England and Wales Lands Tribunal

[2000] EWLands ACQ_138_1999 (07 June 2000)

ACQ/138/1999

LANDS TRIBUNAL ACT 1949

COMPENSATION - purchase notice - amenity land adjoining main road - restriction to garden or recreational use - refusals of planning permission - offer - comparables - compensation £2,000

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN ALAN RACHETER Claimant

and

BASINGSTOKE AND DEANE Acquiring

BOROUGH COUNCIL Authority

Re: Land known as rear of

41-45 Hillary Road or

53A Kingsclere Road

Basingstoke

Hampshire

Tribunal Member: P H Clarke FRICS

Determination without an oral hearing under

rule 27 of the Lands Tribunal Rules 1996

The following case is referred to in this decision:

W & S (Long Eaton) Ltd v Derbyshire County Council (1975) 31 P&CR 99


 


DECISION OF THE LANDS TRIBUNAL

1. This is a reference to determine the compensation payable for the acquisition by the local authority of a small plot of open land adjoining Kingsclere Road, Basingstoke following service of a purchase notice.
2. The parties have agreed that the reference shall be determined without an oral hearing under rule 27 of the Lands Tribunal Rules 1996. I have received copies of documents and written representations from the claimant. I have received copies of documents and written statements from Robert J Jackson MPhil BA MRTPI, a principal planning officer, and Brian Barrett Dip Prop Econ BSc ARICS, an assistant principal estates surveyor, both employed by Basingstoke and Deane Borough Council, the acquiring authority. I have inspected the reference land and some of the comparables referred to by Mr Barrett.

FACTS

3. The claimant, Alan Racheter, is the freehold owner of 42 Hillary Road, a terraced house built in 1965 at the end of a cul-de-sac in a residential area to the west of the town centre of Basingstoke, Hampshire. At the rear of the house is Kingsclere Road. Between the rear garden of Mr Racheter's house and the pavement of Kingsclere Road there is first a private path leading from Hillary Road to the back gardens of nos.41-44, then the land which is the subject of this reference ("the reference land") and then a narrow strip of grass with frontage to the pavement of Kingsclere Road.
4. Mr Racheter bought the freehold of the reference land in April 1995 subject to a restrictive covenant "not to use the property for any purpose other than for garden or recreational use."
5. The reference land is known as land at the rear of 41-45 Hillary Road or 53A Kingsclere Road. It is open grassland, triangular in shape with an area of 241 square metres. It is bounded on the north by an open area of grass owned by Basingstoke and Deane Borough Council and leased to Basingstoke Training Association. The eastern boundary is the rear gardens of 44 and 45 Hillary Road and the private footpath from the road giving access to the gardens of nos.41-44. The apex of the triangle is to the south and the western boundary is the small strip of grass between the land and the pavement of Kingsclere Road. The reference land is fenced. Kingsclere Road is part of the A339, a busy main road. On the western side of the road is Houndsmill Industrial Estate.
6. Following his purchase of the reference land Mr Racheter made unsuccessful attempts to obtain planning permission for use or development. On 15 September 1995 planning permission was refused for "change of use of former highway land to land within the domestic curtilage." This decision was upheld on appeal by an inspector appointed by the Secretary of State for the Environment on 4 June 1996. On 25 July 1996 planning permission was refused for "change of use to private garden." This decision was upheld on appeal on 10 March 1997. On 26 May 1998 planning permission was refused for the "erection of a single dwelling."
7. On 29 May 1998 Mr Racheter served a purchase notice on the Basingstoke and Deane Borough Council ("the Council") under section 137 of the Town and Country Planning Act 1990. This was accepted by a response notice dated 25 August 1998. On 19 October 1999 the Council referred the determination of compensation to this Tribunal. Initially both parties agreed to the use of the simplified procedure under rule 28 of the Lands Tribunal Rules 1996. On 13 March 2000 the claimant requested that the matter be dealt with on written representations and the Council agreed. An order vacating the hearing and providing for further representations was made on 22 March 2000.

