England and Wales Lands Tribunal

[2000] EWLands ACQ_141_1997 (14 January 2000)

ACQ/141/1997

LANDS TRIBUNAL ACT 1949

COMPENSATION - simplified procedure - compulsory acquisition of grassland with hardstanding and shed - whether undertaking given at CPO inquiry that compensation would be assessed on cost of reinstatement - whether compensation to be assessed under r(5) of s 5 Land Compensation Act 1961 - whether compensation for reinstatement can be claimed as disturbance - alternative assessments of compensation agreed - compensation of £3,500 awarded for the value of the land with the hardstanding and shed under r(2) of s 5 of 1961 Act - Land Compensation Act 1961, s 5 rules (2) and (5); Compulsory Purchase Act 1965, s 7 - sealed offer in excess of award - costs of hearing awarded to Authority.

IN THE MATTER of a NOTICE of REFERENCE

BETWEEN LESLIE BERNARD NICHOLLS Claimant

and

HIGHWAYS AGENCY Acquiring

Authority

Re: Land south of Warninglid Flyover (B2115)

near Haywards Heath, West Sussex

Tribunal Member: P H CLARKE Esq FRICS

Sitting in public using the simplified procedure at

48/49 Chancery Lane, London WC2 on 6 December 1999

The following cases are referred to in this decision:

Trustees of the Manchester Homeopathic Clinic v Manchester Corporation (1970) 22 P&CR 241

Hughes v Doncaster Metropolitan Borough Council [1991] 2 WLR 16

Wilson v Minister of Transport (1980) 254 EG 875

Harvey v Crawley Development Corporation [1957] 1QB 485

Cole v London Borough of Southwark [1979] 2 EGLR 162

Mr Martin P Saddler FSVA FAAV for the claimant, with leave of the Tribunal.

Miss Kate Selway of counsel, instructed by the Treasury Solicitor, for the acquiring authority.


 


DECISION OF THE LANDS TRIBUNAL

1. This is a reference heard under the simplified procedure to determine the compensation payable for the compulsory acquisition of a small plot of agricultural land. This decision confirms the oral decision given at the close of the hearing.
2. Mr Martin P Saddler FSVA FAAV of Bannisters, estate agents, chartered valuation surveyors and agricultural valuers, of Haywards Heath appeared for the claimant with leave of the Tribunal. I heard evidence from Mr Saddler and from the claimant, Mr Leslie Bernard Nicholls. I received evidence in the form of a written statement from Air Marshall Sir Michael Giddings KCB OBE DFC AFC RAF (Rtd).
3. Miss Kate Selway of counsel appeared for the Highways Agency. I heard evidence from Mr Hugh William Martin MBA BSc FRICS, now team leader in the district valuer's office responsible for highways work in southern England.

FACTS

4. The parties have prepared a statement of agreed facts and from this statement and the evidence I find the following facts:-

(1) The land taken was acquired under The London Brighton Trunk Road (A23 Warninglid Flyover - Brighton Improvement: Warninglid Flyover to Hickstead Section) Compulsory Purchaser Order (No. SE15) 1990. The land is plot 1/9 in this order described as "1,354 sq m grassed smallholding with small building on the east of the Trunk Road (part of OS No. 8182)." The area of the land taken was subsequently agreed at 0.32 acre (0.13 hectare). Notice to treat was served on 27 November 1990. Notice of entry was served on 27 September 1991 and possession was taken on 15 November 1991. This is the agreed date of valuation.

(2) In November 1991 Mr Nicholls, the claimant, owned a plot with a total area of 1.77 acres (0.72 hectare) of level grade 3 agricultural land south of the Warninglid Flyover on the B2115 road and east of the A23 London to Brighton trunk road, to the east of Haywards Heath and Cuckfield in West Sussex. The land taken comprised a roughly triangular part of this land with an area of 0.32 acre (0.13 hectare) in the north-western corner of Mr Nicholls' landholding. It was acquired for the construction of a slip road from the B2115 to the A23 trunk road. The land was predominantly grassland with an area of concrete hardstanding and a single storey timber building ("the shed") of about 210 sq ft (19.33 sq m) with a pitched feltclad roof and concrete floor with a drain running into a nearby septic tank. The claimant's retained land is to the south and the east of the land taken with access from a layby - bus stop on the former A23 leading to a tarmac track or hardstanding which connected to the hardstanding on the land taken.

