COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LANDS CHAMBER, UPPER TRIBUNAL
HIS HONOUR JUDGE JARMAN QC
LCA/354/2009,  UKUT 268 (LC)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE CARNWATH
MR JUSTICE HEDLEY
| THOMAS & ORS
|- and -
|BRIDGEND COUNTY BOROUGH COUNCIL
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Paul Stinchcombe QC (instructed by Bridgend Borough Council) for the Respondent
Hearing date : Tuesday 21st June, 2011
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LORD JUSTICE CARNWATH :
The issue in the appeal
"In the application of this Part of this Act to a highway which has not always since 17 October 1969 been a highway maintainable at the public expense as defined above:
(a) references to its being open to public traffic shall be construed as references to it being so open whether or not as a highway so maintainable;
(b) for references to the highway authority who constructed it there shall be substituted references to the highway authority for the highway;
and no claim shall be made if the relevant date falls at a time when the highway was not so maintainable and the highway does not become so maintainable within three years of that date." (emphasis added)
i) A planning agreement dated 16th June 2000 (under section 106 of the Town and Country Planning Act 1990) provided that the residential development should not begin until construction had begun on the relief road, that the developers should construct the relief road at their own expense in accordance with a "highways agreement", and that no more than 50 dwellings should be occupied until it was open for use by the public.
ii) A "highways agreement" (of the same date) defined the developer's obligations in detail; specified the works to be completed to the satisfaction of the council by a date "no later than four months prior to the opening of the Relief Road for use by the public" (cl 3.7); and required the developer to enter into agreements under the Highways Act 1980 (the "Highways Act") before commencing work (cl 3.8).
iii) Finally, a Highways Act agreement dated 5 April 2002 (under sections 38 and 278 of the Highways Act 1980) set out the process which was expected to lead in due course to the road being adopted by the council as one maintainable at public expense.
i) Having commenced construction of the relief road, the developer was required "diligently and expeditiously (to) proceed with and substantially complete the works within 14 weeks…" (cl 3(c));
ii) The developer would enter into a Bond with the National House Building Council as surety in the sum of £554,270 to reimburse the costs of the council carrying out works on default by the developer (cl 3(m));
iii) The developer indemnified the council against claims arising out of the works including claims for compensation under the Land Compensation Acts (cl 3(r));
iv) A "letter of substantial completion" would be issued by the council's inspector when the works had been substantially completed to his reasonable satisfaction; following which the Bond would be reduced by 90% (2nd sched. para 11);
v) On the issue of the letter of substantial completion, any additional land required to be brought within the highway boundary as a consequence of the works would become "dedicated as part of the public highway" and conveyed to the council at no cost (cl 3(l));
vi) During a 12 month maintenance period following the letter of substantial completion, the developer would make good any defects identified by the inspector as due to defective materials or workmanship (2nd sched para 12);
vii) A "letter of acceptance" would be issued by the inspector at the end of the maintenance period, after any defects had been made good to his reasonable satisfaction, upon which the Bond would be released in full, and the works would become maintainable at public expense (ibid para 13; cl 4(c)).
"The delay in the adoption of the road was a result of wholesale delay by the Developer in completing many minor works, audits and so forth. The Developer was regularly chased by the Council and pressed to carry out the necessary remedial work so that the letter of substantial completion could be produced by the Council."
The Act - background and development
"Where for example a dwelling is depreciated significantly and permanently in value because a noisy road now runs by... the owner can claim for that loss of value..." (para 23)
There would be a threshold of £50 in loss of value to ensure that compensation would be paid "for any significant drop in value while it will exclude frivolous claims" (para 23-4). (I note in passing that, in spite of the significant increases in property values since 1972, the threshold has not changed).
"and no claim shall be made if the relevant date falls at a time when the highway was not so maintainable and the highway does not become so maintainable within three years of that date but, if it does, the claim period shall be treated as continuing until the end of one year from the date on which it becomes so maintainable, if, apart from this provision, that period would end earlier."
The Case under the Convention
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No-one shall be deprived of his possessions except in the public interest and subject to conditions provided for by law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."
