England and Wales Lands Tribunal

[2003] EWLands ACQ_87_2002 (15 January 2003)

ACQ/87/2002

LANDS TRIBUNAL ACT 1949

COMPENSATION – Compulsory acquisition of former open-cast colliery land – value – effect of obligations under a section 106 agreement - compensation awarded £1.00

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN WREXHAM MINING LIMITED Claimant

and

FLINTSHIRE COUNTY COUNCIL Respondent

Re: Land at the former Coed Talon Colliery,

Coed Talon, Mold, Flintshire

Tribunal Member: P R Francis FRICS

Determination without an oral hearing

under rule 27 of the Lands Tribunal Rules 1996


 


DECISION

1. This is a reference to determine the compensation payable to Wrexham Mining Limited ("the claimant") by Flintshire County Council ("the acquiring authority") for the compulsory acquisition of 51.35 acres (20.781 ha) of former colliery land and part of a disused railway track at Coed Talon Colliery, Coed Talon, Mold, Flintshire ("the subject property").
2. The parties have agreed to a determination without an oral hearing pursuant to rule 27 of the Lands Tribunal Rules 1996. I have received written representations in the form of an expert witness statement from Mr Guy J Hirst MA FRICS FAAV of District Valuer Services, Wrexham for the acquiring authority.

FACTS

3. On 7 August 2001, the acquiring authority made the County Council of Flintshire (Restoration of Land at the Former Coed Talon Colliery, Coed Talon) Compulsory Purchase Order 2001 ("the CPO") under section 226(1)(b) of the Town and Country Planning Act 1990, this being confirmed by the Secretary of State for Wales on 7 February 2002. It was made for the purposes of ensuring that the site is properly managed and restored in accordance with a planning permission granted on 1 March 1996, and an agreement under section 106 of the Town and Country Planning Act 1990 made on 12 March 1996 between Flintshire County Council and the site owners.
4. The subject property comprises a former open-cast colliery lying in the valley of the River Cegidog in the heart of rural Flintshire, approximately midway between Wrexham and Mold, with access off the B5101 Llanfynydd to Treuddyn road. Totalling about 20.781 ha (51.35 acres) of sloping ground, the site comprises semi-natural woodland and scrub including part of the Coed Talon Site of Special Scientific Interest ("SSSI") together with the track-bed of a section of the dismantled railway line which ran from Pontybodkin to Llanfynydd.
5. Original planning consent for the extraction of coal by drift mining and the formation of a vehicular access was granted in 1977, and a further permission was granted on 23 June 1989 for continued working and extension of the mining area. In the Statement of Reasons that accompanied the acquiring authority's application for a CPO it was stated that the colliery was never successful, and ownership passed through a number of companies. Only limited amounts of coal were produced, and the colliery was held on a 'repair and maintenance basis' for a number of years.
6. In 1994, Ward Brothers Energy Limited ("WBEL") of Langley Moor, County Durham, who had been appointed by the claimant as its contractor to carry out the proposed development, applied for planning permission for the "reclamation of the existing Coed Talon Colliery by the short term working of remnant coal deposits with subsequent restoration of the land to wildlife habitats together with greater public access". The application had envisaged that the scheme for the whole area (the section upon which mining would take place, and the remainder that was within the claimant's ownership, including the SSSI and the old railway track) would take about 18 months to complete, including restoration. Following that, it was proposed that mining in the valley would cease. The application had stated that "The main benefit to the local community will be the free access to a site which will comprise a large area of managed woodland/wildlife habitat with pathways through what will be an interesting mix of indigenous flora and fauna"
7. In order to secure that objective on a long-term basis, one of the 26 conditions attached to the planning permission that was granted on 1 March 1996 required the claimant and WBEL to enter into a section 106 agreement. The Statement of Reasons referred to above went on to say, in connection with that agreement:

"5. That Agreement provided for, amongst other things, the provision of a guarantee of £90,000 in respect of the restoration and aftercare of the application site, the submission and approval of a Management Plan for the whole of Wrexham Mining Ltd's land within 6 months of the commencement of the development and its implementation for a period of 10 years from the completion of restoration, and the provision of a new public bridleway along the track bed of the former railway track adjoining the site. The Agreement further stated that the Management Plan should provide for the management of different parts of the site for nature conservation purposes, and that no individual parts of the site should be developed "in any manner incompatible with their use as a nature reserve or which might detract from the nature conservation interest". As the restoration has not been completed and the Management Plan has not been written, the positive nature conservation management of Coed Talon Marsh SSSI expected to be undertaken by Wrexham Mining Ltd as part of the section 106 agreement has not materialised.