ISSUE

8. The sole issue in this reference is the amount of compensation payable for the purchase of the reference land by the Council. Mr Racheter claims £9,000; the Council offer £2,000.

CLAIMANT'S CASE

9. Mr Racheter referred to the development of 41-45 Hillary Road in 1965 and to the fact that the reference land then formed part of the A340 Aldermaston Road. If the road had been removed prior to the building of these houses their rear boundaries would have been taken up to the pavement of Kingsclere Road. Thus, a potential use of the reference land is as garden land to extend the back gardens of nos.41-45. Mr Racheter acknowledged, however, that planning permission for this use has been refused.
10. Mr Racheter has lived at 42 Hillary Road since 1988. In 1989 he noticed that the reference land was becoming a nuisance. Acquisition of the land gave him a buffer strip which improved the amenity of his house but as it is the Council's intention to use it as public open space then the old problems will return. The land cannot now be put to reasonable use due to the refusals of planning permission, which Mr Racheter saw as a denial of his proprietary property rights.
11. It is difficult to put a value on the reference land. In May 1999 Mr Racheter advertised the land for sale. He received an offer of £9,000. He has spent £300 on two planning applications; maintenance has been £50 per annum. On an open market sale compensation should be £9,000 plus legal costs. On the basis of potential use Mr Racheter suggested £6,015 (£25 per square metre) plus £3,000 for nuisance to his house. No deduction should be made for future maintenance. The principle of equivalence should be applied, keeping in mind the present and future advantages, including compensation for disturbance, severance and injurious affection. The best comparable in the evidence of Mr Barrett is the sale of land adjoining 65 Buckland Avenue, Basingstoke.

COUNCIL'S CASE

12. Mr Jackson's evidence dealt with the planning history of the reference land and the development plans. He referred to policy ORT 1 in the Basingstoke and Deane Borough Local Plan which restricts the development or change of use of existing or proposed public and private open space and areas of visual amenity.
13. Mr Barrett stated that compensation is to be assessed in accordance with rule (2) of section 5 of the Land Compensation Act 1961 (open market value). This value will be based on existing use limited by the restrictive covenant to garden or recreational use. Planning permission has been refused for change of use or development. The use of the reference land is limited to amenity open space. It has not been used for any other purpose since the realignment of Kingsclere Road in the 1960s and 1970s.
14. Mr Barrett looked at comparables relating to recreational and garden land. For the former he considered the purchase by the Council of 13.6 acres in Overton, 8 miles west of Basingstoke. For garden land he looked at seven sales of small plots in or near Basingstoke. These comparables establish a garden land value of £30 per square metre to which Mr Barrett applied a 50% deduction to arrive at a lower value for open space amenity land. He then applied a further deduction of 15% to allow for the location of the reference land on a busy main road opposite an industrial estate. Finally, Mr Barrett made a deduction for the future cost of maintenance of £1,195.70. These adjustments produced a figure of £1,876.30 for the reference land which he rounded up to £2,000. If the same approach is applied to the recreation/amenity land comparable the result is a negative value.

