land was a
"ransom strip", that is to say it had a ransom value in the hands of the
vendor. That was a primary finding which the Court of Appeal affirmed. As Mr
Cochrane observed, the suggestion that the ransom obtainable was some minute
and insignificant fraction of the released development value is an
absurdity."
For these reasons, and for the reasons elaborated by Otton L.J. I too would
dismiss this appeal.
Mr Justice Evans-Lombe
I agree with my Lords.
Order: Appeal dismissed; Summary Assessment of costs agreed - £25,
274.
(Order does not form part of approved judgment.)