(3) The claimant held the freehold interest with vacant possession in the land taken and the retained land. At the date of valuation he used the land taken for the grazing of goats and the retained land for agricultural purposes.

(4) The Highways Agency ("the Agency") have carried out accommodation works on the retained land at a cost of £1,247.32.

(5) On 4 November 1997 the claimant referred to this Tribunal the determination of compensation for the land taken. On 6 October 1999 the Registrar ordered that it should be determined using the simplified procedure under rule 28 of the Lands Tribunal Rules 1996.

ISSUE

5. The only issue in this reference is the correct basis of compensation for the hardstanding and shed on the land taken. Amounts and heads of compensation have been agreed. The claimant says that the correct basis is the cost of reinstatement with an allowance for wear and tear. He supports this contention on three grounds. First, that an undertaking was given by a representative of the Department of Transport at the inquiry into the compulsory purchase order that compensation would be assessed on a reinstatement basis. Secondly, that compensation should be assessed on the basis of equivalent reinstatement under rule (5) of section 5 of the Land Compensation Act 1961 ("the 1961 Act"). Thirdly, that compensation on the basis of cost of reinstatement should be recovered as disturbance. Compensation for the hardstanding and shed on a reinstatement basis has been agreed at £10,125.
6. The Agency say that the correct basis of compensation for the hardstanding and shed is market value under rule (2) of section 5 of the 1961 Act. They support this measure of compensation on three grounds. First, that no undertaking was given at the compulsory purchase order inquiry that compensation for the hardstanding and shed would be assessed on a reinstatement basis, or, that if it was, Mr Nicholls did not act on it to his detriment. Secondly, that the requirements of rule (5) of section 5 of the 1961 Act have not been satisfied. Thirdly, that a claim cannot be made for reinstatement under disturbance because Mr Nicholls has not incurred expenditure on reinstatement elsewhere. The agreed compensation for the hardstanding and shed on a market value basis is £950.
7. The parties have agreed that the unimproved market value of the land taken (excluding the value of the hardstanding and shed) is £1,680. Other heads of compensation totalling £851 have been agreed in respect of the maintenance of fencing, renovation of water supply, the making good of damage to electricity meter and for the claimant's time and trouble.
8. Alternative figures of total compensation are agreed. If the claimant's basis of compensation for the hardstanding and shed is correct (cost of reinstatement), then the total compensation is £13,156. If the Agency's basis of compensation is correct (market value), then the compensation is £3,500.

DECISION

9. The main ground put forward by the claimant for seeking compensation based on the cost of reinstatement is that he was given an undertaking at the public inquiry into the compulsory purchase order that he would receive compensation on this basis. Mr Saddler, for the claimant, did not argue this point in the context of estoppel but I agree with Miss Selway, for the Agency, that this is how it should be considered. It is necessary to consider whether such an undertaking was given and, if so, whether Mr Nicholls acted upon it.
10. Mr Nicholls said that he purchased the land in the early 1970s to expand his poultry rearing activities He put in, or took over from contractors who were building the Warninglid Flyover in the mid-1970s, the hardstanding, shed and other hard facilities on the land. He started excavations for a twin-span building. Proposals for improving the A23 were then announced which would affect his plans. He could not commit himself to large expenditure if there would be interference with his access and loss of his improvements.
11. In July 1984 Mr Nicholls had discussions with the Department of Transport and their agents but did not receive the assurances he required regarding compensation.
12. A public local inquiry into the proposed compulsory purchase order affecting Mr Nicholls' land was held in March and April 1985. The inspector was Air Marshall Sir Michael Giddings. Mr Nicholls attended the inquiry He was concerned that he would lose his hard facilities and not get them reinstated. The inspector asked a representative of the Department of Transport, Mr Jack Wightman, whether he could given an assurance on this matter. Mr Nicholls said that Mr Wightman was evasive and the inspector had to insist on an answer. Mr Wightman gave an assurance that the Department would pay for the loss of the building and other hard facilities. Mr Nicholls was happy with this assurance. He said that, as a layman, he expected to be paid the cost of reinstatement. He later accepted that a reduction should be made for wear and tear. Mr Nicholls subsequently received a copy of the inspector's report and thought that the last sentence of paragraph 12.43 confirmed the assurance given at the inquiry on behalf of the Department of Transport. He did not seek confirmation in writing from the Department. The sentence in the inspector's report on which Mr Nicholls relied is: "The loss of the building and other hard facilities is a matter for compensation."
13. On 20 March 1997 Sir Michael Giddings prepared a statement at the request of Mr Nicholls, the material part of which is as follows:-

"I am not qualified nor do I seek to offer legal or other advice on these matters. My position is simply to indicate what I believe from memory transpired during the course of the Inquiry. The last sentence of paragraph 12.43 of my Report is the heart of the matter:

"The loss of the building and other hard facilities is a matter for compensation."

