England and Wales Lands Tribunal

[2001] EWLands ACQ_110_1999 (08 October 2001)

ACQ/110/1999

LANDS TRIBUNAL ACT 1949

COMPENSATION - acquisition of two parcels of agricultural land - hope value -ransom value - compensation of £21,000 awarded

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN T R JAMES Claimant

and

SHROPSHIRE COUNTY COUNCIL Acquiring

Authority

Re: Plots 13 and 15,

A49/A53 Roundabout,

Battlefield Link Road,

Shrewsbury,

Shropshire

Before: P H Clarke FRICS

Sitting at Shrewsbury on 27 September 2001

The claimant did not appear and was not represented

Michael Druce instructed by senior solicitor, Shropshire County Council, for the acquiring authority.


 


DECISION OF THE LANDS TRIBUNAL

1. This is a reference to determine the compensation payable for two parcels of land acquired for the construction of the A5124 Battlefield Link Road on the northern outskirts of Shrewsbury.
2. The claimant did not appear and was not represented at the hearing, having given prior notice that he would not be taking part in these proceedings. The acquiring authority were represented by Michael Druce of counsel who called one witness, Colin D Smith FRICS IRRV.

FACTS

3. From the evidence I find the following facts.
4. On 19 December 1997 the Secretary of State for Transport confirmed The Shropshire County Council (A5124 Battlefield Link, Shrewsbury) Compulsory Purchase Order 1997 which authorised the acquisition of land for the construction of the Battlefield Link Road. The reference lands are plots 13 and 15 in this order. Notice to treat and notice of entry were served on 2 March 1998. Shropshire County Council ("the Council") took possession of both plots on 27 July 1998. This is the date of valuation.
5. The Battlefield Link Road (A5124) is 1 km in length and runs east to west about two miles north of the centre of Shrewsbury. It links the A528 Ellesmere Road to the junction of the A49 Shrewsbury By-pass and A53 at a roundabout, reconstruction of which formed part of the scheme and adjoining which are sited the reference lands. At the time of my inspection the road had been built and was in use. The Battlefield Link Road is part of the North of Shrewsbury Challenge Project, a government partnership funded programme of works to attract development by inward investment into the area. The construction of this link road was necessary for the occupation of units on Battlefield Enterprise Park, which is situated to the south of the road at the western end. This Park comprises about 21 hectares of land owned by the Council. On 27 November 1997 outline planning permission was granted for the development of Phase 2 of this Enterprise Park for business use (B1, B2 and B8 uses) subject to a condition that "none of the units shall be occupied until the Battlefield Link Road is completed and fully opened to the public."
6. Plot 13 of the reference lands was a small, irregular shaped parcel of land situated in the north-western corner of the A49/A53 roundabout. In the compulsory purchaser order it is described as disused land to the west of roundabout including half the width of two disused roads. The site area is 980 sq m or 0.242 acre. At the date of acquisition it was isolated from the remainder of the claimant's landholding by the A49 Shrewsbury By-pass.
7. Plot 15 was a narrow, irregular shaped parcel of pasture land with an area of 3,600 sq m (0.89 acre) and is now situated in the southern part of the A49/A53 roundabout between the A5112 Battlefield Road and the A49 Shrewsbury By-pass. It originally formed part of OS field no.6766, pasture land with an area of 4.78 hectares (11.81 acres) and frontage to and access from Battlefield Road.
8. The area surrounding the reference lands is as follows. To the south of Battlefield Link Road, moving in a westerly direction from the A49/A53 roundabout, is Battlefield Road (A5112) which enters the roundabout, then there is an area of open land and then the developed part of Battlefield Enterprise Park. To the south of plot 15 and the A49/A53 roundabout, between Battlefield Road and Shrewsbury By-pass, is pasture land (plots A and B) owned by the claimant which is contiguous with plot 15. This land adjoins an area of woodland to the west (Lion Coppice) and to the south an area of land formerly owned by the claimant and sold to Bryant Homes and now developed, or in course of development, for housing (plot D). To the east of the Shrewsbury By-pass is an area of agricultural land owned by the claimant (plot C). On the north-eastern side of the A49/A53 roundabout is a site with planning permission for a Little Chef restaurant, budget hotel and petrol filling station (plot E).
9. By letters dated 10 November 1997 the Council and the Highways Agency agreed in principle to grant to the claimant access rights from his retained land to the south of the A49/A53 roundabout (plots A and B) onto Battlefield Road and Shrewsbury By-pass.
10. The reference lands are within the area of Shrewsbury and Atcham Borough Council. At the date of the valuation the statutory development plans were Shrewsbury Urban Area Local Plan 1985, Shrewsbury Rural Area Local Plan 1992 and the Shropshire Structure Plan 1993. In February 1995 the Shrewsbury and Atcham Local Plan was published and placed on deposit in November 1997. This supersedes the Urban and Rural Local Plans. Following a public inquiry between January and July 1999 the inspector reported on this Plan in October 2000.
11. The land to the south of the claimant's retained land, sold to Bryant Homes (plot D), was designated for residential development in the Shrewsbury Urban Local Plan 1985. The policy in this Plan for the land to the north of this land (known as the Lion Coppice Area), including plot 15 and the claimant's adjoining retained land (plots A and B), states that this "site is not favoured for housing development during the plan period." Plot 15 and the claimant's retained land (plots A and B) are designated as countryside in the Urban Local Plan 1985 and the Deposit Local Plan 1997 (Policy LNC3). Development will only be permitted in countryside areas in certain limited circumstances. The claimant's retained land to the east of the Shrewsbury By-pass (plot C) is also designated countryside in the Local Plans.
12. The Rural Local Plan 1992 contained a policy regarding roadside services to the north and south of Shrewsbury. Policy 71 noted that "proposals for further roadside development adjacent to the proposed A5/A49 by-pass for service uses will not normally be approved" although "there may be scope for a hotel development subject to siting and design being acceptable." In the Deposit Local Plan 1997 Policy T16 restricts commercial roadside development along trunk roads.
13. On 24 November 1989 outline planning permission was granted for the development of a site of 1.46 hectares on the north side of the A49/A53 roundabout (plot E) for a Little Chef restaurant, 40-bed budget hotel and petrol filling station. Reserved matters were approved in 1993 and a further full planning permission was granted in 1995. The permitted development has not been carried out.
14. On 13 November 1997 planning permission was refused by Shrewsbury and Atcham Borough Council on the claimant's application for the use of his retained lands to the south of the A49/A53 roundabout and to the east and west of the Shrewsbury By-pass (plots A, B and C) "for leisure, graveyard, caravan site, hotel, residential and retail use". The reasons for the refusal were:-

