England and Wales Lands Tribunal

[2000] EWLands ACQ_23_1999 (25 September 2000)

ACQ/23/1999

LANDS TRIBUNAL ACT 1949

COMPENSATION - acquisition under purchase notice of small landlocked plot of land on line of road - preliminary issues - whether an indication given that land likely to be acquired - scheme - held: no indication of likely acquisition; no scheme underlying the acquisition - Land Compensation Act 1961, ss 9 & 39(1)(2); Highways Act 1980, ss 38(3) & 263(1).

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN JOSEPH ROLAND RICHARDS

and

JOANNE VALERIE RICHARDS Claimants

and

SOMERSET COUNTY COUNCIL Acquiring Authority

Re: Land adjoining British Telecom Radio Station,

Burnham-on-Sea, Somerset

Tribunal Member: P H Clarke FRICS

Sitting at 48/49 Chancery Lane, London WC2 on 3-7 & 20 July 2000

The following cases are referred to in this decision:

London Borough of Hackney v MacFarlane(1970) 21 P&CR 342

Trocette Property Co Ltd v Greater London Council (1974) 28 P&CR 408

Jelson Ltd v Blaby District Council (1977) 34 P&CR 77

English Property Corporation plc v Kingston upon Thames Royal London Borough Council(1999) 77 P&CR 1

Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565

Margate Corporation v Devotwill Investments [1970] 3 All ER 864

Toogood v Bristol Corporation (1973) 26 P&CR 132; (1974) 28 P&CR 473

Western Fish Products Ltd v Penwith District Council (1981) 38 P&CR 7

Abbey Homesteads (Developments) Ltd v Northamptonshire County Council [1992] 2 EGLR 18

Melwood Units Pty Ltd v Commissioner of Main Roads [1974] AC 426

Tithe Redemption Commission v Runcorn Urban District Council [1954] Ch 383

Hall & Co Ltd v Shoreham-by-Sea Urban District Council [1964] 1 WLR 240

Batchelor v Kenty County Councl [1992] 1 EGLR 217

Hertfordshire County Council v Ozanne [1989] 2 EGLR 18

Wilson v Liverpool Corporation [1971] 1 WLR 302

Fraser v City of Fraserville [1917] AC 187

Myers v Milton Keynes Development Corporation [1974] 1 WLR 696

Bird v Wakefield Metropolitan District Council (1979) 37 P&CR 478

Bolton Metropolitan Borough Council v Tudor Properties Ltd (2000) (unreported)

Birmingham District Council v Morris & Jacombs Ltd (1976) 33 P&CR 27

Fletcher Estates (Harlscott) Ltd v Secretary of State for the Environment (2000) 2 WLR 438

J A Pye (Oxford) Ltd v Kingswood Borough Council [1998] 2 EGLR 159

Salop County Council v Craddock (1969) 213 EG 633

Wards Construction (Medway ) Ltd v Barclays Bank plc & Kent County Council (1994) 68 P&CR 391

South Eastern Ry Co v London County Council [1915] 2 Ch 252

Re Lucas and Chesterfield Gas & Water Board [1909] 1 KB 16

Robin Purchas QC and Euan Burrows instructed by Clarke Wilmott and Clarke, solicitors of Taunton, for the claimants.

Guy Roots QC and Robert Walton instructed by County Solicitor for Somerset County Council


 


DECISION OF THE LANDS TRIBUNAL

1. This is a decision on preliminary issues in a reference to determine the compensation payable for the acquisition under a purchase notice of vacant land at Burnham-on-Sea. The land is on the line of the eastern distributor road which has been constructed to the north and to the south. The claimants seeks substantial compensation on the grounds that the land must be valued in a hypothetical compulsory purchase world, disregarding the decrease in value which has arisen from an indication of acquisition under section 9 of the Land Compensation Act 1961 and the scheme underlying the acquisition, which came into existence in March 1977. In the absence of the indication and the scheme the reference land would have had a premium or ransom value. Somerset County Council say that the land must be valued in the real world at the date of valuation. No indication has been given of possible acquisition, or, if it has, it has not caused any depreciation in value. The scheme underlying the acquisition did not come into existence until confirmation of the purchase notice, a few months before the valuation date. Compensation is a nominal amount. This decision will establish the basis of valuation for future negotiation or determination.
2. Robin Purchas QC and Euan Burrows appeared for the claimants, Joseph Roland and Joanne Valerie Richards, and called:-

(i) Eustace David Trevor Pugh BSc MRTPI, a planning consultant of Bath since 1998 and formerly a group planner for 10 years with the Magnus Group, developers of part of Rosewood Farm, the residential development immediately adjoining the reference land.

(ii) Anthony Peter Humphreys BSc CEng MICE MIWEM, of Hyder Consulting Limited and from 1988 to 1997 also an employee of the Magnus Group.

3. Guy Roots QC and Robert Walton appeared for the acquiring authority, Somerset County Council, and called:-

(i) Barry James Juniper BSc DipTP MRTPI, development control manager of Sedgemoor District Council since 1994 and formerly principal planning officer in the Local Plans Section of the Council since 1987.

(ii) Michael John Betty FIHIE, development manager since 1976 in the Highways Development Control Group of the Environmental and Property Department of Somerset County Council and an employee of the Council since 1971.

FACTS

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

Rosewood Farm

5. On the eastern edge of the built-up area of Burnham-on-Sea is an area of land of about 28.5 hectares known as Rosewood Farm. Much of this land has now been developed with retail and a petrol filling station in the north and housing to the south and west. There is a former refuse tip on the land. Rosewood Farm is bounded on the north by Love Lane which runs west to east from the centre of Burnham-on-Sea to a roundabout adjoining the north-eastern corner of the land with links to Love Lane North, which runs north to Stoddens Road at Middle Burnham, and Edithmead Link Road (B3140) which runs eastwards to join the A38 and M5 at junction 22. The eastern boundary of Rosewood Farm is the eastern distributor road ("the EDR") where built and the line of the road, where unbuilt, including the reference land. This road and the line of the unbuilt road run approximately south south-east from the Love Lane roundabout, referred to above, to a roundabout adjoining the south-eastern corner of Rosewood Farm at the junction of Wallace Wells Road, Worston Lane, Worston Road and Pepperall Road, which runs south to join Burnham Road (B3139). The southern boundary is Worston Lane which runs westerly towards the centre of Burnham-on-Sea. To the west Rosewood Farm adjoins housing to which it is linked at Ashcott Drive. To the east of the EDR and close to the south-eastern roundabout, is a British Telecom Radio Station.

The EDR

6. On 16 June 1976 the Planning and Transportation Committee of Somerset County Council ("Somerset") resolved to approve in principle the line of a distributor road (the EDR) from the Berrow/Highbridge Road (B3139) in the south to north of Stoddens Road in the north and to request Sedgemoor District Council ("Sedgemoor") to protect the line and include it in any plans for the area. The line of the road between Love Lane and Worston Lane subsequently became part of the EDR in the Rosewood Farm Development Guide.
7. On 14 March 1977 the Planning Committee of Sedgemoor resolved that the line of the road should be protected for development control purposes pending preparation of the local plan for Burnham-on-Sea. Any final decision on the alignment of the road should be determined in the context of that plan. The line of the road has been protected by Sedgemoor in successive local plans since 1977.
8. The EDR does not appear as a major scheme whose implementation is one of Somerset's strategic planning objectives in the Structure Plan in force from 1982 to 1986, the Alteration No.1(1986 to 1992), the Alteration No.2 (1992 to 2000) and the current Somerset and Exmoor Structure Plan Review.
9. In 1981 applications for planning permission for development within Rosewood Farm and beyond were refused by Sedgemoor on the grounds that, although the EDR would have been provided, the scale of development was considerably in excess of that included in the structure plan. The County Surveyor advised Sedgemoor on 1 May 1981 that, if the proposed development was acceptable, then the whole area between Love Lane and Worston Road should be subject to a planning agreement with a phased development for roads, etc. The EDR to be constructed by the developers and completed before 50 per cent of the total site area is developed. Later the District Planning Officer for Sedgemoor stated that it is desirable to achieve the entire length of the EDR at Rosewood Farm before too much of the development is completed, i.e. before more than 400 houses are occupied.
10. To the north of Rosewood Farm the line of the EDR continues along Love Lane North to Stoddens Road, at Middle Burnham. Love Lane North is an existing road which has been improved. Land was to have been acquired by Somerset to link Love Lane North with Stoddens Road to provide for development to the west of Love Lane North. Somerset accepted the dedication of this land after 1990 and highway works were carried out by the developer as agents for the county council.
11. The following references to the EDR to the south of Rosewood Farm between Worston Road and Burnham Road (B3139) appear in the minutes of the Planning and Transportation Committee or Highways Sub-committee of Somerset.
12. On 6 October 1976 the Planning and Transportation Committee resolved to accept an offer of £10,000 from the developer of a site adjoining the B3139 as a contribution towards the cost of the EDR (minute 465).
13. In the minutes of the Planning and Transportation Committee meeting on 12 December 1979 Appendix B records Requests for Highway Improvements including the EDR in Part A (Road Improvements).
14. In a report to, or minutes of a meeting of the Highways Sub-committee on 10 March 1982 Appendix C contains an evaluation of priority for schemes costing less than £500,000. The EDR between Burnham Road and Worston Road is ranked 11th with a cost of £120,000.
15. In the minutes of a meeting of the Highways Sub-committee on 15 September 1982 Appendix B is a list of schemes costing less than £500,000 in priority order. No.12 on this list is "Burnham Eastern Distributor Road - new road between Burnham Road and Worston Road £120,000."
16. On 18 May 1983 the Highways Sub-committee received a report from the County Surveyor that part of the southern section of the EDR had been constructed by developers "and when combined with the southernmost section to be built by the county council would achieve a useful link between Worston Road and Burnham Road." The sub-committee resolved "to authorise the submission of an application for deemed planning permission in respect of the southernmost section of the road", to make a closure order and to obtain vacant possession of Sandacre Caravan Site (minute 1178). This minute was referred to at a meeting of the Planning and Transportation Committee on 15 June 1983. A motion that construction of the southern section of the EDR be deferred until after the northern section had been completed was rejected (minute 1536).
17. On 13 September 1983 the Highways Sub-committee resolved for the purposes of regulation 4 of the Town and County General Regulations 1976 to construct the length of the EDR "between Pepperall Road and Burnham Road" (minute 1233).
18. In a report to a meeting of the Highways Sub-committee on 14 December 1983 the County Surveyor recommended schemes for 1984/85 including a "a new road between Burnham Road and Worston Road (part of the EDR) including widening of a section of Worston Road." It is noted that this scheme ranked first in the priority list and provides a new road link which can eventually be incorporated in an EDR for Burnham-on-Sea. Estimated cost £140,000.
19. At a meeting of the Highways Sub-committee on 19 September 1984 it was reported that the provision of carriageway and footways to the south of Pepperall Road and the widening and realignment of a section of Worston Road were likely to commence in the near future (part of EDR) (minute 1374). This was also contained in a report of the County surveyor to a meeting of the same sub-committee on 23 May 1984.
20. At a meeting of the Highways Sub-Committee on 19 March 1986 it was reported that the "provision of carriageway and footways to south Pepperall Road and widening and realignment of section of Worston Road" had been substantially completed and/or opened to traffic (minute 1624).
21. At a meeting of the Highways Sub-committee on 17 December 1989 it was reported that the line of the EDR (south) had severed the Sandacre Caravan Park (minute 1597).

Development plans

22. In August 1999 the statutory development plan covering Rosewood Farm and the reference land comprised (i) the Somerset Structure Plan Alteration No.2, adopted in September 1992 ("the structure plan") and (ii) the Burnham-on-Sea Area Local Plan, adopted on 18 April 1990 ("the local plan").
23. Following approval of a Local Plan Brief in May 1982 Sedgemoor commenced work on the preparation of a local plan and published the Consultative Burnham-on-Sea Local Plan for public participation in October 1984. The EDR between Love Lane and Pepperall Road was shown as a protected road line on this plan but Rosewood Farm was not allocated for housing. Following public consultation and the first review of the structure plan (Alteration No.1), which came into effect in September 1986, a draft local plan was published on 1 June 1988. This included the line of the EDR and the proposed allocation of land for housing at Rosewood Farm. Following a public local inquiry in February 1989 modifications were made to the draft local plan and it was adopted as the Burnham-on-Sea Area Local Plan on 8 April 1990. Five proposals in this plan are material to this reference.
24. Proposal BH/H4 provides for the allocation of 28.5 hectares of land between Love Lane and Worston Lane (Rosewood Farm) for residential development to ensure the continued supply of land for new housing to satisfy the requirements of Policy SP2 in the structure plan and to secure the construction of a major section of the EDR (Proposal BH/T4). The priority rating for this proposal is A, fundamental to the local plan; the responsibility is the private sector. Phasing is throughout the plan period, i.e. to 1996.
25. Proposal BH/S2 provides for the allocation of land at Rosewood Farm for retail uses to serve local needs. This land is in the north-eastern corner of Rosewood Farm.
26. Proposal BH/R2 provides for the allocation of former tip land as public open space in association with adjoining residential development. This land is in the south-eastern part of Rosewood Farm. The priority rating is (B) (associated with implementation of B-rated proposals) and the responsibility is Sedgemoor and the private sector. Phasing is medium/long term.
27. Proposal BH/U1 provides for allocation for use as a cemetery of land to the north of the British Telecom Radio Station with access from the EDR. This land is immediately to the east of Rosewood Farm, separated from it by the EDR. This proposal was given a priority A rating and was the responsibility of the Burnham Joint Burial Committee. By April 1993 however this cemetery was no longer required.
28. Proposal BH/T4 is for the construction of part of the EDR between Worston Lane and Stoddens Road, in conjunction with the development of adjacent land. The previously identified continuation of this route northwards beyond Stoddens Road will continue to be a protected road line. This proposal is to secure the provision of an improved highway network to serve the urban area and to ensure that new residential development in this area has suitable access to the route hierarchy. The road is to be constructed to "District Distributor Road" standards. Timing will be dependent upon the phasing of adjacent development in the remaining parts of the Love Lane development and at Rosewood Farm (see Proposal BH/H4 above). Developers will be required to enter into legal agreements to secure appropriate financial contributions. This proposal has priority rating A (fundamental to the plan) and the responsibility is Somerset and the private sector. The phasing is throughout the plan period, i.e. to 1996. It is noted that appropriate sections of the road are to be constructed in conjunction with adjacent housing development.
29. The reference land is on the line of the EDR and no part is within the area allocated for residential development in the local plan.
30. When the local plan and a development guide (Development Guide for Residential Development at Rosewood Farm, Burnham-on-Sea) were being prepared it was known that the land allocated for residential development at Rosewood Farm was in a number of different ownerships.
31. On 21 June 1999 Sedgemoor published the deposit draft of a revised local plan. Proposals H16, H22 and H24 in that plan allocate land for housing development at, and to the north of, the British Telecom Radio Station (adjoining Rosewood Farm) and at Burnham Levels, to the east of the EDR and Rosewood Farm. Under Policy TM2 proposals for development which would prejudice the provision of highway infrastructure (including the EDR) will not be permitted. Paragraph 7.12 refers to traffic congestion caused by summer visitors to caravan parks and holiday camps at Berrow and Brean (to the north of Burnham-on-Sea) and to the EDR, funded by housing developments to the east of the town, which should be completed to Stoddens Road within the next few years.

Development guide

32. Paragraph 3.20 of the local plan refers to a development guide for the Rosewood Farm area. This is the "Development Guide for Residential Development at Rosewood Farm, Burnham-on-Sea" prepared by Sedgemoor and dated January 1989 ("the development guide"). It was written by Mr Juniper. It was prepared before the adoption of the local plan on 18 April 1990.
33. The development guide establishes the basic road framework and open space layout for residential development at Rosewood Farm under Proposal BH/H4 in the local plan. Construction of the EDR on the eastern boundary of Rosewood Farm at the developers' expense is a fundamental requirement of the scheme. The purpose of the development guide is to provide the necessary comprehensive guidance to ensure that building on the identified parcels of land takes place in an appropriate sequence and leads to an integrated overall layout, appropriately served by roads and main services to form a satisfactory residential environment. The guide also establishes the basis for the equitable apportionment of developers' payments for the infrastructure.
34. The development guide provides for development in three phases. Phase 1 comprises the maximum development that can take place with access from Love Lane via part of the EDR and Ashcott Drive in advance of completion of a local distributor road. This is land in the northern part of Rosewood Farm. The local distributor road ("the LDR") is a loop road through Rosewood Farm linked in three places to the EDR. Phase 2 comprises a smaller area in the middle of Rosewood Farm where dwellings cannot be occupied prior to the completion of the LDR and the EDR to the point marked A on the plan forming part of the development guide. Point A is on the reference land and provided access to the proposed cemetery to the east of the EDR. Phase 3 is land in the southern part of Rosewood Farm. No dwelling can be occupied prior to 1 April 1993 and before completion of the EDR from Love Lane to Pepperall Road, that is to say the whole of the EDR forming the eastern boundary of Rosewood Farm.
35. The development guide provides for the EDR to be constructed at developers' expense in sections as housing development proceeds. The scheme is to be phased from the northern end of Rosewood Farm where good access to the existing highway network is available via the Love Lane roundabout. The phasing arrangements will require completion of the LDR at an appropriate stage. Roads provided by developers must be in accordance with "Estate Roads in Somerset" or such other standards as Somerset may determine.
36. Developers will be expected to fund all infrastructure at Rosewood Farm. Where facilities serve the total area (e.g. the EDR and major public open space) costs will be shared in proportion to the area of the developer's land. For other infrastructure, developers will be required to install all necessary on-site services. Developers will be required to contribute to the construction of the EDR in either of two ways: by payment to Somerset of £13,000 per hectare of residential development land at 1987 prices index linked, or by construction of the road to standards specified by Somerset (with appropriate reimbursement if the length of road constructed at the developer's expense exceeds the required pro-rata contribution of 40 metres per hectare of residential development land).
37. The section of Worston Lane (on the southern edge of Rosewood Farm) will, subject to the agreement of Somerset, be closed to vehicles upon completion of the EDR and thereafter become a pedestrian/cycle way route. The western leg of Worston Lane will be closed and the eastern leg will join the EDR at a T-junction.
38. The plan which forms part of the development guide shows the reference land on the line of the EDR. The eastern boundary of Rosewood Farm is contiguous with the western boundary of the reference land. The part of Rosewood Farm to the west of the reference land is shown as an area of tree planting and then residential development. No part of the reference land is in an area allocated for residential development in the development guide.
39. On 13 March 1997 Mr Juniper wrote to Michael Evans and Co, solicitors to Hardpart Ltd (former owners of the reference land), stating that the terms of the development guide mean that the EDR will be funded by completion of the housing development.

