England and Wales Lands Tribunal

[2004] EWLands ACQ_40_2002 (28 September 2004)

ACQ/40/2002

LANDS TRIBUNAL ACT 1949

COMPENSATION – compulsory purchase – acquisition of land adjoining highway for improvement of junction and to provide access to housing land – proposed link road to proposed bypass – scheme underlying the acquisition – no scheme world – alternative access points – ransom value – whether value existed independently of the scheme – compensation £1,139,000 – Land Compensation Act 1961, s 5(2) & (3)

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN PERSIMMON HOMES (WALES) LIMITED Claimants

and

RHONDDA CYNON TAFF

Acquiring

COUNTY BOROUGH COUNCIL

Authority

Re:

Land adjoining A473 Llantrisant Road,

Church Village, Llantwit Fardre,

South Wales

Before: P H Clarke FRICS

Sitting at 48/49 Chancery Lane, London WC2

on 19, 20, 22, 23, 26-30 April and 6, 7, 10-12 May 2004

with closing submissions in writing on 25 May, 28 June and 13 July 2004

The following cases are referred to in this decision:

Stokes v Cambridge Corporation (1961) 13 P & CR 77

Batchelor v Kent County Council [1992] 1 EGLR 217; (1990) 59 P & CR 357

Bolton Metropolitan Borough Council v Tudor Properties Limited [2000] RVR 292

Waters v Welsh Development Agency [2004] 1 WLR 1304, HL; [2003] 4 All ER 384, CA; [2001] RVR 93, LT


 


Wilson v Liverpool Corporation [1971] 1 WLR 302

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

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

Fraser v City of Fraserville [1917] AC 187

Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Vizagapatam [1939] AC 302

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

East End Dwellings Co Limited v Finsbury Borough Council [1952] AC 109

Wards Construction (Medway) Limited v Barclays Bank Plc [1994] 2 EGLR 32

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

Ozanne v Hertfordshire County Council [1991] 1 WLR 105

Cedar Rapids Manufacturing and Power Co v Lacoste [1914] AC 569

Blandrent Investment Developments Limited v British Gas Corporation [1979] 252 EG 267

Lady Fox's Executors v Commissioners of Inland Revenue [1994] 2 EGLR 185

Ryde International Plc v London Regional Transport [2004] RVR 61

Corton Caravans and Chalets Limited v Anglian Water Services Limited [2003] RVR 323

Secretary of State for the Environment, Transport and the Regions v Baylis (Gloucester) Limited (2000) 80 P & CR 324

R v Northamptonshire County Council ex p Commission for New Towns [1991] NPC 109

Marshall v Blackpool Corporation [1935] AC 16

R v Warwickshire County Council ex p Powergen Plc (1997) 3 PLR 62

Tottenham Urban District Council v Rowley [1912] 2 Ch 633

Nicholas Nardecchia instructed by Morgan Cole, solicitors, for the claimants.

Matthew Horton QC and Jenny Wigley instructed by Solicitor, Rhondda Cynon Taff County Borough Council for the acquiring authority.

DECISION OF THE LANDS TRIBUNAL

1. This is a reference to determine the compensation payable for the compulsory acquisition of land formerly close to a road junction at Church Village, Llantwit Fardre in South Wales. The claimants seek a substantial sum in compensation on the grounds that the land was required for access to adjoining housing land (the Dyffryn Dowlais site) and therefore had a ransom or key value. The acquiring authority say that, disregarding the scheme and having regard to alternative access points, the land had only a nominal value.
2. Nicholas Nardecchia of counsel appeared for the claimants and called (i) Lyn Powell BSc Dip TP MRTPI FRSA, Planning Director with RPS Planning, Transport and Environment of Cardiff; (ii) Graham Good MSc MA FICE CEng FIHT, a consultant to Ove Arup and Partners, Consulting Engineers of Cardiff and elsewhere; (iii) Andrew Crompton, Land Director of the claimants; and (iv) David Steven Gibbon FRICS, an Associate Partner in GVA Grimley of Cardiff and elsewhere.
3. Matthew Horton QC and Jenny Wigley appeared for the acquiring authority and called: (i) John Garfield Penaluna, in the technical department of Barratt South Wales; (ii) Ron Milsom, formerly a principal engineer in the acquiring authority and now a highway consultant of Cardiff; (iii) Derek Woodward, Regional Land and Property Director of Taylor Woodrow and formerly Land Manager of Barratt South Wales; (iv) Richard Hird BSc CEng MICE, Director of Quadrant Consulting Limited of Cardiff; (v) Philip Edward Ratcliffe BA MRTPI, a Senior Planning Officer of the acquiring authority (formerly with the predecessor authorities, Mid Glamorgan County Council and Taff Ely Borough Council); and (vi) Gareth Owain Llywelyn LLB BSc FRICS ACIArb IRRV, Director of Professional Services, Lambert Smith Hampton, of Cardiff and elsewhere.
4. I have made an unaccompanied inspection of the reference land, the Dyffryn Dowlais site and the surrounding area.

FACTS

5. The parties have agreed several statements of agreed facts and from these statements and the evidence I find the following facts.

Compulsory acquisition of reference land

6. On 9 May 1990 Keltecs (Consulting Architects and Engineers) Limited, acting for potential developers of the Dyffryn Dowlais site, wrote to Mid Glamorgan County Council requesting the authority to acquire the land shown on the accompanying plan (later the reference land) to allow road widening relevant to the traffic light controlled junction to be carried out by the developers of the adjoining Dyffryn Dowlais site.
7. On 26 July 1990 the Highways and Transportation Committee of Mid Glamorgan County Council, on the recommendation of the County Engineer and Surveyor, resolved to make a compulsory purchase order in respect of the land referred to in the preceding paragraph. Subsequently it was agreed between the County Council and the applicants that more land was required for the necessary road widening and provision of footway, verge and embankment.
8. On 30 April 1992 the Highways and Transportation Committee of Mid Glamorgan County Council resolved to adopt the recommendation of the County Engineer and Surveyor that a compulsory purchase order be made in respect of an enlarged area of land.
9. On 11 May 1992 the County Council made The Mid Glamorgan County Council (Widening of Route A473 Waterton Cross to Treforest Principal Road at Llantwit Fardre (Compulsory Purchase Order) 1992 under sections 239, 240 and 249 of the Highways Act 1980 and the Acquisition of Land Act 1981. The order was confirmed by the Secretary of State for Wales on 8 March 1993. This order authorised the acquisition of two plots of land described as:-

"1. …95 square metres of land forming highway verge abutting and on the south of Route A473 at its junction with the access road to the Nipa Laboratories, Llantwit Fardre.

10. 175 square metres. Waste ground abutting and on the north-east of the access road to the Nipa Laboratories, Llantwit Fardre."

These two plots are contiguous and together have an L-shape. The total area is 270 sq m. These plots are referred to as "the reference land" in this decision.

11. On 1 March 1996 the County Council made a general vesting declaration in respect of the reference land which vested in the Council on 27 April 1996. This is the agreed date of valuation. Possession of the land was taken on 15 January 1999. The claimants referred the determination of compensation to this Tribunal on 26 February 2002.
12. By an agreement dated 7 March 1996 between David Howard Jenkins and Gwyn Gower Jenkins (owners of part of the Dyffryn Dowlais site) and Mid Glamorgan County Council, the owners agreed to indemnify the County Council in respect of all costs and expenses incurred in connection with the compulsory acquisition of the reference land, to include the purchase of plot 2 and to include fees incurred in negotiations or referred to the Lands Tribunal.
13. By a unilateral planning undertaking dated 31 October 1997 under section 106 of the Town and Country Planning Act 1990 Barratt Homes Limited agreed to reimburse the cost of acquiring the reference land and to pay all fees incurred by the Council in the acquisition.
14. The acquiring authority, Rhondda Cynon Taff County Borough Council ("the Council"), are the successors to Mid Glamorgan County Council (from 1 April 1996)

Reference land and surrounding area

15. The reference land is in the area known as Church Village, Llantwit Fardre, in South Wales, approximately 10 miles north west of Cardiff and three miles south of Pontypridd. The A473 Llantrisant Road runs in a north easterly direction, close to Beddau and Llantwit Fardre in the south west and then through Church Village and on towards Treforest and Pontypridd. The essential geography for the purposes of this reference is best described by reference to this road.
16. On the outskirts of Church Village, proceeding towards the centre of the village from the south west, the A473 passes laboratories, formerly Nipa now Clariant, on the south eastern side of the road. At the end of this property is an access road; the reference land was immediately to the north east of this access; it now forms part of the widened and improved A473. Along the road, travelling a short distance north east, is now a cross roads, known as the Pen Yr Eglwys junction. At the date of valuation it was a priority T-junction, the A473 being joined on its north western side by a distributor road, Pen Yr Eglwys, which passes through a residential area, comprising Meadow Farm Estate, the rear of the former East Glamorgan Hospital and two residential sites, known as The Link and Ty Draw Farm, to join St Illtyd Road at Upper Church Village. The Pen Yr Eglwys junction is now a traffic light controlled crossroads, with a new road on the south east, Coed Dowlais, leading to a housing estate on the adjoining Dyffryn Dowlais site.
17. At the date of valuation the Dyffryn Dowlais site was agricultural land and woodland with a house and buildings situated approximately in the centre with access from a track joining the A473 on the western edge of Church Village. The site is now a partly developed residential estate with access from the Pen Yr Eglwys junction (Coed Dowlais) and a proposed access (under construction) from Station Road. The Dyffryn Dowlais site is bounded on the north by the line of a disused railway line running at the rear of houses fronting the A473 in Church Village, on the west by the disused line and woodland fronting the A473 and on the east it has a short frontage to Station Road to the south of the cross roads in Church Village. The south western corner of the site adjoined the reference land and the Nipa premises.
18. To the north east of the Pen Yr Eglwys junction the A473 has a line of houses on the north western side, the last house being The Croft, situated a short distance to the south west of the entrance to the former East Glamorgan Hospital, which is on the opposite side of the A473 to the Dyffryn Dowlais site. The former Hospital site is now being developed for housing as St David's Manor. The former entrance to the Hospital will be referred to in this decision as "the Hospital entrance. " On the opposite side of the A473, at this point, between the road and the Dyffryn Dowlais site, is the line of the disused railway and a belt of woodland. The A473 then turns east to the centre of Church Village where it passes through a traffic signal controlled cross roads, with St Illtyd Road to the north, which leads to Upper Church Village, and Station Road, which runs south east. The A473 then leads to Tonteg and Treforest.

Ownerships

19. At the date of valuation the freehold interest in the reference land was held by Ideal Homes (Wales) Limited. The claimants are successors in title to Ideal Homes.
20. Under an option agreement dated 18 March 1996 between Margaret Glyn James and David Evan Naughton Davies (the first grantors), David Howard Jenkins and Gwyn Gower Jenkins (second grantors), Margaret Glyn James and William Edward James (third grantors), Barratt Homes Limited (purchaser) and Barratt Developments PLC (surety), Barratt Homes were granted an option to purchase the whole or part or parts of the Dyffryn Dowlais site at a price or prices to be agreed or determined by arbitration. The option fee was £500. The purchase price was to take into account infrastructure costs which included the cost of acquiring any land outside the Dyffryn Dowlais site necessary to implement any planning permission granted in respect of that site.

Local Plans

21. In the Llantrisant Interim Local Plan Draft Proposals 1976, the Dyffryn Dowlais site was included in a schedule of residential sites (R13 and 14), where "development is intended to proceed from the A473 protecting the existing woodlands and proposed Public Open Space towards the proposed roundabout south of Station Road."
22. The Plan proposed a new and realigned A473 in the long term. In the short term certain lengths of the proposed road should be constructed to bypass Church Village, Llantwit Fardre, Llantrisant and Talbot Green, to be linked to the existing A473 by local distributor roads which would be needed as part of proposed development. The Proposals Map showed a local distributor road (annotated as "New access road provided by the Site Developers") connecting the existing A473 at the Hospital entrance to the proposed bypass to the south east of Church Village. The proposed distributor road then ran west and north west at the side of the Hospital to housing development at Meadow Farm and The Link.
23. In the Llantrisant Local Plan Updated Draft Proposals, April 1983, the Dyffryn Dowlais site was allocated for housing (h2(f)).
24. Under Proposal t3(a) land was safeguarded for "a bypass to Church Village from Cross Inn to Tonteg" on an alignment south of Llantwit Fardre, Church Village and Tonteg. A junction with the local road network was proposed at Station Road. It was not anticipated that finance will become available for the construction of the bypass during the plan period, i.e. before 1991 (paras 4.15 and 4.18).
25. Under Proposal t5(a) and (b) a local distributor road shall be constructed through the housing sites to the north west of the A473 (Meadow Farm, Ty Draw Farm and to the west of the Hospital) to connect to the A473 and then through the Dyffryn Dowlais site "to allow a new link to be provided from the A473 to the proposed Church Village Bypass." Para 4.22 stated that a single access from the A473 should be provided to serve the Dyffryn Dowlais site and the adjoining industrial site (e3), Nipa. This access road will need to be of a standard to enable it to be extended to eventually serve as a link from the A473 to the Church Village Bypass. In relation to the development of Meadow Farm, para 4.23 of the Plan stated that planning permission has already been granted with an access point to the A473 further west and now indicated on the Proposals Map and that agreement will be necessary with the developer for its relocation to enable a common junction to be achieved with the proposed link road to the Church Village Bypass. The access point on the Proposal Map was the present Pen Yr Eglwys junction. The Proposals Map did not show the local distributor road (t5b) linking to the proposed Church Village Bypass.
26. Under Implementation it is stated that the County Council will wish to ensure an appropriate hierarchy of roads when considering planning briefs or planning applications. If this required a level of provision over and above that required to be provided by a developer, then the County Council will identify this as a highway improvement and will be responsible for the additional works and costs (para 4.23). Final draft proposal to the same effect were published in November 1983.
27. In the Llantrisant Local Plan Proposals of December 1984, the Dyffryn Dowlais site was allocated for residential development for 450 dwellings (Proposal h2.6).
28. Proposal t3(a) provided for land to be safeguarded for the Church Village Bypass and t5(a) and (b) provided for a local distributor road as set out in the 1983 Plan. There was a similar provision for implementation as in the 1983 Plan (para 5.23).
29. This Plan was placed on deposit, objections were heard at a public inquiry in 1986. These included an objection to the housing allocation for the Dyffryn Dowlais site, which was rejected by the inspector in his report dated 18 July 1986.
30. In the Llantrisant Local Plan Final Proposals, November 1987, Proposals and Policies h2.6, t3(a) and t5(a) and (b) remained unaltered from the previous Plan. The Proposals Map did not show the local distributor road (t5b) linking to the proposed bypass. The implementation provision followed that in the previous plan (para 5.23).
31. On 3 February 1992 the Llantrisant Local Plan Draft was approved, incorporating draft modifications to the Final Proposals of November 1987, for development control purposes pending publication of a Draft Taff Ely Local Plan. Proposals or Policies h2.6, t3(a) and t5(a) and (b) remained unaltered. This was the Local Plan at the date of the making of the compulsory purchase order.
32. In the Taff Ely Local Plan 1992 – 2006, Consultation Draft 1993, the Dyffryn Dowlais site was allocated for residential development in the period 1992 – 2006 (Policy H1.25) for 450 units. Policy h7.5 required housing development "to have satisfactory access and parking provisions."
33. Policy t1.2 provided for the A473 Church Village Bypass to be safeguarded from other development and Policy t4.4 stated the Dyffryn Dowlais link road was to be provided as part of a new development scheme. As this road is required for a development scheme developers will be expected to finance the construction (para 8.28). A single access from the A473 is required to serve the Dyffryn Dowlais site and this access road will need to be of a standard to enable it to be extended to serve as a link from the A473 to the proposed Church Village Bypass (para 8.32). The Proposals Map showed the link road joining the A473 at the Pen Yr Eglwys junction and extending towards, but not joining, the Church Village Bypass.
34. The Local Plan at the valuation date was the Taff Ely Local Plan Deposit Draft 1995. The policies in the Consultation Draft of 1993 were unaltered, Policies h1.25, t1.2 and t3.3 (formerly t4.4), and the justification was unaltered (now paras 8.19, 8.27 and 8.30). The Dyffryn Dowlais link road joined the A473 at Pen Yr Eglwys junction and was to be financed by the developers as part of a new development scheme.
35. None of the above Local Plans were adopted at or before the valuation date.