Compensation matters are the province of the District Valuer on the one hand, and for this reason it was never possible at a Public Inquiry for a Department of Transport witness to do other than state the Department's position with regard to the principle (as opposed to the degree) as to where compensation would apply in any particular case. At the Inquiry in question I remember asking the Department's witness during cross-examination by Mr Nicholls whether compensation would apply to the loss of the building and the loss of other hard facilities. I am certain that the answer was in the affirmative for I recall asking Mr Nicholls at this point whether the assurance given by the Department's witness satisfied him. Mr Nicholls replied to the effect that, if the new road would not be moved, then 'under the circumstances' he would be satisfied.

To my clear recollection there was no claim that, apart from compensation for the direct loss of Mr Nicholl's land, the provision of a new access to the property under the Road Orders (as required by the Highways Act 1980, Section 125 (3) (b)) comprised the Department's full obligation.

It would not have been appropriate at the Inquiry to discuss whether compensation might be affected by such considerations as wear and tear or partial reinstatement of facilities. These were all matters for subsequent discussion between the District Valuer and Mr Nicholls. What I am clear about is that the Department accepted at the Inquiry the principle that compensation should apply to the loss of the building and other hard facilities. Hence my observation at para 12.43 of my Report:......

The fact that I have to rely on memory over events that occurred some twelve years ago is less than ideal. However, should it be claimed that my memory is at fault the clarity and precision of my observation above should be noted. It would have been unthinkable for me, or any other Inspector, to record such a clear statement without collateral from the Department of Transport at the Inquiry."

14. The first question is whether Mr Wightman gave an undertaking on behalf of the Department of Transport that Mr Nicholls would receive compensation for the hardstanding and shed on the basis of cost of reinstatement. I am not persuaded by the above evidence that Mr Wightman gave such an undertaking. I accept that he gave an assurance that Mr Nicholls would receive compensation for the loss of these facilities but I am not satisfied that he went further and said that this compensation would represent the cost of reinstatement. This is an assumption made by Mr Nicholls. As Sir Michael Giddings wrote in his statement:-

"... it was never possible at a Public Inquiry for a Department of Transport witness to do other than state the Department's position with regard to the principle (as opposed to the degree) as to where compensation would apply in any particular case."

And later:-

"It would not have been appropriate at the Inquiry to discuss whether compensation might be affected by such considerations as wear and tear or partial reinstatement of facilities. These were all matters for subsequent discussion between the District Valuer and Mr Nicholls."

15. Even if I had been satisfied that an undertaking was given that compensation would be assessed on a reinstatement basis, I am doubtful whether this would have created an estoppel binding on the Agency because Mr Nicholls did not expend money or otherwise alter his position to his detriment in reliance on the undertaking (see Manchester Homeopathic Clinic v Manchester Corporation). It is, however, not necessary for me to reach a decision on this point. The claim on this ground fails due to the absence of any undertaking that compensation would be assessed on a reinstatement basis.
16. The next ground on which Mr Nicholls seeks compensation on a reinstatement basis is under rule (5) of section 5 of the 1961 Act. Mr Saddler said that the land taken was a site with works in progress at the valuation date. There was no general demand or market for the land for this purpose. Mr Nicholls gave evidence that he used the land for grazing goats. Mr Martin said that the land was used for agricultural purposes and could have been sold in the open market.
17. Section 7 of the Compulsory Purchase Act 1965 provides for the payment of compensation where land is taken as follows:-

"In assessing the compensation to be paid by the acquiring authority under this Act regard shall be had not only to the value of the land to be purchased by the acquiring authority, but also to the damage, if any, to be sustained by the owner of the land by reason of the severing of the land purchased from the other land of the owner, or otherwise injuriously affecting that other land by the exercise of the powers conferred by this or the special Act."

In this reference the only outstanding issue is "the value of the land to be purchased by the acquiring Authority", is the value of the hardstanding and shed to be assessed on the basis of the cost of reinstatement or on the basis of open market value?