6. The site was subsequently developed by Onyx Land Technologies Ltd, who have completed the mineral extraction operation. The guarantee required under the Agreement was never provided. However, a substantial amount of restoration work has been carried out by Onyx pursuant to an approved restoration scheme under the planning permission…, although upwards of £40,000 worth of work is required to complete the restoration and provide the proposed bridleway.

7. The County Council has, for some time, been seeking to secure the completion of the restoration and the long-term management of the site. However, it appears that Wrexham Mining Ltd, who still own the site, may not be in a position to carry out the necessary works, as they are a wholly owned subsidiary of Consolidated Coal Plc, a company which is in liquidation. In addition, Wrexham Mining Ltd have not indicated a willingness to transfer the land to the County Council voluntarily."

8. Notice to Treat was served on the claimant on 7 March 2002, but as at the date of this determination, the acquiring authority has not yet taken possession. The date of determination is, therefore, the date of valuation. A Notice of Reference was served upon this Tribunal on 5 July 2002 by the acquiring authority, no Notice of Claim having been received from the claimant in response to the Notice to Treat.

ISSUE

9. The single issue in this reference is to determine the value of the land to be acquired.

LAND VALUE

10. Mr Hirst is a chartered surveyor who qualified in 1982, and who has since 1992 been employed in North Wales by the Valuation Office Agency, and since 1997 in the Wrexham office. He was instructed by the acquiring authority to provide his professional opinion of the value of the subject property, and inspected it on 26 October 2001. In his report he set out the relevant background and the reasons why the property was being compulsorily acquired. No claim had been submitted by the claimant, and no negotiations had taken place, hence the reference being submitted by the acquiring authority.
11. The subject property, which was a sloping site, comprised four distinct areas together with old railway track-bed. Approximately 14 acres (5.6 ha) (Zone A), which included the Coed Talon Marsh SSSI was, he said, one of the best examples of mire wetland in Flintshire. It includes willow carr woodland and tall fern vegetation, and provides an important wildlife habitat. A further 14 acres (5.66 ha) (Zone B), comprises steep hillside that had been previously mined for coal. It is now degraded with poor soil and drainage, having been only partially restored. The third area, also 14 acres (5.66 ha) (Zone C)' is semi-natural broad-leaved woodland which has not recently been managed. Zone D comprises approximately 9 acres (3.64 ha) of developing scrub woodland which has remained largely undisturbed. The old railway track-bed which abuts the site helps to provide access and is intended for a public bridleway.
12. In arriving at his opinion of value, Mr Hirst said he had had regard to confidential information available to the Valuation Office Agency, known as Particulars Delivered on Stamps L(A)451 in accordance with section 28 of the Finance Act 1931 (as amended). He had also considered the evidence of a similar property known as Ffrwd Old Quarry, Cymau which comprises 70 acres (28.32 ha) of former sand and gravel workings now returned to nature. That property lies only 2 miles from the subject property and is also in the Celidog valley. It contains a similar mixture of ground cover, and part also lies in the SSSI. Ffrwd Old Quarry was on the market for sale in October 2002, at which time Mr Hirst carried out a valuation for clients. He was also aware of two other valuations undertaken by chartered surveyors in the private sector, and of the level of an offer that had been made to purchase it.
13. It was Mr Hirst's view that land of the type that the subject property and Ffrwd Old Quarry comprised was essentially unproductive and, if unimproved, incapable of producing an economic return. Demand was only likely to be from two types of potential purchaser. Firstly, speculators seeking an eventual change of use for commercial or residential development and, secondly, conservation bodies interested in restoring and managing the land in line with the acquiring authority's intentions. The land was inherently unsuitable for the first type due to the planning scenario and the existence of the SSSI.
14. Conservation bodies such as the RSPB, the Countryside Council for Wales or the North Wales Wildlife Trust were potential purchasers but Mr Hirst said that, for obvious reasons, such bodies do not normally bid against each other, and would be likely to pitch offers at a modest level. They would also take into account, in formulating their bids, the positive obligation imposed under the section 106 agreement to complete a programme of restoration works including the creation of the bridleway, and thereafter to manage the land in accordance with the section 106 requirements.
15. Mr Hirst said that, as the Statement of Reasons had shown, it had been estimated that 'at least' £40,000 needed to be spent in order to comply, and therefore, any purchaser would deduct that from his opinion of the site's value. Having considered land values from the confidential information he had to hand, and the level of bid received for Ffrwd Old Quarry, the valuation became (assuming section 106 works completed):