Dyffryn Dowlais site: planning

36. As stated above, the Dyffryn Dowlais site was allocated for residential development in all Local Plans from 1976.
37. The planning applications referred to below all relate to mainly residential development on the Dyffryn Dowlais site with highway access from a site road with a junction to the A473 at Pen Yr Eglwys and another junction with Station Road.
38. In the Dyffryn Dowlais Planning Study: Observations prepared by Mid Glamorgan County Council in August 1985 it is stated that the "developer will be required to provide a roundabout junction on the A473" (para 1.2).
39. On 19 May 1986 application was made for outline planning permission for residential development, public house and garden centre (56/86/0510). This was refused on 17 November 1986 on the grounds that the proposed development was premature until improvements to the A473 have been carried out and the creation of traffic hazards.
40. On 8 May 1987 application was made for outline planning permission for residential development (56/87/0474). This was refused on 28 September 1987 on the ground that the proposed development was premature until improvements to the A473 have been carried out. An appeal was lodged on 28 September 1987 but held in abeyance pending a further application.
41. On 11 July 1989 an outline planning application was made for residential development, public open space and public house site (56/89/0694). On 23 October 1989 it was resolved by the local planning authority that conditional planning permission be granted subject to the applicants entering into a section 52 agreement in respect of public open space, the phasing of the development and to ensure that no works traffic entered or left the site from Station Road. On 17 September 1990 it was agreed that the agreement be confined to phasing and open space. This section 52 agreement was not completed and no planning permission was granted.
42. On 12 March 1996 application was made for outline planning permission for residential and ancillary use development (56/96/2007). This application was subsequently withdrawn.
43. On 30 January 1997 an outline planning application was made for residential and ancillary development (56/97/2062). This application was not determined within the prescribed period and the applicants, Barratt South Wales, appealed against this non-determination on 12 May 1997. On 25 September 1997 the Planning Committee resolved that the Welsh Officer be informed that if the Committee had determined the application it would have refused planning permission on highway grounds.
44. On 31 October 1997 Barratt Homes Limited entered into a unilateral deed of planning obligation under section 106 of the Town and Country Planning Act 1990 for the purposes of their appeal. It is noted in the recitals that the reference land "is required to construct the proposed access to" the Dyffryn Dowlais site "and has been compulsorily purchased by the Council for that purpose." Barratt agreed to submit a detailed scheme for the improvement, widening and re-alignment of the A473 to accommodate a suitable signal controlled junction access, to include a multi-lane layout to provide for left and right turning traffic to the Dyffryn Dowlais site. The works to be capable of accommodating the traffic generated by their development. No house building shall commence until these A473 improvement works have been completed to the satisfaction of the Council. Barratt will enter into an agreement under section 278 of the Highways Act 1980 to carry out these works. The deed was made on the understanding that the Council will grant Barratt the right to construct the roads permitted by the planning permission under appeal over the reference land and the A473 at, and adjoining, the Pen Yr Eglwys junction. Rights of way were to be granted by the Council from the Dyffryn Dowlais site to the A473. Barratt agreed to dedicate for highway purposes, without consideration, such land as is necessary to construct the Church Village Link Road and the Church Village Bypass as shown on the plan annexed to the deed. This land included an access road from the A473 to the Dyffryn Dowlais site at the Pen Yr Eglwys junction. Barratt also agreed to reimburse the Council for the cost of acquiring the reference land and to pay all fees incurred by the Council in the acquisition.
45. On 4 December 1997 an inspector allowed Barratt's appeal in respect of application 56/97/2062 and granted outline planning permission for residential and ancillary development on the Dyffryn Dowlais site. Not more that 450 dwellings were permitted on a maximum area of 15 hectares. No development could commence until details of the proposed junctions onto the A473 and Station Road had been approved by the Council.
46. Approval of reserved matters under this outline planning permission was given on 10 September 1998. Subsequently, on 10 October 2003 conditional planning permission was granted for a neighbourhood centre comprising doctor's surgery, pharmacy, optician, dental surgery and class A1 retail shop with surgery/offices over on the site allocated for a public house (application 02/1958).
47. On 15 January 1999 the Council made the Rhondda Cynon Taff County Borough Council (No.33) Tree Preservation Order 1999 relating to trees on the Dryffryn Dowlais site.

Pen Yr Eglwys junction

48. The original Pen Yr Eglwys junction was constructed as a priority T-junction in about 1984 when the Meadow Farm Estate was built.
49. On 31 October 1997 Barratt Homes Limited entered into a unilateral deed of planning obligation under which they agreed to submit a detailed scheme for the improvement of the A473 and to enter into a section 278 agreement to carry out these works.
50. On 10 September 1998 the Council granted planning permission for development comprising the construction of a new road junction on the A473, drainage and part of a spine road at Dyffryn Dowlais.
51. Following compulsory acquisition the Council took possession of the reference land on 15 January 1999.
52. On 28 January 1999 the Council and Barratt Homes Limited entered into an agreement under section 111 of the Local Government Act 1972 and sections 1 and 278 of the Highways Act 1980 whereby the Council granted consent to enter upon the public highway and Barratt agreed to carry out approved works at the Pen Yr Eglwys junction, including part of the access road to the Dyffryn Dowlais site and works at the junction and access to Nipa Laboratories.
53. After 1999 the works for widening the A473 and constructing the new traffic signal control junction with footway, verge and embankment were carried out and the development of the Dyffryn Dowlais site proceeded.
54. On 7 June 2001 the Council wrote to Barratt stating that the widened section of the A473 at the Pen Yr Eglwys junction and the unnamed spine road at Dyffryn Dowlais became adopted and maintained at public expense under section 228 of the Highways Act 1980 on 18 April 2001.

Meadow Farm Estate

55. Planning permission for housing development on the Meadow Farm Estate was granted in 1973, with a junction to the A473 located approximately 50 metres south west of the present junction at Pen Yr Eglwys. Subsequently it was agreed that the junction should be relocated to its present position and this was constructed in about 1984 when the Meadow Farm Estate was developed.

Highway improvement near Hospital entrance

56. In 1964 Glamorgan County Council made The County of Glamorgan (Improvement of Pontypridd – Llantrisant Road Route 473 at Nant Ty Crwyn, Church Village) Compulsory Purchase Order 1964. It was confirmed on 24 March 1965 and provided for the purchase of land for the widening of the A473 close to the Hospital entrance. The land to be acquired was 2,700 sq yds of woodland owned by Henry Elias Jenkins on, and adjacent to, the south side of the road.
57. By a deed of exchange dated 29 March 1968 Mr Jenkins conveyed this woodland to the County Council "to the intent that the same may henceforth be dedicated to and form part of the ancient highway repairable at the public expense." The County Council conveyed to Mr Jenkins a plot of land of about 1,260 sq yds on the south side of the road and agreed to pay £50 by way of equality of exchange.
58. After March 1968 but not later than 1974 the County Council carried out works of improvement to the A473 on part of the woodland conveyed by Mr Jenkins. These works comprised the widening of the carriageway and the provision of a paved footway on the south eastern side in respect of the length of highway opposite OS field 755a. Shortly after carrying out these works the County Council erected a wooden fence with a cross rail on an alignment slightly to the south east of the new footway. At the foot of the slope is a line of concrete posts which were not erected by Mr Jenkins or his successors in title. There are a number of drains at or close to the foot of the slope.

Church Village Bypass and link road

59. Neither the Church Village Bypass nor the link or distributor road to join it to the A473 at Pen Yr Eglwys junction via part of the Dyffryn Dowlais access or spine road have yet been built.

Valuation

60. The agreed valuation date is 27 April 1996.
61. The parties agree that the existing use value or amenity value of the reference land at the date of valuation was £500 and the industrial value was £5,300.
62. It is agreed that, if it is necessary to access the ransom or key value of the reference land, this requires the development value of the Dyffryn Dowlais site to be assessed. For the purposes of this valuation it is agreed that:-

(i) the total net developable area of the Dyffryn Dowlais site is 34.65 acres comprising 32.92 acres for residential development and 1.73 acres for the public house site;

(ii) a quantum allowance of 11.25% should be made;

(iii) a deduction of £3,442,000 for abnormal costs should be made;

(iv) the existing use value of the Dyffryn Dowlais site was £275,000.

ISSUES

63. The parties have agreed that the reference land had a nominal value of £500 for amenity purposes at the valuation date. The claimants contend that the land had a much higher value – a ransom or key value of £1,550,000 because it held the key to the development of the Dyffryn Dowlais site. They say that the land was essential to the improvement of the Pen Yr Eglwys junction to enable access to the Dyffryn Dowlais land, the only point on the A473 where access would be permitted. Ransom value would be paid by the owners or developers of the Dyffryn Dowlais site to enable improvement of the junction and the grant of planning permission for residential development on the adjoining Dyffryn Dowlais land. This additional value existed prior to, and independently of, the scheme underlying the acquisition. The value of the reference land was not enhanced by the scheme. The scheme is narrow comprising only the improvement of the junction, excluding any part of the proposed link road to the Church Village Bypass or alternatively only the first part of the link road which forms the access to the Dyffryn Dowlais site. The additional value does not fall to be excluded under rule (3) of section 5 of the Land Compensation Act 1961.
64. The Council contend that the agreed amenity value of £500 is also the market value that is payable on compulsory purchase. The scheme underlying the acquisition is wider than that proposed by the claimants and is related to Local Plan proposals for the Church Village Bypass and link road joining the A473 at the Pen Yr Eglwys junction. The scheme comprises the improvement of the junction and the first stage of the link road as shown on Local Plans. In the no scheme world the reference land did not possess a ransom value. Any additional value above amenity value was created by the scheme underlying the acquisition and is to be disregarded. Furthermore, the Pen Yr Eglwys junction was not the sole point of access to the Dyffryn Dowlais site. Highway works at the Pen Yr Eglwys junction could only be carried out under statutory powers and therefore rule (3) of section 5 of the 1961 Act precluded any additional value. Even if the reference land had a ransom value it was not more than £122,804.
65. From this summary of the parties' contentions the following questions emerge. First, what is the scheme underlying the acquisition of the reference land? Second, what are the characteristics of the no scheme world? Third, does rule (3) of section 5 of the Land Compensation Act 1961 apply? Fourth, having regard to the answers to these questions, what was the market value of the reference land at the valuation date under rule (2) of section 5 of the 1961 Act.

PROCEDURAL DECISIONS

66. I record four procedural decisions made during or after the hearing. Mr Nardecchia expressed concern that the Council wished to call Mr Ratcliffe as an expert witness. His written evidence is headed Witness Statement and contains evidence of fact save for two paragraphs. It does not include the usual declaration given by an expert witness. I agree that Mr Ratcliffe appears to be a witness of fact from his written evidence. However, my directions dated 31 May 2002 allowed each party to call three expert witnesses, for valuation, planning and highways respectively, and the Council did not exceed this limit. Without Mr Ratcliffe they would not have a planning expert. Mr Ratcliffe has the qualifications and experience to be an expert planning witness. I allowed Mr Ratcliffe to give evidence as an expert witness. There was no prejudice to the claimants. His written evidence was served on the claimants before the hearing.
67. At the start of day 8 of the hearing, Mr Horton sought leave to call additional evidence regarding the cost of the spine road which forms part of the Dyffryn Dowlais residential development. Mr Nardecchia opposed the application. I refused leave for two main reasons. First, the parties have agreed a figure of £3,442,000 for several abnormal costs incurred in the development of the Dyffryn Dowlais site. This figure appears to have been agreed about a year before the hearing. Both valuers used this figure in their valuations. It includes the cost of a spine road. In my judgment, it would be wrong to allow the Council to re-sile from one item in this agreement, which I have no doubt was a package deal, a global figure with give and take on both sides. No adequate reason was given by Mr Horton as to why this agreement should be reopened. Second, if I had allowed this additional evidence I would have had to give the claimants the opportunity to call a further witness on this matter, with an inevitable adjournment of the hearing and additional cost.
68. On day 12 of the hearing, during cross examination of Mr Ratcliffe, Mr Nardecchia sought to put in evidence an e-mail dated 29 April 2004 from the Land Charges Officer of the Council to the claimants' solicitors giving details of a planning permission granted for a neighbourhood centre on the public house site on the Dyffryn Dowlais land. Mr Horton objected on the ground that this evidence is not of value, being seven and a half years after the valuation date. I admitted the evidence. It is relevant to the valuation of the public house site (which Mr Gibbon valued as suitable for a neighbourhood centre); Mr Ratcliffe was given an opportunity to comment on it; the information in the e-mail was known to the Council and should have been included in the statement of agreed facts; and the fact that it relates to a planning permission granted some seven and half years after the valuation date should go to weight and not to admissibility.
69. Finally, I refused leave to admit affidavit evidence lodged by the Council after the close of the hearing on 12 May 2004. On 21 May the Council sought leave to lodge an affidavit by Mr David Howard Jenkins regarding the road works carried out in 1968 to the A473 at the entrance to the Hospital, and an affidavit by Mr Michael James Burt regarding the meaning of a letter dated 1 February 1996 which he wrote as an officer of Mid Glamorgan County Council and as to the question of a ransom strip opposite the Hospital entrance. The claimants objected to the admission of this evidence and by an order dated 28 May I refused leave. No reason was given by the Council as to why this evidence should be admitted after the close of the hearing and as to why it could not have been given at the hearing. The matters covered by the affidavits were known to be in issue, although they are peripheral to the main issues. The dates for the hearing held in April and May 2004 were notified to the parties in December 2003 and the date for lodging witness statements was 14 May 2003, just under a year before the hearing. The Council had ample opportunity to prepare their case and to lodge their witness statements before the hearing. If I had allowed this additional evidence it would have been necessary to allow the claimants to produce evidence in rebuttal, perhaps to reopen the hearing, with consequent delay and additional costs. In my judgment there was no justification for the late admission of this evidence.

EVIDENCE OF FACT

70. Mr Penaluna said that he was involved in the provision of access to the Dyffryn Dowlais site. He became aware that the local authority required a junction oppose Meadow Farm to comply with the Local Plan and with the intention to create a bypass. He considered this access in 1997. The estimated cost of £410,320 was unnecessarily expensive. There was a less expensive access opposite the Hospital entrance with an estimated cost of £279,780 with £30,000 extra for the land. He was, however, instructed by the Managing Director of Barratt that they were not interested in a serious attempt to persuade the local authority to use another access. He was told that the local authority would not consider this access because it did not comply with their bypass proposals. Mr Penaluna was told by Barratt's architect that the local authority preferred the Pen Yr Eglwys access due to their consideration of a bypass.
71. There were mine shafts and adits on the Dyffryn Dowlais site. Works to the shafts and adits were carried out at a cost of about £37,000. There were tree preservation orders on the line of both routes but no difficulties were experienced.
72. Access to the Dyffryn Dowlais site opposite The Croft was the subject of a rebuffed inquiry and not pursued.
73. Mr Milsom said that as a principal engineer for the Council his initial involvement with the Dyffryn Dowlais site was dealing with a planning application in 1989. It was his understanding that the Council wished to have the Dyffryn Dowlais access at the Meadow Farm junction to best serve the Church Village Bypass. In April 1989 it was proposed to have a roundabout junction with a through route to Station Road.
74. He referred to the steps taken towards a compulsory purchase order and the proposed section 106 agreement. On 19 October 1993 solicitors wrote to the Council confirming that their clients would meet the cost of buying the reference land. Mr Milsom understood that the Council needed to acquire the land and now had someone to pay for it. He referred to subsequent correspondence and memoranda. In November 1994 a proposal by Barratt for access opposite The Croft was most unlikely to have been unacceptable. On 12 December 1994 the Highway Liaison Officer to the Council stated that, although the Council were willing to consider alternative layouts, Barratt had made no attempt to integrate the new development with the Council's proposals for the Church Village Bypass and link roads. The Council were determined that the Dyffryn Dowlais access should be opposite Meadow Farm. On 20 January 1995 a memorandum from Mr Burt stated that the compulsory purchase order was to facilitate highway improvements for access to Meadow Farm and for a link to the bypass.
75. On 2 October 1995 Mr Milsom wrote to Barratt that the preferred access to the Dyffryn Dowlais site coincided with the proposed link to the Church Village Bypass. If another access existed then it would be considered but he could not see how it could be placed to benefit the bypass in the same way. Mr Milsom anticipated that, if Barratt had proposed a different access, it would have been refused. He would have expected an appeal to be dismissed because a different access would not have met the interests of the Local Plan.
76. On 27 February 1996 Mr Burt wrote to Herbert R Thomas confirming that, had it not been that comprehensive development dictated a particular form of highway layout, an appropriate access along the A473 would have been considered on its merits. It was his opinion that a ransom situation did not exist because the access opposite Meadow Farm was the preferred option in accordance with the Local Plan.
77. Mr Milsom referred to the progress of the planning application for the Dyffryn Dowlais site, for which outline planning permission was granted on appeal in December 1997.
78. It was the Council's policy to keep to a minimum the number of access points from adjoining land onto the A473. Minor works to this road and other roads would not be included in a Local Plan. Before May 1990 the County Council expected the Dyffryn Dowlais developers to provide the bypass link road and the A473 junction. The Council did not wish to have the link road built but leading nowhere: access was to be built to lead into the Dyffryn Dowlais site with potential for a link to the bypass.
79. Mr Woodward said that, when he was Land Manager with Barratt South Wales, he was responsible for overseeing negotiations regarding the option to purchase the Dyffryn Dowlais site.
80. It was apparent that the local authority required access to this land to be at a point to enable an access link to the bypass to be built. There was no reason to argue about this because the additional cost would be defrayed under the option/consortium agreement. A better access was available and under the control of the vendors. This was south of The Croft, near the Hospital entrance. It was, however, obvious that the local authority would not agree and there was little point in pursuing the matter with them or on appeal.
81. It was Mr Woodward's understanding of the position that, although Barratt have indemnified the Council as to the cost of acquiring the reference land, they can pass on the cost to the Dyffryn Dowlais owners.