"The land was designated in the Local Plan as open countryside to be protected from development and the proposal would be detrimental to the character and setting of Shrewsbury, especially approaching the town from the north via the A49 and the east via the A53."

The claimant lodged an appeal against this decision in May 1998 but withdrew it in the following August.

15. The Council referred the determination of compensation for the reference lands to this Tribunal on the 23 August 1999.

EVIDENCE

16. Evidence on behalf of the counsel was given by Colin David Smith FRICS IRRV, a partner in Bruton Knowles in their Gloucester office. Mr Smith qualified as a chartered surveyor in 1973 and was employed by the Valuation Office between 1972 and 1989. He now leads the compulsory purchase and compensation skills group of Bruton Knowles.
17. Mr Smith said that the claimant's retained land is in three parcels: two immediately to the south of plot 15 (plots A and B) and the third on the eastern side of the A49 Shrewsbury By-pass (plot C). Plots A and B are joined by a narrow strip of land through which runs a National Grid overhead power line. Only the northern land (plot A) (contiguous with plot 15) is affected by the new link road. Plot B can be identified as suitable for future residential development but this is unlikely to extend to plot A for three reasons. First, the existence of the power lines. Second, the probable requirement for a landscaped bund along the A49 boundary and other landscaping which would reduce the net developable area. Third, the high servicing and infrastructure costs needed to develop a relatively small area some way from the highway access. The claimant's retained the land to the east of the A49 By-pass (plot C) is not affected by the new link road.
18. The site area of plot 15 and the retained land immediately to the south (plot A) was 2.16 hectares (5.33 acres) before the compulsory acquisition. The land taken (plot 15) has a site area of 0.36 hectare or 0.89 acre, leaving land in the claimant's ownership of 1.8 hectares or 4.45 acres. This land remains available for hotel development which could be accommodated on the smaller plot. However, planning permission including such development has been refused and the appeal withdrawn. There is no policy support for this development and it would have been resisted by the local planning authority. There would have been problems of access. Lack of demand is shown by the grant of planning permission for plot E with the absence of any development of this land. The unconditional sale of land in these circumstances is infrequent and there is a lack of comparable evidence. Mr Smith referred to the sale of a plot of land at Berkeley in Gloucestershire in August 1999 for £70,000 (gross area 6 acres, net developable area 2.3 acres).
19. It is reported that Bryant Homes paid the claimant a price equal to £250,000 per acre for plot D.
20. Mr Smith considered the potential of plots A and B for development. At the date of valuation planning permission had been refused for the development of plots A, B and C and an appeal was pending, later withdrawn. In the light of the inspector's report on the Deposit Shrewsbury and Atcham Local Plan the countryside designation might have been changed to allow development for roadside services including a motel. However, the lack of development on plot E, following the grant of planning permission, indicates insufficient demand for such use. The comments of the inspector suggest that residential development to the north of plot D, on plot B, might be justified at some future time. It is doubtful whether this development would extend northwards to plot A. Access to this plot would present difficulties. Intensification beyond hotel development would be unlikely. Mr Smith concluded that plot A is likely to be independent of any development of plot B. Low traffic generating uses only would be permitted. However, plot A is a prominent site on a trunk road roundabout on the fringe of an area to the south for which development might be permitted. Notwithstanding planning and access problems in the short to medium term, Mr Smith recognised that potential existed for some form of development in the long term. This could be ancillary to residential development of the Lion Coppice Area or a commercial site independent of such a scheme. In summary, plot A and plot 15 have hope value.
21. The development of Battlefield Enterprise Park was dependent on the construction of the Battlefield Link Road. Several other claimants, with whom settlements have now been reached, sought compensation based on ransom value. However, all cases have now been settled on the basis of existing use or hope value without any element of ransom value. The total cost of the Battlefield Link Road (just over £8m) exceeds the development value of the land released for development (£130,000 per acre or a total deferred value of just under £4m) by a significant margin. Ransom value therefore does not arise and has no application to plot 15.
22. Mr Smith valued plot 13 at an existing use value of £2,500 per acre for pasture land, £605. He referred to the settlement of compensation for plots 1 and 3, 12 and 14 at figures of £8,680, £4,000 and £1,000 respectively. Mr Smith valued plot 15 at a calculated hope value of £22,889 per acre. Plot 15 and plot A have an area 5.33 acres. Mr Smith assumed a clean site value for four acres of this land at £250,000 per acre, which he deferred for 10 years at 9% (£422,000) and from which he then deducted £50,000 for fees and £250,000 for developers profit, leaving £122,000 or £22,889 per acre for site purchase, giving a value of £20,371 for plot 15 (0.89 acre). The value of £22,889 per acre is supported by hope value settlements of £24,850 per acre (including severance) for plot 10 and £24,850 per acre for plot 11 in the compulsory purchase order. The total compensation (rounded up) is £21,000 for plots 13 and 15.