Planning permissions and agreements

40. At the valuation date the following planning permissions (with associated planning agreements under section 52 of the Town and Country Planning Act 1971 ("the 1971 Act") or section 106 of the Town and Country Planning Act 1990 ("the 1990 Act")) had been granted in respect of development at Rosewood Farm. None were conditional on the completion of the EDR across the reference land. None of the agreements under section 106 of the 1990 Act required the EDR to be completed in its entirety between Love Lane and Pepperall Road in connection with the development of any part of Rosewood Farm.
41. The first planning permission was granted to Beazer Homes (West) Ltd on 25 January 1988 (ref 11/87/12) for the erection of 63 dwellings and the construction of estate roads and sewers on land to the east of Ashcott Drive. This land is in the western part of Rosewood Farm adjacent to the existing built-up area. Prior to the grant of this permission Beazer entered into a planning agreement dated 15 January 1988 with Sedgemoor and Somerset. The material parts of this agreement for the purposes of this reference are as follows:-

(i) Beazer shall pay to Somerset £20,400 as a contribution to the cost of the EDR.

(ii) Beazer shall construct the part of the LDR on the application land and enter into an agreement with Somerset under section 38 of the Highways Act 1980 ("the 1980 Act") and permit connection to this road by adjoining owners and developers. The LDR shall be available for public use by 15 January 1990.

(iii) Somerset shall use its best endeavours to ensure the construction of the part of the EDR from Love Lane roundabout southwards (to point B) within 10 years and shall make available to developers of the EDR between two fixed points (A to B) the sum referred to in (i) above (£20,400) with interest.

(iv) If the EDR to point B is not completed within 10 years the provisions of (iii) above shall not apply and the £20,400 contribution shall be refunded with interest.

Access to the public highway for this development was available at Ashcott Drive. This planning permission was granted before the adoption of Alteration No.2 to the structure plan and the local plan and the preparation of the development guide. The access to the land and the arrangements for the construction of part of the LDR were consistent with the development guide as later prepared.

42. On 11 March 1992 planning permission was granted to Mr Dodgson and Mrs Baker for the construction of the EDR from Love Lane to Worston Road (ref 12/88/9). This application was dated 12 September 1988 and the Planning Committee of Sedgemoor resolved to grant planning permission on 31 October 1988 subject to the prior completion of a section 52 agreement relating to highway matters. The planning permission makes no reference to this agreement and there is no evidence that it was made.
43. On 9 February 1994 planning permission was granted to Magnus Homes Ltd for the erection of 80 houses and garages and construction of associated parking and access (ref 12/92/011) on land immediately to the north of Worston Lane in the extreme southern part of Rosewood Farm. Access was from Pepperall Road at the junction with Worston Lane. This permission was granted subject to a planning agreement dated 4 February 1994 between Magnus, Sedgemoor and Somerset, the material parts of which for the purposes of this reference are as follows:-

(i) Magnus shall construct within six months and prior to the occupation of any new dwellings authorised by the planning permission a roundabout at the junction of Worston Road and Pepperall Road to serve the application land and the EDR.

(ii) Magnus shall use all reasonable endeavours to enter into an agreement with Somerset under section 38 of the 1980 Act within two months.

(iii) Magnus shall dedicate the roundabout as a public highway.

(iv) Magnus shall pay £2,500 to Somerset towards the cost of the future alteration of the roundabout and other work to enable Worston Road to be closed to vehicular traffic in the future.

(v) Magnus shall pay to Somerset upon the sale of the first house on the application land a contribution towards the cost of construction of the EDR of £14,618 plus an inflation adjustment.

(vi) Somerset shall apply this contribution towards the construction cost of part of the EDR on some part of Rosewood Farm to the north of the application land.

This planning permission is for land within phase 3 of the development guide and represented a departure from that guide. Sedgemoor and Somerset preferred the major access to the Love Lane area to be from the north but accepted that access to limited development could be provided from Pepperall Road (in the south), provided that developers made access arrangements to the satisfaction of Somerset, and which did not prejudice completion of the EDR, and made contributions to the construction cost of the EDR and the provision of open space in accordance with the development guide. The alteration to the phasing for Rosewood Farm represented by this planning permission and the provision of the roundabout originated from Magnus.

44. On 30 May 1995 planning permission was granted to Magnus Homes South West Ltd for the erection of seven houses on the land comprised in the planning permission granted on 9 February 1994 referred to in the preceding paragraph (ref 12/95/4).
45. On 25 September 1995 planning permission was granted to Sanders Superfruit Ltd for the erection of a neighbourhood shopping centre, associated parking and access on land in the northern part of Rosewood Farm, immediately to the south of Love Lane (ref 11/95/044). This permission was subject to a condition that the Country Store shall not open for business until the access roads by sections of the LDR and EDR have been completed to the satisfaction of Sedgemoor. This permission was amended by planning permissions granted on 25 September 1995 for the erection of a petrol filling station, take away restaurant and parking (ref 11/95/50) and on 1 December 1995 for an extension to the shopping centre (ref 11/95/101) and for the erection of a petrol filling station (ref 11/95/99).
46. On 10 October 1995 planning permission was granted to J S Bloor (Swindon) Ltd for residential development and construction of access on land forming the northern part of Rosewood Farm (excluding the site of the commercial development referred to in the preceding paragraph) (ref 11/92/029). This permission was granted subject to a planning agreement dated 28 September 1995 between Sedgemoor, Somerset, David John Dodgson, Josephine Alice Baker and David Dodgson (owners of the land and referred to in the agreement as "the developers"), the material parts of which for the purposes of this reference are as follows:-

(i) The developers shall construct the part of the EDR from Love Lane roundabout south to almost the boundary of the application land, dedicate the road as a public highway and enter into an agreement with Somerset under section 38 of the 1980 Act. The road is to be completed to at least base course level prior to the occupation of any of the houses to be erected on the land.

(ii) The developers shall construct to base course level the part of the LDR on the application land (and slightly beyond) prior to the occupation of not more than 25% of the houses to be erected on the application land. This road shall be dedicated as a public highway. The developers shall enter into an agreement with Somerset under section 38 of the 1980 Act.

Access to the public highway was available at the Love Lane roundabout. The Planning Committee of Sedgemoor were advised that the access arrangements in respect of this planning permission and the five permissions referred to in the preceding paragraph were in accordance with the development guide.

47. On 26 March 1996 Magnus Homes Southwest Ltd were granted planning permission for the erection of 61 dwellings and the construction of accesses on land in the south-eastern corner of Rosewood Farm (ref 12/94/013). This permission was subject to a planning agreement dated 14 March 1996 between Magnus, National Westminster Bank plc, Sedgemoor and Somerset, the material parts of which for the purposes of this reference are as follows:-

(i) In lieu of making a contribution to the cost of construction of the EDR Magnus should construct an appropriate length of such road.

(ii) Magnus shall construct not later than January 1997 part of the EDR from the existing carriageway close to the roundabout at the junction of Worston Lane and Pepperall Road in the south (point A) northwards for 110 metres (to point B) and dedicate the road as a public highway with a strip of land (the yellow land) constituting a continuation of the EDR northwards to approximately the northern boundary of the application land (point C). On completion of the highway it will become a highway maintainable at public expense.

(iii) In consideration of the obligations of Magnus in (ii) above Somerset shall pay to Magnus £14,618 plus interest being the contribution towards the costs of the EDR paid by Magnus under the planning agreement dated 4 February 1994.

(iv) Somerset shall use its best endeavours to: (a) construct or procure the construction of the part of the EDR on the yellow land; (b) to defray the cost of such construction from persons other than frontagers; and (c) to refund any payments made or authorise the release of any security given by frontagers under section 219 of the 1980 Act.

Access to the application land was available to Magnus from Pepperall Road through their own development to the south (ref 12/92/011). On 7 December 1995 Magnus were the owners of the application land plus an adjoining strip of land (between the application land and the former tip) which included the reference land.

48. On 27 October 1997 planning permission was granted to Beazer Homes (BW) Ltd for the erection of 37 houses and construction of accesses at The Leighs, off Ben Travers Way (ref 11/94/028). This land is in the south-western corner of Rosewood Farm close to the existing built-up area. This permission was subject to a planning agreement dated 14 October 1997 between Sedgemoor, Somerset and Beazer, the material parts of which for the purposes of this reference are as follows:-

(i) Beazer shall within either 12 months of the commencement of development or 24 months of the agreement complete the LDR through the application land.

(ii) Beazer shall pay to Somerset £21,500 plus an additional sum for increases in costs as a contribution towards the cost of part of the EDR (not less than 34 metres).

Access to this land was available from the existing roads, Ben Travers Way (the LDR) and Sheridan Road.

49. On 19 March 1998 Mr D J Dodgson and Mrs J A Baker were granted planning permission for residential development on land on the middle and eastern side of Rosewood Farm (bounded by part of the EDR)(ref 12/96/012). This permission was subject to a planning agreement dated 24 February 1998 between Sedgemoor, Somerset and J S Bloor (Swindon) Ltd, the material parts of which for the purposes of this reference are as follow:-

(i) Bloor shall construct part of the EDR (between points B and C, 275 metres) prior to the occupation of the first dwelling in the development. This became part of the highway maintainable at public expense.

(ii) Prior to the start of development Bloor shall convey or transfer or, at the discretion of the Director for Environment of Somerset, dedicate to Somerset for a consideration of £1 a strip of land forming a southward extension of the EDR from point C to point D.

The road construction and dedication requirements were calculated in accordance with the infrastructure contribution required from developers under the development guide. Access was available to the north over the EDR to the north of the application land to the Love Lane roundabout.

50. On 9 April 1998 Redcliffe Homes Ltd were granted planning permission for the erection of 32 dwellings and formation of access on land off Ben Travers Way (in the north-western part of Rosewood Farm) (ref 11/98/002). On 8 May 1998 J S Bloor (Swindon) Ltd were granted planning permission for the erection of 32 houses and public open space on land to the east of Ashcott Close (in the north-western part of Rosewood Farm) (ref 11/97/66). On 11 May 1998 J S Bloor (Swindon) Ltd were granted planning permission for the erection of 15 dwellings and the formation of access on land in the middle to northern part of Rosewood Farm (ref 11/97/30). On 23 October 1998 planning permission was granted to Bovis Homes Ltd for the erection of 30 dwellings and formation of access on land off Ben Travers Way (in the north-western part of Rosewood Farm) (ref 11/98/104). Each of these planning permissions was subject to the planning agreement dated 28 September 1995, referred to in paragraph 46 above. These planning permissions are phased in accordance with the access arrangements envisaged in the development guide.
51. On 12 May 1998 planning permission was granted to J S Bloor (Swindon) Ltd for the construction of roads (as extensions to the EDR and the LDR) to provide access for residential development at land off Ben Travers Way (ref 12/98/002). This permission relates to a middle section of the EDR and the southern part of the LDR.
52. On 6 October 1998 a renewal of the planning permission dated 25 September 1995 (ref 11/95/99) for the erection of a petrol filling station was granted to Tesco Stores Ltd.
53. On 30 December 1998 planning permission was granted to Beazer Homes (West) Ltd for development for residential purposes including the layout of part of the EDR and part of the LDR to serve as a means of access on land at Love Lane/Worston Lane (land in the middle to south of Rosewood Farm) (ref 11/90/210). This permission were subject to a planning agreement dated 7 December 1998 between Sedgemoor, Somerset and Beazer, the material parts of which for the purposes of this reference are as follows:-

(i) Beazer shall construct part of the LDR on the application land, to base course prior to the commencement of the housing development, to be completed within 12 months of the commencement of development or 7 December 2000. This road shall become part of the highway maintainable at public expense.

(ii) Beazer shall pay £90,000 (plus an inflation adjustment) as a contribution towards the cost of construction of not less than 150 metres of the EDR (between points A and B, the southern section of the EDR).

(iii) This contribution shall be paid within seven days of demand by Somerset, but this demand shall not be made less than six months or later than 7 December 2000 and shall not be made where: (a) Beazer have constructed this part of the EDR, or (b) are in the course of carrying out these works and complete them within three months.

The development under this permission was not phased in accordance with the development guide.

54. On 5 January 1999 planning permission was granted to Beazer Homes Bridgewater for the erection of 37 dwellings and formation of access on land off Ben Travers Way (land in the south of Rosewood Farm, the southern part of the land covered by planning permission ref 11/90/210 referred to in the preceding paragraph) (ref 11/97/146). This permission is subject to the planning agreement dated 7 December 1998 referred to in the preceding paragraph.
55. On 23 March 1999 planning permission was granted to Prowting Homes South West Ltd for the erection of 41 dwellings and formation of access on land close to the middle of Rosewood Farm, the northern part of the land covered by planning permission ref 11/90/210 (ref 11/98/115). This permission relates to land subject to the planning agreement dated 7 December 1998. The development under this permission was not phased in accordance with the development guide.

Refusals of planning permission

56. The following applications for planning permission for development at Rosewood Farm have been refused.
57. On 19 October 1987 the Planning Committee of Sedgemoor refused planning permission on the application of Mr Dodgson and Mrs Baker for development for residential purposes, construction of estate roads and EDR at Rosewood Farm (ref 12/57/009).
58. On 30 August 1990 planning permission was refused on the application of Mr P Jones for the erection of 4 houses and formation of access at land off Woodfield Close (ref 11/90/121). Permission was granted on appeal in 1991.
59. On 8 January 1993 planning permission was refused on the application of Mr P Jones for residential development and construction of accesses on land off Woodfield Close (ref 11/92/121). An appeal against this refusal was unsuccessful.
60. On 22 August 1994 planning permission was refused on the application of Mr P Jones for residential development of 16 dwellings and construction of new accesses to highway on land adjacent to Woodfield Close (ref 11/94/85). An appeal against this refusal was dismissed on 10 November 1995.
61. On 29 August 1997 planning permission was refused on the application of Mr J R Richards (one of the claimants) for the erection of a dwelling on the reference land (ref 12/97/11).

Purchase notice

62. Following the refusal of the planning permission referred to in the preceding paragraph, the claimants served on Sedgemoor a purchase notice dated 17 December 1997 under section 137 of the Town and Country Planning Act 1990 in respect of the reference land. On 13 March 1998 Sedgemoor served a response notice. This stated that they were unwilling to comply with the purchase notice and confirmed that no other local authority or statutory undertaker was found who would be willing to comply with it. On 21 April 1998 the parties were notified of the proposal of the Secretary of State for the Environment, Transport and the Regions not to confirm the notice. The claimants requested to be heard and an inquiry was held on 27 and 28 October 1998. The purchase notice was confirmed on 22 January 1999 with the substitution of Somerset for Sedgemoor as the acquiring authority.
63. Under section 143(1) of the 1990 Act Somerset were deemed to be authorised to acquire the claimants' interest in the reference land compulsorily under Part IX of the Act (acquisition and appropriation of land for planning purposes etc) and to have served notice to treat on 22 January 1999. Somerset took possession of the reference land on 18 August 1999. This is the agreed date of valuation. On 26 February 1999 the claimants referred their claim for compensation to this Tribunal for determination. On 14 January 2000 it was ordered that certain matters should be treated as preliminary issues and disposed of at a preliminary hearing.