PLANNING EVIDENCE

82. Mr Powell referred to the development of Meadow Farm and said that there were safety concerns about the Pen Yr Eglwys junction. In August 1986 the County Surveyor required the widening of the A473 and traffic signals in connection with proposed housing on the Dyffryn Dowlais site. The existing junction emerged from a dual purpose: to provide access to Dyffryn Dowlais and to increase safety standards at the junction which then had a priority arrangement. It was always the Council's intention to improve this junction.
83. The scheme underlying the acquisition is the widening and improvement of the A473 by the creation of a traffic signal controlled junction and associated works to provide satisfactory access to residential developments on either side, particular to the Dyffryn Dowlais site. He did not see the link road as part of the scheme. The acquisition came about because the developers of Dyffryn Dowlais required the County Council to use their compulsory purchase powers to allow junction improvements to be carried out as a necessary part of access to their development. In the no scheme world it is not necessary to disregard the link to the proposed bypass, only the junction improvements.
84. Mr Powell considered the development plan history and said that there appears to be no evidence to suggest that since 1983 any access point for the Dyffryn Dowlais site other than that constructed would have been acceptable to the local authority. He particularly referred to the Taff Ely Local Plan 1993, Policy t4 and para 8.32. In the no scheme world planning permission would not have been granted for the Dyffryn Dowlais site with access to the A473 elsewhere. This would have fettered the objectives of securing a direct link from Meadow Farm to the bypass, securing until at least 1993 a link to provide access from the laboratory expansion and the Dyffryn Dowlais development and securing an improved junction with traffic lights.
85. Mr Powell referred to the development history of the Dyffryn Dowlais site and said that, in his decision letter of 4 December 1997 (at para 10), the inspector in the Dyffryn Dowlais appeal said that he could see no direct link between the release of the site and the provision of the bypass. As the sole purpose of the link road was to join the bypass to the A473, it follows that planning permission for the Dyffryn Dowlais site was not dependent on the progress of the link road. The inspector stated that there was Council support for the development because it used compulsory purchase powers to acquire land for access to this site.
86. The development history of the Dyffryn Dowlais site demonstrates: continual support from the Council's planning officer and general support from the County subject to access at Pen Yr Eglwys junction; initial support for a roundabout at this junction; and a subsequent move by the County from August 1986 to see additional lanes and traffic signals.
87. In the no scheme world other options would have been a roundabout on the Dyffryn Dowlais site and an alternative junction along the A473. Mr Powell said, however, that permission would not have been forthcoming for either option. There were no credible options to the junction eventually constructed.
88. At the valuation date the Dyffryn Dowlais site was a sound prospect for residential development with two access points, from Station Road and from the A473. From 1983 there was no indication that access from the Dyffryn Dowlais site onto the A473 other than at Pen Yr Eglwys was formally considered by the Council. On three occasions the Council were asked to advise on alternative accesses, at The Croft and the Hospital entrance, and each time the reply was that an alternative would not be evaluated and the preferred option was the Pen Yr Eglwys junction. The Council would not have approved an alternative access to the A473. Such an access would have been in conflict with the development plans and the desire to achieve comprehensive development in the Llantwit Fardre area. It is preferable to limit the number of accesses onto a highway and the preferred option is always to use an existing junction, even if it requires upgrading at the developer's expense.
89. Mr Powell said that he recognised that the choice of the Pen Yr Eglwys junction as the right location for access to the Dyffryn Dowlais site was further supported by the junction of the A473 and link road at this point. However, even if this is disregarded in the no scheme world, the evidence still shows that the Pen Yr Eglwys junction would have been regarded as the only satisfactory location for the new junction.
90. In cross examination Mr Powell was asked to consider an alternative link from the A473 to the Church Village Bypass if the proposed link at Pen Yr Eglwys was not allowed. He said there were two alternative routes: across the Dyffryn Dowlais site from the Hospital junction to Station Road (and then south to the bypass) or from north to south across Dyffryn Dowlais from the Hospital junction to the proposed bypass. Both routes suffered from planning and development objections.
91. Mr Ratcliffe referred to the proposals and policies in the Local Plans relating to the Dyffryn Dowlais site, the Church Village Bypass and link road and access to Dyffryn Dowlais. He said that it can be inferred that Policy t5b in the 1984 Plan intended that the link from the A473 to the bypass was to benefit other development on the A473 in addition to the Dyffryn Dowlais site. It is correct to interpret paragraph 5.22 in this Plan as recognising that it would be expedient to use the link road as access to the Dyffryn Dowlais site. It was possible to access this land from at least one other point opposite the Hospital entrance. This would have been acceptable on planning grounds. The access at the Pen Yr Eglwys junction was to facilitate the link with the proposed distributor road.
92. In the Taff Ely Local Plan 1995, Policy t3 proposed a Dyffryn Dowlais link road to be provided as part of a new development scheme and supporting paragraph 8.30 stated that a single access is required to serve the Dyffryn Dowlais development, to be of a standard to serve as a link from the A473 to the bypass. This policy, said Mr Ratcliffe, referred to the provision and location of the link road, not the purpose. The primary purpose of the road is to make a link with the A473 and meanwhile it will also provide access to the Dyffryn Dowlais site.
93. The primary purpose of the road proposals at Dyffryn Dowlais has always been to provide a link to the Church Village Bypass, with access to the Dyffryn Dowlais site as secondary. But the immediate purpose of the improvement works at the Pen Yr Eglwys junction was to provide access to the Dyffryn Dowlais site. From a planning policy viewpoint there would have been little to choose between an access to the Dyffryn Dowlais site cutting through the woodland near the Clariant premises and one cutting through woodland opposite the Hospital entrance. Loss of woodland might have been less had an alternative access been used, which would have been preferable in policy terms. An access at a point other than Pen Yr Eglwys was less likely to have been given planning permission. Mr Ratcliffe acknowledged in cross examination that an access to the Dyffryn Dowlais site opposite the Hospital entrance would conflict with open space policies in the Local Plan and that this was not the position with Proposal t4 in the Taff Ely Local Plan 1995. If the proposed link to the Church Village Bypass had been on a different line to that proposed in the Local Plans, the Council would not have insisted on access to the Dyffryn Dowlais site at the Pen Yr Eglwys junction. It is likely that the A473 access would have been opposite the Hospital entrance.
94. Mr Ratcliffe said that the scheme underlying the acquisition is the provision of a local distributor road to the bypass, that is to say an access to the Dyffryn Dowlais site which also formed a link to the Church Village Bypass on the alignment in the Local Plan. This scheme first emerged in 1976. His concept of a scheme is that it comprises proposals by a public authority which cannot be achieved without the compulsory acquisition of land. A distributor road from the Hospital entrance through the Dyffryn Dowlais site would have been acceptable in planning terms. Mr Ratcliffe accepted that in the real world the access to the Dyffryn Dowlais site had to be at the point where the proposed bypass link meets the A473. No other access would be allowed as a matter of policy. Mr Ratcliffe acknowledged that before 1990 it was not the intention of the local authority to carry out any works at the Pen Yr Eglwys junction. They participated from that date to assist the developers of the Dyffryn Dowlais site. The commencement of compulsory purchase in 1990 was a significant change, but it was always in the contemplation of the local authority that the junction works would be carried out by the developers. The role of the Council was to acquire the reference land to allow the developers to carry out the junction improvement. The Council would not, however, have agreed to compulsory purchase procedures without the motivation of the link road. The purpose of the acquisition in this reference was to enable the Dyffryn Dowlais developers to improve the Pen Yr Eglwys junction.
95. Mr Ratcliffe acknowledged that it could not have been foreseen at the valuation date that the Council would have refused planning permission for residential development on the Dyffryn Dowlais site. If the Council had acted reasonably planning permission would have been granted on an application at that time.
96. Mr Ratcliffe said that there was nothing to stop the whole of the Dyffryn Dowlais development having access from Station Road. A sequence of development under the planning permission granted might have been: phase 1 development (75%) from a junction with the A473 and then phase 2 (25%) with access from Station Road.
97. As to the possible grant of planning permission for a neighbourhood centre on the public house site on the Dyffryn Dowlais land, Mr Ratcliffe referred to Policies CN35, C2, S13 and C7 in the Local Plan and said that they gave support to the provision of such a centre in 1996. There was evidence that in 1996 the developers had identified the public house site as having potential for a neighbourhood centre.

HIGHWAYS EVIDENCE

98. Mr Good said that planning permission was granted in 1973 for residential development at Meadow Farm and construction started in 1984. The proposed junction with the A473 was moved to the present Pen Yr Eglwys junction. This was to enable the construction of a roundabout to serve other land allocated for housing to the south of the A473. The County Council could not fund a roundabout and a priority junction was built but with a less than standard vision splay. This resulted in safety problems. The link to the Church Village Bypass was subsequently proposed to be connected to the A473 at this point. In about 1986 the proposal for a roundabout at Pen Yr Eglwys was changed to traffic signals.
99. Mr Good referred to the no scheme worlds proposed by the parties and said that the claimants' scheme appears to be correct because the compulsory purchase was principally made to improve the substandard Pen Yr Eglwys junction and to provide satisfactory access to the Dyffryn Dowlais site. It was not made because the Council intended to build the bypass or link road at that time, although the long term purpose of the scheme was to provide a link to the bypass. The Council's no scheme world comprised the junction improvements and stage 1 of the link road, all to be provided by the developers.
100. Referring to the claimants' no scheme world, Mr Good said that the evidence indicates that the local authorities required four situations which have now occurred. These are: access to the Dyffryn Dowlais site from the A473 at Pen Yr Eglwys; the bypass link to connect to the A473 at this junction; access to Dyffryn Dowlais to be common with the link road at the A473; and the Pen Yr Eglwys junction to be traffic signal controlled. In this no scheme world access to Dyffryn Dowlais would have been from the Pen Yr Eglwys junction and, if the Council had not intervened, the developers of the Dyffryn Dowlais site would have had to purchase the reference land by agreement to carry out the junction improvement works to make it acceptable to serve the new development.
101. In the Council's no scheme world, possible junctions on the A473 were constrained by three factors: the alignment of the A473; existing junctions and access points; and the need for adequate junction capacity. The alignment of the A473 limits the area of search from the Clariant premises to just north of the Hospital entrance. A new junction would need to be opposite or some distance from an existing junction. A new junction would need to be at Pen Yr Eglwys or opposite the Hospital entrance or between these two points (perhaps opposite The Croft). As to capacity, a junction at Pen Yr Eglwys or at the Hospital entrance could be traffic signals or a roundabout. Between these points a roundabout could be provided. Possible constraints on these options were: statutory undertakers' plant, old mine workings and adjoining woodland. Also of relevance was the strategy for the management of the A473, namely to minimise the number of junctions and to introduce traffic signals rather than roundabouts. The critical issues were highway geometry, capacity and network management. An access to the Dyffryn Dowlais site opposite The Croft is unattractive and has been rejected by the County Council. The Pen Yr Eglwys junction access has been proposed by local authorities since the late 1970s. It appears in the view of the highway authority that it was comprehensive development in the area, rather than the proposed link road, which dictated that this junction should form the access to the Dyffryn Dowlais site.
102. In the Council's no scheme world the position is no different from the claimants' world. The same highway junction arrangements would have been insisted on by the highway authority and the Dyffryn Dowlais developers left to purchase the reference land to provide an improved traffic signal junction at Pen Yr Eglwys. There is no evidence that a junction other than that at Pen Yr Eglwys was ever seriously considered and no evidence that any other arrangement than signals was considered.
103. Overall, since 1983, the strategy has been a connection to Dyffryn Dowlais at Pen Yr Eglwys with traffic signals. This is the most sensible and appropriate arrangement. In either no scheme world, planning permission for the Dyffryn Dowlais site was only likely to have been granted on condition that highway access would be from a signal controlled junction at Pen Yr Eglwys. This would have required the purchase of the reference land.
104. Mr Good said that, applying the nationally adopted standards for roundabouts in TD16/93, a roundabout to appropriate standards could not have been built at the Pen Yr Eglwys junction without taking the reference land or land to the north of the junction. Mr Hird's layout on drawing 2013201/103 would not have been acceptable.
105. Mr Good considered Mr Llywelyn's evidence that one-third of the Dyffryn Dowlais site could be accessed from Station Road without access from the A473. He said that the Station Road access has always presented problems due to the traffic lights at the junction of the A473 and Station Road in the centre of Church Village. There is no evidence to support Mr Llywelyn's evidence. It is unlikely that planning permission would have been granted for significant development on the Dyffryn Dowlais site with access only from Station Road.
106. Mr Hird put in evidence a drawing showing a proposed traffic light junction opposite the Hospital entrance to serve the Dyffryn Dowlais site. It was based on a drawing prepared by Lawrence Rae Associates and approved by the Council on 8 December 1998. This junction could be constructed on land owned by the local authority and Mr Jenkins. A similar form of junction could be constructed at numerous locations along the A473. The fact that permission for a modified access at the Hospital entrance was granted for residential development at this point shows that a second access close to Pen Yr Eglwys would be accepted on traffic grounds. Mr Hird also put in evidence a drawing showing a proposed junction opposite The Croft. This was also based on a drawing approved on 8 December 1998. This would meet the requirements for the spacing of junctions. It is a reasonable assumption that planning permission was unlikely to be granted with access to the Dyffryn Dowlais site opposite The Croft.
107. The highway authority have indicated that it is unlikely that a roundabout would have been acceptable at the Pen Yr Eglwys junction. Mr Hird put in evidence a drawing (201320/103) showing a schematic roundabout at this junction which could have been constructed on land outside the reference land (201320/103). This design could be carried forward to a detailed design.
108. Mr Hird said that there would have been no grounds for refusing development on the Dyffryn Dowlais site with 150 houses accessed from Station Road and 300 from the Pen Yr Eglwys junction.

VALUATION EVIDENCE

109. Mr Crompton confirmed details of the comparables at Cefyn Yr Hendy and Ty Draw Farm used by Mr Gibbon. He said that there was no significant difference between house prices per sq ft at Cefyn Yr Hendy and on the Dyffryn Dowlais land.
110. Mr Gibbon valued the reference land at £1,550,000. The purpose of the scheme underlying the acquisition was to widen and improve the A473 and to provide a signal controlled crossroads at the Pen Yr Eglwys junction, to cater for left and right turning traffic into existing and proposed side roads, and to provide improved and safer access to existing and proposed residential development. The reference land held the key to housing development on the Dyffryn Dowlais site. Principles relating to the valuation of an access or ransom strip were considered in Stokes v Cambridge Corporation (1961) 13 P & CR 77 and Batchelor v Kent County Council [1992] 1 EGLR 217; (1990) 59 P & CR 357.
111. Mr Gibbon said that consideration of the relevant development plans and the evidence of Mr Powell and Mr Good showed that from 1983 onwards the only access considered for the Dyffryn Dowlais site was at Pen Yr Eglwys.
112. The market value of the reference land must be determined in a no scheme world. The parties disagree on the extent of the scheme underlying the acquisition. In the claimants' no scheme world it is only necessary to ignore the widening and improvement of the A473. The link to the proposed Church Village Bypass from the A473 can be taken into account. In the Council's no scheme world it is necessary to ignore all, or stage 1, of the link road. In the claimants' no scheme world consideration is to be given to the likelihood of planning permission being granted for development of the Dyffryn Dowlais site with alternative access from the A473 in the knowledge that the bypass link is to be constructed on an alignment connecting with the A473 at the Pen Yr Eglwys junction. In the Council's no scheme world it appears that we are to consider the likelihood of planning permission being granted for the Dyffryn Dowlais site with access from an alternative point along the A473, ignoring the fact that a bypass link is to be constructed at Pen Yr Eglwys.
113. Mr Gibbon considered the highways evidence given by Mr Good and said that his conclusions are that, in the Council's no scheme world, planning permission for the Dyffryn Dowlais site was only likely to have been given with access from the Pen Yr Eglwys junction, as has in fact occurred. This is the most sensible and appropriate arrangement.
114. Mr Gibbon referred to the planning evidence given by Mr Powell and his conclusions that the development plan history shows that no access point for Dyffryn Dowlais other than the Pen Yr Eglwys junction would have been acceptable to the local planning authority; planning permission may not have been granted for the Dyffryn Dowlais site if access to the A473 had been proposed elsewhere; there was no credible alternative to the junction arrangement eventually constructed at Pen Yr Eglwys; and the Dyffryn Dowlais site was a sound prospect for development at the valuation date.
115. In preparing a valuation of the reference land it is to be assumed that there were no credible alternatives to the Pen Yr Eglwys junction as built, requiring acquisition of the reference land. This is the position in both no scheme worlds. The fact that the County Council required an indemnity from Barratt and that Barratt sought comfort that no ransom situation existed showed their concern that a ransom situation existed at the Pen Yr Eglwys junction. Mr Gibbon referred to the phrase "comprehensive residential development around Dyffryn Dowlais farm" in correspondence in February 1996 and said that this is not something to be disregarded under section 6 and Schedule 1 to the Land Compensation Act 1961 nor under the Pointe Gourde rule.
116. To find the value of the reference land as a ransom strip it is first important to establish the development value of the land ransomed, the Dyffryn Dowlais site. Mr Powell has said that the Dyffryn Dowlais land was ripe for development for 450 houses. Mr Gibbon referred to nine comparables between September 1992 and March 1998, which he analysed to show prices of between £160,000 and £275,000 per acre. He adopted £250,000 per net developable acre for the Dyffryn Dowlais site, including the public house site which he valued as a neighbourhood centre. He allowed for a 6% increase in land values between the valuation date and 1998. The comparables at Cefyn Yr Hendy show that land prices rose by 16.67% between 1994 and 1996. His price per acre produced a gross value of £8,662,500 from which Mr Gibbon deducted 10% for lack of planning permission at the valuation date (it would take 12 to 15 months to obtain permission), 11.25% (agreed) to reflect the scale and phasing of the development and agreed abnormal costs of £3,442,000, to produce a value of £3,379,719. Mr Gibbon had regard to the option to purchase the Dyffryn Dowlais site by Barratt and made no deduction for multiple ownership of the land. In cross examination he agreed that, if the option is not to be taken into account, the existence of five owners of the Dyffryn Dowlais site would have complicated the position. In answer to a question from me, Mr Gibbon said that the purchasers of the reference land at the valuation date would have been the owners of the Dyffryn Dowlais site acting together to realise the development value of their land. The application for planning permission and the option show that a joint purchase would have been agreed and that the existence of different ownerships at the valuation date would not have affected the value of the reference land.
117. The existing use value of the Dyffryn Dowlais site has been agreed at £275,000. The net development value of the land at the valuation date was therefore £3,104,719. In the absence of an alternative access to the Dyffryn Dowlais site, 50% of that net development value should be attributed to the reference land as a ransom strip, giving a value of £1,550,000 (in the claimants' no scheme world). In the Council's no scheme world the percentage of development value would fall to about 25%.
118. Mr Llywelyn valued the reference land at a nominal £500. If the land had possessed ransom value at the valuation date it would have been £122,804. On an industrial value basis the reference land had a value of £5,300.
119. Mr Llywelyn said that he was advised that in the no scheme world developers of the Dyffryn Dowlais site would not have been required to provide access in a manner which made it necessary to acquire the reference land. Such developers would not have bid for the land. It would not have been incumbent on them, nor desirable, to include the costs of the link to the A473 in their development costs. Access could have been obtained by a shorter route at a number of points along the A473, none of which required the purchase of third party land. Consequently, the reference land had a only a nominal value.
120. Mr Llywelyn referred to the background to the acquisition, including the purpose of the scheme. The reference land was required to form a satisfactory junction between the A473 and an existing link from Meadow Farm Estate and the proposed first section of a future link to the Church Village Bypass. Access to the Dyffryn Dowlais site was to be created by a spine road which would form a junction with the stage 1 link road. There was no specific requirement in any of the Local Plans that access should be provided to the Dyffryn Dowlais site at any particular point. The only requirement was that "all new housing would be required to have satisfactory access."
121. Mr Llywelyn referred to the planning background and said that Mid Glamorgan County Council accepted that access to the Dyffryn Dowlais site could be created satisfactorily at other points on the A473, including opposite the Hospital entrance. No planning permission was required for the highway works on the reference land (see General Development Order 1988).
122. Mr Llywelyn prepared an alternative valuation of the reference land on a ransom value basis. He referred to eight comparable transactions between 1992 and 1994 at prices of between £80,000 and £180,000 per acre. The land market in Wales did not experience equivalent increases in value as elsewhere in 1994-95; between December 1993 and April 1996 prices rose by only 5%. But by the middle of 1995 increases in prices could be seen. The residential market in 1996 was encouraging: prices rose by 15-20% during the year (3.75-5% between April and August) and were perceived to continue to rise. Land purchases increased as developers increased their land banks. Against this background Mr Llywelyn adopted £175,000 per net developable acre for the residential part of the Dyffryn Dowlais site, less 11.25% quantum allowance. For the public house site he adopted a lower figure of £110,000 per acre (1.15 acre), based on a residual valuation and comparables, not put in evidence. His gross development value was £5,327,969. He then deducted the agreed abnormal costs of £3,442,000 to produce an adjusted figure of £1,885,969 from which he deducted the agreed existing use value of £275,000, to produce £1,610,969.
123. He then made further deductions for uncertainties relating to ownerships (five owners, option to be ignored), the grant of planning permission, mining, potential contamination from an old colliery gas main, and contentious rights of access through Dyffryn Dowlais Farm, and woodland and tree preservation orders. Mr Llywelyn applied a discount of 65% for these uncertainties to reduce his valuation to £563,839. The uncertainties regarding ownerships and planning accounted for 55% (40% ownership and 15% planning) with a 10% deduction for the other elements. In cross examination Mr Llywelyn conceded that, in the absence of tree preservation orders at the valuation date, his overall deduction could be reduced to 63% or 63.5%. As to multiple ownerships, Mr Llywelyn said that he believed that there were five owners. They would each have separate bargaining positions and different agents. Some may have been mavericks. Two owners were believed to have been indifferent to development. In cross examination Mr Llywelyn acknowledged that the owners had acted together in making planning applications and entering into the Barratt option.
124. Mr Llywelyn then made two further adjustments: a deduction of 33% to reflect the fact that at least one-third of the overall total developable area could have been developed with access from Station Road without any access from the A473; and a further 33% to reflect the fact that only one-third would be paid to the owners of the reference land on the Stokes v Cambridge principle. His valuation was finally reduced to £122,804.
125. Mr Llywelyn said that a developer of the Dyffryn Dowlais site, who was asked to pay a substantial ransom value for the reference land, would seek an alternative access elsewhere. He might pay industrial value plus an overbid to avoid this aggravation but he could not put a figure on this additional bid.