DECISION

15. The Lands Tribunal is a judicial tribunal, that is to say I am required to make my determination of compensation solely on the evidence put before me by the parties. I can evaluate that evidence but cannot go outside it nor introduce my own evidence. I cannot prepare a valuation independently of the evidence. I cannot take into account matters such as the conduct of the parties and any offers they may have made. In short, the scope of my determination is limited by Mr Racheter's figure of £9,000, supported by an offer, and Mr Barrett's figure of £2,000, supported by sales of small plots of land, adjusted to reflect the limitations on the use and development of the reference land. It is against this background that I make my decision.
16. The acquisition in this reference follows service and acceptance of a purchase notice under section 137 of the Town and Country Planning Act 1990. It is, in effect, a compulsory purchase in reverse: the owner forces the local authority to purchase his land because it has become incapable of reasonably beneficial use in its existing state due to refusal of planning permission and cannot be developed. The Council, by their response notice dated 25 August 1998, are deemed to be authorised to acquire compulsorily the reference land and to have served notice to treat on that date (section 139(3)(a) and (b) of the 1990 Act). The Council have not taken possession of the land and therefore the date of valuation has not been fixed. Mr Racheter made no representations as to this date; Mr Barrett suggested the date of the hearing originally fixed for 26 March 2000, having regard to the decision in W & S (Long Eaton) Ltd v Derbyshire County Council. By analogy with that decision, that where possession has not been taken by the acquiring authority the valuation date should be the last day of the hearing before the Lands Tribunal, I have decided to adopt a date of valuation of 4 April 2000, the date when the last written submissions were received from the parties. It has not been suggested by either party that values have changed in the past few months and therefore the exact date of valuation is not material.
17. The right to compensation where land is compulsorily acquired is contained in section 7 of the Compulsory Purchase Act 1965. The owner receives the value of the land purchased and, where part only is acquired, may receive compensation for severance and injurious affection to the retained land. The value of the land acquired is defined in rule (2) of section 5 of the Land Compensation Act 161 as "the amount which the land if sold in the open market by a willing seller might be expected to realise."
18. I look first at the value of the land purchased, the reference land. What was the position at the date of valuation? It comprised a small triangular plot of grassland, virtually landlocked, at the side of a busy main road, opposite an industrial estate. It was subject to a restrictive covenant limiting the use to garden or recreational use. Planning permission had been refused for use within the domestic curtilage, as a private garden and to build a house. In my judgment the land can only be valued as open amenity land. It is unlikely that any of the owners of the houses at 41-45 Hillary Drive would wish to buy it, having regard to the refusals of planning permission. I find that the only purchaser would be the Council wishing to use the land as amenity land adjoining the highway and to preserve the street scene. In seeking to buy they would have no competition. They are not special purchasers willing to pay an enhanced price for the land.
19. Under these circumstances, what is the value of the land? Mr Racheter put forward an offer to support his value of £9,000. On 14 May 1999 he placed an advertisement in a local newspaper, open space land for sale. He replied to enquiries with particulars of the reference land. These referred to the restrictive covenant, the refusals of planning permission and commented that for the foreseeable future "the property is of no beneficial use and it is offered on this basis." On 3 June 1999 he received an offer (subject to contract) of £9,000. This was without address or name. On 15 February 2000 the offer was confirmed with permission for it to be disclosed to this Tribunal. It would appear from the confirmation of the offer that this followed a telephone conversation with Mr Racheter. Mr Racheter therefore knows the identity of the offeror but this was not disclosed in his representations.
20. An offer is only the first step towards a completed sale and can be given little or no weight when preparing a valuation. I have no information regarding the person making the offer, his name and address are unknown to me, his reasons for making the offer are also unknown. On the other hand I have value evidence in the form of sales of similar land. In the face of this evidence I can give no weight to the anonymous offer.