The interpretation of Article 1
"61. …. The first rule, which is of a general nature, enounces the principle of peaceful enjoyment of property; it is set out in the first sentence of the first paragraph.
The second rule covers deprivation of possessions and subjects it to certain conditions; it appears in the second sentence of the same paragraph.
The third rule recognises that the States are entitled, amongst other things, to control the use of property in accordance with the general interest, by enforcing such laws as they deem necessary for the purpose; it is contained in the second paragraph."
On the facts of Sporrong itself, the court held that there was no deprivation of possession under the second rule, and no "control" under the third; but that there was a breach of the first rule, because the measures created a situation which -
"upset the fair balance which should be struck between the protection of the right of property and the requirements of the general interest..."
and (for the claimants) -
"an individual and excessive burden which could have been rendered legitimate only if they had had the possibility to seek a reduction in the time-limits or of claiming compensation". (para 73)
i) Whether there was an interference with the peaceful enjoyment of "possessions";
ii) Whether the interference was "in the general interest";
iii) Whether the interference was "provided for by law";
iv) Proportionality of the interference.
"... the court has recognised a type of interference with the peaceful enjoyment of possessions which is neither a deprivation nor a control of use. It has been described as a kind of catch-all category for any kind of interference which is hard to pin down. The court is increasingly using the concept of interference with the substance of property when it has difficulty classifying interferences."
This suggests that searching for an all-embracing test of the situations engaged by the first rule may be unproductive.
Interference with peaceful enjoyment
"does not afford… a right to peaceful enjoyment of possessions in a pleasant environment" (para 18.81).
To similar effect is Harris, O'Boyle and Warbrick: Law of the European Convention on Human Rights 2nd ed:
"The State will be responsible under Article 1 of the First Protocol for interferences which affect the economic value of property. Accordingly claims about interferences with the aesthetic or environmental qualities of possessions are protected, if they be protected at all, elsewhere in the Convention." (page 662)
"6. The applicant has further invoked Prot. No. 1 Art. 1 which guarantees the right to the peaceful enjoyment of possessions. This provision is mainly concerned with the arbitrary confiscation of property and does not, in principle, guarantee a right to the peaceful enjoyment of possessions in a pleasant environment. It is true that aircraft noise nuisance of considerable importance both as to level and frequency may seriously affect the value of real property or even render it unsaleable and thus amount to a partial taking of property. However, the applicant has not submitted any evidence showing that the value of his property was substantially diminished on the ground of aircraft noise so as to constitute a disproportionate burden amounting to a partial taking of property necessitating payment of compensation..." (emphasis added)
"There is no explicit right in a convention to a clean and quiet environment, but where an individual is directly and seriously affected by noise or other pollution, an issue may arise under Article 8…" (para 96)
i) Mr Weir submits that, for the first rule of Article 1 to be engaged, it is enough to show interference with peaceful enjoyment combined with evidence of loss of value. The debate then shifts to the other pre-conditions of liability: legality, general interest, and proportionality. Apart from the citations already given, he relies for direct authority on Antonetto v Italy (2003) 36 EHRR 10, and the absence of Strasbourg authority to the contrary.
ii) Mr Stinchcombe submits that, in the absence of an unlawful interference (as in Antonetto v Italy), it is not enough to show diminution in value caused by the interference. For Article 1 to be engaged, no less than Article 8, the interference must be "direct and serious". Apart from the analogy with Hatton v UK (above), he relies on the passage already cited in Rayner v UK, and on statements by the House of Lords in Marcic v Thames Water Utilities Ltd  2 AC 42.
"even though it partially blocked the light and view from the applicant's house, thus reducing its value. In these circumstances the Italian authorities are responsible for interference in the applicant's right of property; the interference in question constitutes neither deprivation of nor control over the use of property but rather is covered by the first sentence of the first paragraph of Article 1." (para 34)
Although it may be inferred from the amount of the award that the court accepted that the effect on the property was serious, there is no indication that such a finding was a necessary precondition to the engagement of the rule.