DECISION

Scheme

126. The first question for my determination is what is the scheme underlying the acquisition of the reference land?
127. Mr Nardecchia said that his primary submission is that the scheme is narrow and is limited to the widening and improvement of the A473 by the construction of a traffic signal controlled junction at Pen Yr Eglwys and associated works. The main supporting evidence is the County Council's resolution of 30 April 1992, the purpose specified in the compulsory purchase order and the description of the scheme in the Statement of Reason, which accompanied the order and must be taken to have superseded other draft statements and purposes which preceded it. The purpose of the scheme is given by the County Engineer in his report to committee on 30 April 1992 and in the order itself. This report superseded the earlier report of 26 July 1990. Although mention is made of connecting side roads nothing is said in the description of the scheme of any works for constructing the local distributor or link road, or part of if. The narrowness of the scheme is confirmed by the evidence of Mr Milsom and Mr Ratcliffe. The scheme is also narrow in a temporal sense; this is also supported by the evidence of these two witnesses. The scheme first came into existence on 26 July 1990, the date of the first resolution of Mid Glamorgan County Council.
128. The Council's identification of the scheme is unclear and confused. There are inconsistencies between the pleadings and Mr Horton's skeleton which were not clarified by the Council's witnesses. This lack of clarity suggests that the scheme should not include any part of the link road. Conversely, the claimants' case was adequately pleaded and the Council could not have been in doubt as to their identification of the scheme. The fact that the link road is to be built by private developers is important to the identification of the scheme (see Bolton Metropolitan Borough Council v Tudor Properties Limited [2000] RVR 292, 294-6). The Council use the phrase "Stage 1 of the Link Road" in their definition of the scheme. This has no settled meaning. It is used to mean the section of road to be built by the Dyffryn Dowlais developers which will eventually become part of the link road. The differences between the two identified schemes is limited to a section of road which is part of the Dyffryn Dowlais access road and was permitted under the 1999 permission.
129. If the Tribunal should disagree with a narrow scheme then the claimants' alternative scheme comprises the junction improvement works and the part of the link road shown on drawing 12A i.e. the length of road which would be part of the Dyffryn Dowlais site access in the short to medium term but also part of the link road in the long term.
130. The Council's wide scheme should be rejected on the facts. Physically and spatially it is wrong because the acquisition was not made so that the length of link road shown as t5b on the Local Plan Proposals Map could be built. This remains unbuilt and there are no firm plans to build it even now. The scheme did not come into existence before 1990. The link road policy in Local Plans from 1976 is not a scheme because it was intended that the road should be built by private developers as part of their development.
131. Mr Nardecchia referred to the recent decision of the House of Lords in Waters v Welsh Development Agency [2004] UKHL 19, particularly paras 58-63, 64-66 and 157. Six pointers are given in para 63 as to the extent of scheme. The claimants' scheme accords much better with this guidance than the Council's scheme, particularly pointers (1), (2), (5) and (6). Although helpful and relevant guidance is given in Waters as to the no scheme rule, the facts of that decision are of no assistance in this reference. In Waters it was argued that the only possible purchaser of the claimants' land at a figure above agricultural value was the acquiring authority, with a need to purchase for a nature reserve. This aspect of the scheme was said to be capable of being taken into account when assessing compensation. This was rejected but a distinction was drawn with ransom cases where there is a market for the land quite apart from that created by the acquiring authority and its scheme (paras 153-8). The claimants in this reference do not advance the same submissions as put forward in Waters. There is clear evidence to show that, if the acquiring authority had not intervened, there would still have been a market for the reference land with the Dyffryn Dowlais site owners or developers as the likely purchasers.
132. Although purpose is a relevant factor in defining the scheme, it is not the scheme itself. A scheme may have more than one purpose and the purpose may be defined at different levels. A scheme is likely to be defined according to its immediate rather than long term purpose (see Waters in the Court of Appeal (2002) RVR 289, 311 at para 98). The narrowness of the scheme and its purpose in this reference is emphasised by the fact that it only came into existence at the request of the Dyffryn Dowlais owners/developers. This is central to the issues, as is the fact that the scheme works were to be carried out by the Dyffryn Dowlais owners or developers for their own benefit (albeit with an element of public benefit) rather than by the acquiring authority.
133. The legality of Local Plan Policy t5b is not an issue in these proceedings. The legality of a policy requiring developers to build the entire length of a link road was not raised until Mr Ratcliffe was asked to express an opinion on it. The Council did not insist on the developers building this length of road or even the shorter length shown on drawing 12A.
134. Mr Horton QC said that in the real world the reference land was acquired to ensure that access to residential development on the Dyffryn Dowlais site would be taken at Pen Yr Eglwys junction, where the northern section of the distributor road joined the A473. The Statement of Reason in the compulsory purchaser order is not necessarily conclusive evidence of the scheme underlying the acquisition. These reasons reveal that the purpose of the order was related to the proposal in the Draft Local Plan for a link road to the Church Village Bypass.
135. If objection had been made to the proposed compulsory purchase order the justification for the order would have been investigated. The issues examined would have shown the following. The Pen Yr Eglwys junction functioned satisfactorily and was not constructed to unacceptable standards. The need for improvement was not included in any lists of improvements in Local Plans. Access to the Dyffryn Dowlais site could have been provided elsewhere. The requirement that the junction be located at Pen Yr Eglwys was to facilitate and further the construction of the southern section of the distributor road, in particular stage 1 of the road, that is to say the link (t5b) shown on the Draft Local Plan at the time of the making of the compulsory purchase order. This road was shown terminating at a point where it met the southern boundary of the Dyffryn Dowlais site. Its alignment between that point and the proposed Church Village Bypass was not shown. This requirement had been a concomitant of the allocation of the Dyffryn Dowlais site for development since 1976. The requirement for the link arises out of the proposals in Local Plans for a Church Village Bypass. The function of the distributor or link road is to take traffic to the bypass. It has a more than acceptable alignment. The proposed bypass would substantially reduce traffic on the A473 and it was not necessarily vital therefore that a southern link had to be built. For the alignment of the bypass link to function as envisaged in the Local Plan it was necessary for the northern section of the A473 to have a junction design to appropriate standards.
136. It follows from the above that the scheme underlying the acquisition is the improvement and widening of the A473 at the Pen Yr Eglwys junction and stage 1 of the link road, namely the local distributor road from the A473 required pursuant to the Local Plan. This Plan did not show the entirety of the link road but only stage 1.
137. Mr Horton referred to the recent decision in Waters and said that it is striking that the House of Lords agreed that the nature reserve and barrage were part of a single scheme, despite the fact that work on the barrage started more than a year after the land for the reserve was identified and more than three years before the compulsory purchase order. The references in this decision to resolutions or documents in the plural suggest that the relevant evidence as to the scheme is not limited to a single formal resolution or other document of the acquiring authority.
138. In the pleadings the claimants failed to adequately identify the scheme. It appears to be their case that, regardless of the identity of the scheme, there must always be assumed to be a requirement for sole access to Dyffryn Dowlais at the Pen Yr Eglwys junction.
139. The Statement of Reason for the compulsory purchase order included two elements: a junction with existing and proposed side roads and access to existing and proposed housing. Published with the order was a Statement of Purpose and it is clear from Waters that regard should be had to the reasons and purpose of a compulsory purchase order when identifying the scheme. The purpose of the order was to improve the Pen Yr Eglwys junction to enable the construction of the t5(b) link road, for residential development at Dyffryn Dowlais.
140. Mr Horton said that it is clear from the Draft Local Plans that the scheme to provide a link from the A473 to the bypass had its origins well before 1990. He referred to the relevant provisions in the 1984, 1987 and 1992 Local Plans and the 1989 planning application for the Dyffryn Dowlais site and said that, if the claimants have identified a scheme, it appears to be one to provide a new junction at Pen Yr Eglwys to serve the northern and southern distributor roads and to enable access to Dyffryn Dowlais from the southern link road. This definition is consistent with the Council's scheme in its Reply to the claimants' Statement of Case. It was accepted by the claimants during the hearing that stage one of the link road referred to the entire length of t5b shown on the Local Plan when the compulsory purchase order was made. The Council's pleaded scheme is in accordance with the compulsory purchase order resolution of 27 May 1992. This formulation that the implementation of t5b may have been the main, rather the sole, purpose, is to reflect the fact that there was also an aspiration that access to the Dyffryn Dowlais site by the developer should be taken off the link road. Mr Horton referred to alleged inconsistencies in the way in which the claimants have defined the scheme and the narrowness of their scheme. In Waters a narrow scheme was rejected.
141. Mr Horton referred to certain matters peripheral to the identification of the scheme. These included the letter of 9 May 1990 seeking a compulsory purchase order; the evidence of Mr Ratcliffe; a presumption that the compulsory purchase order was lawfully made and therefore justified in the public interest; evidence that the authority intended to carry out the works itself and that it would be unlawful for a developer to be required to bear the costs not required as part of a permitted development. It is clear that it could not be said that, but for the Dyffryn Dowlais development, the construction of the t5b link would not be necessary. The only basis on which it was lawful for the developers to pay for the junction improvement and for the first part of t5b was that, if Dyffryn Dowlais was to be developed with access at that point, the developers would have to pay to bring forward the requisite junction improvement and commencement of t5b, otherwise not yet programmed for implementation, although all the work would be necessary in due course regardless of the Dyffryn Dowlais development.
142. The developers paid for the land and the construction costs at the junction and the first few metres of the link road, but this did not make those works any less the Council's scheme. Furthermore it did not turn the scheme into the furtherance of the Dyffryn Dowlais development rather than the furtherance of the t5b link and the junction it would inevitably require with the A473. Mr Nardecchia's submission that the link road was never intended to be part of the authority's scheme because it was to be constructed by developers, is wrong. Mr Nardecchia referred to the Tudor Properties decision but the facts of that case are entirely different.
143. Mr Horton referred to the claimants' alternative scheme (the junction improvement works and part of the link road leading to the Dyffryn Dowlais site) and said that it defines the scheme, not by reference to any documents of the promoters but by reference to a document produced by an application for planning permission. This is irrational but it accepts the Council's argument that the scheme had at its heart t5b in some guise or other.
144. The decision in Waters does not overrule the principle established in earlier cases that a scheme can have its origins before the compulsory purchase order (Wilson v Liverpool Corporation [1971] 1 WLR 302 was not overruled). A scheme can still be progressive.
145. Decision – The claimants contend that the scheme underlying the acquisition is the widening and improvement of the A473 at the Pen Yr Eglwys junction, including provision of a traffic signal controlled junction but excluding the proposed link road to the bypass. In the alternative the scheme is the junction improvement and the provision of the short length of access road leading to the residential development on the Dyffryn Dowlais site, which is also to form part of the link road from the A473 to the proposed Church Village Bypass. The Council contend that the scheme is the junction improvement works and the whole of the first stage of the link road as shown on the Local Plans leading towards the Church Village Bypass.
146. During the hearing the House of Lords gave its decision in Waters v Welsh Development Agency [2004] UK HL 19, to which I now look for guidance as to the identification of the scheme.
147. Lord Nicholls considered the approach to value in the Land Clauses Consolidation Act 1845 and the distinction drawn between value to the owner and value to the purchaser. It is out of this distinction that the scheme principle emerged. He said (para 21):-

"Drawing a distinction between value to the owner and value to the purchaser makes it necessary to distinguish the one from the other. It is necessary to separate from the market value of land any enhancement in value attributable solely to the presence of the acquiring authority in the market as a purchaser of the land in exercise of its statutory powers. It is important to recognise that, for this purpose, it is not the existence of a power of compulsory acquisition which increases the value of land. What is relevant, because this may affect the value of the land, is the use the acquiring authority proposes to make of the land it is acquiring. Accordingly, in identifying any enhanced value which must be disregarded it is always necessary to look beyond the mere existence of the power of compulsory purchase. It is necessary to identify the use proposed to be made of the land under the scheme for which the land is being taken. Hence the introduction of the concept of the 'scheme' or equivalent expressions such as project or undertaking."

148. Lord Nicholls considered the development of the scheme principle, particularly the much quoted observation of Lord MacDermott that "compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition" (Pointe Gourde Quarrying and Transport Co Limited v Sub-Intendent of Crown Lands [1947] AC 565, 572). Lord Nicholls then said (para 43):-

"Notoriously the practical difficulty with the Pointe Gourde principle lies in identifying the area of the 'scheme' in question. This difficulty does not arise when the enhanced value arises from the authority's proposed user of the subject land. Then, by definition, what is in issue is the proposed use of the subject land. But when regard is had to the authority's use or proposed use of other land the application of the principle is not self-defining. A major development project of a general character, covering a wide geographical area, may proceed in several phases, each phase taking years to implement, and the detailed content and geographical extent of each phase being subject to change and finalised only as the phase nears the time when the work will be carried out. Is that one scheme or several?"

149. He then proceeded to the identification of the scheme (para 58):-

"I turn, then, to the question of how the extent of the scheme should be identified in today's conditions. A scheme essentially consists of a project to carry out certain works for a particular purpose or purposes. If the compulsory acquisition of the subject land is an integral part of such a scheme, the Pointe Gourde principle will apply accordingly. Both elements of a project, the proposed works and the purpose for which they are being carried out, are material when deciding which works should be regarded as single scheme when applying Pointe Gourde principle to the subject land."

Here Lord Nicholls emphasised that a scheme comprises works for a particular purpose or purposes and that both elements (works and purpose) are material to the definition of a scheme and the application of the Pointe Gourde principle.

150. The determination of a scheme is not solely a question of fact but requires the exercise of judgment (Lord Nicholls referred to it as a "judgmental exercise", para 61). He said (para 59):-

The extent of a scheme is often said to be a question of fact. Certainly, identifying the background events leading up to a compulsory purchase order may give rise to purely factual issues of a conventional character. But selecting from these background facts those of a key importance for determining the ambit of the scheme is not a process of fact-finding as ordinarily understood."

151. The purpose of the Pointe Gourd principle must be borne in mind when deciding the extent of a scheme (para 61):-

"What, then, is the purpose of this principle? Its purpose, in separating 'value to the owner' from 'value to the purchaser', is to forward Parliament's objective of providing dispossessed owners with a fair financial equivalent for their land. They are to receive fair compensation but no more than fair compensation. This is the overriding guiding principle when deciding the extent of a scheme."

152. Pointers to the application of the general principle are (para 63):-

(1) The Pointe Gourde principle should not be pressed too far. The principle is soundly based but it should be applied in a manner which achieves a fair and reasonable result. Otherwise the principle would thwart, rather than advance, the intention of Parliament. (2) A result is not fair and reasonable where it requires a valuation exercise which is unreal or virtually impossible. (3) A valuation result should be viewed with caution when it would lead to a gross disparity between the amount of compensation payable and the market values of comparable adjoining properties which are not being acquired. (4)  When applied as a supplement to the section 6 code, which will usually be the position, the Pointe Gourde principle should be applied by analogy with the provisions of the statutory code. Thus in the class 1 type of case the area of the scheme should be interpreted narrowly, for instance, so as to embrace the property acquired under the compulsory purchase order and the property which probably would have been so acquired had it not been bought by agreement. In other cases, such as case 2, Parliament has spread the 'disregard' net more widely. Then it may be appropriate to give the scheme a wider scope. (5) Normally the scope of the intended works and their purpose will appear from the formal resolutions or documents of the acquiring authority. But this formulation should not be regarded as conclusive. (6) When in doubt a scheme should be identified in narrower rather than broader terms."