21. I turn now to Mr Barrett's comparables. I do not find the sales of land at Overton, Ellisfields and Tadley helpful. They are situated too far from the reference land. The Town Meadow land at Overton (13.6 acres) is much larger. I give no weight to these comparables. The other sales are helpful. They are all small plots of land in residential areas in Basingstoke. In Petrel Close the Council sold two small plots in April 1998 and January 1999 to the owners of nos.12 and 13. These plots have now been incorporated into their gardens. The land was sold subject to restrictive covenants limiting the use to garden land. The prices devalue to £24.03 and £19.05 per square metre respectively. In August 1999 the Council sold a small plot at the side of 65 Buckland Avenue to the owner of that house at a price which devalues to £30.06 per square metre. This land has also now become part of the garden and was sold subject to a restriction to garden land. Land adjoining 2 Foyle Park was agreed to be sold in February last to the owner of that property at a price of £6.25 per square metre. This is a private sale. The land is subject to rights of way and a sewer easement.
22. On the strength of these transactions Mr Barrett adopted a figure of £30 per square metre for garden land as the starting point for his valuation of the reference land. I agree. I also agree that this figure must be substantially reduced due to the refusals of planning permission for use of the reference land as garden and to incorporate it within a domestic curtilage. Mr Barrett suggested a 50% deduction. I have no other evidence as to what this deduction should be but it seems reasonable and I accept it. Mr Barrett then made a deduction of 15% to reflect the different locations. Petrel Close and Buckland Avenue are quiet residential areas. The reference land is at the side of a busy main road opposite an industrial estate. I accept this further deduction in the absence of any rebuttal evidence. Again, it seems reasonable. Finally, Mr Barrett made a deduction of £1,195.70 for future maintenance costs based on the Council's commuted maintenance sums in planning agreements. I have found that the only purchaser of the reference land would be the Council and I agree that the price it would pay would reflect the obligation to maintain the land. In the absence of any evidence in rebuttal, I accept Mr Barrett's suggested maintenance deduction. These deductions reduce the value to £2,000 (rounded up), equivalent to £8.30 per square metre. These figures compare to £1,000 each (£24.03 and £19.07 per square metre) for the plots in Petrel Close, £2,530 (£30.06 per square metre) for the plot in Buckland Avenue and £1,500 (£6.25 per square metre) for the land in Foyle Park. In all these cases the land sold had a particular value to the adjoining owner for incorporation into his property. That is not the position with the reference land which, due to the refusals of planning permission, cannot be so incorporated and cannot have such a special value. Stepping back from the arithmetic and reasoning behind the valuation of £2,000, I am satisfied that this price is correct, even generous. The conclusions I have reached on the evidence and my inspection are that the reference land has little value, that the only purchaser would be the Council wishing to use the land as amenity land adjoining the highway and that the Council would not pay a special price in the open market for the land.
23. I find on the evidence that £2,000 is the value of the reference land having regard to the restricted use which can be made of it.
24. Mr Racheter's total landholding comprises 42 Hillary Road and the reference land. Part only of his holding has been purchased and the question arises whether he should receive compensation for severance and injurious affection to his retained land (42 Hillary Road). Mr Racheter referred to £3,000 for future nuisance to his retained property but gave no further explanation. Mr Barrett appeared to treat the reference land on its own and disputed any right to compensation for severance and injurious affection. In my judgment the ownership of the reference land, with the restrictions on use, does not enhance the value of 42 Hillary Road and therefore the sale of this land will not reduce the value of the retained house. After the sale the reference land will be maintained by the Council as open amenity land. I cannot accept that it will constitute a nuisance or that Mr Racheter's occupation of his house will be adversely affected by the ownership of the land by the Council and its continued use as open amenity land at the side of the highway. I find that no compensation for severance and injurious affection arises on the sale of the reference land.
25. Mr Racheter mentioned disturbance in his representations. In the law of compensation disturbance means the consequential loss to the owner arising out of the acquisition and forced sale of his property. I cannot see that any disturbance arises in this case. Moreover, I have no evidence on which to make an award.
26. I determine that the total compensation payable to the claimant for the acquisition of the reference land in pursuance of the purchase notice dated 29 May 1998 is £2,000 (two thousand pounds). No claim is made for surveyor's fees. Legal costs on the transfer of the land to the Council and any interest on the compensation are the subject of separate statutory provisions (sections 23 and 11 of the Compulsory Purchase Act 1965).
27. This decision concludes my determination of the substantive issue in this case. It will take effect as a decision when the question of costs is decided and at that point, but not before, the provisions relating to the right of appeal in section 3(4) of the Lands Tribunal Act 1949 and order 61 rule 1(1) of the Civil Procedure Rules will come into operation. The parties are invited to make submissions as to the costs of this reference and a letter accompanying this decision sets out the procedure for submissions in writing.