Reference land, Rosewood Farm and the EDR

64. The reference land is a small plot of vacant land, about 78 metres by 18.1 metres, with a site area of between 0.14 and 0.16 hectare (0.35 to 0.4 acre). It is on the line of the EDR which forms the eastern boundary of Rosewood Farm and is situated about three -quarters of the way along the length of this road from Love Lane roundabout in the north to Worston Lane/Pepperall Road roundabout in the south, i.e. in the southern part of this length of the EDR. No part of the reference land lies within the area allocated in the local plan for residential development.
65. The reference land is bounded on the north by a high hedge and a rhyne. To the east is a field owned by British Telecom used for hay cropping. There is no defined southern boundary. Immediately adjacent to the reference land to the west is a high brick wall and a small area to be planted and dedicated as open space. The reference land is of poor quality, marshy with sparse grass cover. It is heavily rutted and top soil has been removed. A public footpath crosses the land. It is much used for dog walking and motorcycle practice.
66. The claimants' interest in the reference land is the freehold with vacant possession. The claimants do not, and have not at any material time, owned an interest in any other land which is contiguous or adjacent to the reference land or which forms part of Rosewood Farm. However, the claimants acquired their freehold of the reference land through the following transactions. In March 1996 the reference land and other land was owned by Magnus Homes Southwest Ltd and adjoined the northern boundary of the land for which Magnus obtained planning permission on 26 March 1996 (ref 12/94/013). Mr Richards, one of the claimants, was formerly chairman of Magnus Homes Southwest Ltd. On 14 February 1997 Magnus entered into a contract with Hardpart Limited, a company wholly owned by the claimants, to sell to Hardpart for a total consideration of £82,000 various plots of land including the reference land. On 27 August 1997 the claimants acquired their interest in the reference land from Hardpart.
67. At the date of valuation (18 August 1999) the position was as follows. The reference land was as described above. Rosewood Farm had been partly developed. There was a supermarket in the north-eastern corner, close to the Love Lane roundabout, with access from the LDR. This road had been laid out as a single loop road (Ben Travers Way) connected at two points to the EDR as built, close to the Love Lane roundabout in the north and to the north of the reference land in the south. Housing development had been completed with access from the LDR in the north, to the west (adjoining existing housing) with access from Ashcott Drive and there was a small area of housing to the south of the LDR (Priestley Way). In the south-eastern corner of Rosewood Farm was a separate area of housing with access from the Worston Lane/Pepperall Road roundabout via Wallace Wells Road. There were areas of undeveloped land at Rosewood Farm in the north-western corner, in the middle and to the south. Close to the south-eastern corner (and to the north of the housing off Wallace Wells Road) was the site of a former tip, to be used as public open space (OS parcel 6437).
68. The position regarding the EDR where it formed the eastern boundary of Rosewood Farm was as follows. Proceeding south from the Love Lane roundabout a long section of the road had been built and was in use. This section stopped at the southern junction of the LDR, just to the north of the reference land. There was then a short length of the road line which had been dedicated but not built. This stopped at the northern boundary of the reference land. No part of the EDR had been built or dedicated on the reference land. Proceeding south from the southern boundary of the reference land a short length of the line of the EDR was subject to a planning agreement to dedicate but had not been dedicated. The final southern section of the EDR had been built to join the roundabout at Worston Lane and Pepperrall Road. Wallace Wells Road also joined this roundabout (and the EDR) to give access to the housing in the south-eastern corner of Rosewood Farm.

ISSUES

69. Following a pre-trial review the following matters were ordered to be treated as preliminary issues:-

"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, s106 agreement or any other means) upon completion of the eastern distributor road across the reference land.

Alternatively,

2. Whether (as the claimants contend):

(i) an indication (within the meaning of Land Compensation Act 1961, s9) was given that the land would, or would be likely to be, acquired by Sedgemoor District Council or Somerset County Council.

(ii) such indication caused depreciation in the value of the reference land at the valuation date (within the meaning of the Land Compensation Act 1961, s9).

(iii) The scheme underlying the acquisition (for the purposes of the 'Pointe Gourde Rule') existed prior to confirmation of the purchase notice."

70. During the hearing it emerged that the extent of the scheme underlying the acquisition was not agreed, even though it is included in the statement of agreed facts as an agreed matter.
71. On the last day of the hearing Mr Purchas put forward redrafted preliminary issues as follows:-

"(1) In connection with the application of the Land Compensation Act 1961, s9 ('the 1961 Act'):

(a) Would vesting in the highway authority as a result of dedication of the land as a highway maintainable at public expense constitute acquisition for the purposes of s9 of the 1961 Act?

(b) Was an indication (within the meaning of the Land Compensation Act 1961, s9) given that the reference land was to be, or was likely to be, acquired by any authority possessing compulsory purchase powers?

If so,

(c) When or over what period and how was any such indication given; and

(d) Was any depreciation of the value of the reference land attributable to that indication or those indications?

(2) In connection with the application of the 'Pointe Gourde' principle:

(a) What was the 'scheme' underlying the deemed compulsory acquisition of the reference land;

(b) When did that scheme first come into existence;

(c) Did the scheme caused any decrease in the value of the relevant interest on the valuation date?"

72. Mr Roots could accept this restatement with the exception of question 1(a), which he would accept if the words "pursuant to section 38 of the Highways Act 1980" were inserted after the word "dedication". Mr Purchas would not agree to this amendment. Question 1(a) is therefore not agreed.
73. Having regard to the formulation of the preliminary issues set out above, the way in which they developed during the hearing and the purpose of this determination, which is to establish the basis of valuation for the reference land, I restate the issues as follows:-

(1) Has any indication been given within section 9 of the Land Compensation Act 1961 that the reference land is, or is likely, to be acquired by an authority possessing compulsory purchase powers?

(2) If so, when or over what period has such indication been given?

(3) If such an indication has been given, and on the assumption that there has been a depreciation of the value of the claimants' interest in the reference land, is that depreciation attributable to the indication?

(4) What was the scheme underlying the acquisition of the reference land?

(5) When did that scheme first come into existence?

(6) What was the no scheme world at the date of valuation?

74. Mr Purchas's question 1(a) (vesting in the highway authority) can be subsumed into my question (1) above. His question 2(c) (decrease in value due to the scheme) cannot, in my view, be answered in these preliminary proceedings due to the absence of valuation evidence. I can, however, by answering the above questions, establish the world of valuation for the assessment of compensation, whether it was a hypothetical no scheme/no indication world at the date of valuation (as contended by the claimants) or the real world (as contended by Somerset).

INDICATION

75. I deal now with the first two issues under this heading: has an indication of likely acquisition been given and, if so, when or over what period?

Claimants' case

Evidence

76. Mr Pugh said that it is a fundamental requirement of the local plan that the Rosewood Farm development should be connected to existing highways by the EDR. The involvement of Somerset (as highway authority) would be necessary, although the costs would be borne by developers.
77. To establish whether an indication of acquisition has been given it is necessary to examine the history of planning and development at Rosewood Farm. Mr Pugh said that he understands that an indication would arise from the proposals for the construction of the EDR in the development plan. Further indications of the compulsory purchase of the reference land have been given by Somerset and Sedgemoor. He referred to numerous matters.
78. Statements made at the purchase notice inquiry confirm that acquisition of the reference land for highway purposes had been anticipated by Sedgemoor and Somerset as part of a long term strategy. This was a scheme which came into existence many years ago.
79. The planning permission granted to Beazer in January 1988, with the payment of a contribution towards the cost of the EDR, was an indication that the provision of this part of the road was assured by compulsory purchase if necessary. Similarly, all subsequent planning permissions are an indication because none of the permissions contained a condition or agreement to guarantee the construction of the whole of the EDR along the eastern boundary of Rosewood Farm.
80. Sedgemoor have asserted that dictation by one owner of the Rosewood Farm development could be prevented and that delays will not occur. These assertions could only be achieved by the imposition of conditions or agreements to ensure the provision of the EDR or the compulsory purchase of the land needed for this road. The first alternative was not used and therefore the indication must be that compulsory powers will be used, including acquisition of the reference land.
81. The refusals of planning permission at Rosewood Farm are indications. The reasons for refusal are lack of access from the EDR. The developer (Mr Jones) urged Sedgemoor to intervene by compulsory purchase. Therefore when further planning permissions were granted without conditions or agreements ensuring the completion of the EDR, the indications were strengthened.
82. The grant of planning permission to Beazer in 1998 had been deferred indefinitely and in the meantime Beazer had accepted a ransom situation. Thus, in 1990 when the planning application was made, Sedgemoor were no longer prepared to grant planning permission without an assurance that the line of the EDR was within the applicant's control.
83. The delay to development at Rosewood Farm from the north was the principal reason why Sedgemoor and Somerset relaxed their previous refusal to consider development from the south. When planning permission was granted to Magnus in 1994 there was no condition or agreement to ensure the completion of the EDR. There must have been therefore an assumption by the two councils as to the ultimate provision of the EDR. This was an indication to developers that Sedgemoor or Somerset had assumed responsibility for ensuring the completion of the EDR, either by condition or by planning agreement on further applications or by compulsory purchase. No condition or agreement was imposed. This strengthened the indication that compulsory purchaser powers would be used to acquire the reference land.
84. An indication of the implied use of compulsory purchase was included in a letter dated 24 November 1993 from the solicitors to Magnus to Sedgemoor. At a meeting held on 22 February 1995 between Magnus and Sedgemoor the use of compulsory purchase powers to acquire the reference land was discussed.
85. When planning permission was granted on 10 October 1995 to Baker/Dodgson, Sedgemoor allowed them to retain a ransom strip on the line of the EDR. This may be contrasted with the grant of planning permission to Beazer where adjoining owners were given free connection to the LDR. No condition or agreement in the Baker/Dodgson planning permission required the completion of the EDR. By the grant of this permission Sedgemoor gave an indication that Somerset or Sedgemoor would ensure the completion of the EDR, by compulsory powers if necessary, since there was no other provision for building this road across the reference land.
86. A further indication was given in a letter dated 23 April 1996 from Sedgemoor to Mr Dodgson which formally lifted any restrictions on development from the single access at Love Lane and removed any need to link the EDR through to the southern section built by Magnus. A letter of 4 November 1996 from the solicitors to Magnus refers to access and ownership issues which by implication indicate that compulsory purchase powers may be used. Mr Pugh referred to numerous other letters which he said contained indications that compulsory purchaser powers might be used.
87. Developers and owners at Rosewood Farm knew from early in the development process what was happening with regard to the EDR. It was apparent that, in light of the matters referred to above regarding the grants of planning permission, the only way in which the EDR could be completed on the line in the development guide would be by the use of compulsory powers. The acquisition of the reference land was the only solution. It was an accepted fact. Developers were also aware that in November 1988 Somerset sold a strip of land at the northern end of Rosewood Farm to Baker/Dodgson which it claimed had a ransom value. It was therefore apparent that Sedgemoor and Somerset fully understood the value of access land and the potential for access problems at Rosewood Farm. Owners and developers, knowing that neither authority subsequently acted to ensure the completion of the EDR, took this as an indication that one or other had assumed responsibility for completion of the EDR, by compulsory powers if necessary. There have been continuous disputes between all parties regarding access to Rosewood Farm.
88. Having regard to the indications referred to above, Mr Pugh concluded that, from the earliest indication in January 1988 (the grant of the first Beazer planning permission), events in the real world would never be the same again. The indications removed the need for developers and owners to acquire the reference land for the EDR. With an assurance of the acquisition of the reference land by Sedgemoor or Somerset (by compulsion if necessary), developers and owners knew that they did not need to acquire this land.
89. Mr Pugh gave examples of other development where Sedgemoor and/or Somerset have used planning conditions or agreements to ensure satisfactory permanent access to the development. A similar approach should have been used at Rosewood Farm after it was used for the first Beazer planning permission in January 1988. All developers and owners expected such conditions or agreements to be imposed.
90. Mr Pugh was unable to refer to any evidence which showed that an indication of likely acquisition had influenced the actions of Magnus as former owners of the reference land. If a purchase notice had not been served the land would have been retained by the claimants until acquisition by Somerset which would have been inevitable. I asked Mr Pugh whether the present unsatisfactory situation at Rosewood Farm, with the EDR uncompleted, may have arisen because development control had not been satisfactory: might this be an "indication" that Somerset had no intention of acquiring land for the EDR? He said that the planning framework was wrong from the beginning - that is the cause of the present situation.
91. Mr Humphreys said that the reference land lies on the route of the EDR which is the principal access to Rosewood Farm. It was fundamental to the local plan, supported by the development guide. The phasing arrangements in the guide, in the absence of the completed EDR or a guarantee of its completion, are not intended to overrule the standards for single access points in Estate Roads in Somerset. At the valuation date the compulsory acquisition of the reference land was the only means of completing the EDR to the east of Rosewood Farm to provide the principal access and to connect it to the existing highway network, in accordance with the local plan and development guide. Without the completion of the EDR the present access arrangements are not a satisfactory permanent solution. They are not in accordance with Estate Roads in Somerset and Residential Roads and Footpaths - Design Bulletin 32 (1992) ("DB 32"). Mr Humphreys produced traffic volume and other calculations to support this opinion.
92. The reference land is needed to allow the EDR to function as envisaged in the local plan and the development guide in the real world and as the permanent access in the no scheme/no indication world. In this latter world, and in the absence of permanent access or legal agreements to ensure such access, no development of Rosewood Farm would have been allowed in excess of 200 dwellings with access from Love Lane. A developer or owner, seeing a ready made access route on the line of the EDR, established since 1977, would conclude that permanent access between Love Lane and Pepperall Road (across the reference land) could be provided, albeit at a ransom value which would have to be deducted from the value of the residual development land. Alternative access routes would be considered but would be unrealistic. The total extent of potential development land controlled by the southern access would be: 20.43 hectares for residential development (excluding land for 200 dwellings), 1.62 hectares of shopping land, 1.9 hectares for a local park and 3.40 hectares for a cemetery (total 27.35 hectares). In the no scheme/no indication world the acquisition of the reference land (as part of the southern access for the EDR) by a prospective developer, in order to complete a permanent access between Love Lane and Pepperall Road, would be necessary.
93. Mr Humphreys agreed with Mr Pugh that the scheme underlying the acquisition is the construction of the EDR across the reference land, as part of the EDR between Love Lane and Pepperall Road. It came into existence many years before the valuation date. This is an indication within section 9 of the 1961 Act. Mr Humphreys attended the meeting on 22 February 1995. Compulsory purchase, ransom issues and valuation methods for the reference land were discussed. If the purchase notice had not been served it would have been necessary for Somerset to acquire compulsorily the reference land to complete the EDR.

Submissions

94. Mr Purchas QC said that an indication under section 9 of the 1961 Act was first given in 1977 that the reference land would or would be likely to be acquired by Sedgemoor or Somerset. There is no requirement that the acquisition should be under compulsory powers, merely that the land is to be acquired by an authority possessing such powers. Section 9 is to be construed in broad terms. It is sufficient if the likely consequence of the indication is that an acquisition will ensue (see London Borough of Hackney v MacFarlane at page 346, Trocette Property Co Ltd v Greater London Council, Jelson Ltd v Blaby District Council and English Property Corporation plc v Kingston upon Thames Royal London Borough Council).
95. The term "acquired" in section 9 means the transfer of a relevant interest in land. It should be construed in the context of the section itself. This provision was introduced by section 9(6) of the Town and Country Planning Act 1959 as an extension of the original provision in section 51(3) of the Town and Country Planning Act 1947. This was concerned with designation for compulsory purchase. Section 9 of the 1959 Act as a whole sought to enact statutory expression of the Pointe Gourde principle (at least in part). It was intended to deal with a situation where part or the whole of the land proposed to be acquired was subject to an indication of acquisition. Any construction of section 9 that sought to limit application to the acquisition of the whole of the land, as opposed to part, should be resisted. Thus, given the nature of vesting through dedication of a highway as maintainable at public expense, that indication would in law suffice as an indication for the purposes of section 9.
96. Mr Purchas did not believe that it is disputed that the effect of statutory vesting is to vest in the highway authority so much of the soil as is required for the authority to carry out its functions (see section 263 of the 1980 Act and Halsbury's Laws of England, volume 21 (1995 re-issue) at paragraph 106). Thus, the consequence of vesting is effectively identical to that which would arise if the entirety of the land was compulsorily acquired, save in the exceptional circumstances of mineral rights. That vesting pursuant to section 263 constitutes acquisition for the purposes of section 9 of the 1961 Act. This is reinforced by the definition of "land" in section 39(1) of the 1961 Act, which includes a right over land. Acquisition of an easement would constitute acquisition for this purpose. This is seen by the option in the planning agreement with Bloor entitling Somerset to elect whether to take a transfer or a dedication. Mr Roots has referred to section 38 of the 1980 Act. Mr Purchase submitted this provision is not relevant. Some planning agreements refer to section 38 (e.g. Beazer, Magnus and Bloor) but not in the context of dedication. Other agreements do not refer to this provision.
97. Even if the restricted interpretation of section 9 is accepted, there is an indication in this case. A proposal for a public highway brings with it an indication that land is likely to be acquired (see Jelson, Trocette, Margate Corporation v Devotwill Investments Ltd, English Property Corporation and Toogood v Bristol Corporation). This is reinforced by the acquisition of land by Somerset for the construction of the EDR off Rosewood Farm and by references to acquisition in correspondence (see the letter dated 1 August 1997 and the notes of the meeting on 22 February 1995). It is relevant that land to the north of the reference land was expressly required to be offered for transfer to Somerset for a nominal consideration.
98. An indication must be viewed objectively, what someone would conclude from the actions or inactions of the authority, including actions in respect of adjoining land (MacFarlane). It is not correct to say that an indication can only be given by an authority: section 9 refers to an indication "by any other means". Furthermore, it is incorrect to say that an officer cannot given an indication without express authority to do so. It is contended on behalf of Somerset that this view is supported by Western Fish Products Ltd v Penwith District Council. That case was decided on the entirely different point of estoppel in relation to a council's statutory discretion in planning control. An indication of possible acquisition by an officer does not commit the council to acquire the land and no question of estoppel arises. Since at least 1990, when the local plan was adopted, if not earlier from 1976, Somerset have proposed the construction of a highway over the reference land. This necessarily implied that Somerset would obtain the necessary rights to do so, by dedication or acquisition. In the absence of dedication (which is a matter for the owner) the only means by which Somerset could secure the necessary rights would be by acquisition. A landowner not wishing to dedicate would recognise that the proposal to build the road meant that his land would have to be acquired. That was the position here. A sufficient indication was given that the reference land would be acquired. This was maintained throughout the period for which there was a firm proposal for the construction of the EDR over the reference land.
99. The indications include: the policies in the local plan and development guide requiring contributions to the construction of a highway for which Somerset were responsible; the planning agreements governing the payment and application of those contribution; the grants of planning permission without conditions or agreements to secure the provision of the EDR in its entirety; the reference to acquisition at the meeting on 22 February 1995; and the letter dated 23 April 1996. Mr Purchas said that this letter was evidence of the fact that the policies in the local plan and development policies in the local plan and development guide, particularly those requiring a contribution rather than construction of the EDR, were wholly dependent on the construction of the EDR by Somerset.

