England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE LANDS TRIBUNAL

		Royal Courts of Justice Strand London, WC2
		9th March 2006

1. LORD JUSTICE SCOTT BAKER: On 26 February 1999 the claimants, Mr and Mrs Richards, made a reference to the Lands Tribunal. This was in order to ascertain the amount of compensation payable following confirmation of a purchase notice. The claimants, as the owners of a strip of land approximately 78 x 18 metres on the line of the proposed eastern distributor road ("EDR") at Rosewood Farm, Burnham-on-Sea, Somerset, required the local planning authority to purchase their interest in it pursuant to section 137 of the Town and Country Planning Act 1990. The purchase notice having been confirmed by the Secretary of State, the local planning authority was deemed to have been authorised to acquire the land compulsorily under Part 9 of the Act. Compensation then became payable on compulsory purchase principles.
2. On 19 October 2000 the Lands Tribunal determined two preliminary issues. These were whether an indication had been given for the purposes of section 9 of the Land Compensation Act 1961, and whether a scheme underlay the acquisition by the planning authority. Both questions were answered in the negative. On 25 July 2002, the Lands Tribunal determined the amount of compensation. The figure was £100,000. The applicants had sought £ millions and claimed that the land had ransom value, but this was rejected. The applicants sought, but were refused, permission to appeal against a second decision. They later sought, out of time, permission to appeal against the first decision. Again this was refused. The present application is a second attempt to obtain permission to appeal against the first decision. The basis of the present application is fresh evidence comprising 19 previously undisclosed documents and a witness statement from a Mr Condor.
3. The relevant test for fresh evidence is set out in the well-known case of Ladd v Marshall [1956] 1 WLR 1489 which broadly can be summarised as follows:

"1. that the evidence could not have been obtained with reasonable diligence for the trial or the hearing below;

"2. it would probably have had an important influence on the result although this need not be decisive; and

"3. that it is apparently credible."

4. The respondents argue:

"1. that it is unlikely that the determination of the preliminary issues would have been any different;

"2. that the applicants were advised by very experienced leading and junior counsel and solicitors and if there was anything to be done about inadequate discovery, it would have been done at the time;

"3. it is well over five years since the decision was made that is now sought to be impugned; and

"4. that the tribunal proceeded to a further hearing, that is the July 2002 determination, in consequence of the now impugned decision and that that decision is not the subject of any application for permission to appeal."