18. The rules for assessing compensation are set out in section 5 of the 1961 Act. Rule (2) states:-

"The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise:"

Rule (5) states:-

"Where land is, and but for the compulsory acquisition would continue to be, devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, the compensation may, if the Lands Tribunal is satisfied that reinstatement in some other place is bona fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement:"

19. Rule (5) is, in effect, an exception to rule (2). In order to recover compensation under rule (5), it must be shown that, at the date of acquisition, the land:-

(i) is, and but for the compulsory acquisition would continue to be, devoted to a purpose of such a nature that there is no general demand or market for land for that purpose; and

(ii) reinstatement in some other place is bona fide intended; and

(iii) that the Lands Tribunal should exercise its discretion to award compensation on the basis of the reasonable cost of equivalent reinstatement.

All three conditions must be satisfied.

20. The first condition relates to the purpose for which the land was used at the time of acquisition. The question is whether that purpose "is of such a nature that there is no general demand or market for land for that purpose"? Mr Saddler submitted that the land taken was a site with works in progress. Mr Nicholls said that he grazed goats on the land. I prefer Mr Nicholls' evidence to Mr Saddler's submission. As I understand the position works on the land ceased in the late 1970s or early 1980s; the land was acquired in November 1991 and at that time was in use for the purposes of grazing. I do not think that the land can be said to have been a site with works in progress. I find that the land taken was used for the grazing of goats, an agricultural purpose, and I accept Mr Martin's opinion that there was a general demand or market for land for that purpose. The first condition in rule (5) is not satisfied and compensation cannot be awarded on an equivalent reinstatement basis. Even if I had been satisfied that this condition could be met, I heard no evidence that Mr Nicholls had a bona fide intention to reinstate the hardstanding and shed on other land and therefore the second condition under the rule would not have been satisfied.
21. The third ground on which Mr Nicholls claims for the cost of reinstatement of the hardstanding and shed is that this falls under the category of disturbance.
22. The evidence is that Mr Nicholls was using the land taken for the grazing of goats. He said that this was part of his agricultural business. He did not replace the hardstanding and shed which existed on the land with similar facilities on the retained land or elsewhere. I heard no evidence that Mr Nicholls was using the hardstanding and shed when the land was acquired.
23. In support of this disturbance claim, Mr Saddler produced an opinion by Mr Barry Denyer-Green of counsel dated 13 May 1992. The material parts of this opinion are as follows:-

"3. Provided the Claimant was in occupation of the land taken, and therefore was disturbed from possession in consequence of the compulsory acquisition by the Department, then I am of the opinion that some if not all the costs of reinstatement may be recoverable as disturbance compensation... It is now perfectly clear since the House of Lords decision in Hughes v Doncaster Metropolitan Borough Council ...that the claimant's claim for compensation is but one claim for all those losses which flow from a compulsory acquisition of which the value of the land taken and any injury to retained land is but part of the compensation claim. Accordingly a Claimant will only be adequately compensated if he recovers the cost of such reinstatement as he carries out in consequence of the acquisition...

4. ...It seems to me that if the owner does incur costs in reinstating a shed, hardstanding, water supply and septic tank, such costs are not too remote and reasonably flow from the compulsory acquisition. ... It is important to note that the Lands Tribunal have never applied a strict rule that the market value approach applies to the value of fixtures which are part of the land. [Wilson v Minister of Transport] shows, and this is now consistent with the Hughes case, if fixtures are taken as part of land taken and their value is not reflected in the market value of the land taken, and reinstatement of those fixtures elsewhere on land retained is reasonable, then the cost of that reinstatement (less for dilapidations and improvement) is normally allowed."