Somerset's case

Evidence

100. Mr Juniper referred to the development guide and the local plan and explained the circumstances in which a variation to the phasing in the development guide was permitted. In February 1994 Magnus obtained planning permission for development in phase 3. This was instigated by Magnus through Mr Pugh. Magnus were able to provide the whole of the section of the EDR which connected directly to Pepperall Road, thus providing the opportunity to resolve the difficulties which the Burial Committee were experiencing in obtaining access to the proposed cemetery. An outline application was made by Magnus in 1990, withdrawn, re-submitted in 1992 and planning permission was granted on 9 February 1994 (ref 12/92/011). After September 1992 the ceiling on the number of dwellings to be provided in phases 1 and 2 no longer had relevance in terms of housing allocation in the structure plan. Thus, the Magnus permission did not contravene the housing allowance in the structure plan. For access Magnus proposed a roundabout at Pepperall Road and made a contribution towards the cost of part of the EDR. This planning permission represented a departure from the development guide because the houses could be occupied without completion of the whole of the EDR from Love Lane to Pepperall Road.
101. Point A on the EDR on the development guide plan (on the reference land) was included to ensure that access to the proposed cemetery was available as part of phase 2. Phase 1 and 2 developers were asked for contributions towards the EDR in excess of the formula contributions. If development had proceeded under the original phasing some phase 3 development would have had to start to secure the appropriate contributions to enable the EDR to reach point A before houses in phase 2 were occupied. Access to the cemetery was originally a major planning objective and prompted the requirement that the EDR should be completed to point A before phase 2 houses were occupied. The cemetery proposal was abandoned long before the claimants acquired the reference land in 1997. Access to the proposed cemetery no longer had any relevance when the Magnus planning application (12/92/011) was considered by Sedgemoor. Development from the north at Rosewood Farm had been slow. Mr Juniper did not think there were any sound planning reasons for refusing the Magnus application. He expected that the land required for those sections of the EDR that had to be built, and their costs, would be provided by the land at Rosewood Farm which had not yet received planning permission. The access to the above Magnus development is from the Pepperall Road roundabout and the additional LDR loop in the development guide was abandoned.
102. On 21 March 1995 Mr Morgan of Sedgemoor wrote to Mr Humphreys (then employed by Magnus) confirming that the development guide still formed the basis of development, although phasing had been overtaken by events. No mention was made of any limit on the number of houses which would be permitted to have access to the EDR from estate roads and the LDR.
103. In summary, three planning permissions were granted which did not fully accord with the development guide (refs 12/92/011, 12/95/004 and 12/94/013). There were no reasons for refusal and they represented a satisfactory alternative to the phasing in the development guide.
104. The development of Rosewood Farm has not involved any relaxation of normal highway standards. DB 32(1992) and Estate Roads in Somerset are not relevant to the construction of the EDR. This is a district distributor road and not controlled by Estate Roads in Somerset. If the EDR is not completed, safe and convenient access to the whole of the development guide area could be achieved through the unlinked ends of the EDR. It would be logical to link these two portions of the road but the absence of a section of the road would not cause undue danger to pedestrians and drivers.
105. Mr Juniper said that his approach to the development of Rosewood Farm was to look at each planning application and ensure that the land had adequate freestanding access and infrastructure. "Freestanding" means that the development would be acceptable in planning terms even if no further development took place at Rosewood Farm. The completion of the EDR across the reference land is not, and never has been, an essential pre-requisite of the grant of any planning permissions at Rosewood Farm. Future development is not dependent upon the completion of the EDR across the reference land. The development of the southern part of Rosewood Farm was, and remains, acceptable with access from Pepperall Road; development of the northern part was, and remains, acceptable with access from Love Lane roundabout. Sedgemoor have avoided involvement in private access and ransom issues among landowners. The claimants, plus Magnus and BT, do not control the southern access to Rosewood Farm. By August 1997, when the claimants acquired the reference land, no development land needed access across the reference land to satisfy the planning requirements of Sedgemoor (see letter of 23 April 1996).
106. There was never any suggestion that Sedgemoor might wish to exercise compulsory purchase powers to acquire land for the EDR. There is no record of any proposal or resolution by Sedgemoor to acquire any land at Rosewood Farm for any purpose. The records begin in 1974. No committee has given any consideration to compulsory purchase at Rosewood Farm. In correspondence Mr Juniper did not intend to suggest, and had no authority to suggest, that the reference land was, or was likely, to be compulsorily acquired by Sedgemoor or Somerset. The references to compulsory purchase in the letters of 29 July and 4 August 1997 were made by the claimants. The letter of 29 September 1997 by Mr Juniper to Mr Richards confirmed that the reference land was not needed for access to enable the remainder of Rosewood Farm to be developed; there was no reason to consider compulsory purchase. Conditions in planning permissions or planning agreements could not properly have guaranteed the provision of the EDR in its entirety because adequate access was available at the north and south of Rosewood Farm. Compulsory purchase was not considered as an alternative. In answer to a question from me, Mr Juniper confirmed that Sedgemoor have never given any consideration to the possible need to acquire land for the completion of the EDR. Funds were not available for this road. In the light of the current situation, where part of the EDR has not been built, Mr Juniper said that Sedgemoor were probably naive in thinking that the purchase of land would not be necessary but that has always been their position.
107. In cross-examination Mr Juniper accepted that the developers of Rosewood Farm had no responsibility for building the EDR, this rested with Somerset. If Somerset had decided to use compulsory powers this would have been to complete the road within a particular time scale.
108. Mr Betty said that the EDR had two purposes: the provision of an improved highway network and to ensure that residential development had suitable access to the route hierarchy. The EDR was intended to link the B3140 in the north to the B3139 in the south: to act as a town centre relief road. Although Somerset identified the line of the EDR in 1976 and asked Sedgemoor to protect this line, it has not adopted the scheme for its own implementation. Suitable access from residential development to the route hierarchy is assessed by Somerset on a site by site basis. Mr Betty referred to Estate Roads in Somerset and DB 32 and said that they do not support the claimants' assertion that the EDR at Rosewood Farm should have been completed before phase 3 planning permissions were granted. The current road layout at Rosewood Farm is acceptable to Somerset in terms of highways safety and compliance with Estate Roads in Somerset and DB 32. The claimants' contention that the construction of the whole of the EDR was required before more than 200 houses could be built at Rosewood Farm cannot be supported on highway grounds. Furthermore, the line of the EDR was not immutable: it was not inevitable that it would cross the reference land. Although the completion of the EDR was desirable for the wider highway network, Mr Betty said that he was content to see it built in sections as residential development proceeded. It was not a Somerset scheme. The objectives of Somerset as set out in the development guide have been achieved. It is anticipated that contributions from the developers of the remaining sites at Rosewood Farm will eventually fund the remaining length of the EDR.
109. Mr Betty said that, from his own knowledge since 1988 and from his search of relevant files, there is no record of Somerset or Sedgemoor having resolved to acquire land for the construction of the EDR at Rosewood Farm. In about 1998 it may have become apparent that the whole of this road might not be dedicated but no action has been taken. He has not given any indication that compulsory powers would be used if land was not made available by agreement. Similarly, Mr Betty has been unable to find any committee report where Somerset took into account any possibility of compulsory purchase for the completion of the EDR. Somerset's decisions concerning highways at Rosewood Farm were not influenced by the availability of compulsory purchase powers. Mr Betty was present at the meeting on 22 February 1995 but he has no recollection of any discussion of compulsory purchase.
110. In answer to questions from me Mr Betty said that if the purchase notice had not been served Somerset might have taken steps in the future to acquire the reference land. The letter of 23 April 1996 is not evidence of any change of policy by Somerset at that time.

Submissions

111. Mr Roots QC said that there are three elements in section 9 of the 1961 Act: an indication of acquisition or likely acquisition, a depreciation in the value of the land and a link between indication and depreciation: the depreciation must be attributable to the indication. Section 9 leaves open the means by which an indication may be given but it must comprise a statement or conduct, made by or on behalf of the authority in question, which is clearly capable of conveying the message that the land is, or is likely, to be acquired in circumstances in which compulsory purchase powers could be used. The claimants contend that Somerset are the authority likely to acquire the reference land and therefore it is necessary to look at the evidence which is alleged to support the contention that an indication was given by or on behalf of Somerset.
112. It is agreed that Somerset requested Sedgemoor to protect the line of the EDR; it was envisaged that the road would be built on this line. By inference, if the EDR was built by a developer, it would be dedicated under section 38 of the 1980 Act and become vested in Somerset as the highway authority. The planning agreements at Rosewood Farm refer to section 38 and therefore operate as agreements under this section. The prospect of dedication after construction is insufficient to amount to an indication under section 9. This section should be read as if the following words had been added at the end: "in order to carry out development on the relevant land in accordance with its statutory powers." This is consistent with the underlying purpose of the section, to ensure that compensation is not reduced due to the prospect of acquisition for a purpose which could be achieved through the exercise of compulsory powers. It is not accepted that, where a highway authority acknowledge that a road may have to be created in connection with other development, the prospect that, following that development, the highway will be dedicated and become vested in the authority, amounts to an indication under section 9. If the claimants' contention is correct it would mean that every time a highway authority approve the layout of the roads in a development this would be an indication under section 9.
113. Since dedication and vesting do not amount to an indication it is necessary to consider whether Somerset have given any other indication under section 9. There is no evidence that the council resolved to acquire the reference land or even considered so doing. They have not included in any document a statement which could be interpreted as an indication of acquisition. Somerset have not applied for planning permission to construct the EDR at Rosewood Farm.
114. The claimants rely on the local plan to show an indication. This is a Sedgemoor document and all the policies come from Sedgemoor. The terms in which Somerset objected to the deposit draft indicate that Somerset were not pressing for the construction of the EDR.
115. The construction by Somerset of part of the EDR to the south of Rosewood Farm with public funds is not an indication that they would do so at Rosewood Farm. Each section of the road serves a distinct purpose. The section south of Rosewood Farm was built partly by a developer and partly by Somerset to provide a useful link between Worston Road in the north and Burnham Road in the south. Somerset obtained deemed planning permission for this length of road, in contrast to the EDR at Rosewood Farm where no planning permission has been obtained by Somerset.
116. Statements or conduct by an officer of Somerset cannot be treated as an indication in the absence of evidence that the council expressly or impliedly resolved that acquisition was likely (see Western Fish Products Ltd v Penwith District Council at pages 25-28). In this respect the claimants rely on the evidence given by Mr Juniper at the purchase notice inquiry. This came too late to serve as an indication which might have influenced events. If it is relied upon to confirm a long standing position it must be considered in context. Mr Juniper repeated the point that, since shortly after the first Magnus planning permission in 1994, and from the viewpoint of access, the reference land was not required. Mr Juniper's reference to the acquisition of the reference land for highway purposes meant that the line of the EDR has been protected for several years. When constructed by developers it would be subject to an agreement and dedication under section 38 of the 1980 Act. The 1990 Act does not require it to be assumed that Somerset acquired the land for highway purposes under the 1980 Act.
117. There is a distinction in section 9 between "is to be acquired" and "is likely to be acquired". The former relates to a decision to acquire, the latter to the position where the authority may not have made a formal decision but have nevertheless progressed the project to a point at which it is possible to conclude that the land is likely to be acquired. The word "likely" means "probable", less than certain but more certain than merely "possible". This reference is concerned with whether the reference land "is likely to be acquired". For the reasons set out above it cannot be said to be likely to be acquired by dedication and vesting under the 1980 Act.
118. The claimants rely on letters and notes of meetings. None are capable of the interpretation that acquisition of the reference land was likely. If this is not accepted then there is no evidence that any representation by an officer was authorised by the council.
119. No indication has been given under section 9 of the 1961 Act.

Decision

120. I consider together the first two issues:-

(1) Has an indication been given within section 9 of the 1961 Act that the reference land is, or is likely, to be acquired by an authority possessing compulsory purchase powers?

(2) If so, when or over what period has such an indication been given?

The claimants contend that an indication was first given in 1977 and further indications have been given after that date. Somerset contend that no indication has been given.

121. Section 9 of the 1961 Act 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."

The expressions "relevant interest" and "relevant land" are defined in section 39(2):-

"... in relation to a compulsory acquisition in pursuance of a notice to treat, 'the relevant interest' means the interest acquired in pursuance of that notice, 'the relevant land' means the land in which the relevant interest subsists, ..."

"Land" is defined in section 39(1) to mean :-

"any corporeal hereditament, ..., and includes any interest or right in or over land ...;"

122. Section 9 of the 1961 Act was previously subsection (6) of section 9 of the Town and Country Planning Act 1959 which superseded similar but more restricted provisions in section 51(3) of the Town and Country Planning Act 1947. Section 9 of the 1959 Act modified the rules for the open market basis of compensation, then contained in section 2 of the Acquisition of Land (Assessment of Compensation) Act 1919 and now in section 5 of the 1961 Act. On the Second Reading of the Bill in the House of Lords the Lord Chancellor, Viscount Kilmuir, said that this section "enunciates and extends the well known principle of compensation that 'value due to the scheme' must be ignored" and "protects owners whose land is being bought from depreciation caused by a threat of public acquisition" (215 House of Lords Official Report 584). In Abbey Homesteads (Developments) Ltd v Northamptonshire County Council Glidewell LJ said that section 9 is a provision which is analogous to the Pointe Gourde principle and relates to planning blight (page 20 B-C). In Melwood Units Pty Ltd v Commissioner of Main Roads Lord Russell of Killowen, giving the judgment of the Privy Council, said (page 435):-

"... it is part of the common law deriving as a matter of principle from the nature of compensation for ... compulsory acquisition, that neither relevantly attributable appreciation nor depreciation in value is to be regarded in the assessment of land compensation. The relevant New South Wales section merely reflects the law, as it did in England section 9 of the Land Compensation Act 1961, ..."

123. The question whether an indication of possible acquisition has been given is one of fact (see English Property Corporation plc v Kingston upon Thames Royal London Borough Council at page 7). I derive assistance from the following decisions.
124. In London Borough of Hackney v MacFarlane six old houses and a shop were compulsorily acquired. Adjoining houses had been declared unfit for human habitation and subsequently acquired. The Court of Appeal held that the fact that adjacent houses had been compulsorily acquired was an indication within section 9 ("by ... other means") that the houses and shop in question were likely to be acquired and should be disregarded. Compensation should not be depreciated on that account. The provisions of the 1961 Act should be interpreted liberally (page 345). Sachs LJ said (page 345):-

"It is probably sufficient to say that, when one comes to the word 'indication', it really means very little more or less than the word 'sign' - a sign of intention - and, just as in the criminal law one has often to judge a man's intention by his actions, including those which have preceded the one under consideration, the same line of approach can properly be applied to signs as to what a local authority is likely to intend or to do."

125. In Trocette Property Co Ltd v Greater London Council the claimants were tenants of a disused cinema, the GLC were their landlords and had produced a plan showing the route of a proposed road through the property. Negotiations for a new long lease ceased due to this proposal. The claimants' interest was acquired following service of a purchase notice. Marriage value due to the merger of the landlords' and tenants' interests was effectively excluded by the road scheme and the value of the claimants' leasehold interest was thereby reduced. The Court of Appeal by a majority held that this depreciation was attributable to the road scheme, which was an indication within section 9 of the 1961 Act and must be disregarded.
126. The decision of the Court of Appeal in Jelson Ltd v Blaby District Council was concerned with the line of the Leicester ring road and an acquisition under a purchase notice. In 1951 the road was first shown as a "principal traffic road" in the development plan. Lord Denning MR referred to section 9 and said (page 80):-

"There is no doubt that this section applies here. An 'indication' was given years ago that this strip of land was to be acquired by an authority possessing compulsory purchase powers. It was given by the 'particulars contained in the current development plan' of 1951. Thereafter there were many 'indications' given time after time during the course of the various inquiries that this strip of land was to be acquired by the highway authority in order to make the ring road."

127. In Abbey Homesteads one of the issues was whether a restriction in a planning agreement reserving the land to be acquired for a school was an indication within section 9. The Court of Appeal held that the claimants' interest in the land taken was the freehold subject to the restriction. Neither the Pointe Gourde principle nor section 9 could apply so as to remove the restriction or require it to be disregarded. Glidewell LJ referred to section 9 and said (page 21 B-C):-

"In my view, in order to come within that section, an indication given 'by any other means' must share this characteristic with an indication to be found in the development plan, that it provides information which is available not merely to the landowner - vendor but also to a potential purchaser."