Lord Nicholls' guidance was agreed by Lord Woolf, Lord Steyn and Lord Brown.

153. The difference between the parties in this reference as to the scheme is narrow and relates solely to the question whether the whole or part of the link road to the bypass is part of the scheme? There is no special magic in the scheme or the no scheme world; they are steps towards the assessment of market value to the owner, removing any enhancement in value attributable solely to the presence of the acquiring authority as purchasers in the exercise of statutory powers for their proposed use of the land (Waters para 21). But value which exists independently of the scheme is part of value to the owner and is to be taken into account (Waters paras 64, 65 and 157). I return to this matter later in this decision.
154. Against this background I consider the identification of the scheme. I look first at the documents leading to the compulsory purchase order. Following a meeting (of which there are no minutes or other evidence), Mr P J Hewett of Keltecs (on behalf of the proposed developers of the Dyffryn Dowlais site) wrote to the County Engineer and Surveyor as follows:-

"We would be grateful, if we could, have your confirmation as discussed that Mid Glamorgan County Council would utilize their CPO powers to acquire the piece of land outlined in red to allow the road widening relevant to the traffic light controlled junction to be carried out by the Developers of the residential site."

This is the first indication of compulsory acquisition of the reference land. It referred solely to road widening at the Pen Yr Eglwys junction.

155. It led to the following report to the Highways and Transportation Committee on 26 July 1990:-

"ROUTE A473 LLANTWIT FADRE

PROPOSED LOCAL DISTRIBUTOR ROAD TO CHURCH VILLAGE BYPASS

ACQUISITION OF LAND

Policy t5(b) of the Llantrisant Local Plan states that a local distributor road shall be constructed through the proposed development at Dyffryn Dowlais in order to allow a new link to be provided from Route A473 to the proposed Church Village bypass. The developer of this estate is willing to construct the first stage of the local distributor road which will form a traffic signal controlled crossroads at the existing junction of route A473 and the Meadow Farm estate access road. However, the developer controls all of the land required for the proposals with the exception of a small area of land alongside route A473 which is required for road widening at the proposed traffic signals. The acquisition of this land would enable the development to take place and the first stage of the local distributor road to be implemented.

I RECOMMEND

(i) that a Compulsory Purchase Order be made in respect of the land coloured pink on the plan now submitted, required for the proposed local distributor road to the Church Village bypass."

The Committee resolved to adopt this recommendation. It includes reference to the first stage of the link road to be constructed by the developers.

156. Following agreement as to a larger area of land to be acquired, a further report was made on 30 April 1992 in similar terms:-

"A473 PRINCIPAL ROAD BRIDGEND TO PONTYPRIDD

IMPROVEMENT AT LLANTWIT FARDRE

ACQUISITION OF LAND

157. 1 Committee on 26th July 1990, resolved to acquire land at Llantwit Fardre in connection with Policy T5(B) of the Llantrisant Local Plan to construct a traffic signal controlled crossroads with a new local distributor road. The first stage of the distributor road is to be constructed by the developer of the Duffryn Dowlais scheme. Detailed design has identified the area of land required for the highway scheme.

I RECOMMEND

i) that a compulsory purchase order be made in respect of the land coloured pink on the plan, number 5339.001, now submitted, for Widening of Route A473 Waterton Cross to Treforest Principal Road at Llantwit Fardre."

The Committee resolved to adopt this recommendation.

158. The Compulsory Purchase Order was made on 11 May 1992. It was accompanied by a Statement of Reason (sic) dated 15 April 1992. The purpose and description of the scheme are defined as follows:-

"2. Purpose of the scheme

The existing A473 is a major route from Bridgend to Treforest serving many Industrial Estates and thus being a major travel route to jobs along this principal road.

The Llantrisant Local Plan identifies a Local Distributor Road, tb(5), with a junction on the A473 at Llantwit Fardre.

Highway proposals include the widening and improvement of the A473 to provide signal controlled crossroads with a layout on the A473 to cater for left and right turning traffic to the existing and proposed connecting side roads.

The proposed new highway layout will provide much improved and safer access to existing and proposed residential developments.

3. Description of Scheme

The A473 carriageway will be three lanes of 3.65m width with the centre lane being used as a holding lane for right and left turning traffic. The connecting 7.3m single carriageway side roads, existing to the north and proposed to the south, forming the cross-roads.

A 1.8m wide footway and 2.5m verge will be provided on the south side of the A473 at the widening."

159. Although this document refers to the distributor or link road shown as t5(b) in the current Local Plan (Llantrisant Local Plan Draft 1992), there is no reference to the building of the whole of the road as shown on the plan. The purpose of the scheme, at most, relates to the improvement of the Pen Yr Eglwys junction to cater for the link road connection at this point. The description of the scheme refers solely to the junction improvement works.
160. I look now at the documents leading to the works and the works which were carried out following the acquisition of the reference land.
161. On 31 October 1997 Barratt entered into a unilateral planning undertaking under section 106 of the 1990 Act in connection with their appeal in respect of the Dyffryn Dowlais site. This noted in recital (5) that the reference land "is required to construct the proposed access to" the Dyffryn Dowlais site "and has been compulsorily acquired for that purpose." On 10 September 1998 the County Council granted planning permission for a new road junction and part of the spine road at Dyffryn Dowlais. Shortly after, on 28 January 1999, the Council and Barratt entered into an agreement under section 111 of the Local Government Act 1972 and sections 1 and 278 of the Highways 1980 which included an agreement by Barratt to carry out junction works including part of the access road to the Dyffryn Dowlais site. These works were carried out after 1999 and the widened section of the A473 and the spine road to Dyffryn Dowlais were adopted on 18 April 2001. The section of spine road as built, giving access to the Dyffryn Dowlais site, is shown on Plan 339/17A as part of the approval of reserved matters given on 10 September 1998. It was indicated in evidence where a possible junction with the link road might be, a short distance from the Pen Yr Eglwys junction. This is a shorter length and on a different alignment to the length of access or link road shown on drawing 12A which is marked as refused planning permission on 3 October 1997 under application 56/89/0694. The parties have agreed that the remainder of the link road to the proposed Church Village Bypass has not yet been built. The building of the Church Village Bypass and link road are still Local Plan policies but there is no indication as to when they might be built.
162. Barratt as developers of the Dyffryn Dowlais site carried out and paid for the Pen Yr Eglwys junction improvement works and the access or spine road into their development site. The remainder of the link road to the proposed Church Village Bypass was proposed in Local Plans to be provided by developers as required for development schemes. Mr Horton, however, recognised that the unbuilt length of link road may have to be paid for by the Council in the absence of justification by another development.
163. Also relevant to the identification of the scheme are the separate agreements made between the Council and the owners of part of the Dyffryn Dowlais site and Barratt regarding the reimbursement of the cost of acquiring the reference land. By an agreement dated 7 March 1996 two of the Dyffryn Dowlais owners agreed to indemnify the County Council in respect of the cost of acquiring the reference land. In their unilateral planning undertaking of 31 October 1997 Barratt also agreed to reimburse the cost. In my judgment it is unlikely that these owners and prospective developers would have agreed to meet the whole of the cost of the acquisition of the reference land if the purpose of the acquisition included the construction of the whole length of link road shown on the Local Plans. It was clearly in their interests to fund the acquisition to obtain access to the Dyffryn Dowlais site, leading to the grant of planning permission, but if one of the purposes of acquisition was the building of the remainder of the link (which would not benefit Dyffryn Dowlais), it seems likely that the owners and Barratt would have negotiated a lesser contribution to cost and not agreed to meet the whole cost.
164. Taking all these factors into account – the purpose and description of the scheme in the compulsory purchase order, the works carried out and the documents relating thereto, the payment for the works and for the acquisition of the reference land and the provision of the remainder of the link road – I have reached the conclusion that the scheme underlying the acquisition of the reference land comprises the widening and improvement of the A473 at the Pen Yr Eglwys junction and the construction of the short length of access road from that junction on to the Dyffryn Dowlais site, which also will serve as the first part of the link road to the Church Village Bypass. This is substantially the same as the claimants' alternative scheme. I reject their primary scheme as too narrow and I reject the Council's scheme, which includes all the link road shown on the Local Plans, as too wide. It would be wrong, in my judgment, to include in the scheme the length of link road which has still not been built some eight years after the acquisition and which may never be built.
165. I find that the scheme came into existence on 26 July 1990, the date of the first resolution to compulsorily acquire the reference land. There is no mention, express or implied, of compulsory purchase before that date. The existence of policies or proposals to build a link road to the proposed bypass before that date in Local Plans were no more than planning policies or proposals and not a scheme underlying possible compulsory purchase. There is no indication before July 1990 that compulsory purchase powers may be used in connection with the improvement of the Pen Yr Eglwys junction and the building of the proposed link road. Those powers were suggested by the Dyffryn Dowlais developers, not the Council.
166. In Waters in the Court of Appeal [2002] EWCA Civ 924, Carnwath LJ referred to Lord Denning's well-known observation in Wilson that a scheme is progressive and said (para 47):-

"Insofar as this implies that the 'scheme' may come into existence before any formal adoption by the authority concerned, it does not appear to be supported by authority, or consistent with principle …. where the acquisition is made under general statutory powers, the scope of the scheme should be apparent from an appropriate resolution or decision which provides the basis for the compulsory powers. The first preparatory stages may be vague and known to few, but they do not make it a 'scheme' of the authority as such."

167. Considering my findings as to the scheme in the light of the pointers in para 63 of Waters, I find that (2), (5) and (6) are relevant, at least at this stage in the decision. As to pointer (2) my narrower scheme (with a commencement date in July 1990) will produce a no scheme world which is close to the real world at the valuation date and will avoid any unreality in the valuation exercise. As Lord Nicholls explained (paras 59-61) the determination of a scheme involves judgment in addition to fact finding and, in my judgment, a narrower scheme with a more recent inception date will avoid the rewriting of history, as proposed by Mr Horton. The scheme follows the scope of the works and their purpose as set out in the documents of the acquiring authority. The narrower scheme which I have determined can be seen in the resolutions prior to the making of the compulsory purchase order and in the purpose and description of the scheme which accompanied the making of the order (pointer (5)). It is identified in narrower rather than the broader terms of the Council's scheme (pointer (6)).

No scheme world

168. The second question for my determination is the nature of the no scheme world. It is in this world that the market value of the reference land has to be determined.
169. Mr Nardecchia said that, following the definition of the scheme, it is necessary to consider the no scheme world, i.e. what is to be disregarded in valuing the claim. Section 6 and Schedule 1 to the Land Compensation Act 1961 do not apply. The judicial version of the no scheme principle to be applied is that compensation for compulsory purchase shall not include any increase in value entirely due to the acquiring authority's scheme (see Pointe Gourde). The principle is to be applied as it has previously been applied (see South Eastern Railway v London County Council [1915] 2 Ch 252; Fraser v City of Fraserville [1917] AC 187 and the Indian case [1939] AC 302 at 319-320). He said that the valuation has to be made on the basis that no compulsory purchase powers have been granted and that the scheme had not been, and was not to be, carried out by the Council. This disregards the effect on value of the scheme.
170. The application of the principle does not, however, in this case lead to any material diminution in the value of the reference land because the no scheme world is close to the real world and includes the projects or proposals for the bypass and the link road, the Dyffryn Dowlais site allocation and the housing and distributor road (Pen Yr Eglwys) already built to the north of the A473. In this world the market demand for the reference land is unaffected because the land is still required to construct the improved junction. The Pointe Gourde principle does not operate to disregard a pre-existent value, ie a value not entirely due to the scheme (Batchelor v Kent County Council (1990) 59 P & CR 357, 361). No grant of planning permission for the development of the Dyffryn Dowlais site with an alternative access point to the A473 could be expected.
171. Even if the Council's wider scheme is correct, the no scheme world still includes the bypass, the greater part of the link road, the residential allocation of the Dyffryn Dowlais site and Meadow Farm and adjoining residential development. The valuation consequences are not therefore materially different from those in the claimants' no scheme world.
172. This world is similar to the real world due to the narrowness of the scheme. The only disregard is that the Council agreed to use their powers in 1990 to take over the junction improvement works which it had expected the Dyffryn Dowlais owners or developers to carry out. It is not necessary to disregard the pre-scheme world, where a junction at Pen Yr Eglwys was intended for access to Dyffryn Dowlais and the link road. In this world the chances were nil or negligible of obtaining planning permission for development of the Dyffryn Dowlais site with access from another point on the A473. The position is the same under the claimants' scheme and alternative scheme: the Pen Yr Eglwys junction was the only access point from the Dyffryn Dowlais site onto the A473. There is no evidence to support the view that 150 houses could be built solely with access from Station Road.
173. The Council's case that the existence of the Pen Yr Eglwys junction should be disregarded because it was created as part of the scheme is unreal. This junction was built in 1984 when there was no scheme. This substandard junction as built is part of the no scheme world.
174. The Council's assumption that an alternative link road on a north to south alignment through the Dyffryn Dowlais site could meet the same need as proposed is prohibited by section 14(5)-(8) of the 1961 Act. Thus, the Council's no scheme world has to be a no link world rather than an alternative link road world. The Council are wrong to say that the decision to seek planning permission for the Dyffryn Dowlais site with access at Pen Yr Eglwys was in reliance on the compulsory purchase order. This decision pre-dates the order and must also pre-date any consideration of ransom value. If planning permission might have been granted with another access then why were no steps taken to achieve it? If these had been successful it would not have been necessary to request the use of compulsory purchase powers.
175. Mr Horton said that in modelling the no scheme world it is necessary to establish the physical facts and the planning policies. The value of the reference land is then to be determined having regard to those facts and policies. Any increase or decrease in value resulting from the underlying scheme of acquisition is to be ignored (see the Pointe Gourde line of cases).
176. The Council's no scheme world is one in which there would have been no Local Plan policy for a link to the bypass on the route shown on the Plan. There was no requirement for such a link. There would still have been a bypass and a recognition that it would be necessary to ensure satisfactory access to it from Church Village, although not on the scheme world link alignment. It is not necessary to identify the route of such a link. Mr Horton referred to Margate Corporation v Devotwill Investments Limited [1970] 3 All ER 864 and East End Dwellings Co Limited v Finsbury Borough Council [1952] AC 109, 132, and said that the Margate decision was not overruled in Waters. Section 14(5)-(8) of the 1961 Act does not apply because the reference land was acquired in connection with the Council's future plans for the construction of a link road rather than in the actual construction of the road. It does not matter, however, whether these provisions apply, it should not be assumed in the Council's no scheme world that there would have been a link on another alignment. If the scheme included the t5b link alignment it is possible to consider whether a similar project on a different alignment would inevitably have been pursued. This could have been that shown in the 1976 Local Plan with the A473 access and link opposite the Hospital entrance.
177. In the Council's no scheme world the development of the Dyffryn Dowlais site would not have been dependent on the acquisition of the reference land. It would have been dependent solely on satisfactory access to the A473 but this could have been opposite the Hospital entrance with another access to Station Road. Further or alternatively, the Dyffryn Dowlais development could have had a layout with a link from the access south towards the bypass (as in the 1976 Local Plan). It follows therefore that the developers of the Dyffryn Dowlais site would have had no interest in the reference land for access. They would have preferred access to the A473 at the Hospital entrance or opposite The Croft. Any increase in value in the scheme world due to the Council's insistence on access at Pen Yr Eglwys is caused by the scheme and must be ignored. The arguments by the claimants that, even in the Council's no scheme world, the authorities would have required access to Dyffryn Dowlais at Pen Yr Eglwys carry no weight. No access to the Pen Yr Eglwys junction from Meadow Farm would have been provided and there would be no need to improve the junction or this could not have been a burden on the developers. The creation of a traffic signal junction at the Hospital with a T-junction at Pen Yr Eglwys is no less rational than the existing Hospital and Pen Yr Eglwys junctions. There would be a dog leg manoeuvre in either situation. Additional traffic on the A473 would not have been a sustainable highway objection.
178. There is no evidence to support the contention in the claimants' no scheme world that access to Dyffryn Dowlais had to be at Pen Yr Eglwys to allow a connection to the link road. There would be no objection to other access points. If the claimants are correct in their identification of the no scheme world, however, Mr Horton accepted that developers of the Dyffryn Dowlais site would have had an incentive to negotiate with the owners of the reference land.
179. Regardless of the identity of the no scheme world, interest in the Dyffryn Dowlais site would have been the same as in the real world, with the same difficulties. By analogy with the real world, it is rational to hypothesise that by the valuation date a planning application would have been made for this site with access opposite the Hospital. Officers would have recommended the grant of permission; members may have resolved to grant it, with a subsequent retraction following public opposition. It is irrelevant that no such application was made in the real world because it is clear that the decision to seek planning permission with access at Pen Yr Eglwys was in reliance on the compulsory purchase and the belief that no ransom would be payable.
180. The option on the Dyffryn Dowlais site must be ignored in all no scheme worlds. Even if an option is to be assumed it should also be assumed that it would have been founded on the assumption that access could be at a point without ransom, because in the real world the Dyffryn Dowlais owners were only prepared to enter into such an option after they had satisfied themselves through correspondence that no ransom would be payable at Pen Yr Eglwys.
181. Mr Horton said that, since it is necessary to ignore the compulsory purchase, the improvement of the Pen Yr Eglwys junction and the t5b link proposal, it is necessary to identify their origins. As to the link this first appeared at the Pen Yr Eglwys junction in the 1983 Local Plan. But it was under consideration earlier in 1978. At that time the County Council wished to move the proposed Meadow Farm junction to the present location at Pen Yr Eglwys and the link also to that point. Rationality dictates that, in the Council's version of the scheme, access to Meadow Farm would have remained at the old position to the south west and there would have been no t5b link. The old position of the junction would have been to a satisfactory standard.
182. Turning to the claimants' no scheme world, Mr Horton said that it is contradictory to say that there would have been a requirement for a link road as part of the Dyffryn Dowlais development while also predicating the absence of a junction at Pen Yr Eglwys. This contradiction would have had to be resolved when considering proposals for development at Dyffryn Dowlais. Mr Horton made detailed criticisms of two possible versions of the claimants' no scheme world, which could not have emerged later than May 1990.
183. Mr Horton submitted that the claimants' alternative no scheme world is even weaker, particularly with regard to the point that the t5b link road alignment is to be disregarded as part of the scheme. It is central to the claimants' case that the prospect of planning permission for the Dyffryn Dowlais site with access to the A473 elsewhere than at Pen Yr Eglwys is negligible. This ignores the propriety in law and practice of seeking to require developers of that site to provide access in a fashion dictated by the wish to compel them to provide a junction to serve the t5b link and not the exigencies of the development of the site.
184. Decision – In Wards Construction (Medway) Limited v Barclays Bank Plc [1994] 2 EGLR 32, a later manifestation of the Batchelor case, Nourse LJ said (at 34D):-

"In order correctly to apply the Pointe Gourde principle it is necessary, first, to identify the scheme and, second, its consequences. The valuer must then value the land by imagining the state of affairs usually called 'the no-scheme world', which would have existed if there had been no scheme."