5. I first say a brief word about the background. The land ("the reference land") is about a third of an acre in area and lies to the east of the developed area of Burnham-on-Sea and on the line of the proposed EDR, and also close to an area called Rosewood Farm where many permissions have been given for housing and other development between 1988 and 1999. The whole development comprises about 850 dwellings and a shopping centre and car park. The applicant, Mr Richards, had been chairman of a house building company called Magnus Homes South West Limited ("Magnus"). This company owned land forming part of Rosewood Farm. The reference land was a small part of this. On 14 February 1997, Magnus transferred a number of small parcels of land in different locations, one of which was the reference land, for £82,000 to a company called Hardpart Limited, which was a company wholly owned by the applicants. Six months later, on 27 August 1997, those parcels were transferred to the applicants.
6. Two days afterwards, that is on 29 August 1997, the applicants applied for planning permission to build a house on the reference land. This was refused by the local planning authority, Sedgemoor District Council ("SDC"), on the ground that the proposed development lay on the line of the proposed EDR, which was protected from development through policies in the local plan. On 17 October 1997 the applicants served a purchase notice on SDC. There was a public enquiry. The purchase notice was confirmed by the Secretary of State on 22 January 1999, but the Secretary of State substituted Somerset County Council as the acquiring authority because it was the highway authority and the land had been safeguarded for highway use. Somerset County Council ("SCC") was therefore deemed to have been authorised to acquire the land compulsorily under Part 9 of the Town and Country Planning Act 1990.
7. On 5 February 1999 the applicants' valuers submitted a compensation claim for about £6 million. The argument was that the reference land was crucial to a large area of development at Rosewood Farm, which could not proceed without the EDR on whose line the reference land lay. On 26 February 1999 the applicants, as I have already mentioned, referred their claim to the Lands Tribunal. On 18 August 1999, SCC took possession of the reference land and this became the agreed date for valuation purposes for assessing compensation.
8. I refer next to the chronological history with regard to the locality in question. In 1976, SCC resolved to approve the line of the EDR so that it could be protected and included in the local plan. Between 1982 and 1990, SCC prepared and eventually adopted a local plan for Burnham-on-Sea. Policies in the plan provided for a substantial area on the east side of Burnham-on-Sea, known as Rosewood Farm, to be developed for housing and certain other purposes, including retail use. Policy BH/T4 referred to the construction of the EDR for two purposes: to secure the provision of an improved highway network in the area, and to ensure that new residential development had suitable access to the highway network. The plan expressly provided that the road would be a district distributor road, that its timing would be dependent upon phases of adjacent development and that developers were to be required to enter into agreements under section 106 of the 1990 Act to secure financial contributions.
9. In 1989 SDC published a development guide, which took the form of a plan of the Rosewood Farm area with annotations to indicate the intended phasing, infrastructure and other information. The area proposed for development at Rosewood Farm was in a number of ownerships. Many of the owners were developers who had acquired interests in anticipation that Rosewood Farm would be designated for development in due course. SDC, as local planning authority, had to devise a mechanism which would ensure that the parcels of land would come forward for development in an ordered manner and that each parcel made an appropriate contribution to the provision of infrastructure, including the EDR.
10. So far as the EDR was concerned, the approach in the development guide was as follows: applicants for planning permission who controlled land on the line of the EDR were to be required, by means of section 106 agreements, to make the land available and to construct a section of the road. Applicants who did not control land on the line of the road were to be required to make a financial contribution pro rata to their acreage of the development. The development guide provided for Rosewood Farm to be developed in three phases, from north to south. The development in the first phase was to be provided with access by means of local distributor roads leading off a length of the EDR, which was to be connected to the existing highway network at its northern end. In the second phase, development was again to be provided with access by means of local distributor roads connected to a further length of the EDR while it was still connected to the existing highway network at its northern end only. A condition was to be imposed on planning permissions which prevented occupation of dwellings in phase two until the EDR had been constructed as far south as a point marked 'A' on the development guide. In the third phase, the EDR was to be constructed so as to connect with the existing highway network to the south of Rosewood Farm. A condition was to be imposed on all planning permissions which prevented occupation of dwellings until the EDR had been connected from north to south. This mechanism was devised with a view to ensuring that the EDR was constructed from north to south by developers before the development of Rosewood Farm was completed.
11. Between 1988 and 1994, a number of planning permissions were granted for development of land comprising parts of Rosewood Farm. Each was accompanied by an agreement under section 106, and these were in evidence before the tribunal. Each made provision for the EDR either by construction of a section, or by contribution as required by the development guide.
12. For the purposes of the hearing in the Lands Tribunal, a plan was prepared comprising the development guide with additional information to show planning permissions subsequently granted. Of particular significance was the planning permission granted to Magnus on 9 February 1994. The land to which it related was within that part of Rosewood Farm identified as phase three in the development guide. Under the development guide, any planning permission granted for development within phase three should have been subject to a condition that no house could be occupied until the EDR had been completed. However, due to delays in phases one and two coming forward, Magnus wished to progress the development of its own land. It therefore advanced a proposal which involved the construction of a roundabout at the southern end of the EDR at the junction of Worsten Road and Peverill Road, one arm of which would provide an access into Magnus' land and another arm of which would serve as a connection to the EDR. Magnus persuaded the SDC and the SCC that this would be a satisfactory highways solution and, notwithstanding the provisions of the development guide, SDC and SCC took the view that there were no grounds for refusing planning permission for residential development of the Magnus land with access provided in this manner. As the Lands Tribunal records, this planning permission represented a departure from the development guide.
13. Between 1994 and 1999, further planning permissions were granted for development including, in 1996, an additional area owned by Magnus. All were accompanied by section 106 agreements, requiring either provision of the EDR or a financial contribution. The development guide envisaged that the whole of phases one and two would be constructed and accessed by means of the northern part of the EDR, with a single connection to the highway network at Love Lane roundabout. Phase three would then have provided the through connection to the south. Had the development of Rosewood Farm proceeded in accordance with the development guide, the EDR would almost certainly have been completed by developers. However, as a result of Magnus' proposing a roundabout at the southern end of the EDR in order to provide access to its own land, it obtained permission and its land was developed ahead of parts of phases one and two. There was then no incentive for Magnus, which at that time owned the reference land, to provide the EDR on the reference land because no other developer had any commercial incentive to negotiate with Magnus to achieve this; and SDC judged, rightly or wrongly, that it was not in a position to require Magnus to enter into a section 106 agreement which committed Magnus to do so.
14. I turn next to the application to the Lands Tribunal. The applicants' valuer's report put the value of the compensation at £3.28 million, i.e. less than the £6 million in the original claim, but nevertheless arrived at on broadly the same ransom basis as the original claim. Two questions were critical to the tribunal's decision on the amount of compensation. The first turned on section 9 of the Land Compensation Act 1961 and whether there was an indication within the meaning of that section. The issues to be determined by the tribunal were defined as follows:

"1. Whether as the council contends, the reference land should be valued having regard to all the facts at the valuation date including the fact that the parts of Rosewood Farm which remained undeveloped were not dependent through planning condition section 106 agreement or any other means upon completion of the eastern distributor road across the reference land; or alternatively

"2. whether as the claimants contend, 1) an indication within the meaning of Land Compensation Act 1961 section 9 was given that the land would or would be likely to be acquired by SDC or SCC; 2) such indication caused depreciation in the value of the reference land at the valuation date within the meaning of the Land Compensation Act 1961 section 9;

"3. the scheme underlying the acquisition for the purposes of the point gourd rule that existed prior to confirmation of the purchase notice."

15. As I have mentioned, the first question turned on section 9 of the Land Compensation Act 1961. That section provides as follows:

"No account shall be taken of any depreciation of the value of the relevant interest which is attributable to the fact that (whether by way of allocation or other particulars contained in the current development plan or by any other means) an indication has been given that the relevant land is or is likely to be acquired by an authority possessing compulsory purchase powers."

16. As the tribunal pointed out, first, for a statement or action to be an indication within section 9 it must be of an intention on the part of an authority possessing compulsory purchase powers that it is, or is likely, to acquire the land. An intention may be evidenced by an action or series of actions. Second, the statement or action said to be an indication must be given by an authority possessing compulsory purchase powers; in this case SDC or SCC. Third, the indication must be available not only to the owner of the land, but also to hypothetical potential purchasers of the land, at the date of valuation. Fourth, the provisions of the 1961 Act should be interpreted liberally. The second main question was whether there was a scheme underlying the acquisition, because compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition. This is known as the Pointe Gourde rule. There was, as I have mentioned, a preliminary hearing that dealt with these points and these points alone. They were resolved against the applicants; i.e. the conclusion was no indication and no scheme.
17. The effect of the tribunal's decision on the preliminary issues was that the reference land had to be valued in the real world rather than as a ransom strip. The assumptions on which the applicants' valuer's report were based were wrong. The applicants sought and obtained leave to produce a fresh valuer's report, approaching valuation on an entirely new tack. Details of this, which seem to me to be irrelevant for present purposes, are set out in paragraph 30 of the respondent's skeleton argument. This time the value of the reference land was put at £4.8 million. The Lands Tribunal held a hearing in April 2002 which lasted over some 14 days. The tribunal rejected the evidence of the applicants' valuer and awarded compensation of £100,000 as assessed by the respondent's valuer.
18. Application for permission to appeal was refused by this court, comprising Pill LJ and Mummery LJ, on 4 February 2003. In the course of his judgment, Pill LJ referred to the tribunal's acceptance of Mr Juniper and Mr Berry's evidence that:

"Although it would be more satisfactory for the two existing lengths of the EDR to be linked across the reference land, the accesses to Rosewood Farm are satisfactory in highway terms."

Pill LJ concluded that there was no realistic prospect of the Full Court quashing the decision and that there was no merit in the grounds of appeal. The application was refused.

19. What happened next was that the applicants sought leave to appeal, out of time, against the October 2000 preliminary hearing decision. This time the application came before Mummery LJ alone, but on notice to the respondent. Mummery LJ said:

"Mr Roots correctly pointed out that this does not necessarily make it impossible for Mr and Mrs Richards to appeal the earlier order because it was pointed out by Mr Roots that in certain circumstances it is possible for the court to set aside an order which it has made refusing permission to appeal. Those circumstances are laid down by this court in the case of Taylor v Lawrence where it was made clear that for such an application to succeed there must be exceptional circumstances which show that there would be a real injustice if the order refusing permission were not set aside. I shall proceed on the basis that it is not impossible for Mr and Mrs Richards to succeed on their application for permission to appeal against the order of 19 October 2000 even though there has been a refusal of appeal against the later decision on the valuation on 2 September 2002."