DECISION

23. I have inspected the reference lands and the surrounding area.
24. Mr James, the claimant, for reasons that are largely unknown to me, decided not to appear or be represented at the hearing. I do not know what compensation he is seeking nor what his evidence would have been if he had put his case to me. The only evidence I have is that given by Mr Smith, on behalf of the Council. The Lands Tribunal is a judicial body and my decision is limited by the evidence. I am not bound to wholly accept it - I can evaluate it and may reject some of it in reaching my decision - but I cannot go outside it and give myself evidence by making my own enquiries and preparing my own valuation as a valuer and not as a judicial tribunal. Against this background I consider the evidence given by Mr Smith.
25. In this case I am fortunate in the quality of the evidence. I find Mr Smith to be an objective and reliable witness. His opinions of value are, in my view, honest attempts to produce objective and fair valuations of the reference land. In the absence of evidence in rebuttal I accept Mr Smith's figures for the following reasons.
26. The date of valuation is 27 July 1998. The reference lands and surrounding area must be valued having regard to their condition at that date, as described earlier in this decision. The town planning position at that time must be taken into consideration. Plot 13 is a small, isolated parcel of former pasture land. At the valuation date it had no development potential. It was not contiguous with other lands retained by the claimant. No compensation for severance and injurious affection should arise. I accept Mr Smith's figure of £2,500 per acre, giving a value of £605. I note that this amount is below the settlements reached in respect of other small plots of agricultural land acquired under the same compulsory purchase order (plots 1 and 3, 12 and 14) but I have only brief details of the settlements and I am unable to say whether or not the figures included severance and injurious affection or disturbance in addition to the value of the land taken. I suspect that they did. The value of £2,500 per acre for pasture land seems to me realistic as at July 1998 and, in the absence of any evidence in rebuttal, I accept it.
27. Plot 15 forms part of a larger area of land owned by the claimant (plots A, B and C) and the compensation payable for this plot may comprise the value of the land taken plus compensation for any loss to the land retained by severance and injurious affection plus disturbance if the land acquired was occupied by the claimant. I am satisfied that the severance of plot 15 from the remainder of the land and the use of the new road have not depreciated the value of the retained land and therefore no compensation is payable for severance and injurious affection. I have no evidence that Mr James was in occupation of plot 15 when it was acquired and, in the absence of such evidence, I am satisfied that no compensation for disturbance is payable. Compensation is limited to the value of the land purchased.
28. Plot 15 is designated countryside in the Local Plans (where development will only be permitted in limited circumstances) and planning permission has been refused for a development scheme including this land. In my judgment, the chances of obtaining planning permission for the development of plot 15 at the valuation date were remote. The land did not possess development value for a specific development. However, I accept Mr Smith's opinion that the land had hope value for future development in the long term. This increased the value above agricultural value. In the absence of other evidence I accept Mr Smith's hope value of £22,889 per acre. It is close to the settlements in respect of plots 10 and 11 of £24,850 per acre and I note that the settlement for plot 10 included for severance in addition to hope value for the land taken. This gives a value of £20,371 for the 0.89 acre comprising plot 15. The figures for plots 13 and 15 total £20,976 which I round up to £21,000. Mr James at one time appointed a surveyor to act for him and I allow a surveyor's fee under Rydes scale.