In this reference the claimants' no scheme world is close to the real world; the Council's no scheme world involves departures from reality.

185. I refer again to Waters. The principle underlying the guidance as to the no scheme world is that this world should remain close to the real world at the valuation date; there should be no material rewriting of history. Lord Nicholls said (para 55):-

"Undoubtedly the present state of the law gives rise to serious valuation difficulties. It is unreal to require land to be valued on the basis of what would have been the position if a major development which took place years ago had not been carried out. Lord Denning, in his accustomed style, referred to a valuer having to 'conjure up a land of make-believe' and 'let his imagination take flight to the clouds': see Myers v Milton Keynes Development Corporation [1974] 1 WLR 696, 704. In a recent case in the Lands Tribunal the President had to rewrite the history of Mold in North Wales over 17 years. He described this as a 'virtually impossible task': [2003] RVR 140, para 98."

In his pointers to the extent of the scheme, to which I have already referred, Lord Nicholls said (para 63):

"(2) A result is not fair and reasonable where it requires a valuation exercise which is unreal or virtually impossible."

186. Lord Brown considered a possible wide version of the scheme underlying an acquisition, discussed in the Law Commission Report "Towards a Compulsory Purchase Code: (1) Compensation" (2003) (Law Commission No.286, Cm 6071) para 7.16(2), and said (para 148):-

"Insofar as 'the wide version' of the rule described in para 7.16(2) of the report involves the disregard of 'the planning history over a much wider area [other than the order land] and dating back years', I too would deprecate it. If, indeed, that is thought to be the approach required following Point Gourde's reference to the 'underlying scheme' as subsequently interpreted, then in my opinion the rule has been developed impermissibly far and should now be narrowed down. Clearly, for example, it cannot be right that the valuer must let his imagination 'take flight to the clouds' as Lord Denning MR suggested in Myers v Milton Keynes Development Corporation… – see para 78 of Carnwath LJ's judgment below. As, however, Carnwath LJ observed (in para 89), although the words in Pointe Gourde – 'the scheme underlying the acquisition' – were new, it is clear from their context that they were not intended to differ from the words used by Lord Buckmaster in Fraser v City of Fraserville [1917] AC 187, 194, 'the scheme for which the property is compulsorily acquired'."

187. In the light of this guidance and my finding for a narrower scheme than that proposed by the Council, which commenced in July 1990, much later than the Council's scheme, I reject Mr Horton's no scheme world. It requires unacceptable departures from the real world, a partial rewriting of history, eg. no link to the proposed bypass on the line shown on the Local Plan, the Pen Yr Eglwys junction in the old proposed position, no option agreement.
188. In my judgment, the no scheme world at the valuation date was the same as the real world with two differences. First, there was no scheme to widen and improve the A473 at Pen Yr Eglwys junction and construct the short length of access road to the Dyffryn Dowlais site. Second, the Council had no compulsory purchase powers in respect of the reference land.
189. Valuation in this no scheme world excludes any additional value created by the scheme and any demand by the Council arising out of their compulsory purchase powers. These exclusions restrict value to the owner. These are the only exclusions from value: any value which pre-existed the scheme or exists independently of the scheme is to be taken into consideration, a matter which I consider in more detailed later in this decision.
190. It follows that the elements in the no scheme world (and real world) which affect the value of the reference land are as follows. The Pen Yr Eglwys junction is to be considered as it actually existed in April 1996, before improvement. It was built in 1984, some six years before the inception of the scheme, and comprised a priority T-junction. The Local Plan was the Taff Ely Local Plan Deposit Draft 1995, containing the allocation of the Dyffryn Dowlais site for residential development (h1.25), a proposed Church Village Bypass (t 1.2) and a proposed link road from the Pen Yr Eglwys junction to the bypass (t 3.3). Following earlier refusals of planning permission the Council resolved on 23 October 1989 to grant conditional planning permission in respect of application 56/89/0694 for residential development, public open space and public house site at Dyffryn Dowlais, subject to a section 52 agreement. On 12 March 1996 a further outline planning application was made (56/96/2007), later withdrawn. An option agreement dated 18 March 1996 existed between the Dyffryn Dowlais owners and Barrett. I must say a little more about this option.
191. It existed in the real world and I cannot accept Mr Horton's submission that it would not have been entered into in the no scheme world. He said that even if this is to be assumed, it is also to be assumed that access could be gained at a point which would have avoided a ransom payment. The owners in the real world had satisfied themselves that no ransom would be payable at Pen Yr Eglwys. He relied on the correspondence included in Mr Good's evidence. I cannot find in this correspondence any assurance or comfort that no ransom would be payable, sufficient to satisfy a reasonable and prudent owner. The letters do no more than indicate that an access opposite the Hospital would be considered on its merits, with an opinion by an officer of the County Council regarding ransom. I refer to this correspondence in more detail later when I consider the valuation adjustment for alternative access.
192. The option agreement was included in the evidence of Mr Woodward, who conducted negotiations with the owners on behalf of Barratt. Surprisingly it is not referred to in the statement of the agreed facts nor included in the trial bundle. It was referred by Mr Woodward in order to show that the additional cost of the Pen Yr Eglwys junction would be borne by the Dyffryn Dowlais owners. Mr Woodward did not give any evidence to the effect that the owners only entered into this option agreement because they were satisfied that no ransom would be payable. None of the owners gave evidence on this important point, although I was told that they have a financial interest in the outcome of this reference. I have no direct evidence to support Mr Horton's submission that the option agreement would not have existed in the no scheme world or that it is to be assumed that, if it did exist, there would have been an alternative access to avoid a ransom.
193. I look more closely at the elements of the no scheme world when I consider the value of the reference land.

Rule (3)

194. My third question is whether rule (3) of section 5 of the Land Compensation Act 1961 applies to the assessment of compensation for the reference land? This rule seeks to remove from consideration the special suitability or adaptability of the land for a purpose to which it could be applied only under statutory powers or for which there is no market apart from the requirements of an authority with compulsory purchase powers.
195. Mr Nardecchia said that the rule only applies where the land has special suitability or adaptability. In Batchelor v Kent County Council (1990) 59 P & CR 357 at 362, it was held that "special" means something exceptional in character, quality or degree, not merely the most suitable of alternative accesses. Although the House of Lords in Waters had reservations about this decision it allowed to it to stand (see paras 39 and 143). Clearly the reference land is the most suitable location for the new junction giving access to the Dyffryn Dowlais site but it is not the only access point. By raising the rule the Council have, in effect, conceded that no other suitable access points to the Dyffryn Dowlais site from the A473 existed. In Hertfordshire County Council v Ozanne [1991] 1 WLR 105 at 111 D-F, 112 and 113, it was held that the statutory powers must relate to the use of the acquired land and must be powers enabling the use of the land for a statutory purpose and to be necessary for that purpose. This excludes planning permission or other general consents. They do not include agreements to do works on land owned by a statutory authority.
196. Accordingly, rule (3) does not apply for two reasons. First, the works on the reference land could be carried out and applied to highway purposes without any statutory powers or consent granted by the highway authority. Second, although works carried out on the highway by a private developer require agreement with the highway authority, such consent is not a statutory power within rule (3). An agreement under section 278 of the Highways Act 1980 is not a statutory power. Section 72 of the Act does not provide that only a highway authority may widen a highway. A highway authority may make an agreement under section 111 of the Local Government Act 1972 and thus allow a person to go on to the surface of the highway to carry out approved works which may then be used by the public. This consent by the authority is not a statutory power within rule (3). Under section 228(1) of the 1990 Act a highway includes part of a highway.
197. Mr Horton said that if the reference land possessed a ransom value this would be precluded by rule (3) in any no scheme world. Two questions arise. The first is whether, on the assumption that the owners or developers of the Dyffryn Dowlais site were interested in the reference land for the purpose of widening the A473 to give access to the site, this gave the land special suitability or adaptability for that purpose? On the claimants' case, that planning permission would not have been given for any other access than Pen Yr Eglwys, it must follow that the land had such suitability. But Batchelor was wrongly decided in this respect (see Waters at paras 111, 112 and 143).
198. The second question is: was the purpose to which the reference land could be put only pursuant to statutory powers? The land was acquired to improve and widen the A473 pursuant to sections 239, 240 and 249 of the Highways Act 1980. In Ozanne the land was acquired for a new highway under section 214 of the Highways Act 1959. This is now section 239 of the 1980 Act but subsection (1) relates to the construction of highways whereas subsection (3) relates to the improvement of an existing highway. Only a highway authority has the power to undertake works to an existing highway or to widen a highway. Under section 278 of the 1980 Act a third party may be authorised to do those works but acts as the agent for the authority under statutory powers. The position is similar to that in Cedar Rapids Manufacturing and Power Co v Lacoste [1914] AC 569, referred to in Ozanne (at 112H) that the power to construct and develop water power adjacent to the St Lawrence River was conferred by statute and "would not be taken into account in a case to which rule 3 … applied."
199. Decision – Rule (3) of section 5 of the 1961 Act (as amended) is as follows:-

"The special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the requirements of any authority possessing compulsory purchase powers."

Two questions are raised which must both be answered affirmatively if the rule is to apply. First, did the reference land have a special suitability or adaptability for any purpose? Second, was that purpose one to which it could be applied only in pursuance of statutory powers or for which there was no market apart from the needs of an authority possessing compulsory purchase powers?

200. The relevant purpose under the first question is the widening and improvement of the Pen Yr Eglwys junction and the provision of access to the Dyffryn Dowlais site. Did the reference land have a special suitability or adaptability for that purpose?
201. In Batchelor the facts are similar to those in this reference. The claimant owned two adjoining plots of land, one was compulsorily acquired for highway purposes and the other purchased following a counter-notice. On the town map they were shown as part of a larger area allocated for residential development. Outline planning permission had been granted for housing on a substantial area of land to the south and east of the two plots but subject to conditions inhibiting development until highway improvements were made. The acquiring authority built a roundabout on the claimant's land, which made it possible for the adjoining development to take place. One of the findings of the Tribunal was that there were other possible accesses to the land to the south and east and this excluded the "special suitability" in rule (3). On appeal Mann LJ said (at 362):-

"However the rule is divided, one or other of the limbs can be motivated only if the land has a 'special suitability or adaptability.' This involves a consideration both of ordinary English words and of fact (as to the latter see Blandrent Investment Developments Limited v British Gas Corporation [1979] 252 EG 267 at 273. A special suitability can be found where land has a positional advantage for the purpose in hand (see Raja Vyricherla Narayana Gajapatiraju v The Revenue Divisional Officer Vizagapatam). What then is 'special'? This ordinary word in its adjectival sense is given the following meaning in the Oxford English Dictionary:

Of such a kind as to exceed or excel in some way that which is usual or common; exceptional in character, quality or degree.

The Tribunal found that:

the most suitable access to the land to the south is that which has been formed on the order land.

The Tribunal further found it 'was unable to find that the order land would have been the only access to the land to the south'. There were other options. The findings of the Tribunal in my judgment are decisive against a 'special suitability'. The order land may have been the most suitable land for access to the south but it was not specially suitable for that purpose. Most suitable does not correspond with specially suitable.

In my judgment the appeal by reference to Rule 3 fails in that the prefatory words of the rule are not satisfied upon the facts as found."

The decision was remitted to the Tribunal on other grounds.

202. In Waters the restriction of rule (3) in Batchelor and other decisions was criticised but allowed to stand. Lord Nicholls said (para 39):-

"Over the years the courts have interpreted rule 3 narrowly. In an illuminating report the Law Commission said that in practice rule 3 appears to have little remaining purpose. It has effectively become redundant: see 'Towards a Compulsory Purchase Code: (1) Compensation' (2003) (Law Com No.286, Cm 6071), paras D94, D131, pp 203, 216. Some of the court decisions restricting the scope of rule 3 are open to criticism. But, like my noble and learned friend Lord Brown of Eaton-under Heywood, I would let them be. They do not seem to give rise to difficulties in practice. Where rule 3 is not applied the 'value to the owner' principle operates. Essentially this is a sound basic principle, although in recent years some difficulties have arisen. Subject to statutory provision to the contrary it should continue to be applied generally."

Lord Scott, in a dissenting judgment, said that the Batchelor interpretation of "special suitability" should be overruled (paras 111 and 112). Lord Brown observed that rule (3) has been increasingly marginalised and the Pointe Gourde principle expanded to fill its place (para 142). He then said (para 143):-

"Again in common with Lord Scott (see his paragraph 112), I believe that rule 3 has hitherto been too narrowly construed, in particular by the Court of Appeal in Batchelor v Kent County Council … But again, rather than attempt to put back the clock and reinstate rule 3 at the expense of the Pointe Gourde rule, I am inclined to treat the latter as the prevailing law."

203. In my judgment, the "special suitability" test used by Mann LJ in Batchelor, although criticised, still stands. It was applied by the President in Waters, and not overruled in the Court of Appeal or House of Lords. It should be applied in this reference.
204. I consider later in this decision the question of access to the Dyffryn Dowlais site from the A473. It is sufficient to state for this part of the decision that, although access at the Pen Yr Eglwys junction was the most suitable and the one most likely to have received planning permission, there was at least one other possible access (opposite the Hospital entrance). As I find later, at this point there was the possibility of the grant of planning permission (albeit remote) and therefore it cannot be wholly disregarded. Accordingly, although the reference land was needed to provide a junction improvement which gave the most suitable access to the Dyffryn Dowlais site, there was at least one other option and this removed the special suitability from the reference land. Adapting the words of Mann LJ in Batchelor, although the reference land was the most suitable for the purpose of access it was not specially suitable, due to the existence of another possible access. The first requirement of rule (3) is therefore not satisfied and on this ground alone the rule does not apply. I will, however, consider the second question.
205. There are two alternatives. The first relates to the need for statutory powers for highway works on the reference land, the purpose for which it was said to have a special suitability or adaptability. Statutory powers were required to widen and improve the A473 at Pen Yr Eglwys junction (sections 239, 240 and 249 of the Highways Act 1980 are referred to in the compulsory purchase order), but the reference land was not part of the highway. No statutory powers were needed for works on this land: the exercise of statutory powers related to works on other land. In my judgment, the decision of the House of Lords in Ozanne takes the case outside rule (3).
206. In Ozanne the claimants' land adjoining the south side of a lane was compulsorily acquired. The purpose of the acquisition included the construction of a new highway. No stopping up order was made in respect of the existing lane and no part of the lane that could be affected by any such order lay within the claimants' acquired land. The sole ground of appeal to the House of Lords was whether rule (3) applied. Lord Mackay, giving judgment, said (at 111D):-

"The special suitability or adaptability of the land for any purpose is directed to be left out of account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers. This is expressed in the passive voice but the context shows that the application referred to is by a person using the land and, therefore, the statutory powers in question must be powers enabling a person entitled to use the land to apply it to the purpose in question and since the purpose in question is one to which the land could be applied only in pursuance of the statutory powers the statutory powers must be necessary to enable such person to use the land for that purpose. I do not see how statutory powers not related to the use of the land acquired could form a basis for the application of this part of the rule.

Therefore, I consider that statutory powers conferred upon the Secretary of State to order the stopping up of a highway on land which is not part of the land being acquired could not form the basis of the application of this part of the rule to the land acquired. Since the only statutory powers here relied upon by the council are the statutory powers of the Secretary of State to stop up parts of Thorley Lane, I consider that the council's argument must fail."

Later he said (at 113B):-

"… in the present case the land acquired could have been used for a highway without the exercise of any statutory power and certainly was not dependent upon the Secretary of State exercising any statutory power to stop up any part of Thorley Lane."

207. He then drew a distinction between a general statutory consent (eg planning permission), which does not fall within the rule, and a particular statutory power (113C):-

"This I think goes to emphasise the distinction referred to by counsel for the claimants when he pointed out that, if the present case were covered by the rule, it was very difficult to see why the rule should not also cover a purpose to which a piece of land could be put only after obtaining some particular statutory consent such as planning permission, consent under the Building Acts, or the like. It is clear from the modern statutory provisions governing compensation for the compulsory acquisition of land and the question of what types of development would receive planning consent is highly relevant to the determination of compensation for compulsory acquisition and any construction of the provision founded upon which resulted in any enhancement of the value of a piece of land resulting from its use for a purpose which required planning permission being disregarded would be absurd."

He agreed with the Tribunal's conclusion that "the first limb of the provisions of rule (3) cannot apply in that special suitability or adaptability of the land can be realised other than by the use of statutory powers."