24. I do not materially disagree with Mr Denyer-Green's opinion but it must be read in the context of the facts in this reference. The facts as proved by the evidence do not support the conclusion in the opinion. The important facts are that Mr Nicholls has not reinstated the hardstanding and shed elsewhere and there was no evidence of his intention to do so. In my judgement this claim cannot be considered under the heading of disturbance because Mr Nicholls has not suffered loss by reinstating the hardstanding and shed on other land. It is a requirement of disturbance compensation that the claimaint must have suffered loss in respect of the item claimed, eg by incurring expenditure (see Harvey v Crawley Development Corporation per Romer L J at page 494 and Cole v London Borough of Southwark at page 163). Mr Denyer-Green makes this point in paragraph 3 of his opinion ("a claimaint will only be adequately compensated if he recovers the costs of such reinstatement as he carries out in consequence of the acquisition") and in paragraph 4 ("It seems to me that if the owner does incur costs in reinstating a shed, hardstanding, water supply and septic tank, such costs are not too remote and reasonably flow from the compulsory acquisition") (my emphasis in both extracts). If Mr Nicholls had been carrying on a business on the land taken, involving the use of the hardstanding and shed, and in order to mitigate his loss, had incurred expenditure in providing similar facilities on other land, then he may have had a claim for this expenditure under the heading of disturbance. That is not, however, the position in this reference.
25. In my judgement, the correct position, is that the hardstanding and shed formed part of the land taken and compensation for their acquisition as part of that land is to be assessed in accordance with rule (2) of section 5 of the 1961 Act, namely "the amount which the land if sold in the open market by a willing seller might be expected to realise." The parties have agreed that the value of the unimproved land is £1,680, and that the shed and hardstanding have values of £450 and £500 respectively. The total value of the land, including the shed and hardstanding, is therefore £2,630. Other items of compensation have been agreed at £851, making a total (rounded) figure of compensation of £3,500 to which I add surveyors' fees under Rydes scale. This is the compensation contended for by the Agency and agreed by the claimant if compensation is to be assessed on a market value basis.
26. I determine by the compensation payable to Mr Nicholls for the compulsory acquisition of the land taken under The London Brighton Trunk Road (A23 Warninglid Flyover - Brighton Improvement: Warninglid Flyover to Hickstead Section) Compulsory Purchase Order (No. SE 15) 1990 and for severance and injurious affection to the retained land and for disturbance is the sum of £3,500 (three thousand five hundred pounds) plus surveyors' fees under Rydes scale. Interest on the compensation and legal costs on the conveyance of the land taken are the subject of specific statutory provisions (sections 11 and 23 of the Compulsory Purchase Act 1965 respectively).
27. I heard submissions on costs The general rule where the simplified procedure is used is that "no award shall be made in relation to the cost of the proceedings" (rule 28 (11) of the Lands Tribunal Rules 1996). However, there are three exceptions to this general rule, two of which are relevant to these proceedings, that is to say where section 4 of the 1961 Act applies and where the Tribunal regards the circumstances as exceptional.
28. Section 4 (1) (a) of the 1961 Act provides that, where the acquiring authority have made an unconditional offer of compensation in writing and the sum awarded does not exceed this amount, the Tribunal shall, unless for special reasons it thinks it proper not to do so, order the claimant to bear his own costs and to pay the costs of the acquiring authority so far as they were incurred after the offer was made. On 11 November 1999 the Treasury Solicitor wrote to Mr Saddler with an unconditional offer of compensation at a figure above my award. This offer was not accepted. Miss Selway submitted that Mr Nicholls should pay the Agency's costs of the hearing, each party bearing their own costs up to that date.
29. Before the hearing Mr Saddler wrote to the Tribunal seeking the claimant's costs on the grounds of exceptional circumstances. He did not pursue this application at the hearing in view of my decision, although I gave him an opportunity to do so. He agreed that each party should bear their own costs up to the date of the hearing but submitted that Mr Nicholls should not be required to pay the Agency's costs of the hearing.
30. Although the Agency's offer was made at a late stage in the proceedings this was not so close to the date of the hearing as to make it ineffective. The offer exceeds my award by a substantial margin and, in the light of my decision, should have been accepted by Mr Nicholls. He has gained nothing by proceeding to a hearing. Furthermore, I have rejected his claim under all heads; it is unsupported by the evidence brought in support of it. Although I am reluctant to award costs against a claimant under the simplified procedure this claim is entirely without merit and, under these circumstances, I cannot find any special reason why I should not order Mr Nicholls to pay the Agency's costs of the hearing.
31. I order the claimant to pay the Agency's costs of the hearing held on 6 December 1999, such costs, if not agreed, to be the subject of a detailed assessment on the standard basis by the Registrar of the Lands Tribunal in accordance with rules 44.4 and 44.7 of the Civil Procedure Rules. The procedure laid down in rule 52 of the Lands Tribunal Rules 1996 shall apply to such detailed assessment.

DATED 14 January 2000

(Signed: P H Clarke)