29. I agree with Mr Smith that, on his figures, plots 13 and 15 did not have any ransom value. Ransom value occurs where the land to be purchased unlocks the potential value of other land, eg. by providing access to a landlocked development site. In these circumstances a purchaser seeking to develop the landlocked site will usually pay a proportion of the increase in value of the development land for the purchase of the other land which unlocks that value. In this reference the construction of the Battlefield Link Road allowed the development of the Battlefield Enterprise Park. There was, however, on the figures no net development gain producing ransom value. The agricultural value of the Enterprise Park site was £125,950 (50.38 acres at £2,500 per acre), the development value (excluding deferment) was £6,549,400 (50.38 acres at a £130,000 per acre) and the cost of building the link road and other infrastructure was £8,015,405. Thus, expenditure of £8m was needed to increase the value of the Enterprise Park Land by about £6.5m at the most and without deferment of development value. Mr Smith assumed development of five acres a year giving a much reduced present development value of just under £4m. Whichever figure of development value is taken it is clear that ransom value does not attach to any of the land needed for the Battlefield Link Road. Mr Smith said that several of the other claimants initially sought compensation on a ransom value basis but all settlements have been reached on existing use or hope value basis. I accept this evidence and note that all the claimants were professionally advised.
30. I determine that the compensation payable for the compulsory acquisition of plots 13 and 15 in The Shropshire County Council (A5124 Battlefield Link, Shrewsbury) Compulsory Purchase Order 1997 is the sum of £21,000 (twenty-one thousand pounds) plus a surveyor's fee under Rydes scale.
31. This decision concludes my determination of the substantive issues in this reference. It will take effect as a decision when the question of costs has been decided and at this point, but not before, the provisions relating to the right of appeal in section 3(4) of the Lands Tribunal Act 1949 and order 61 rule 1(1) of the Civil Procedure Rules will come into operation. The parties are invited to make submissions as to the costs of this reference and a letter accompanying this decision sets out the procedure for submissions in writing.

DATED: 8 October 2001

(Signed) P H Clarke

ADDENDUM

32. I have received written representation on costs from the claimants' former surveyor, Mr M J Inscoe of Thomas Skidmore (who informed the Tribunal on 27^th March 2001 that he no longer had instructions) and from the Council. Mr Inscoe states that it would be unfair if costs are awarded against the claimant; costs should be borne by the Council. The Council apply for their costs in a calculated sum and refer to an offer contained in a letter dated 23^rd June 2000.
33. Section 4(1) (a) of the Land Compensation Act 1961 provides that, where the acquiring authority have made an unconditional offer of compensation which is not exceeded by the award of the Tribunal, then the Tribunal shall, unless there are special reasons why it should not do so, order the claimant to bear his own costs and pay the costs of the acquiring authority after the offer was made.
34. The offer referred to by the Council is contained in a letter dated 23^rd June 2000 written by their agents to Mr Inscoe with whom they were then in negotiation on behalf of the claimant. The claimant referred to Mr Inscoe as "my agent" in a letter to the Council dated 1^st November 2000 and also referred in that letter to the amount of the offer. Clearly, this offer had been communicated to him by Mr Inscoe. The offer in the letter of 23^rd June 2000 was on a "without prejudice (save as to costs) basis". It was unconditional. It was substantially in excess of my award. I am unaware of any special reasons why section 4(1)(a) of the 1961 Act should not apply.
35. Accordingly, I order the claimant to bear his own costs of the reference (if any) and to pay the costs of the Council incurred after 23^rd June 2000, such costs, if not agreed, to be the subject of a detailed assessment by the Registrar of the Land Tribunal on the standard basis.

DATED: 2 November 2001

(Signed) P H Clarke