208. I find that the same position applies in this reference. No statutory powers were needed for the works on the reference land: the exercise of statutory powers related to works on the public highway adjoining the reference land. A suitability or adaptability of the reference land for highway works as part of the improvement of the Pen Yr Eglwys junction could be realised without statutory powers.
209. A second alternative requires that there should be no market apart from the requirements of an authority possessing compulsory purchase powers. This is clearly not the position in this reference. The reference land was of interest to the developers and owners of the Dyffryn Dowlais site, whether at ransom value or at a lower figure. As I find later, it was the key, or at least the most important key, to the realisation of the Dyffryn Dowlais development. The Council acquired the land at the request of the Dyffryn Dowlais developers and owners but would not have done so in the absence of such a request.
210. For the reasons set out above, I find that rule (3) does not apply. The suitability or adaptability of the reference land for the highway works needed to give access to the Dyffryn Dowlais site can be taken into account when assessing the market value of the land.

Value

211. My final question is, having regard to the answers to the above three questions, what was the market value of the reference land at the valuation date (27 April 1996) under rule (2) of section 5 of the Land Compensation Act 1961? Mr Gibbon says that the land had a ransom value of £1,550,000; Mr Llywelyn puts the value at a nominal £500 but, if ransom value existed, it was only £122,804.
212. Mr Nardecchia said that a 40% discount for ownership difficulties (as made by Mr Llywelyn) does not reflect reality. The hypothetical purchaser is a person who would reflect reality by embodying what would have been the demand for the land at the valuation date (see Lady Fox's Executors v Commissioners of Inland Revenue [1994] 2 EGLR 185 at 186E; Ryde International Plc v London Regional Transport [2004] RVR 61 at 63 (para 18); and Corton Caravans and Chalets Limited v Anglian Water Services Limited [2003] RVR 323 at 336 (para 109)). The likely purchasers of the reference land would have included the owners of the Dyffryn Dowlais site. There is no evidence to warrant a deduction for multiple ownership. There would have been an option agreement in the no scheme world, but this is not necessary to the claimants' case. In the pre-scheme world the owners acted jointly in making planning applications and were represented by the same firm.
213. In the claimants' no scheme world the reference land possessed a significant ransom value as the sole key to the development of the Dyffryn Dowlais site. This value existed prior to the scheme and is not to be disregarded under the Pointe Gourde rule (see Batchelor at 361). The valuation must be made on the basis of facts and circumstances known to the hypothetical purchaser at the valuation date, eg he would not have known that the Council would refuse planning permission for the Dyffryn Dowlais site in 1997 contrary to the 1989 resolution and the housing allocation in the Local Plan.
214. Mr Horton said that, in the absence of compulsory purchase, the reference land did not possess a ransom value because such a value was premature in the absence of planning permission for the Dyffryn Dowlais site. It was not yet known whether the reference land would be a pre-requisite to the development of Dyffryn Dowlais.
215. As to ransom value in the no scheme world, Mr Horton said that in the Council's world there would have been no basis for requiring access to Dyffryn Dowlais at the Pen Yr Eglwys junction and the developers would have had no interest in doing so. There would have been no ransom negotiations at Pen Yr Eglwys or opposite the Hospital entrance. In the claimants' no scheme world, the owners or developers of the Dyffryn Dowlais site would not have accepted that the reference land was, or ever likely to be, a pre-requisite to the development of the Dyffryn Dowlais site. There was a realistic prospect of the grant of planning permission with access opposite the Hospital or at The Croft. At the valuation date they would not have negotiated at all with the owners of the reference land. The Dyffryn Dowlais owners would have adopted a policy of wait and see and would have refused to enter into negotiations.
216. I disregard Mr Horton's submission which involves reworking Mr Llywelyn's valuation to produce a ransom of 15.4% compared to his figure in evidence of 33%. In my judgment, this is evidence which only Mr Llywelyn could give and which he did not give at the hearing. New evidence cannot be introduced for the first time in closing submissions.
217. I refer later to submissions on a possible access to the Dyffryn Dowlais site at a point opposite the Hospital entrance.
218. Decision – The market value of the reference land must be determined in the no scheme world, which I have found closely resembled the real world at the valuation date, disregarding only the improvement and widening of the A473 at the Pen Yr Eglwys junction (including the short length of access road on to the Dyffryn Dowlais site) and ignoring the Council's compulsory purchase powers. What is in dispute is whether the reference land had a ransom value, or key value, and whether compensation is properly payable for such a value.
219. In Waters Lord Nicholls said:-

"64. One last point should be noted before returning to the present case. This concerns so-called 'ransom' value or, less pejoratively, 'key' value. I have already mentioned that under the 'value to the owner' principle or the Pointe Gourde principle, whichever nomenclature is preferred, the pressing need of an acquiring authority for the subject land as part of a scheme should be disregarded when assessing its value for compensation purposes. The value of the land is not the price a 'driven' buyer would be prepared to pay. But a strip of land may have special value if it is the key to the development of other land. In that event this feature of the land represents part of its value as much for purposes of compensation as on an actual sale in the open market.

65. The intersection of these two principles was identified neatly by Mann LJ in Batchelor …, 361:

'If a premium value is 'entirely due to the scheme underlying the acquisition' then it must be disregarded. If it was pre-existent to the [scheme] it must in my judgment be regarded. To ignore the pre-existent value would be to expropriate it without compensation and would be to contravene the fundamental principle of equivalence.'"

Lord Brown agreed (see paras 140 and 157).

220. In my judgment, the acquisition of the reference land is a good example of ransom value, whether in the real world or the no scheme world. If the Council had not intervened with their compulsory purchaser powers (at the request of the developers of the Dyffryn Dowlais site and most likely purchasers of the reference land), and on the assumption of a sale in April 1996, both vendor and purchaser of the reference land would have known that it effectively held the key (or at least the most important key) to the development of the Dyffryn Dowlais site.
221. It is not in dispute that the reference land was essential for works to widen and improve the A473 at the Pen Yr Eglwys junction to take an access road to the Dyffryn Dowlais site and later the link road to the Church Village Bypass. The prospect of the grant of planning permission for Dyffryn Dowlais with access to the A473 at Pen Yr Eglwys was considerably greater than at any other point on this road. It is common ground that an access opposite The Croft was not a realistic alternative. Both parties to the sale of the reference land in April 1996 would have known that, although the possibility could not be completely disregarded, planning permission with an access opposite the Hospital entrance was unlikely to be granted – it was no more than a remote possibility. Furthermore, the Council owned part of the land needed for a junction at this point; the position in law was not entirely clear; and there may well have been another ransom situation at this location. Both issues are considered further below.
222. Against this background the prospective developers of the Dyffryn Dowlais site would have recognised that payment of ransom value for the reference land was necessary if they were to obtain planning permission to unlock the development potential of the Dyffryn Dowlais site. The price would have taken into account the lack of planning permission at the valuation date and the remote possibility of an alternative access, but it would still have reflected the high value of the reference land to the Dyffryn Dowlais developers or owners. It is unreal to suggest that the vendors of the reference land would have parted with this land for only £500 or that the purchasers would not have bid in excess of this figure.
223. It would be wrong, and contrary to the underlying principle of equivalence or fair compensation, for the claimants to be deprived of a value which existed independently of the scheme by an acquisition under compulsory powers. In Batchelor, a case with similar facts, following the second hearing before the Tribunal, the member (T Hoyes) said (at 222C):-

"It is accepted that the order land falls to be valued disregarding the scheme underlying the acquisition, identified above, and the fact that the acquisition is taking place under compulsion. It is not disputed that the market for the order land effectively comprised prospective developers of the Grove Green area of which Wards were the most prominent. It is also accepted that if the order land is found to be endowed with some measure of premium value, the amount is entirely in issue, that sum is to be treated as having accrued independent of the scheme. In essence, what falls to be ascertained is the bargain which would have been made between the claimant and a prospective developer-purchaser had the acquiring authority not intervened."

On appeal Nourse LJ described that paragraph as an "entirely correct direction as to the application of the Pointe Gourde principle" (see Wards Construction at 34J).

224. I am satisfied that the reference land possessed a ransom value at the valuation date, which may be properly taken into account when assessing the compensation payable to the claimants. The amount is in issue within a bracket of £122,804 and £1,550.000. I now deal with the amount and follow the form of valuation used by Mr Gibbon and modified by Mr Llywelyn, namely deducting from the development value of the Dyffryn Dowlais site the agreed existing use value and then attributing a percentage of the difference in value (or uplift) to the reference land as the price of that land.
225. I start with the value per acre. Mr Gibbon adopted £250,000 for both the net residential area and the public house site; Mr Llywelyn used £175,000 and £110,000 respectively. I was referred to nine comparables, three of which were used by both valuers. I give no weight to five of Mr Llywelyn's comparables for lack of adequate and reliable information. These are: Pontyclun, Llanharry, Llanharen, Nant Celyn and Gwaun Misgyn.
226. I find that the two best comparables are Ty Draw Farm and the Dyffryn Dowlais site itself. In September 1992 Westbury purchased by tender a site at Ty Draw Farm, Upper Church Village (only a short distance from Dyffryn Dowlais) at a price of £1,500,000. The net residential area was 12 acres. Abnormal costs were £420,000. The price plus abnormal costs gives a value of £160,000 per acre. In March 1998 Barratt/Beazer purchased the first tranche of the Dyffryn Dowlais site (14.18 acres net) at a total price of £2,050,000. Abnormal costs were £1,707,000 giving a price per acre of £264,950.
227. These comparables are either side of the valuation date, with the need to relate them to that date by reference to changes in residential land values between 1992 and 1998. Mr Gibbon said that values rose by 6% between 1996 and 1998 and referred to a 16.67% increase in prices at Cefn Yr Hendy between 1994 and 1996. Mr Llywelyn thought that there was a 5% increase in prices between December 1993 and April 1996; in 1996 prices rose 15-20% during the year, 3.75 to 5% from April to August.
228. Some indication of changes in residential land prices can be found by analysing the four sales at Miskin Heights, Cefn Yr Hendy, some 3½ miles south west of Church Village. These transactions were at various dates within the period December 1993 to June 1996. The first was in December 1993, of a site of 34 acres (net), the others were smaller areas of between 3.5 and 5.3 acres; the use of the first transaction in the comparison thus adding the complicating factor of comparing large and small sites. Nevertheless, these transactions give some guide. Between December 1993 and June 1996 the price per acre rose by 33.8%; between December 1993 and September 1994 by 14.4%; between September 1994 and 1995 by 4.3%; between September 1995 and June 1996 by 12%; and between September 1994 and June 1996 by 16.9%.
229. At Ty Draw Farm the price of £160,000 per acre in September 1992 must be increased to relate it to higher values at April 1996. At Cefn Yr Hendy the increase from December 1993 to June 1996 was 33.8%. If a 40% increase is used for the longer period from September 1992 to April 1996 this indicates a price per acre in the region of £224,000 in April 1996 at Ty Draw Farm.
230. The sale of part of the Dyffryn Dowlais site in March 1998 must be related back to lower values at April 1996. The only evidence I have of the changes in values between 1996 and 1998 is Mr Gibbon's opinion of a 6% increase, which I think is too low. On the basis of the Cefn Yr Hendy figures I consider that the rise over this two year period was in the region of 15%, giving an equivalent figure of just over £230,000 per acre in April 1996.
231. These two comparables produce figures of £224,000 and £230,000 as at April 1996. The Dyffryn Dowlais transaction is clearly the best comparable as it relates to the property being valued and I adopt this figure for the residential land value at Dyffryn Dowlais at the valuation date (£230,000 per acre). It is not out of line with the other comparables outside Church Village which show a range of prices for the period December 1993 to August 1997 between £188,630 and £235,471 per acre. At Dyffryn Dowlais the residential land had a total value of £7,571,600, in April 1996.
232. Mr Gibbon has used a residential value per acre for the public house site on the grounds that it could be developed as a neighbourhood centre and valued at residential prices. Mr Llywelyn used a lower price per acre (£110,000 compared to £175,000) which he said was based on comparables and a residual valuation but none of this supporting information was produced in evidence. I agree with Mr Llywelyn that the public house site had a lower value than the housing land. From my inspection and having regard to the proximity of Church Village, with shops and public houses, to Dyffryn Dowlais, it is unlikely that a high value would be placed on this non-residential site. Mr Llywelyn has adopted a value of 63% of his residential value; I agree this relationship in values. Applying this percentage to a residential value of £230,000 gives £140,000 per acre for the public house site, a total value of £250,850.
233. The total gross value of the Dyffryn Dowlais site is £7,822,450. The parties have agreed that a quantum allowance of 11.25% should be applied. I agree with Mr Gibbon that this should relate to the whole of the land, including the public house site. This allowance is £880,026, reducing the gross value to £6,942,424, which represents the value of the Dyffryn Dowlais site with planning permission, subject to an agreed deduction for abnormal costs and possibly other deductions.
234. At the valuation date the Dyffryn Dowlais site did not have planning permission for residential development. Both valuers have made a deduction for lack of permission, Mr Gibbon 10%, Mr Llywelyn 15%. The position at the valuation date in April 1996 was as follows. In Local Plans since at least 1976 the site has been allocated for residential development. The Plan at the valuation date was the Taff Ely Local Plan Deposit Draft 1995. Dyffryn Dowlais was allocated for housing under Policy h1.25 for 450 units. Housing development was required to have satisfactory access. By the valuation date four planning applications had been made for residential development. In November 1986 and September 1987 the first two applications were refused as premature on highway grounds. An appeal was lodged in respect of the second refusal but held in abeyance pending a further application. On 23 October 1989 the local planning authority resolved to grant outline planning permission on a third application for residential development, public open space and public house (56/89/0694) subject to a section 52 agreement, which in 1990 was confined to phasing and open space. This agreement was not completed and no planning permission was granted. On 12 March 1996 a further outline application was made and subsequently withdrawn.
235. It is common ground that I should not take into consideration events which occurred after the valuation date. The question is what allowance (between 10 and 15%) would have been made in April 1996 by a purchaser of the Dyffryn Dowlais site for the lack of planning permission? To avoid double counting I leave out of consideration here the question of access to the A473 which I reflect at the end of my valuation in my percentage of uplift in value attributable to the reference land. In my judgment, there was a good prospect of the grant of permission in April 1996, for housing at Dyffryn Dowlais, having regard to the Local Plan allocations and the resolution of October 1989. I do not think it could have been foreseen that in the year following the valuation date the local planning authority would have resolved to refuse planning permission, contrary to their officers' recommendation, although a successful appeal would have been anticipated. For these reasons I prefer Mr Gibbon's lower deduction of 10%.
236. The parties have agreed that a deduction of £3,442,000 should be made for abnormal costs. These two deductions reduce the value to £2,806,182.
237. Mr Llywelyn then made further deductions which are not made by Mr Gibbon. The first is for multiple ownership of the Dyffryn Dowlais site, 40%. In my judgment, there is no persuasive evidence to support this deduction. The owners of the Dyffryn Dowlais site co-operated in the grant of an option to Barratt and in the making of planning applications. I heard no evidence to support Mr Llywelyn's statement that two of the owners were unwilling to sell. The Dyffryn Dowlais owners have a financial interest in the outcome of this reference and I would have expected one or more of them to have given evidence in support of this deduction if there was any substance in it. At the valuation date Barratt had secured an option to purchase the whole of the Dyffryn Dowlais site which I have found would have existed in the no scheme world. I reject Mr Llywelyn's deduction for multiple ownership.
238. Next, Mr Llywelyn made a deduction of 10% (reduced at the hearing to 8 or 8.5% for his error in assuming that Tree Preservation Orders existed at the valuation date) for past mining on the land, potential contamination from an old colliery gas main and for a contentious right of way. I find there is no reliable evidence to support any part of this deduction. As I understand the position there is an allowance in the agreed abnormal costs for dealing with past mining activity, and I reject Mr Llywelyn's claim that mining operations would have put a stigma on the land, warranting a further deduction. I heard no evidence at all as to the existence of the gas main nor as to why the right of way is contentious, other than Mr Llywelyn's vague reference to anecdotal evidence. I noted on my inspection that this right of way is now an attractive footpath through the housing development and I cannot see how it has adversely affected the layout and value.
239. There is no evidence to support Mr Llywelyn's further deduction of 33% on the grounds that one-third of the development could have been accessed solely from Station Road. All the planning applications and the planning permission granted have two accesses, from the A473 and Station Road respectively. I accept the evidence of Mr Good that the narrowness of Station Road and the busy crossroads in Church Village would have prevented the grant of planning permission for a development of part of the Dyffryn Dowlais site with sole access from Station Road. Furthermore, the Local Plan current at the valuation date required a single access from the A473 to serve the Dyffryn Dowlais site. I reject this deduction.
240. My rejection of all these deductions leaves the development value of the Dyffryn Dowlais site at £2,806,182. Both valuers agree that the existing use value (£275,000) should be deducted to give the uplift in value attributable to the necessary access to the A473. My uplift in value is £2,531,182 and the final question is what proportion of this figure would have been paid for the reference land to provide that access. Mr Gibbon said 50% on the grounds that the reference land provided the only access to the Dyffryn Dowlais site. Mr Llywelyn's figure is 33% because he said that there was alternative access opposite the Hospital entrance. It became common ground during the hearing that planning permission would not have been granted with access opposite The Croft.
241. There are two matters for consideration here: whether planning permission would have been granted with access opposite the Hospital entrance and whether there was a potential ransom situation at this point. For both matters I am not required to make a definitive decision but must decide how vendor and purchaser of the reference land would have viewed the position and the effect it would have made on their negotiations and the price agreed for the reference land.
242. Mr Nardecchia said that in the no scheme world the chances of obtaining planning permission for development of the Dyffryn Dowlais site with access from a different point on the A473 than Pen Yr Eglwys were nil or negligible. Suggested access points are opposite The Croft and at the entrance to the former Hospital. A different access would have been in conflict with Local Plans since 1983. Since 1986 the Dyffryn Dowlais owners had been attempting to obtain planning permission but at no time did they put forward an access other than Pen Yr Eglwys. They preferred the uncertainties and delays of a compulsory purchase order rather than seeking planning permission at an alternative location. Barratt as prospective developers made the same judgment, even though they recognised a ransom problem in 1994.
243. The evidence regarding alternative locations comprises correspondence with officers of the highway authority in 1995 and 1996. Various reasons for the Pen Yr Eglwys junction were given including the rationalisation of existing junctions, the need to improve the Pen Yr Eglwys junction and comprehensive development. These are valid and relevant planning reasons. An improved junction at Pen Yr Eglwys was required to cater for the additional traffic from the Dyffryn Dowlais development. It would also correct the substandard visibility splay, a benefit arising naturally from the Dyffryn Dowlais development. The correspondence shows that a Dyffryn Dowlais application with Hospital access would have been refused. It is also apparent from development control in 1996 that Council officers drew a distinction between permitting the application which was the subject of the 1989 resolution and permitting a new application with a different access point.
244. With regard to access opposite the Hospital entrance, there was the additional complication of land ownership, i.e. a possible ransom strip held by the Council. To achieve an improved junction this location would require land to the south or south east of the highway fence line. This is significant because the highway works following the deed of exchange with Mr Jenkins in 1968 are all on the north or north western side (the highway side) of the fence. The inference is that this is the boundary of the highway. The land to the south or south western side of it is in the Council's ownership but not part of the highway.
245. The Council dispute this by reference to Secretary of State for the Environment v Baylis (Gloucester) Limited (2000) 80 P & CR 324. This decision can be distinguished on the facts and the different wording of the deed. In this reference there has been no dedication of the land on the non-highway side of the fence and the woodland forms no part of the highway. There is no reference in the deed of exchange to section 214(2) of the Highways Act 1959 nor any other statutory power. Furthermore, there is no evidence of a resolution to enter into a deed or accept dedication.
246. A developer requiring access opposite the Hospital would therefore require control of third party land, as at Pen Yr Eglwys. The Council as owners would have been under a statutory duty to obtain the best consideration reasonably obtainable (see section 123(2) of the Local Government Act 1972). This is not the same situation as at Station Road: at the Hospital entrance the 1968 deed was effectively a voluntary conveyance.
247. The decision in R v Northamptonshire County Council ex p Commission for New Towns [1991] NPC 109, can be distinguished on the facts and in respect of Marshall v Blackpool Corporation [1935] AC 16, also relied upon by the Council, it cannot be said that there was any legitimate expectation of access when the land was conveyed for highway purposes. The Council also rely on R v Warwickshire County Council ex p Powergen Plc (1997) 3 PLR 62, but this decision can only apply if the Council can establish that a hypothetical developer would have made a planning application for development with access opposite the Hospital and won an appeal on refusal. Furthermore, this would not have inhibited a ransom payment.
248. On the facts, the Council owned, and a hypothetical purchaser would have thought that it owned, a ransom strip opposite the Hospital entrance. This is a further reason why the reference land would have been considered to be valuable.
249. Mr Horton said that development of the Dyffryn Dowlais site was dependent on satisfactory access to the A473 and this could have been opposite the Hospital entrance. The Dyffryn Dowlais development could have had a layout with a link from this access south towards the bypass (as in the 1976 Local Plan).
250. Mr Horton said that the claimants have raised the possibility of a ransom situation opposite the Hospital entrance where the highway authority accepted land in 1968 for road widening. He referred to the deed of exchange under which land was conveyed to be dedicated to, and become part of, the highway. Between 1968 and 1974 works were carried out on the land. An agreement between owner and highway authority could be sufficient evidence of dedication and acceptance of land as part of the highway (see Baylis). Thus, under the deed of 1968 there has been dedication of the land conveyed and acceptance by the highway authority.
251. The decision in the Commission for New Towns case, that the question whether land is part of the highway is one of fact and that, since the highway works were not carried out on the land, it had not become part of the highway, can be distinguished on the facts. The more recent decision in Baylis is to be preferred.
252. If the land subject to the 1968 conveyance did not become part of the highway under the transfer, it did become highway when the widened carriageway and new footway created between 1968 and 1974 began to be used by the public. Use of part of the dedicated land amounts to acceptance of the whole (see Baylis at 14). This is also in accordance with the boundary and embankment to be seen on site.
253. If the land transferred in 1968 became part of the highway, it cannot be disputed that the owners of the Dyffryn Dowlais site would have had the right to take access to the highway without payment of ransom (see Marshall).
254. Even if the land transferred was not part of the highway at the valuation date, the Council would be prevented from charging a ransom because the 1968 deed created a legitimate expectation in the minds of the Dyffryn Dowlais owners that ownership by the highway authority would not in itself restrict the rights of the owners to gain access to the highway over the land in the future (see Commission for New Towns).
255. If the highway authority could charge a ransom for access there is evidence to show that such a ransom would not be charged (see letter 30 May 1991 from the County Engineer to the solicitors for the owners of Dyffryn Dowlais). The land subject to the 1968 deed was purchased under a compulsory purchase order for highway purposes. There is no reason to suppose that the highway authority would have acted differently than it did in 1991 with regard to land at Station Road.
256. It was suggested in the evidence of Mr Gibbon that the Council might have refused to negotiate opposite the Hospital because they preferred the Pen Yr Eglwys junction. They would have faced insuperable difficulties, particularly if planning permission had been refused and obtained on appeal (see Powergen).
257. Decision – I look first at the planning position. At the valuation date no planning application had been made for Dyffryn Dowlais with access to the A473 opposite the Hospital entrance and none has subsequently been made. Indications as to the possibility of planning permission with this access can be found in the Local Plan and correspondence.
258. In the Taff Ely Local Plan Deposit Draft 1995, Policy t3.3 (formerly t4.4) stated that the Dyffryn Dowlais link road to the proposed bypass was to be provided as part of a new development scheme. A single access from the A473 is required to serve the Dyffryn Dowlais site and this access road will need to be of a standard to enable it to be extended to serve as a link from the A473 to the bypass (para 8.30). The Proposals Map showed the link road joining the A473 at the Pen Yr Eglwys junction. These were policies and proposals at the valuation date which clearly indicated that access other than at Pen Yr Eglwys would not have been acceptable. I have found that this Plan existed in the no scheme world at the valuation date (as it did in the real world). It would have indicated to a developer of Dyffryn Dowlais that a successful planning application for this site needed access at Pen Yr Eglwys and purchase of the reference land.
259. I look now at the correspondence referred to by the parties. The first letter is dated 14 November 1994 from Barratt to Mid Glamorgan County Council indicating that they propose to access the Dyffryn Dowlais site at The Croft to avoid a ransom situation at the reference land. The response dated 12 December 1994 was not encouraging:-