128. In English Property Corporation the indication was the revision to a planning permission granted in 1976 setting back the development to allow for future road widening.
129. The following guidance can be found in section 9 and the above decisions as to an indication within this section.
130. First, for a statement or action to be an indication within section 9 it must be a sign 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 sequence of actions (MacFarlane at pages 345-6). In my view, however, the sign must be read in context, against the background of development control and property development and the execution of public works at the time it is given. Thus, a fact which would be perceived as an indication of likely acquisition at a time when public works are wholly or mainly carried out by public authorities using public funds, with the compulsory acquisition of land, may not be seen as an indication at a time when there are financial restraints on public expenditure and where works of a public nature are often carried out or funded by private enterprise or in partnership with public authorities without resort to compulsory acquisition. I return to this point later.
131. Second, the statement or action said to be an indication must be given by an authority possessing compulsory purchase powers (in this case Somerset or Sedgemoor). It cannot be given by the claimant, his advisers or a third party. This follows as a matter of common sense from the words "has been given" in section 9, meaning "has been given by an authority possessing compulsory purchase powers". Mr Purchas submitted that the words "by any other means" in section 9 are wide enough to include an indication given otherwise than by an authority. I do not agree. In my view these words refer to the form of the indication, which can be in the development plan or given "by any other means", not to the source of the indication. It would be a strange situation if a claimant or his advisers could raise an indication by writing to the authority referring to compulsory purchase. An indication given by an authority may be evidenced from another source (and thus the question of weight would inevitably arise) but it must ultimately have come from the authority.
132. 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 (Abbey Homesteads at page 21 B). The indication must be made public or be otherwise ascertainable by potential purchasers. An indication given privately or which is not likely to come to the notice of such purchasers cannot be an indication within section 9 of the 1961 Act.
133. Fourth, the provisions of the 1961 Act should be interpreted liberally (MacFarlane at page 345).
134. In my judgment, and against the background of a liberal interpretation of the 1961 Act and the development control and execution of public works prevailing at the time, a statement or action by Somerset and Sedgemoor must satisfy the first three requirements referred to in the preceding paragraphs if it is to be an indication within section 9. It must be a sign of intention as to the likely acquisition of the reference land. It must be given by Somerset or Sedgemoor. It must be available not only to the owners of the reference land, but also to potential purchasers of the land at the date of valuation.
135. I consider now the facts and circumstances which the claimants rely on as an indication within section 9 of the 1961 Act. The claimants' case rests on a wealth of detail and, in order to give full consideration to their contentions, I must look at each of the "indications" relied on by the claimants.
136. I start with the resolutions of Somerset and Sedgemoor in 1976 and 1977. On 16 June 1976 the Planning and Transportation Committee of Somerset resolved as follows (minute 441):-

"(1) to approve in principle the line of the Distributor Road from Berrow/Highbridge Road (B3139) to the north of Stoddens Road, Burnham-on-Sea, ... subject to the agreement of the District Council; and

(2) to request the District Planning Authority and Planning Executive Sub-Committee to protect the line and include it in any plans for the area."

It is important to note that the committee had before it a report of the County Surveyor, which referred to development north of Rosewood Farm, including part of a north to south distributor road, and then commented:-

"Recent planning applications and a proposed change of use have made it desirable to lay down the general line of the Distributor from the Berrow/Highbridge Road (B3139) to north of Stoddens Road and to make modest adjustments to the alignment shown in the Development Guide. The Distributor Road is expected to be constructed mainly by the developers."

On 14 March 1977 the Planning Committee of Sedgemoor resolved:-

"... that the Council agrees to inform the County Planning and Transportation Committee that this proposed alignment of a future road to the east of Burnham-on-Sea should be protected for development control purposes pending preparation of the Statutory Local Plan for Burnham-on-Sea, and that any final decision on the alignment of the road (including its function) should be determined in the context of the Statutory Local Plan for Burnham-on-Sea."

I cannot find in these resolutions any indication of the possible acquisition of land for the EDR. They record a proposal for the protection of a road line for development control purposes. Furthermore, the County Surveyor's report makes it clear that this road is to be constructed by developers, with the implication that land is not to be acquired by Sedgemoor or Somerset.

137. In June 1988 Sedgemoor published a draft local plan and a public local inquiry was held in February 1989. The plan includes the line of the EDR and the proposed allocation of land for development at Rosewood Farm. The claimants refer to parts of the inspector's report as indications of possible acquisition.
138. There were numerous objections on the grounds of possible excessive use of Ashcott Drive and Rosewood Drive for access to the Rosewood Farm development (paragraph 2.38). Sedgemoor's response was (paragraph 2.39):-

"The development currently proceeding with access from Ashcott Drive is limited to 63 dwellings and any further development must be served by the new distributor road network specified in the design guide for the area. "

I do not find any indication here of possible acquisition for the EDR.

139. An objection by Magnus to the phasing of the Rosewood Farm development urged the early release of land in the southern part. If land in the south is not released at an early date the development of the whole site could be dictated by one dominant landowner (paragraph 2.41). Sedgemoor responded (paragraph 2.42):-

"The phasing of development is not 'arbitrary' but is intended to ensure that appropriate infrastructure can be provided as the development proceeds. It is desirable that development proceeds from north to south to direct traffic to the Love Lane and Edithmead Link Road routes to the Town Centre and to the M5 Motorway respectively. ... It is also confident that dictation by one landowner can be prevented and that undue delay in the progress of development will not occur."

The inspector found the council's submissions convincing and saw no reason to doubt their assertion regarding potential impediment to the progress of development (paragraph 2.43). The claimants particularly rely on the last sentence in Sedgemoor's response as an indication that compulsory purchase powers will be used to ensure the construction of the whole of the EDR. I do not put this interpretation on these words. This sentence contains an opinion as to the likely course of development, not an expression of willingness to use compulsory powers to resolve difficulties in the construction of the EDR. What actually happened later was that Sedgemoor granted planning permission to Magnus for development in the south and, in effect, changed their policy and acknowledged the force of Magnus's view on the question of phasing. These are not, however, indications of possible acquisition.

140. Somerset objected to the amount of housing proposed at Rosewood Farm and commented that the desire to secure the EDR in its entirety at developers' expense is the basic reason for the amount of housing proposed (paragraph 2.44). Sedgemoor replied (paragraph 2.46):-

"The Council does not consider that it can rationally allocate only part of the land concerned, which is a finite area bounded by the proposed Eastern Distributor Road."

The inspector agreed that Rosewood Farm is a finite area bounded by the EDR, to be considered as one comprehensive unit (paragraph 2.47). These statements refer to planning control and I cannot find here any indication of likely acquisition.

141. An objection was made regarding the loss of open land (paragraph 2.49). Part of Sedgemoor's response was (paragraph 2.50):-

"Construction of the Eastern Distributor Road should improve the quality of life in some respects and population growth should be accompanied by improvements in the nature and quality of local services."

There is no indication here of possible acquisition.

142. I was referred to an objection by David Dodgson Ltd that the protected road line does not facilitate the best use of development land to the north of Stoddens Road. Realignment to the east was proposed (paragraph 4.1). The response of Sedgemoor was (paragraph 4.2):-

"The 'protected road line' carries no presumption that the land through which it passes will be released for development at any future time. The alignment of the route should be governed by engineering and other practical considerations in the context of the route as a whole and not on the basis of the aspirations of one landowner. The alignment of the protected route is considered to be entirely appropriate."

I cannot find in these words any indication of possible acquisition.

143. Looking at the above matters singly and cumulatively I cannot find any indication of the possible acquisition of the reference land.
144. I turn now to the local plan, adopted in April 1990, which must be considered with the development guide of January 1989.
145. I look first at the local plan and the proposal for the EDR (Proposal BH/T4). "Proposals" in the local plan (paragraph 1.12):-

"... define specific sites for particular types of development in accordance with planning policy. Proposals usually involve financial expenditure, either from public or private funds, or a combination of both. Only proposals which may reasonably be expected to start within about ten years can be included in the Local Plan."

I note two points in this definition: proposals are an expression of planning policy and expenditure may be public or private. Proposals do not mean public works carried out by public authorities at public expense.

146. Proposal BH/T4 is illustrated on Inset 1 to the local plan as a "road scheme/protected road line" in two lengths, Love Lane North to Stoddens Road and then northwards stopping just short of Brent Broad Rhyne (without connection to an existing or proposed road) and as the eastern boundary of Rosewood Farm between Love Lane roundabout in the north and Pepperall Road in the south. It shows three access points to the Rosewood Farm development land (Proposal BH/H4) and one to the proposed cemetery (Proposal BH/U1).
147. Paragraph 6.04 in the local plan is as follows:-

"The County Council has no proposal to construct any 'major road scheme' in the Plan Area; but the line of an 'Eastern Distributor Road' at Burnham-on-Sea has been identified and protected since 1977 with the intention that the major share of the construction costs would be met by developers in conjunction with the development of adjoining land. It has also been anticipated that such a route could be extended northwards to improve access to the Brean and Berrow Area."

148. Proposal BH/T4 is explained as follows:-

6.25 PARTS OF THE BURNHAM-ON-SEA EASTERN DISTRIBUTOR ROAD BETWEEN WORSTON LANE (HIGHBRIDGE) AND STODDENS ROAD (BURNHAM) WILL BE CONSTRUCTED IN CONJUNCTION WITH THE DEVELOPMENT OF ADJOINING LAND; AND THE PREVIOUSLY IDENTIFIED CONTINUATION OF THIS ROUTE NORTHWARDS BEYOND STODDENS ROAD WILL CONTINUE TO BE A PROTECTED ROAD LINE.

Reason:-

6.26 To secure the provision of an improved highway network to serve the urban area and to ensure that new residential development in this area has suitable access to the route hierarchy.

Interpretation:-

6.27 The road line has been protected from development since 1977 and parts of Love Lane have already been improved in conjunction with adjoining residential development. The road is to be constructed to 'District Distributor Road' standard with a 7.3 metre carriageway. The timing of construction will be dependent upon the phasing of adjacent development in the remaining parts of the Love Lane development and the Rosewood Farm area (Proposal BH/H4 refers); developers being required to enter into legal agreements to secure appropriate financial contributions.

6.28 Funding for a northwards continuation of the Burnham-on-Sea Eastern Distributor Road beyond Stoddens Road is not likely to be available during the Plan Period but the aim of achieving a more commodious route between the primary road network and the Brean/Berrow/North Burnham area remains a longer term objective and it is therefore considered appropriate that the existing 'Protected Road Line' continues to be safeguarded."

149. These paragraphs make it clear that the road has a dual function (as part of an improved highway network and to provide suitable access to new residential development) and that the cost is to be met by developers. The EDR may be contrasted with the Brean-Berrow coast road (Proposal BH/T5) where it is stated that there is little prospect of funding for this scheme and therefore the work will be carried out by Somerset "as a series of separate minor improvements as land and finance become available" (paragraph 6.31). Here, by comparison with the EDR, there is some indication that the county council will play an active role under this proposal.
150. The implementation of the EDR is given priority rating A (fundamental to the plan) and the responsibility is Somerset and the private sector. Phasing is throughout the plan period. Chapter 11 of the local plan (implementation) underlines private sector involvement in what at one time would have been seen as solely public works. In paragraph 11.02 it is stated that the "implementation of the proposals does not rest solely with the public sector but relies also on private sector involvement." Paragraph 11.06 states:-

"Many of the proposed releases of land for development have been deliberately conceived and drafted to secure associated infrastructure investments, particularly new roads and public open space, as planning gain. In the prevailing context of public expenditure constraints this approach to securing investment in schemes which will improve local facilities or ameliorate existing problems is considered to be entirely appropriate. Such instances of interdependence are generally evident from the Proposals Map (geographic proximity) and are further highlighted in the Written Statement."

151. Proposal BH/U1 is for the allocation of land for a cemetery to the east of the EDR. Paragraph 10.07 states:-

"Access to the site is dependent upon prior constructions of an appropriate length of the proposed Eastern Distributor Road. The Rosewood Farm Development Guide seeks to secure construction of this road in conjunction with residential development (Proposal BH/H4 refers) prior to occupation of any dwellings in Phase 2 of that development."

This access was to have been from the EDR on the reference land but the abandonment of the cemetery proposal by the Burnham Joint Burial Committee in 1993 removed the need for the EDR to be built to this access point.

152. Proposal BH/H4 is the allocation of land for residential development at Rosewood Farm. Paragraphs 3.19 to 3.21(part) are as follows:-

"Reason:-

3.19 To ensure the continued supply of land for new housing development in a location which satisfies the requirements of Structure Plan Policy SP2. Development in this area will also secure the construction of a major section of the Burnham Eastern Distributor road (Proposal BH/T4 refers).

Interpretation:-

3.20 The principle of the release of this land for development has already been determined through the granting of planning permissions on parts of the area. The road layout and other infrastructure need to be designed to accommodate a comprehensive development and to this end the District Council has approved a Development Guide for the Rosewood Farm area. The entire developable area is allocated in the Local Plan, this totals about 28.5 hectares which could accommodate approximately 850 dwellings. Developers will be expected to fund all infrastructure provision in this area. The costs of facilities which serve the area as a whole (e.g. Eastern Distributor Road, off-site drainage improvements and major public open spaces) will be shared in proportion to the size of the developer's site. The scheme is phased to proceed from the northern end where good access to the existing highway network is available via the Love Lane roundabout. Development from the north is also the most satisfactory for extension of existing water supply and sewerage systems. Further details of these infrastructure requirements and other matters are set out in the Development Guide. The access via Ashcott Drive is likely to result in some increase in traffic in the existing residential neighbourhood; this is not anticipated to reach proportions which would cause undue difficulties but the situation will be monitored by the local highway authority and consideration given to any measures that may be necessary.

3.21 Whilst the whole site is allocated in the interest of resolving layout matters on a comprehensive basis, and the District Council is prepared to grant planning permissions in this context, the inference that development will be completed before 1996 is not intended. The phasing provisions of the Development Guide will permit a maximum of 56% of the site (phases 1 and 2) to be occupied before April 1993; i.e. approximately 475 dwellings."

153. The local plan must be considered in conjunction with the development guide. This comprises explanatory material and a plan showing the EDR between Love Lane and Pepperall Road and the LDR through Rosewood Farm as two loops with three connections to the EDR. The second paragraph of the introduction makes it clear that the EDR is a fundamental requirement of the Rosewood Farm development and that it is to be constructed "at the developers' expense". This is amplified as follows:-

"The Eastern Distributor Road is to be constructed at developers' expense in sections as the housing development proceeds. The scheme is phased to proceed from the northern end where good access to the existing highway network is available via the Love Lane roundabout. Development from the north is also the most satisfactory for extension of existing water supply and sewerage systems. The phasing arrangements will require completion of the Local Distributor Road loop at an appropriate stage."

Developers will be required to contribute to the cost of the EDR on the following basis:-

"(i) by paying to the County Council £13,000 per hectare of residential development land at 1987 prices index-linked;

or

(ii) by constructing the road to standards specified by the Somerset County Council (with appropriate financial reimbursement being made if the length of road constructed exceeds the required pro rata contribution of 40 metres per hectare of residential development land)."

154. In my judgment, two points emerge regarding the EDR from the local plan and the development guide. First, that this road is to be wholly provided by the private sector by contributions or by construction. Second, that Somerset and Sedgemoor do not have the financial resources to provide the EDR at Rosewood Farm and are unlikely therefore to play any part in the provision of the road by the acquisition of land or the construction of any part of the road out of public funds. I can find no indication under section 9 of the 1961 Act in the local plan and development guide.
155. I look now at the history of development control at Rosewood Farm. Most planning permissions for residential development at Rosewood Farm were accompanied by a planning agreement which included provisions relating to the EDR. These agreements fall into two broad categories in so far as they refer to the EDR. In the first category the developers were required to pay to Somerset a contribution towards the cost of the EDR and Somerset agreed to use its best endeavours to build part of the EDR or to apply the contribution towards the cost of construction (see planning agreements dated 15 January 1988, 4 February 1994, 14 October 1997 and 7 December 1998). In the second category are those agreements where the developers agreed to build part of the EDR and transfer the road to Somerset as highway authority (see agreements dated 4 February 1994 (roundabout), 25 September 1995, 14 March 1996, 24 February 1998). The planning permissions dated 11 March 1992, 12 May 1998 and 7 December 1998 also refer to the EDR..
156. In his closing submissions Mr Purchas said that the vesting of a highway as a result of dedication constituted an acquisition under section 9 of the 1961 Act. Therefore, vesting under the planning agreements was an indication of acquisition under section 9. Mr Roots resisted this contention: the prospect of dedication after construction of a highway is insufficient to amount to an indication under section 9. The agreements dated 4 February 1994, 28 September 1995 and 4 March 1996 each provided for construction of the roundabout or part of the EDR with provision for dedication/adoption upon completion and the agreement dated 24 February 1998 also provided for the conveyance or transfer or, at the discretion of Somerset, dedication of a further strip of land (C-D) on the line of the EDR. Do these arrangements amount to an indication under section 9? It is necessary to look now at the relevant provisions of the Highways Act 1980.
157. An owner may dedicate land as a highway. Section 38(3) of the 1980 Act provides for the adoption of a highway by agreement:-

"A local highway authority may agree with any person to undertake the maintenance of a way -

(a) which that person is willing and has the necessary power to dedicate as a highway, or

(b) which is to be constructed by that person, or by a highway authority on his behalf, and which he proposes to dedicate as a highway;

and where an agreement is made under this subsection the way to which the agreement relates shall, on such date as may be specified in the agreement become for the purposes of this Act a highway maintainable at the public expense."

Where a highway is maintainable at the public expense the highway vests in the highway authority (section 263(1)). The effect of statutory vesting is explained in Halsbury's Laws of England (vol.21) (4th ed re-issue 1995) at paragraph 108:-

"The effect of the statutory provisions vesting highways in highway authorities is not to transfer the fee simple absolute in the land to the authority, even where it had originally been vested in turnpike trustees, but merely to vest in the authority the property in the surface of the street or road, and in so much of the actual soil below, and air above, as may reasonably be required for its control, protection and maintenance as a highway for the use of the public. The rights and property of the original owner remain, except so far as they are transferred to the authority; and even so far as they are thus transferred, they revest in him if the street or road ceases to be a highway. The interest in the property so vested in the authority is a legal estate in fee simple determinable in the event of the street or road ceasing to be a public highway."

Mr Purchas referred to Tithe Redemption Commission v Runcorn Urban District Council at pages 397-98, 407-8 as authority for the proposition that the depth of a highway vested in a highway authority is so much of the soil as is necessary for the authority to carry out its functions. "Land" in the 1961 Act includes any interest or right in or over land (section 39(1)).