20. Mummery LJ went on to cite Brooke LJ in Sayers v Clarke Walker. When considering whether to grant an extension of time for an appeal against a final decision in a case of any complexity, the court should consider all the circumstances of the case, including a) the administration of justice; b) whether the application for relief has been made promptly; c) whether the failure to comply was intentional; d) whether there was a good explanation for the failure; e) the extent to which the party in default has complied with other rules practice directions and court orders; f) whether the failure to comply was caused by the party; h) the effect which the failure to comply had on each party; and i) the effect which the granting of relief would have on each party.
21. The thrust of the applicants' attack was that the respondent had not disclosed relevant evidence. Mr Berry and Mr Juniper, crucial witnesses for the respondent – so it was contended to Mummery LJ – had not given truthful evidence. The tribunal was wrong to find there was no indication and no scheme, and would not have done so had these two witnesses given truthful evidence which was unbiased and objective. Mummery LJ, in refusing leave, said that the applicant had two very substantial difficulties in his way, (1) the long period of time that had passed; and (2) that there had been no application for permission to appeal the October 2000 decision, and another decision had subsequently been made on the basis of the ruling now sought to be attacked. He said the only purpose of granting permission to appeal against the preliminary issues decision would be for the purpose of disturbing the ultimate award. If that was an unappealable decision, it would be an empty exercise to embark on an appeal against the earlier order on which the valuation was based.
22. He said at paragraph 18:

"I have been able to look more into the merits of the particular grounds on which Mr Richards seeks to appeal. Although he has set them out at great length in his written submissions and has condensed them in his oral submissions, I find that his points so detailed do come down to a small area of complaint. All his points return again and again to his attack on the evidence of two of the witnesses before the hearing on the preliminary issues and on compensation. He says that their evidence was untrue. There had been a failure of disclosure of material which would have been required to make their evidence truthful and that if it had been disclosed, then a decision would have been different. I am not satisfied that there is any realistic prospect of succeeding in those contentions. It does not come anywhere near the prospect of satisfying this court that the decision of factual questions was a perverse decision in the sense that no reasonable fact finding body could have reached the decision that it did on the preliminary issues."

23. Since the hearing before Mummery LJ on 9 May 2003, the situation has, so it seems to me, changed in three respects: (1) yet further time has passed; (2) the applicant has already been refused an extension of time by Mummery LJ; and (3) the applicant has now produced further material.
24. The appeal was finally disposed of by Mummery LJ on 9 May 2003. The court has power to re-open that decision (see Taylor v Lawrence), but it will only do so if it is necessary to avoid a real injustice. The applicant has produced 19 new documents and a witness statement. He says they should have been available at the hearing and had they been, the result would have been different. In my judgment, the new evidence would have to go very close to showing a prima facie case of fraud on the part of the respondent to justify a grant of permission. In other words, do any of these new documents appear to show that the evidence of Mr Juniper and Mr Berry was demonstrably untrue?
25. The principle of finality in litigation is an important one. The longer a decision has remained undisturbed, the more difficult it will be to persuade this court to disturb it. Over five years have passed in this case. Further, the decision assailed was the basis for another decision and, as Mummery LJ pointed out, there would be no point in overturning the preliminary issues decision unless the court is prepared to overturn the subsequent compensation award. Also, the parties are entitled to know where they stand, and in this regard I note that the underlying compensation claim which the applicants seek to obtain from the local authority amounts to several million pounds. This is, I have little doubt, money that is unbudgeted and would in the end have to fall on the tax payers.
26. Do the new documents produce evidence of (1) an indication or (2) a scheme? Before I seek to deal with that question, I should say a brief word about discovery; because it is the applicants' case that there has been a discovery failure on the part of the respondents and that these documents should have been produced at the preliminary hearing. The discovery at the Lands Tribunal took place under the Lands Tribunal rules. It is not disputed that there is an obligation to disclose all material documents. Before the Lands Tribunal, Mr Purchas QC, who appeared then for the applicants, made an application to the tribunal for further discovery. The tribunal took the view that the discovery sought was too wide. Mr Roots QC, who has appeared for the respondent today – as he did, indeed, earlier and before the tribunal – says that it is difficult in circumstances such as this case for a local authority to know precisely what is required until they hear the claim advanced. Indeed, in this case, bearing in mind that there were two authorities and this was a substantial development, there must have been a vast number of documents and files which might or might not have been relevant.
27. At any rate, assuming for present purposes that these documents should have been before the tribunal, what Mr Roots says in general is that really they are no different in nature to other documents of the same kind that were before the tribunal, raising very much the same kind of point. Mr Richards – who, if I may say so, has advanced this application before us with both realism and moderation – sensibly sought to highlight what he regarded as his strongest material in the fresh evidence. He referred first to a letter dated 6 January 1994 from the SDC to the solicitors of Magnus, the company with which he was concerned. Now in the first place, it seems to me that if this is a truly material document it could have been obtained by Mr Richards for the hearing. His response is that he fell out with Magnus and had nothing to do with them, or they would have nothing to do with him, by the time of the preliminary hearing before the tribunal.
28. Be that as it may, this was a letter from the Sedgemoor District Council to their solicitors responding to earlier letters of 20 and 21 December 1993. The critical part of the letter reads:

"So far as the question of ransom strips is concerned, the council after consultation with the county council is prepared to accept that the development guide does not require each developer to actually make up the road to the edge of the development, merely requiring contributions towards the cost of construction and not acquisition."

That response was plainly in answer to a question in earlier correspondence made to the council.

29. Then there is a run of correspondence between pages 114 and 117 in the bundle concerning Bisa Homes. Here the high point appears to me to be at 115, where the Development Control Manager, who I think is Mr Juniper, wrote to the Land and Development Director of Bisa Homes saying he was currently investigating with the solicitor for the council the possibility of beginning the procedures to serve a compulsory purchase order under section 226 of the 1990 Act. And then at page 116, referring to the land in question:

"This is the only major area of residential land allocated in Burnham-on-Sea and I am concerned that the continuing failure of these negotiations is endangering the supply of housing land for the town. I believe that what Bisa Homes have in mind is an attempt by the district council to serve a compulsory purchase order under section 226 of the Town and Country Planning Act 1990."

This was from the Development Control Manager to the solicitor. The SDC reply at page 117:

"I believe in principle that the council would secure the confirmation of a compulsory purchase order under section 226 of the 1990 Act."

30. In my judgment, these documents fall far short of upending the tribunal's decision that there was no indication within the meaning of section 9 of the 1961 Act. They are insufficient to show an indication that the local authority is, or is likely, compulsorily to purchase the reference land, or I should say was or was likely. What happened was that there was a delay in land coming forward for development, and officers were asked by developers to consider compulsory purchase; but no resolution was passed, no decision was ever taken to that effect. It seems to me that at best this material might have been used to ask the odd question in cross-examination of the respondent's witnesses, but in my judgment it goes nowhere near indicating that there was something very seriously wrong with the evidence of the council's representatives.
31. I have considered all the other documents within the 19 documents, and also the statement of Mr Condor; but, as I have said, Mr Richards advanced those documents as, as it were, the high point among the others. As to Mr Condor's statement, his evidence is not new evidence and in my view it does not pass the first test in Ladd v Marshall. Although at the time of the first Lands Tribunal hearing Mr Condor was employed by SDC, there would have been nothing to prevent the applicants requesting him to give evidence and if necessary obtaining a subpoena to require him to do so. At the second hearing before the Lands Tribunal, the applicants applied for permission to introduce Mr Condor's evidence. The Lands Tribunal recorded in its written decision its reasons for rejecting the applicants' application.
32. In broad terms, the respondent's answer to the fresh evidence and documents is first, that they are of similar character to the documents that were before the tribunal and which, the applicant unsuccessfully argued, evidenced an indication or a scheme. Second, that in order to constitute an indication, communication must have been made by the authority possessing compulsory purchase powers and must have been made publicly. There is no evidence that either SDC or SCC passed a resolution to the effect that any part of the land required for the EDR, or the reference land in particular, should be compulsorily acquired. Indeed, there are a number of documents approved by one or both councils making it clear that the EDR was to be provided by the private sector, and not by either of the two local authorities. Also, with regard to a number of documents, the references therein do not relate to the reference land, and there is no evidence that the compulsory purchase of other land was considered other than at officer level. There is no evidence that compulsory purchase was either considered or approved by the council or by any duly authorised committee.
33. In my judgment, where all this leads is that Mr Richards gets nowhere near crossing the very high hurdle, outlined in Taylor v Lawrence, of persuading me that there is a sufficiently arguable case to justify, in these very exceptional circumstances, granting permission to appeal and so re-opening a matter that has been long since closed. I would therefore refuse this application.
34. SIR CHARLES MANTELL: So would I.

Order: Application refused.