"...aircraft noise nuisance of considerable importance both as to level and frequency may seriously affect the value of real property or even render it unsaleable and thus amount to a partial taking of property… "
Implicit in this, argues Mr Stinchcombe, is the proposition that Article 1 is not engaged by anything short of interference sufficiently serious to amount to "partial taking" of the property in the sense there explained. It cannot be argued that noise from the ordinary use of a nearby public highway, accepted by millions of people as part of "the give and take of everyday life", comes near this threshold.
"The flooding of Mr Marcic's property falls within the first paragraph of Article 8 and also within Article 1 of the First Protocol. That was common ground between the parties. Direct and serious interference of this nature with a person's home is prima facie a violation of a person's right to respect for his private and family life under Article 8 and of his entitlement to the peaceful enjoyment of his possessions under Article 1 of the First Protocol…" (emphasis added)
"Having regard to the background and purpose of each Article, I do not accept that solution, a loss of value in itself does not involve a loss of privacy or amenity and it does not affect the peaceful enjoyment of possessions. Diminution of value in itself is not a loss contemplated by the Articles in this context." (para 51)
"whether the interference with the applicants' right to peaceful enjoyment of their possessions struck the requisite fair balance between the demands of the general interest of the public and the requirements of the protection of the individual's fundamental rights, or whether it imposed a disproportionate and excessive burden on them." (Bugajny above, para 67).
"effectively evade the obligation to build and maintain roads other than major thoroughfares provided for in the plans and shift this obligation onto individual owners." (para 73)
In the same way, Mr Weir argues, the form in which the time-limit is expressed enables those responsible for compensation to evade their responsibility for the compensation which Parliament intended by the simple expedient of delay in completion.
"to make the period relatively tight in order to address the initial dip in a property's value upon a road opening and before people get used to it".
The fact that there are some anomalies in the operation of the limits set by Parliament is not sufficient to show that those limits are without reasonable foundation, or to take the legislation outside the permissible margin of discretion.
"30. The scheme under the Act aims to mitigate one effect, a decrease in value of homes, by the giving of compensation. Mr Weir emphasised that it is that effect which is at the heart of his case of interference within the meaning of article 1. However, such a decrease, in my judgment, has been suffered whether compensation under the Act is paid or not. The compensation provided for by the Act to mitigate that decrease is not in my judgment a possession within the meaning of article 1."
"...no claim shall be made if the relevant date falls at a time when the highway was not so maintainable and the highway does not become so maintainable within three years of that date unless the highway authority agreed by the relevant date that the highway would become so maintainable."
"For present purposes it is sufficient to say that a meaning which departs substantially from a fundamental feature of an Act of Parliament is likely to have crossed the boundary between interpretation and amendment. This is especially so where the departure has important practical repercussions which the court is not equipped to evaluate…" (para 40)
In that case it was held that the proposed re-interpretation (favoured by a majority of the Court of Appeal) would have departed fundamentally from the legislative scheme. Where Parliament had entrusted to local authorities, not the courts, the responsibility for looking after children subject to care orders, the proposed interpretation (involving a so-called "starring system") would have enabled the court to exercise a "newly created supervisory function" (para 42).
"In my view section 3 requires the court to subordinate the niceties of language of section 41(3)(c), and in particular the touchstone of coincidence, to broader considerations of relevance judged by logical and common sense criteria of time and circumstance. After all, it is realistic to proceed on the basis that the legislature would not, if alerted to the problem, have wished to deny the right to an accused to put forward a full and complete defence by advancing truly probative material"
The section should be read as subject to an implied provision that "evidence or questioning required to ensure a fair trial under Article 6 of the Convention should not be treated as inadmissible" (para 45).
"... no claim shall be made if the relevant date falls at a time when the highway was not so maintainable and the highway does not become so maintainable within three years of that date unless, under an agreement made by the highway authority before the relevant date, the highway should reasonably have become so maintainable within that period."
This would have the advantage of respecting the spirit of the three-year time-limit, but in a way which avoids the absurd effects of unreasonable delay by the developer.
MR JUSTICE HEDLEY :
LORD JUSTICE MUMMERY :