158. Having regard to this brief excursion into the law of highways and the provisions of the planning agreements referred to above, do these provisions amount to an indication under section 9? The process under these agreements is that the developer carries out the highway works and Somerset adopt those works under section 38 of the 1980 Act. The highway then becomes maintainable at public expense and vests in Somerset. The extent of the vesting is the surface of the road and so much of the soil below and the air above as may reasonably be required for the control, protection and maintenance of the highway for the use of the public. The interest vested is a legal interest in fee simple determinable in the event of the road ceasing to be a public highway. The vesting, which may be called the acquisition, occurs by agreement after the works have been carried out. In my view this is an entirely different situation to that envisaged under section 9.
159. The purpose of section 9 is to exclude from the assessment of compensation depreciation due to the prospect (or threat) of acquisition by an authority with compulsory purchase powers. It is analogous to the Pointe Gourde principle. A threat of acquisition for the building of a road (as in Jelson) could be within section 9. Footnote 4 to paragraph 108 in Halsbury makes it clear that the compulsory acquisition of land for the construction of a highway usually involves the purchase of the entire interest of the owner. Furthermore, section 9 of the 1961 Act (read with section 39(2)) refers to "the relevant interest", i.e. the interest acquired, and an indication that "the relevant land is, or is likely, to be acquired", i.e. the land in which the interest to be acquired subsists. Although "land" is defined to include "any interest or right in or over land" it seems to me that an indication under section 9 must refer to the whole of the interest likely to be acquired, not part only of that interest, as is the case with vesting under the Highways Act 1980. In my judgment, the prospect of vesting by agreement after a highway has been built by agreement cannot be "an indication ... that the relevant land is, or is likely, to be acquired ..." The indication under section 9 must be something unwelcome which provides a depreciation of value; the prospect of vesting of a highway by agreement is not unwelcome to the owner, who disposes of any obligation to maintain, and can cause no depreciation to the land on which the highway has been built. These are two wholly different situations within different legal regimes. I agree with Mr Roots that it would be an absurd situation if, every time a highway authority approved the layout of roads in a proposed development, they gave an indication under section 9 that the land on which the roads are to be built is, or is likely, to be acquired. I reject Mr Purchas's submissions on this point.
160. The planning permissions and planning agreements are examples of development control. The planning permission to Magnus dated 9 February 1994 and the related planning agreement of 4 February 1994 represented a change of policy and a departure from the phasing in the development guide. I do not see this as an indication that it would now be necessary for the reference land to be acquired. This is not a consequence of this change of policy. Furthermore, the fact that the whole length of the EDR from Love Lane to Pepperall Road has not been secured by planning conditions or planning agreements does not, in my view, necessarily mean that the reference land might be acquired by Somerset or Sedgemoor. This is not therefore an indication under section 9. I do not think that owners and developers who might have been prospective purchasers of the reference land would see this situation as a sign of possible acquisition. I accept the evidence of Mr Juniper and Mr Betty 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. Overall, I find that the planning permissions and planning agreements, considered individually or collectively, do not constitute an indication under section 9.
161. Planning control has also been exercised at Rosewood Farm by several refusals of planning permission. Mr Pugh in his evidence drew attention to the main reason for refusal, that access had to be from the EDR in accordance with the development guide. I cannot find in this reason an indication that Somerset or Sedgemoor were likely to acquire the reference land. The reason is a planning reason given in the exercise of planning control, not an indication of possible acquisition of the land. The refusals of planning permission do not constitute an indication under section 9.
162. I look now at the correspondence I have been referred to as evidence of an indication. Six letters are to Sedgemoor from Michael Evans & Co (solicitors), Hardpart Ltd and Mr Richards. They do not record statements made by Sedgemoor which might indicate possible acquisition, they were not given to possible purchasers of the reference land. These letters do not therefore satisfy any of the three requirements of an indication under section 9. The other correspondence relied on by the claimants comprises four letters from Sedgemoor.
163. The first letter is dated 23 April 1996 and is from Mr Juniper to Mr David Dodgson. The material part is as follows:-

"...I confirm that both the County Highway Authority and the local planning authority are content that the whole of the Development Guide area could be developed as envisaged in the Development Guide with access from the Love Lane roundabout only, via the Eastern Distributor Road and the Local Distributor Road. There is thus no question of any of the land controlled by yourself, Beazer Homes or Mr Jones needing to await the completion of the Eastern Distributor Road across land controlled by Magnus Homes Limited before development can proceed."

The claimants particularly rely on this passage. Mr Pugh said that this letter formally lifted any restrictions on development from Love Lane and removed any need to link the EDR through to the southern section built by Magnus. This allowed Baker/Dodgson to obtain planning permission on 19 March 1998 (ref 12/96/012) for residential development on land on the middle and eastern parts of Rosewood Farm. Mr Purchas said that the policies in the local plan and development guide, particularly those requiring a contribution rather than construction of the EDR, were wholly dependent upon the construction of the EDR by Somerset. This implied the acquisition of rights to do so. That commitment and the absence of any policy requiring construction resulted in the letter of 23 April 1996. The consequences of that letter were the release of land for development without the securing of control over the reference land or the completion of the EDR, the offer of land from Magnus by Dodgson on 28 May 1996, the Dodgson/Beazer planning applications and the Beazer ransom payment to Dodgson for securing access from Dodgson to Beazer land.

164. I cannot agree that the letter of 23 April 1996 contain an indication of the possible acquisition of the reference land. It is a statement on behalf of the local planning authority of their current policy regarding planning control at Rosewood Farm and, in particular, their access requirements. I cannot find any suggestion, express or implied, that they may acquire the reference land. I do not think that any reasonable owner or developer of land at Rosewood Farm, who might wish to buy the reference land, would interpret that letter as an indication that Somerset or Sedgemoor might acquire the land.
165. The next letter is dated 24 January 1997 from Mr Juniper to Michael Evans & Co, solicitors. The material part of this letter is as follows:-

"It has never been the intention of the District Council to use the provisions of the Development Guide to overcome 'key' issues arising between landowners; it was always expected that these would be overcome by commercial negotiations in the normal way. Indeed it is my understanding that there is substantial case law (eg Hall v Shoreham) that specifically precludes planning authorities from requiring developers to provide access to third party land.

I do not see, therefore, that the public authorities have in any way acted unreasonably in regard to the progress of the development of the Rosewood Farm area. Indeed it could be argued that they have behaved with desirable flexibility in departing from the original terms of the Development Guide where circumstances permitted. Whilst I appreciate the frustration of your clients and other development companies at the relatively slow progress made by the parties controlling the land to the north, it would seem to me ironic indeed if the public authorities were to be criticised for taking steps to bring forward land for development allocated in an adopted Local Plan."

As I understand the claimants' case, it is that not only was Mr Juniper wrong to state that planning authorities are precluded from requiring developers to provide access to third party land, but this meant that Sedgemoor or Somerset, in the absence of the provision of access across the reference land, would buy the land to provide such access. That is not my interpretation. The letter as a whole explains the change of policy to allow development from the south and is an 'indication' that Sedgemoor have no intention of intervening between developers and owners to resolve access and ransom problems. I can find no indication of possible acquisition in this letter.

166. On 1 August 1997 Mr Morgan of Sedgemoor wrote to Hardpart c/o M J Evans & Co replying to matters of concern raised in an earlier letter (29 July 1997) written by Mr Richards. In paragraph 7 of the former letter Mr Morgan wrote:-

"It is hoped that further sections of the eastern distributor road will be constructed in the near future to facilitate the Local Plan objectives. If, at that time, there are obstacles preventing the completion of the entire length of the eastern distributor road, the authority will have to consider what action it wishes to take. This may include compulsory purchase powers. To date such action has not been necessary and I would hope that existing situation will prevail. I cannot prejudge what the situation at that time will be. However, such matters will have little impact on the determination of this planning application."

This paragraph, in my judgment, confirms the absence of possible compulsory acquisition in the past and hopes that this situation will continue. I do not think that, taken in context, the words "this may include compulsory purchase powers" are strong enough to amount to an indication within section 9. Even if they are an indication it was given only to the owners of the reference land. I heard no evidence that this statement was known to prospective purchasers.

167. Finally, I consider the letter dated 29 September 1997 from Mr Conder of Sedgemoor (signed by Mr Juniper) to Mr Richards. This was in reply to two letters from Mr Richards suggesting the purchase by Sedgemoor of the reference land at its commercial value, the possibility of service of a purchase notice and referring to two cases concerned with ransom value (Batchelor and Ozanne). The letter of 29 September 1997 confirmed the policy of Sedgemoor, rejected a value above agricultural value and gave no indication of possible acquisition.
168. Overall, I cannot find in this correspondence an indication within section 9 of the 1961 Act.
169. Next I consider two meetings relied on by the claimants. On 22 February 1997 a meeting was held regarding the grant of planning permission to Magnus and the completion of a planning agreement. Mr Betty and Mr Humphreys attended the meeting. The minutes to which I was referred were prepared by Mr M J Evans, solicitor to Magnus. They record the wish of Somerset that Magnus should construct part of the EDR, rather than pay a contribution, and then say:-

"In stating this, they acknowledge that Magnus have a ransom strip and that that ransom strip would be 'moved' to the northern boundary of the BT land. Other applications on the site are subject to appeal and there are questions of CPO's. There could be a scenario where compulsory powers are used to link the road through the ransom strip and the question of its value would then be a mater for compulsory purchase valuation."

Mr Betty said that this is not an accurate record. I reject this statement as an indication for three reasons. I am not satisfied that it is an accurate record agreed by both parties; the statement was not made directly by Somerset but is an indirect record made by a third party (solicitor to Magnus); and it was not available to prospective purchasers of the reference land.

170. On 26 August 1997 the Planning Committee of Sedgemoor considered the planning application which led to the service of the purchase notice on the reference land. A report to the committee stated that Mr Richards asks for the following statements to be included in this report:-

"1) The equivalent of 1000 units will be served from the one access, in traffic usage terms, until the Eastern Distributor Road is completed.

2) There has been a change in the Phasing from the north, irrespective of whether it can be justified in planning and highway terms.

3) How your Council intends to ensure the completion of the Eastern Distributor Road?

4) Who will pay for our land if your Council uses CPO powers?"

Clearly, these statements by one of the claimants cannot constitute an indication by Somerset or Sedgemoor of possible acquisition.

171. I look now at the policy of, and actions by, Somerset relating to the EDR to the north and south of Rosewood Farm. The whole length of the EDR approved by Somerset and Sedgemoor in 1976 and 1977 falls into four sections. To the north of Stoddens Road the EDR is a protected line. Between Stoddens Road and Love Lane the EDR is an existing road (Love Lane North) which has been improved. Between the Love Lane roundabout and the Worston Lane/Worston Road roundabout the EDR is a new road forming the eastern boundary of Rosewood Farm. To the south the EDR is an existing road, Pepperall Road, which has been improved and which joins Burnham Road (B3139). In my judgment, these lengths of road are distinct and serve different purposes. The policies adopted by Sedgemoor for the building of these lengths of the EDR are distinct. To the north of Rosewood Farm the EDR constituted the improvement of an existing road and I heard little evidence regarding the involvement of Somerset. To the south of Rosewood Farm the EDR was again the improvement of an existing road (Pepperall Road) and the evidence showed Somerset playing a more active role, including the obtaining of planning permission and the construction of part of the road.
172. I do not find that the more active involvement by Somerset north and south of Rosewood Farm to be an indication of the possible acquisition of the reference land, on a different section of the road. At Rosewood Farm Somerset have not resolved to build any part of the road nor acquired land for that purpose; they have not obtained nor sought planning permission. They have made it clear in policy documents and elsewhere that the EDR at Rosewood Farm is to be provided by developers. A prospective purchaser of the reference land with knowledge of the position at Rosewood Farm and to the north and south would not, in my view, have considered the actions of Somerset to be an indication of acquisition. He would have distinguished their policy and actions and concluded that a more active involvement north and south of Rosewood Farm was not a sign of such an approach at Rosewood Farm. No indication of possible acquisition had been given.
173. I look now at the sale of land in 1988 by Somerset. This was a strip of land at the northern end of Rosewood Farm sold to Baker/Dodgson, owner and owner-developer respectively of adjoining land. Mr Pugh said that Somerset claimed that the strip had ransom value. Sale at ransom value indicated that Somerset knew the relevant planning and highway issues affecting Rosewood Farm and the "well-established valuation principles" for such land (see letter of 17 June 1988). Prospective purchasers of the adjoining Baker/Dodgson development land were advised of the access/ransom problem by a letter dated 27 April 1988 from Barrington & Sons, solicitors to Baker/Dodgson. They were thus alerted to the need to secure satisfactory access to the land. Sedgemoor were aware of these matters. In the light of these facts, all prospective purchasers and existing owners expected the route of the EDR in its entirety between Love Lane and Pepperall Road to be secured by planning conditions and/or planning agreements.
174. The letter of 27 April 1988 to prospective purchasers of the Baker/ Dodgson development land to be sold by tender contained the following paragraph:-

"Somerset County Council are considering their position as land owner of an intervening rhyne, and there is a degree of uncertainty as to whether or not the said rhyne enables the Council to claim a ransom for providing road access from Love Lane to Rosewood Farm ..."

I am unable to understand how this letter and the sale of a strip of land by Somerset to Baker/Dodgson at ransom value can be said to be an indication within section 9 of the 1961 Act of the possible acquisition of the reference land. All that these facts prove is that Somerset as landowners were aware of ransom value and that this was probably also known at the time to purchasers of the Baker/Dodgson land. I find that the sale of this land by Somerset is not an indication under section 9 of the 1961 Act.

175. Finally, I look at the purchase notice inquiry. This was held on 27 and 28 October 1998. Mr Juniper gave evidence on behalf of Sedgemoor. Paragraph 3.03 of his Proof states:-

"Although it is desirable to complete the Eastern Distributor Road in due course, the land allocated for development in the Local Plan can be developed separately in the meantime with access to the northern part via the Love Lane roundabout and Ashcott Drive and to the southern part via Pepperall Road. The County Highway Authority has no objection to development proceeding in this way. The Eastern Distributor Road is unlikely to be completed until all the contributions from developers in the area are in place, since it is a 100 per cent developer funded road. The need to resolve possible difficulties arising from the development of part of the area which is close to a former landfill site means that these contributions are unlikely to be in place for at least another three years."

The claimants particularly rely on paragraph 4.01 of Mr Juniper's Proof:-

"The District Council has a long standing strategy for the Rosewood Farm area, which ultimately envisages the acquisition of the" (referenced land) "for highway purposes ..."

176. At the inquiry Mr W E Wall FRICS FAAV gave evidence for the claimants. Two paragraphs in his witness statement may be noted:-

"10.4 In para 5, SDC suggests that the claimants have made no attempt to sell, let or licence the notice land to a third party. I would point out that the claimants approached SDC as long ago as 1 September 1997 ... requesting that SDC buy the notice land. SDC declined to respond and the purchase notice was therefore served ...

10.5 The claimants did not contact any of the developers on the Rosewood Farm site because they knew from an examination of the Section 106 agreement, required in connection with the adjacent residential development, that none of the developers had any obligation to acquire the notice land for the construction of the Eastern Distributor Road ..."

177. In a letter dated 22 October 1998 the Assistant County Solicitor to Somerset wrote to Sedgemoor declining to add to the case being advanced by Sedgemoor. The penultimate paragraph of that letter is as follows:-

"You also raised the possibility that, if the Inspector were minded to confirm the Notice, the District Council would contend that the County Council should be substituted for it as the purchasing Authority ... Given that the land in question lies directly on the route of the Burnham-on-Sea Eastern Distributor Road, and will ultimately have to be acquired for highway purposes, the County Council could not reasonably resist any such contention. This statement is, of course, entirely without prejudice to the County Council's view that the Purchase Notice is misconceived and should not be confirmed."