Zone A (Marshy Woodland part in SSSI) 14 acres @ £750 £10,500

Zone B (Partially restored workings) 14 acres @ £300 £ 4,200

Zone C (Woodland part in SSSI) 14 acres @ £800 £11,200

Zone D (Woodland) 9 acres @ £1,200 £10,800

Former railway track-bed Say £ 3,000

Say £40,000

Less

Cost of restoration £40,000

Nominal value, therefore, £1.00

16. The fact was, Mr Hirst said, that the claimant had not complied with its obligations under the section 106 agreement and it was unlikely that it would do so. The only way that the acquiring authority could ensure that the land was restored and properly managed in accordance with the planning requirements was for it to own the land, and arrange, through local interest groups, for the necessary works to be done.

DECISION

17. No claim has been made to the acquiring authority by the claimant, and no representations from it were submitted in accordance with the required procedures. The material produced by the acquiring authority, and upon which the claimant has had ample time to comment, is, therefore, all that I have before me. Mr Hirst's report does not contain irrefutable evidence of value, there having been no completed transactions involving similar property, but he does refer to the marketing of, and his involvement with, Ffrwd Old Quarry. That property has similar characteristics to the subject property, and the evidence demonstrates to me that Mr Hirst has first-hand knowledge of the relevant market and values attributable to that type of land.
18. The costs involved in restoring the land in accordance with the requirements of the section 106 agreement are, as Mr Hirst said, a positive obligation which any prospective purchaser would take into account when considering what to bid for the land. I am satisfied that if, as he says, the land has a value of £40,000 but a purchaser would be legally bound to spend at least that much on restoration, then that land can only, realistically, have a nominal value. The failure of the current owners to complete the restoration works or provide either the financial guarantee or the management plan that was anticipated under the section 106 agreement must, in my judgment, be taken into account in determining compensation.
19. If all the obligations had been complied with, and a purchaser had the comfort of knowing that he did not have to spend large sums of money, then a value in the region of that proposed by Mr Hirst would apply. However, if the compensation that I awarded did not take into account those unfulfilled obligations, the claimant would, in effect, be receiving double the value of the land.
20. I also accept that the land is of a type, and in a location, which precludes any long term commercial development opportunities and it follows, therefore, that I accept Mr Hirst's figures. I determine that the acquiring authority shall pay compensation to the claimant in the sum of £1.
21. This determines the substantive issue in this case and it will take effect as a decision when the question of costs is decided. At that point, and 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) 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: 15 January 2003

(Signed) P R Francis FRICS

ADDENDUM ON COSTS

22. Written submissions have been received from the acquiring authority requesting that it be awarded its full costs in the reference. It was suggested that despite every effort having been made to open a constructive dialogue with the claimant, no positive response had been received from it or any professional adviser.
23. Other than a single letter from the claimant following the Notice to Treat, suggesting a compensation figure of £6,300 (which was rejected), no other response to the Notice was received. The reference to this Tribunal therefore had to be submitted by the acquiring authority in order for the compensation to be determined.
24. This matter, following the agreement of both parties, was set down to be heard under the simplified procedure (Rule 28, Lands Tribunal Rules 1996) and if it had proceeded on that basis, costs would only have been awarded in exceptional circumstances. It was upon the suggestion of the Tribunal that, principally in order to save costs, the reference was determined under Rule 27 – written representations.
25. It would be incongruous therefore if, especially as in my view there are no circumstances of such an exceptional nature as to warrant an award of costs, I were to penalise the claimant just because this case now falls outside Rule 28.
26. Also, my determination was in the nominal sum sought by the acquiring authority and no question arises in terms of a sealed offer.
27. I therefore determine that there shall be no order as to costs.

DATED: 3 February 2003

(Signed) P R Francis FRICS