DATED

(Signed: P H Clarke)

ADDENDUM

28. I have received written representations on costs. Both parties have proceeded on the assumption that these proceedings are under the simplified procedure (rule 28 of the Lands Tribunal Rules 1996). This is incorrect. Both parties originally agreed to the simplified procedure and this was ordered by the Tribunal on 25 January 2000. Subsequently Mr Racheter requested that the matter be dealt with "as a written matter under the simplified procedure." This was considered to be an application for a determination without an oral hearing under rule 27. There is no provision in rule 28 for determination under the simplified procedure without a hearing. The Council agreed to written representations and directions were given by the Tribunal on 22 March 2000. Paragraph 1 states that "this reference be determined without an oral hearing in accordance with rule 27 of the Lands Tribunal Rules 1996." Neither party objected to this order or stated that it was incorrect. There is no restriction on costs under rule 27 as is the case under rule 28(11) when the simplified procedure is used.
29. The Council seek their costs mainly on the grounds that they made an offer to settle on 1 December 1998 at £2,000, the amount of my award. Mr Racheter rejects this contention. He says that the offer was made "without prejudice" and was not unconditional. The Council reply that documents or letters marked "without prejudice" are not necessarily privileged and that the offer letter was later contained in a statement of facts agreed or not disputed submitted to the Tribunal. Mr Racheter says that he has never seen this document. Neither has the Tribunal. I reject any arguments based on its existence.
30. The position regarding the relevance of offers to an award of costs is clear. An offer marked "without prejudice" cannot be taken into consideration when awarding costs, except with the consent of both parties (Walker v Wilsher (1889) 23 QBD 335) or if it is labelled "without prejudice save as to costs", or similar words (usually referred to as a Calderbank offer) (Cutts v Head [1984] ChD 290). The letter dated 1 December 1998 from Mr Barrett of the Council to Mr Racheter is marked "subject to contract without prejudice" and contains no reservation as to its use on the question of costs. It is not therefore admissible and I disregard it.
31. The acquisition in this case follows service and acceptance of a purchase notice. The Council are deemed to be authorised to acquire compulsorily the reference land and to have served notice to treat. It is a notional compulsory purchase. Both parties have prepared their representations on this basis and I make my decision on this basis.
32. The general rule where land is compulsorily acquired is that the costs of a reference to the Lands Tribunal fall on the acquiring authority (Emslie and Simpson Ltd v Aberdeen District Council (No.2) (1995) 35 RVR 159; Lesquende Ltd v Planning and Environment Committee of the States of Jersey [1998] 1 EGLR 137 and English Property Corporation v Royal Borough of Kingston upon Thames (1999) 77 P&CR 1). My starting point is therefore that the Council should bear the costs of this reference. Where an award is considerably less than the amount claimed the general rule may be modified: this is a matter for the discretion of the Tribunal (Emslie and English Property Corporation). Should I modify the general rule in this case? The Council rely on the offer for an award of costs (which I have rejected) but they also refer to extensive correspondence and negotiations with Mr Racheter (often on irrelevant issues); his fluctuating claim figures, unsupported by value evidence; his obduracy and intransigency; and his failure to obtain professional advice. Mr Racheter replies by referring to the failure by the Council to release information on comparables and to his inability to find a surveyor willing to act for him.
33. I have rejected Mr Racheter's case on compensation and substantially accepted the case put forward by the Council. I have awarded compensation at the Council's figure. I am satisfied that I should depart from the general rule and not award any costs against the Council. I am not, however, satisfied, that I should go further and order Mr Racheter to pay any part of the Council's costs. Although I have rejected his claim it was not wholly unreasonable and was tenuously supported by evidence. The Council could have protected their position as to costs by making an admissible offer but did not do so. In all the circumstances I think that a fair and just decision is to require each party to bear their own costs. Accordingly, I make no order as to costs. I would add that if I had heard this reference under the simplified procedure I would have made the same decision.

DATED

(Signed: P H Clarke)