178. Mr Pugh relied on paragraph 4.01 of Mr Juniper's Proof and the letter of 22 October 1998 as confirmation that the acquisition of the reference land for highways purposes had been anticipated throughout by Sedgemoor and Somerset. These statements confirm, he said, that the acquisition of the reference land as part of the provision of the EDR was the scheme involved in Sedgemoor's long standing strategy and came into existence many years ago.
179. Mr Roots submitted that statements by an officer cannot be treated as an indication in the absence of evidence that Somerset had expressly or impliedly resolved that acquisition of the reference land was likely. He referred to Western Fish Products Ltd v Penwith District Council. The statements by Mr Juniper at the purchase notice inquiry came too late to serve as an indication which might influence events. Presumably it is relied upon by the claimants to confirm what has always been the position. It should be read in context. Paragraph 4.01 must be considered in relation to paragraph 3.03. Thus, even before the claimant had identified his claim for compensation, Mr Juniper was repeating the point made by the authorities since shortly after the first planning permission granted to Magnus in 1994 that, from the viewpoint of access to development, the reference land was not required. The reference by Mr Juniper to the acquisition of the reference land for highway purposes was no more than a statement that the line of the EDR had been protected for several years and that, when the EDR at Rosewood Farm was constructed by developers, there would be agreement under section 38 of the Highways Act 1980 that dedication would follow construction. The same interpretation can be placed on the letter of 22 October 1998 from Somerset. The 1990 Act does not require it to be assumed that Somerset acquired the land for highway purposes under the 1980 Act.
180. On this last point Mr Purchas said that Somerset were substituted as acquiring authority because they needed to acquire the reference land for highway purposes. As to the question whether an indication can be given by an officer, Mr Purchas said that section 9 refers to an indication "by any other means". The decision in Western Fish does not prevent an officer giving an indication without formal authority from his council. That case was decided on the entirely different point of estoppel in relation to planning control. An indication of possible acquisition by an officer does not commit his authority to buy the land and therefore the question of estoppel does not arise.
181. The statement by Mr Juniper in paragraph 4.01 of his Proof seems to indicate the future acquisition of the reference land: "The District Council has a long standing strategy for the Rosewood Farm area, which ultimately envisages the acquisition of the "(reference land)"for highway purposes". It must, however, be considered in context. It was made at a purchase notice inquiry where the issue was whether the land was incapable of reasonably beneficial use. It was a gratuitous statement and, in my view, it is clearly wrong and in conflict with other evidence. It appears to mean that Sedgemoor are to be the acquiring authority under their long-standing strategy for Rosewood Farm. However, Sedgemoor were opposing acquisition of the reference land under the purchase notice. If they intended to acquire the land, why did they not accept the notice and avoid the possible need for a compulsory purchase order? In paragraph 10.4 of Mr Wall's witness statement (for the claimants) he said that the claimants tried to sell the reference land to Sedgemoor in September 1997 but Sedgemoor failed to respond. Why should Sedgemoor decline to consider purchase if they had already intended to buy the land? Sedgemoor, although promoters of the EDR, are not the highway authority and have never given an indication that they might need to acquire the reference land. Why should they wish to do so in the future? In paragraph 3.03 of his Proof Mr Juniper makes it clear that the present situation, with the EDR at Rosewood Farm in two unconnected sections, is satisfactory. In his evidence before me he was adamant that there has never been any suggestion by Sedgemoor that it might acquire land for the EDR. Mr Betty, on behalf of Somerset, was equally adamant that acquisition of land for the construction of the EDR was never considered by Somerset. The letter of 22 October 1998 by Somerset to Sedgemoor, agreeing to substitution as acquiring authority, makes it clear that Somerset opposed the purchase notice while recognising that the reference land "will ultimately have to be acquired for highway purposes".
182. In my judgment, the meaning of paragraph 4.01 in Mr Juniper's Proof, considered in context, is the meaning suggested by Mr Roots in his closing submissions. Acquisition did not mean acquisition in order to construct the EDR, it meant acquisition by way of dedication and adoption by agreement after the EDR across the land had been constructed, either by a developer or by Somerset with funds provided by developers.
183. I find that no indication under section 9 was given by Mr Juniper in his evidence to the purchase notice inquiry nor by the letter dated 22 October 1998 from Somerset to Sedgemoor. It is unnecessary for me to consider whether Mr Juniper was authorised to make the statement. Even if I am wrong, and the statement in paragraph 4.01 of Mr Juniper's Proof is an indication of acquisition under section 9, it was given on 26 or 27 October 1998, only a few months before the agreed date of valuation, 18 August 1999, and, as Mr Roots said, it was given far too late to influence events and cause a depreciation in value.
184. I have now considered each of the 'indications' suggested by the claimants. I have found that none of them individually constitutes an indication of possible acquisition under section 9 of the 1961 Act. Do they cumulatively amount to such an indication? I do not think so. Essentially, they are examples of planning control, not indications of likely acquisition, compulsory or otherwise. They must be considered in their time: a time of financial restraint on local authorities when public works were often provided and paid for by private developers through planning agreements. In an earlier period, the 1950s or 1960s, the EDR would have been constructed by the highway authority at public expense using powers of compulsory purchase for the prior acquisition of the land. The position had changed, however, by the period covered by this reference. It could no longer be assumed that a road would be provided by a public authority at public expense. Planning gain was now important, secured by planning agreements linked to the grant of planning permission. Accordingly, facts or circumstances which might have been an indication of likely acquisition when section 9 was first enacted would not have been seen to be so from the mid to late 1970s onwards.
185. In my view the overall position is as follows. The development of Rosewood Farm started with resolutions by Somerset and Sedgemoor to protect the line of the EDR. These were based on a report from the County Surveyor that the road is to be constructed mainly by developers. Thus, at the outset, it was clear that this road would be provided by the private sector. There was no indication of acquisition. To the proposal for the EDR was added the development of Rosewood Farm, fully explained in the local plan and development brief. These were statements of planning policy for the purposes of development control. The provision of the EDR by the developers of Rosewood Farm was clearly set out in these public documents. It would have been known to developers at Rosewood Farm and to any prospective purchaser of the reference land.
186. The development of Rosewood Farm proceeded by successive grants of planning permission in a piecemeal fashion, usually coupled with a planning agreement providing for either the construction and subsequent dedication and adoption of part of the EDR, or the payment of a contribution towards the cost. Somerset had, and still have, a role as highway authority, collecting and disbursing contributions from developers, constructing or supervising the construction of the EDR and adopting the road as a public highway. But there are no provisions in the planning agreements for the prior purchase of land by Somerset for the construction of the road (save as an option exerciseable by Somerset of the right to purchase in the agreement dated 24 February 1998). The claimants say that the fact that Somerset did not make provision by planning conditions or agreements for the construction of the whole of the EDR to the east of Rosewood Farm is an indication that they were likely to acquire any land needed to build the whole of this length of road. I do not agree. I accept the evidence of Mr Juniper and Mr Betty that the acquisition of land for the construction of this length of road was never contemplated. Development control was exercised parcel by parcel on a piecemeal (or freestanding) basis, on the merits of the application, which would be granted if it had adequate road access. The current position is not wholly satisfactory but there is now adequate access for the existing and proposed housing. In my view, the present position, two lengths of unconnected road, has arisen because Somerset or Sedgemoor, due to financial restraints, have been unable to acquire land and build the road themselves. It is an 'indication' of the absence of possible acquisition - the converse of an indication under section 9 of the 1961 Act.
187. The change of planning policy in February 1994, by the grant of planning permission to Magnus for development in the southern part of Rosewood Farm, was not an indication that Somerset or Sedgemoor would acquire the necessary land for the completion of the EDR. It was no more than a change of policy to meet changed circumstances. This change of policy may have removed ransom value from the reference land but it cannot be said that it was a sign to possible purchasers that the land would be acquired. A change of planning policy does not give a right to compensation. The action of Sedgemoor in opposing the purchase notice, and the contention of Somerset that it was misconceived, reinforce the view that neither authority wished to acquire the reference land for the construction of the EDR.
188. My decision on the first two issues is that an indication within section 9 of the 1961 Act has not been given that the reference land is, or is likely, to be acquired by an authority possessing compulsory purchase powers. It is therefore not necessary for me to deal with the third issue, whether an indication has caused depreciation of the reference land.

SCHEME

189. I deal now with issues (4) and (5): what is the scheme underlying the acquisition? when did it first come into existence?

Claimants' case

Evidence

190. Mr Pugh said that a scheme which included the acquisition of the reference land must have arisen when an indication within section 9 of the 1961 Act was given. Thus, the scheme came into existence many years before the valuation date. For example, if an indication was given in 1977, when the line of the EDR was first designated, the scheme would have been the construction of that road between Love Lane and Pepperall Road. If an indication was given when the consultative local plan was published in October 1984, then the scheme would also have included this section of road. And if an indication was given at any time prior to, or during, the development of Rosewood Farm, then the scheme could have been defined to include a particular section of the EDR, such as across the reference land.
191. The scheme is the physical construction of the EDR across the reference land as part of the provision of that road between Love Lane and Pepperall Road. Whatever the scheme, however, the reference land would be needed due to the particular planning and highway circumstances relating to Rosewood Farm.
192. Mr Humphreys said that he agreed with Mr Pugh that the scheme is the physical construction of the EDR across the reference land as part of the provision of that road in its entirety between Love Lane and Pepperall Road. It came into existence many years before the valuation date.

Submissions

193. Mr Purchas said that it is for the Tribunal to determine what activities are properly to be regarded as part of the scheme underlying the acquisition for the purposes of the Pointe Gourde rule (Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands at page 572). He also referred to Wilson v Liverpool Corporation at page 309, Fraser v City of Fraserville, Myers v Milton Keynes Development Corporation at pages 700, 703 and 704H, Melwood Units Pty Ltd v Commissioner of Main Roads, Bird v Wakefield Metropolitan District Council at pages 485 and 487, Hertfordshire County Council v Ozanne and Bolton Metropolitan Borough Council v Tudor Properties Ltd. The identification of the scheme is as relevant to an acquisition under a purchase notice as it is to an acquisition under a compulsory purchase order. Compensation pursuant to a purchase notice is just as much subject to the underlying principle of equivalence as other compensation. Examples of acquisitions under a purchase notice include Jelson v Blaby District Council, Toogood v Bristol Corporation, Margate Corporation v Devotwill Investments Ltd and Birmingham District Council v Morris & Jacombs Ltd. The decision of the House of Lords in Fletcher Estates (Harlscott) Ltd v Secretary of State for the Environment is concerned with section 17 of the 1961 Act and not with the Pointe Gourde rule.
194. The scheme underlying the acquisition (as opposed to the acquisition itself) for the construction of the EDR across the reference land came into existence on 14 March 1977 when Sedgemoor resolved to protect the line of the EDR for development control purposes. There was then a scheme and it underlay the acquisition. Thereafter the existence of the scheme was evidenced by the local plan and the development guide and the grant of planning permissions on Rosewood Farm coupled with the payment of contributions by developers for the construction of the EDR. Mr Juniper and Mr Betty have accepted that there has not been a time when Sedgemoor or Somerset did not intend that Somerset should complete the EDR across the reference land. They also accepted that, in order to construct the road, Somerset had to acquire the reference land. A highway proposal is the archetypal example of blight for compensation purposes. There is a proposal to construct a highway across the reference land and it would be inconceivable that there was not a scheme underlying the acquisition. Service of a purchase notice is the only redress for the consequences of blight.
195. Other evidence in support of the existence of a scheme includes: the action taken by Somerset for the construction of the EDR to the north and to the south of Rosewood Farm, the local plan and development guide, the exercise of planning control at Rosewood Farm, contemporary letters and notes of meetings and telephone conversations, statements made at the purchase notice inquiry and in the inspector's report and in the deposit review of the local plan.
196. In the light of all the evidence it is beyond argument that there was a scheme for the construction of the EDR. It is not essential that this should be a scheme of Somerset. There may be a range of views as to the precise extent of the scheme but the better view is that it was the construction of the whole of the EDR from Stoddens Road to Burnham Road. It does not, however, make a material difference whether the scheme is the construction of the whole of the EDR or limited to the section between Love Lane and Pepperall Road. It would be artificial, at a time when Somerset were proposing to acquire the reference land for the EDR, to isolate the purchase notice (stimulated as it was by blight caused by the scheme) from the scheme itself. The only reason why acquisition had not proceeded was absence of funding. For that reason Somerset would have preferred not to acquire the land in 1999. This does not mean, however, that the scheme for construction of the EDR ceased to underpin the acquisition. This conclusion is reinforced by the substitution of Somerset for Sedgemoor in the purchase notice; the receipt of contributions for the EDR by Somerset and the transfer or dedication of land on both sides of the reference land for the road as part of the construction of the EDR as a whole; and the fact that the construction of the road solely on the reference land has no function in highway or other terms.
197. Mr Purchas said that the decision of the Court of Appeal in J A Pye (Oxford) Ltd v Kingswood Borough Council can be distinguished on the facts. In Pye the reference to the Lands Tribunal was by agreement which described the object of the acquisition. Pye's need to build the section of access road across the subject land arose at a later date and there was no indication under section 9.
198. The grant of planning permission to Magnus in 1994 was not a change of policy regarding the EDR: Somerset had no policy for the completion of this road. Mr Purchas reserved his position as to whether there were any changes in the reference land and Rosewood Farm between January and August 1999 (between confirmation of the purchase notice and the date of valuation).

Somerset's case

Evidence

199. The evidence of Mr Juniper and Mr Betty did not deal with the scheme.

Submissions

200. Mr Roots said that the Pointe Gourde rule should be considered separately from the question of an indication. If the claimants can show that the scheme underlying the acquisition caused a decrease in the value of the reference land, that decrease is to be disregarded when assessing compensation. He referred to Pointe Gourde, Salop County Council v Craddock and Birmingham District Council v Morris & Jacombs Ltd. It is necessary to identify the scheme and then its consequences (Wards Construction (Medway) Ltd v Barclays Bank plc at page 396). The extent of the scheme is a question of fact for the Lands Tribunal (Wilson v Liverpool City Council at page 310A-B, Morris & Jacombs Ltd at page 33, Bolton Metropolitan Borough Council v Tudor Properties Ltd).
201. It is difficult to identify the scheme where there is a deemed acquisition under a purchase notice. There will be no prior compulsory purchase procedures (e.g. a statement of reasons) to provide evidence of the purpose of the acquisition. Examples of purchase notice acquisitions are Toogood v Bristol Corporation, Morris & Jacombs Ltd and Jelson. Mr Roots particularly drew attention to Morris & Jacombs where the Court of Appeal held that there was no scheme underlying the acquisition. This may appear to be inconsistent with Wilson. The explanation for the difference lies in the words of Stamp LJ in Morris & Jacombs that the scheme probably came into existence after the purchase notice. This is a case where the scheme did not exist prior to the purchase notice.
202. There are similarities between this current reference and Pye where the Court of Appeal upheld the finding of the Lands Tribunal that the scheme underlying the acquisition of a small plot of land for the completion of a link road was the completion of that road on the reference land and not the whole road. This shows that a scheme may be limited. It may be the completion of a road even where the concept of the road had been identified by a local authority in a development brief and had originally been intended for construction by that authority.
203. Mr Roots noted that it had been agreed that the scheme was the construction of the EDR across the reference land. This is recorded in the statement of agreed facts and appears in the claimants' experts' reports of August 1999. They have both now changed their identification of the scheme, apparently on advice. The claimants now contend that the scheme is the whole of the EDR and that it came into existence in 1976 or 1977. However, it appeared to be suggested in the cross-examination of Mr Juniper and Mr Betty that the scheme was simply the role of Somerset in promoting the EDR. It is clear from the authorities that a scheme is a physical project and there are only two possibilities in this reference. The scheme is either, as Somerset contend, the construction of the short length of EDR across the reference land, which came into existence when the purchase notice was confirmed, or, as the claimants contend, it is the EDR as a whole and came into existence in 1976 or 1977. It is not in dispute that the concept of an eastern distributor road came into existence in 1976 and that, if and when such a road was built, it would become a public highway. The action taken in 1976 was, however, development control, to safeguard the route. It might, or might not, have been the precurser of a scheme. On its own it tells us little.
204. Mr Roots referred to the local plan and Policy BH/T4. One of the reasons for this policy was the improvement of the highway network "as a long term objective" and not solely for access to Rosewood Farm. However, the local plan does not state or imply that the EDR would be built by Somerset, nor that it would be publicly funded, nor that any authority would acquire land for the construction of the road. The road was to be achieved in conjunction with the development of Rosewood Farm. The claimants rely on the implementation table in the local plan, which shows responsibility for the EDR as Somerset and the private sector, as evidence of a scheme on the part of Somerset. This is a Sedgemoor document. Although Somerset would have to be involved in the EDR in a supervisory role and as highway authority, it is plain that Somerset were not intending to build the road themselves. There is a distinction between the actions of Sedgemoor and Somerset in the exercise of development control and actions which are in the nature of the promotion of a project for which land must be acquired. These dual functions will also exist in the no scheme world. Reliance is also placed by the claimants on the priority rating in the local plan but this is solely a guide.
205. The development guide for Rosewood Farm made it clear that the EDR is to be provided by developers, not Sedgemoor or Somerset. The phasing provided for development from the north and a restriction was placed on the number of houses to be built in accordance with the structure plan. No provision was made for access from the south. Delays then occurred in Phase 1 development. The need to limit the number of houses became unnecessary and Magnus persuaded Sedgemoor and Somerset to allow development in the south with access from Pepperall Road. The planning permission granted to Magnus in 1994 was an abandonment of the phasing in the development guide.
206. There came a time when it became clear that planning permission would be granted for development with access from Love Lane only. This was not a change of policy. It was always the intention under the development guide that Phases 1 and 2 would be accessed from Love Lane. With regard to Phase 3, insofar as there was a change of policy, it occurred when Magnus was granted planning permission in 1994. The decision to allow other parts of Phase 3 to have access from Love Lane was a consequence of the changes brought about by the Magnus planning permission. After the grant of planning permission to Magnus in 1994 Sedgemoor could not have "reversed" the phasing to make Phases 1 and 2 dependent on the completion of the EDR. These phases now had satisfactory access from Love Lane.
207. With hindsight it can now be seen that, once Magnus were granted planning permission in 1996 with a planning agreement allowing them to retain a ransom strip (which became the reference land) without the requirement that the EDR be taken to the boundary of their land ownership, then there was a possibility that the EDR might not be completed without the intervention of Sedgemoor or Somerset. There is, however, no evidence that these authorities recognised this possibility at the time. There is no evidence that Somerset had decided to complete the road. The evidence is that Somerset had not applied their minds to the completion of the EDR.
208. The claimants rely on the various planning agreements but these show Sedgemoor and Somerset acting in supervisory and development control roles. In particular, Somerset had to administer the highway arrangements as highway authority and would have anticipated adoption under section 38 of the 1980 Act. They acted as "honest broker" by collecting developers' contributions and ensuring that they were applied to the construction of the EDR. These agreements do not provide evidence of a scheme on the part of Somerset.
209. The scheme (the construction of the EDR across the reference land) came into existence when the purchase notice was confirmed on 22 January 1999. Possession of the land was taken on 18 August of that year (the valuation date). There is no evidence that any changes in the reference land and the locality occurred between January and August 1999. There was, therefore, no difference at the valuation date between the real world and the no-scheme world.

Decision

210. Issues (4) and (5) can be considered together:-

(4) What was the scheme underlying the acquisition of the reference land?

(5) When did that scheme first come into existence?

211. I look first at the authorities. In Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands Lord MacDermott said (page 572):-

"It is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition. As it was put by Eve J in South Eastern Railway Company v London County Council: 'Increase in value consequent on the execution of the undertaking for or in connection with which the purchase is made must be disregarded.'"

This principle has an earlier history. For example, in Fraser v City of Fraserville Lord Buckmaster, after referring to earlier authorities, said (page 194):-

"... the substance of them is this: that the value to be ascertained is the value to the seller of the property in its actual condition at the time of expropriation with all its existing advantages and with all its possibilities, excluding any advantage due to the carrying out of the scheme for which the property is compulsorily acquired, the question of what is the scheme being a question of fact for the arbitrator in each case."

The principle now applies to both increases and decreases in value (Salop County Council v Craddock and Birmingham District Council v Morris & Jacombs Ltd). The Pointe Gourde principle is a principle of law, not a principle of valuation (Bolton Metropolitan Borough Council v Tudor Properties Ltd).

212. A scheme "is neither a technical term nor a legally precise concept" (per Mummery LJ in Bolton). It is a question of fact:-

"The extent of the scheme is a matter of fact in each case, ... It is for the tribunal of fact to consider just what activities - past, present or future - are properly to be regarded as the scheme within the meaning of this proposition." (per Widgery LJ in Wilson v Liverpool Corporation at page 310)."

In the same case Lord Denning MR explained the scheme and its effect as follows (page 309):-

"A scheme is a progressive thing. It starts vague and known to few. It becomes more precise and better known as time goes on. Eventually it becomes precise and definite, and known to all. Correspondingly, its impact has a progressive effect on values. At first it has little effect because it is so vague and uncertain. As it becomes more precise and better known, so its impact increases until it has an important effect. It is this increase, whether big or small, which is to be disregarded at the time when the value is to be assessed."

In Bolton Mummery LJ said:-

"... the identification of the underlying scheme involves the application of a legal principle to the available material in order to arrive at a factual conclusion."

213. The correct application of the Pointe Gourde principle requires first the identification of the scheme and then the identification of its consequences. The land must be valued in "the no scheme world", that is to say the world which would have existed if there had not been a scheme (Myers v Milton Keynes Development Corporation at page 704G and Wards Construction (Medway) Ltd v Barclays Bank plc and Kent County Council at page 396).
214. Whenever land is compulsorily acquired this must be in consequence of some scheme or undertaking or project. As Widgery LJ observed in Wilson (page 310):-

"Whenever land is to be compulsorily acquired, this must be in consequence of some scheme or undertaking or project. Unless there is some scheme or undertaking or project, compulsory powers of acquisition will not arise at all, and it would, I think, be a great mistake if we tended to focus our attention on the word 'scheme' as though it had some magic of its own. It is merely synonymous with the other words to which I have referred, and the purpose of the so called Pointe Gourde rule is to prevent the acquisition of the land being at a price which is inflated by the very project or scheme which gives rise to the acquisition."

But the scheme cannot be the acquisition:-

"So to hold would not only be logically inconsistent with Pointe Gourde, but also inconsistent with statements, such as that in Wilson and in Pointe Gourde itself, that the scheme must underlie the acquisition."

(per Buxton LJ in J A Pye (Oxford) Ltd v Kingswood Borough Council at page 162M; see also Bird v Wakefield Metropolitan District Council at page 487 and Bolton Metropolitan Borough Council v Tudor Properties Ltd.)

It is not necessary that the scheme should provide for compulsory purchase but it must underlie the acquisition (Bird at page 487).

215. A scheme may start life as a scheme by a different authority to the one carrying out the acquisition. Thus, in Bird both the county council and the (then) urban district council originally had separate schemes which had become by the relevant date a scheme to which the predecessors of the respondent council had been a party and not a scheme by a different authority. This was the scheme underlying the acquisition. Although it had not provided for the compulsory acquisition of any land, this was necessary and it was sufficient for the Pointe Gourde principle if it "underlay" it.
216. A scheme need not as a matter of law be confined to the land being acquired or to the specific purpose of the compulsory purchase order. The acquisition may be a small part of the underlying scheme (see Bird and Bolton).
217. The authorities referred to above, with the exception of Morris & Jacombs, were concerned with acquisition under a compulsory purchase order. In these cases it is, as Mr Roots said, easier to find the underlying scheme. In this reference I am concerned with acquisition pursuant to a purchase notice, a deemed compulsory acquisition under section 143 (1) of the 1980 Act, where the reality is that Somerset are reluctant purchasers. It is therefore more difficult to identify the scheme underlying the acquisition. Furthermore, I have found that no indication has been given of likely acquisition. Under these circumstances, what is the scheme underlying the acquisition? Can there be a scheme where I have found that Somerset had no intention of acquiring the land? I find some assistance in the decision of the Court of Appeal in Birmingham District Council v Morris & Jacombs Ltd, where the Pointe Gourde principle was considered in the context of acquisition under a purchase notice.
218. In this case planning permission was granted for residential development subject to a condition that a strip of land be provided for an access road. The development was completed. The owners then applied for planning permission for residential development on the access strip. The purpose of the application was to found a purchase notice. Planning permission was refused and a purchase notice was served in May 1968 and confirmed by the Secretary of State in the following December. The council did not take possession of the land and the agreed date of valuation was June 1975. The question of compensation was referred to this Tribunal. The parties agreed that the value of the strip as access road was £4,000 and for residential development (as part of the larger site) it was £15,000. The Tribunal held that the decrease in value from £15,000 to £4,000 was entirely due to the scheme underlying the acquisition. Compensation of £15,000 was therefore awarded. The Court of Appeal allowed the local authority's appeal and substituted a valuation of £4,000. The lower value was due to the planning condition and not to any scheme of the local authority.
219. Sir John Pennycuick, after a review of the authorities relating to the scheme, said (page 33):-

"There has been some discussion as to what is meant by 'a scheme' in this connection. A scheme means, I think, no more than a project on the part of the authority concerned to acquire land - and, of course, to acquire it for some purpose for which it is authorised to acquire it."

Later he said (page 36):-

"I conclude that, there never having been any relevant scheme, there is no justification for increasing the value of the strip beyond £4,000."

Ormrod LJ said (page 39):-

"Finally, I agree with the observations of Sir John Pennycuick that on the facts of this case there was in fact no scheme.

There is clearly a danger that the word 'scheme' is acquiring or will acquire a mystique of its own and be used as a starting point for highly elaborate - I almost said 'sophisticated' - argument whereas if one looks at the authorities the scheme referred to is the scheme for which the property is being compulsorily acquired. I can see no scheme of acquisition by the local authority in this case. In fact, on the evidence set out in the case the indications are that the one thing which the local authority had no intention of doing was to acquire this land until they were compelled to do so. The rule in Fraser and Others v City of Fraserville applies to schemes for which the property is compulsorily acquired and not to schemes in general."

Stamp LJ agreed with both judgments. He referred to the principles stated in Re Lucas and Chesterfield Gas & Water Board and Fraser and said (page 40):-

"These principles, in my judgment, run through the authorities to which we have been referred so far as the authorities are relevant to the issue in the instant case. The word 'scheme' in the context in which it is used in the cases, in those circumstances, refer, in my judgment to a scheme pursuant to which the property is being compulsorily acquired, and not, as was submitted by counsel for the respondent, to a policy or, if you will, a 'scheme' whereunder permission to develop the property as building land would if applied for have been refused."

220. Where there is an acquisition under a purchase notice, therefore, there may not be a scheme underlying the deemed compulsory acquisition or the scheme may have come into existence after confirmation of the purchase notice.
221. I now apply the legal principle - the Pointe Gourde principle - to the available material in order to arrive at a factual conclusion regarding the scheme (if any) underlying the acquisition in this reference (see Bolton). The Pointe Gourde principle now operates to exclude from the compensation for compulsory acquisition any increase or decrease in value "which is entirely due to the scheme underlying the acquisition". The principle requires: (a) the existence of a scheme (or project or undertaking), which (b) underlies the acquisition. Both requirements must be satisfied.
222. In this reference it is common ground that there has been a proposal for the construction of the EDR since 1976. This started life as a resolution of Somerset County Council; it was included in the local plan and explained in the Development Guide for Residential Development at Rosewood Farm; it has been partly implemented and sections of the road east of Rosewood Farm have been built under planning permissions and accompanying planning agreements. There is the appearance of a scheme under the Pointe Gourde principle. It is also common ground that, if there is a scheme underlying the acquisition of the reference land, it is the construction of the EDR, although the parties disagree as to the extent of the scheme and when it came into existence. The claimants contend that it is the construction of the whole of the EDR which came into existence in 1977 when Sedgemoor resolved to protect the line of the road. Somerset contend that the scheme is limited to the construction of the EDR across the reference land and that it did not come into existence until confirmation of the purchase notice in January 1999. Mr Roots, however, raised the question as to whether there is a scheme underlying this acquisition, having regard to the nature of that acquisition, under a purchase notice and not under a compulsory purchase order, and the Morris & Jacombs decision.
223. In my view the nature of the acquisition is a material consideration which goes to the heart of the dispute regarding the scheme. I accept that the construction of the EDR, in whole or in part, is capable of being a scheme under Pointe Gourde and that, if the acquisition of the reference land had been under a compulsory purchase order, it probably would have been the scheme underlying the acquisition. That is not the position, however, in this reference. The acquisition was implemented by service of a purchase notice by the claimants. Under these circumstances, can it still be said that the construction of the EDR was the scheme underlying the acquisition? The word "underlie" means "to lie beneath" or "be the basis of " or "be the foundation of ". Thus, in order to be a scheme for the purposes of Pointe Gourde, the construction of the EDR must lie beneath or be the basis of or the foundation of the acquisition of the reference land. In short, it must be the reason for the acquisition. As Sir John Pennycuick observed in Morris & Jacombs (page 33):-

"A scheme means, I think, no more than a project on the part of the authority concerned to acquire land - and, of course, to acquire it for some purpose for which it is authorised to acquire it."

Ormrod LJ, in the same case, said that "the scheme referred to is the scheme for which the property is being compulsorily acquired" (page 39) and a similar observation was made by Stamp LJ at page 40.

224. In this reference I have considered at some length whether an indication has been given under section 9 of the 1961 Act, and concluded that neither Somerset nor Sedgemoor had any intention at any time, express or implied, to acquire land for the construction of the part of the EDR to the east of Rosewood Farm. In particular, they have never proposed to buy the reference land for the construction of the EDR. Sedgemoor objected to the purchase notice and failed to respond to a request from the claimants to buy the land. Somerset considered the purchase notice to be misconceived. It is clear from the evidence that this is a road to be provided by the private sector, with Sedgemoor acting as planning authority and Somerset acting in a co-ordinating and supervisory capacity and as highway authority in taking over completed lengths of road as a public highway. The construction of the EDR is, in my judgment, not the reason for the acquisition of the reference land. As a scheme or project or undertaking it does not lie beneath the acquisition; it is not the basis of, or the foundation of, the purchase of the reference land. The reason for the acquisition of the reference land by Somerset is the confirmation of the purchase notice. This cannot be the scheme. In Bolton Metropolitan Borough Council v Tudor Properties Ltd Mummery LJ said:-

"The compulsory acquisition itself cannot be the scheme which underlies it: J A Pye (Oxford) Ltd v Kingswood BC ... at 162M. The compulsory acquisition of the relevant land presupposes that there was an underlying scheme of development, in consequence of which the CPO was made."

225. In this reference the construction of the EDR cannot be the scheme underlying the acquisition and the acquisition under the purchase notice cannot be the scheme underlying that acquisition. The position is that there is no scheme underlying the acquisition. This is, in my judgment, entirely consistent with the nature of the acquisition. Where an authority acquire land under a compulsory purchase order there must always be a scheme underlying that acquisition, as Widgery LJ observed in Wilson (page 310). Compulsory purchase is not an arbitrary process; there must be some reason why an owner is to be compulsorily deprived of his land in the public interest. There must always, therefore, be a scheme underlying acquisition under a compulsory purchase order. This is not necessarily the position under a purchase notice. It is now clear from the decision of the Court of Appeal in Morris & Jacombs that there need not necessarily be a scheme underlying an acquisition under a purchase notice. Sir John Pennycuick said (page 35):-

"The true position, it seems to me, is that at the date of the deemed notice to treat, December 24, 1968, the strip was simply a strip suitable for making up an access road. It was in the same condition at the valuation date, June 30, 1975. Its value as such was £4,000. At no relevant date was any scheme in existence by reference to which the value fell to be adjusted either upwards or downwards on the principle laid down in the cases to which I have referred, i.e. the Pointe Gourde principle."

Ormrod LJ said (page 39):-

"Finally, I agree with the observations for Sir John Pennycuick that on the facts of this case there was in fact no scheme."

And Stamp LJ, while agreeing with the judgment of Sir John Pennycuick and Ormrod LJ, said (page 40):-

"I am prepared to assume, without deciding, that at some time after the 'originating' purchase notice of May 6, 1968, a scheme for the acquisition of the strip came into being and that the strip was acquired pursuant to that scheme, but, by May 6, 1968, the land was worth £4,000, not the £15,000 which it might have been worth but for the fact that it had not been building land."

226. The acquisition of the reference land by Somerset was pursuant to a purchase notice served by the claimants. At the date of valuation and before there was no intention on the part of Sedgewood or Somerset to acquire the reference land for the construction of the EDR. I find that there was no scheme underlying the acquisition of the reference land.
227. I would add that, if I am wrong on this then, having regard to the evidence which I have considered under indication above, the scheme could not have come into existence until the date of confirmation of the purchase notice, at the earliest, when the project for the construction of the EDR might be said to have crystallised into the scheme underlying this particular acquisition. The scheme would, therefore, have come into existence at the earliest in January 1999. At that time most of the EDR to the east of Rosewood Farm had been built and the scheme would have been the construction of the EDR across the reference land. This scheme would have come into existence only a few months before the valuation date (18 August 1999) and therefore it is unlikely that the no scheme world would have differed from the real world at that date. Mr Purchas reserved his position on this point and I heard no evidence on this matter.
228. Issue (6) is: what was the no scheme world at the date of valuation? I have found that there was no scheme underlying the acquisition of the reference land: it must follow that the no scheme world and the real world were the same at the date of valuation.

CONCLUSIONS

229. My conclusions on the preliminary issues are as follows:-

(1) No indication has been given within section 9 of the 1961 Act that the reference land is, or is likely, to be acquired by an authority possessing compulsory purchase powers.

(2) There was no scheme underlying the acquisition of the reference land.

It follows, therefore, that in relation to the preliminary issues under the order dated 14 January 2000 I accept the contentions of Somerset set out in paragraph 1 and reject the claimants' contentions set out in paragraph 2(i) - (iii).

230. The purpose of this determination of preliminary issues is to establish the basis of valuation for the reference land. The value to be determined is the open market value under section 5 of the 1961 Act of the claimants' freehold interest in the reference land as at 18 August 1999 having regard to all the circumstances in the real world at that date. No adjustments are to be made to that value in respect of an indication under section 9 of the 1961 Act nor in respect of an underlying scheme.
231. I can see that the reference land may have had ransom value in the past. It is likely that this element of value was removed from the land by two factors. First, by the change of planning policy by Sedgemoor which resulted in the grant of planning permission to Magnus (former owners of the reference land) in February 1994 for development in the southern part of Rosewood Farm. There may well have been other grants of planning permission and changes of policy which removed the ransom value from the land. Second, by the fragmentation of the former landholding of Magnus by the sale in February 1977 of part to Hardpart Ltd (a company wholly owned by the claimants) and then the transfer to the claimants of the reference land in August 1997 resulting in the separation of that land from a larger landholding, leaving it as a small landlocked plot. The claimants now seek to recover this ransom value from Somerset through compensation on a purchase forced on the council by service of a purchase notice and requiring for success the highly elaborate or sophisticated arguments referred to by Ormrod LJ in Morris & Jacombs. For the reasons given above I regard this approach as misconceived. The reference land must be valued as it was at the date of valuation.
232. I will stay the proceedings for three months to allow the parties to negotiate a settlement based on this decision. If agreement has not been notified to the Tribunal by the end of this period I will issue directions for expert evidence and a further hearing.
233. The above decision concludes my determination of the preliminary issues in this reference. The parties are invited to make submissions as to the costs of these preliminary issues and a letter accompanies this decision setting out the procedure for submissions in writing.

DATED:25 September 2000

(Signed: P H Clarke)

ADDENDUM

234. I have received written representations on costs. The claimants submit that the costs of the preliminary issues should be costs in the reference. This would allow the parties to deal with them as part of negotiations for settlement of the claim and allow the costs of the proceedings as a whole to be determined by the Tribunal in the event of a further hearing. Somerset seek their costs of the preliminary issues on the grounds that these issues have been determined in their favour. It should now be possible to reach agreement on the amount of compensation.
235. I agree with Somerset. Although the preliminary issues form the basis for the determination of the amount of compensation they are separate from this exercise and should be treated separately with regard to costs. Furthermore, it should now be possible for the parties to reach agreement on the amount of compensation without a further hearing. Somerset have been successful on the preliminary issues and should have their costs.
236. Accordingly, I order the claimants to pay Somerset's costs of this reference up to and including the determination of the preliminary issues, 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 rule 44.4 and 44.7 of the Civil Procedure Rules. The procedure in rule 52 of the Lands Tribunal Rules 1996 will apply to such detailed assessment. I determine that the hearing of the preliminary issues was suitable for two counsel.

DATED:

(Signed: P H Clarke)