"You will be aware that the development of the Duffryn Dowlais site has been the subject of detailed discussions between the developers agents Messrs Keltecs and district and county officers. Whilst I am prepare to consider on a 'WITHOUT PREJUDICE' basis, alternative layouts to those previously discussed and included in a Draft Section 106 Agreement between the parties, I have to advise you that your proposed draft master plan does not fulfil the highway authority's requirements.

You have failed to take on board a rationalisation of junctions on Route A473 and moreover made no attempt to integrate the new development with the county council's proposals to construct a Church Village Bypass and its associated link roads."

260. On 20 September 1995 Barratt wrote again, in connection with a request for an indemnity regarding the compulsory purchase, and said:-

"The owners are willing to do this but it would help them considerably if you could confirm that an alternative access into these site would be possible from the A473, from say opposite the hospital."

The reply on 2 October 1995 was as follows:-

"The county council, as highway authority, look for access to any new development to be accommodated at an existing junction which can be adjusted to cater for the additional traffic generated. Of all the possibilities available, the preferred option for access to Duffryn Dowlais coincides with the proposed link road from the A473 to the Church Village Bypass.

The development of Meadow Farm Estate by Ideal Homes allows for this junction, subject to improvements being carried out by the developer, on behalf of the county council, by way of a Section 278 agreement.

If, however, another suitable access exists, then, in principle, it would also be considered on its own merits."

This letter makes two points: the preferred access is at Pen Yr Eglwys but if another suitable access exists it will be considered on its merits.

261. On 1 February 1996 the County Council wrote to Messrs Herbert R Thomas (who were I believe agents to the owners of the Dyffryn Dowlais site):-

"With reference to your telephone conversation of today's date, I am pleased to confirm that all else being equal, access to this development could be considered opposite to the access to East Glamorgan General Hospital, with an appropriate improvement to the existing junction.

Clearly the highway authority have co-operated in using highway powers to achieve a Compulsory Purchase Order for the above mentioned land because there is a need for traffic signal control at the junction with Meadow Farm Estate and that junction coincides with the link road to the future Church Village Bypass. It was therefore considered good planning practice to incorporate the development traffic control for Dyffryn Dowlais at the same location."

This letter is slightly ambiguous: it does not rule out access opposite the Hospital but does no more than say that it could be considered while repeating the preferred access option at Pen Yr Eglwys junction. It is not clear what the words "all else being equal" mean.

262. Herbert R Thomas wrote on 5 February 1996 referring to the previous letter but asking for a further reply to the proposed Hospital access:-

"Accepting this, I am wondering if you are in a position to confirm that had it not been for the Church Village Bypass Scheme in the Highway Structure Plan for this area, the more appropriate access to the comprehensive residential development around Duffryn Dowlais Farm would then have been in a position in the vicinity opposite the access to the East Glamorgan Hospital.

The owners of the land are quite prepared to cooperate with your Authority in constructing a new junction opposite the Meadow Farm Estate and the first short length of link to the future Church Village By Pass but clearly this has been undertaken to assist in the Highway Schemes of the Authority and can be considered as a form of planning gain."

The produced the last letter in the sequence, dated 27 February 1996 from the County Engineer and Surveyor:-

"I confirm that had it not been that comprehensive development in the area dictated a particular form of highway layout, then an appropriate location along the frontage with the A473 route would have been considered on its merits.

There can be no question therefore of a ransom situation."

Again, this letter is ambiguous, particularly the reference to "comprehensive development", but it says no more than that another access along the A473 would be considered on its merits.

263. How would a purchaser of the reference land at the valuation date have viewed this correspondence? In my judgment, he would have drawn two conclusions: first, that the preferred access is clearly at Pen Yr Eglwys; second, that another access (particularly at the Hospital entrance) would have been considered on its merits, an action which a local planning authority is bound to take on any planning application. I can find no assurances, express or implied, that access opposite the Hospital entrance would have been acceptable. The situation was, in my view, that a planning application for Dyffryn Dowlais development with access at Pen Yr Eglwys would have been acceptable from the viewpoint of access. Furthermore, the highway authority wished to improve this junction for reasons of safety. This is seen in the Statement of Reason for the compulsory purchase order (which refers to safer access), in the evidence of Mr Iles (on behalf of the Council) at the planning appeal hearing (para 9.7 of his Proof of Evidence where he states that a signal controlled junction "will greatly improve the safety and efficiency of all turning movements from Pen Yr Eglwys") and in a letter dated 16 April 1984 from the County Surveyor which states that the Council were willing to accept less than the standard vision splay at Pen Yr Eglwys. Although an application with access opposite the Hospital would have been considered on its merits, there were no indications that planning permission would have been granted. At best, there was a remote possibility that a Hospital access would have been acceptable. I put it no higher than that.
264. The second matter to be considered concerning the Hospital access is whether there was a potential ransom situation at this location. It is common ground that the construction of an access to the A473 from Dyffryn Dowlais at this point would have required the use of land owned by the highway authority. The issue is whether this land had become part of the highway at the valuation date, and whether the Dyffryn Dowlais developers could have gained access to the A473 without the need to cross or acquire third party (Council) land, or whether they would have needed to acquire land not part of the highway and for which they could have been held to ransom, in a similar fashion to the reference land. It is not for me to determine this issue definitively but to examine it to see how it would have affected the negotiations and the bid of a purchaser of the reference land in April 1996.
265. The essential questions are: was the land to the south or south east of a fence (i.e. on the Dyffryn Dowlais side of the highway) part of the public highway in April 1996, and, if not, would the highway authority have required the Dyffryn Dowlais owners to pay a ransom value for access or on the purchase of this land to form part of the junction. It is not in dispute that this land was conveyed to the former Glamorgan County Council in March 1968, to be dedicated to form part of the highway and that between 1968 and 1974 works were carried out on part of the land and a fence was erected. I have been referred to four authorities by Mr Horton.
266. In Marshall v Blackpool Corporation it was confirmed that the owner of land adjoining a highway has a right of access to that highway from any part of his premises. This right is not in dispute in this reference.
267. In R Northamptonshire County Council ex p Commission for New Towns the Commission sold land to the County Council for highway purposes and reserved rights of way over roads to be constructed on the land. They also constructed a ramp on the property to connect to any adjoining roundabout. A road was never built on the land sold. The land became essential access to development land owned by the Commission and for which the Council demanded a ransom payment.
268. It was held that, although there was not a public highway on the land with rights of access reserved to the Commission, they had a legitimate expectation to access to the land for highway purposes without paying a ransom sum. At the time of the conveyance in 1975 it was plain that the Council would build a road to the Commission's land and the roundabout was constructed to enable a road to be built over the land leading to that land. There was no evidence that the parties ever changed their intention to provide a link to the Commission's land. The Commission could legitimately expect that access would be provided on the original terms.
269. This case can be distinguished from the current reference on the facts. There is no evidence that the 1968 deed of exchange was in any way connected with access from the Dyffryn Dowlais site onto the A473. There is no evidence that Mr Jenkins had any expectation that he would be able to connect future residential development on Dyffryn Dowlais to the A473 at this point. As far as I am aware, and certainly on the evidence, Dyffryn Dowlais was first allocated for residential development in the 1976 Local Plan, although this showed the A473 access at the Hospital entrance. I do not think that a purchaser of the reference land in April 1996 would have relied on a legitimate expectation that he would be allowed to access the Dyffryn Dowlais site opposite the Hospital entrance over Council land without ransom.
270. In R v Warwickshire County Council ex p Powergen Plc Powergen obtained a planning permission on appeal which required highway works to be carried out before the site could be used. The County Council as highway authority had opposed the grant of planning permission on highway grounds and subsequently refused on the same grounds to enter into a section 278 agreement with Powergen to allow the works to be carried out. These objections had been rejected by the inspector on appeal. The Court of Appeal dismissed an appeal from the decision of the court below that the County Council's refusal to enter into a section 278 agreement was unlawful, unreasonable and perverse.
271. This decision was given after the valuation date but even if it had been known to a purchaser of the reference land, I do not think that it would have reassured him regarding the possibility of ransom at the Hospital access. He would have known that, if he obtained planning permission on appeal for development of the Dyffryn Dowlais site with this access, the Council could not have refused to enter into a section 278 agreement to allow him to carry out the junction improvement works. But the question of ransom would still have remained if some Council land was needed for the works. I do not think that a purchaser of the reference land would have seen Powergen as of assistance in combating such a demand.
272. Finally, I was referred to Secretary of State for the Environment, Transport and the Regions v Baylis (Gloucester) Limited. This decision was also given after the valuation date and would not have been known to a purchaser of the reference land in April 1996. As far as the issues in this reference are concerned, however, it appears to be essentially a restatement of the existing law. The relevant issue in Baylis was whether land adjoining a highway had become part of that highway under a memorandum of agreement dated 17 January 1964.
273. The Deputy Judge (Kim Lewison QC) said that under the common law the existence of a public highway could only be established by proving dedication by the owner and acceptance by the public. The modern law of highways began with the Highways Act 1835. This did not abolish the twin requirements of dedication and acceptance but introduced a second stage, adoption, before a highway became maintainable at public expense. This remains the position today (at 328).
274. He considered the agreement of January 1964, the works carried out on the land and the relevant statutory provisions, and reached two conclusions. The first was that the agreement amounted to a dedication of the disputed strip as a highway maintainable at public expense. The second was that the dedication had been accepted, either by the memorandum itself or by subsequent public use of part of the disputed land and/or the activities of the highway authority (including mowing the grass on the land twice a year) (at 340).
275. If this decision had been known to a purchaser of the reference land in April 1996 it might have given him some encouragement to think that the whole of the land conveyed by Mr Jenkins in March 1968 had become part of the public highway and that therefore a ransom situation could not arise. Access to the A473 could be taken from the Dyffryn Dowlais site as of right (see Marshall).
276. Looking at the matter objectively, however, which it should be assumed would have been the approach of a purchaser of the reference land asked to pay a large sum in ransom or key value, the position at the Hospital entrance was not the same as in Baylis. The agreement in that case stated that the owners "hereby forthwith give up and dedicate to the public" the land "for the purpose of improving the highway" to the intent that the land "shall be added to and form part of the highway." Under the agreement the County Council agreed to carry out highway works but these were never executed. The Deputy Judge placed emphasis on the words "hereby forthwith … dedicate" which he said indicated an intention to dedicate immediately. Although the agreement contemplated that works would be carried out in the future there was no link between that obligation and dedication, except to the extent that the works were part of the consideration for the dedication (at 329). The deed of 29 March 1968 in this reference, however, had different wording. The woodland was conveyed "to the intent that the same may henceforth be dedicated." In my judgment, the use of the word "may" (and not "shall") casts doubt on any intention to be an immediate dedication or acceptance under the deed (as in Baylis).
277. As to acceptance by works or public use at the Hospital entrance, it is agreed that the works were carried out on part of the woodland conveyed. Works on the north or north western side of the fence erected were clearly highway works and this land has become part of the public highway. There is, however, no agreement as to whether works were carried out on the south eastern (or Dyffryn Dowlais) side of the fence. This land is clearly part of the land conveyed (and now owned by the Council) but it is in dispute whether it has become part of the highway. There is no evidence of public use of this part of the land.
278. Highway works were carried out between 1968 and 1974 on part of the land conveyed. If those works could amount to acceptance of dedication on part of the land, the question is whether the use of part of dedicated land can amount to acceptance of the whole? In Baylis the Deputy Judge, basing his decision on Tottenham Urban District Council v Rowley [1912] 2 Ch 633, decided that it could. It may well have been therefore that the works on the clearly defined area adjoining the highway opposite the Hospital entrance operated as acceptance of dedication of the whole of the land. There is, however, no resolution or documentary evidence (at least none was put before me), that the Council believed the land to the south east of the highway fence line had become part of the public highway.
279. The matter is not, and was not in April 1996, clear. The Dyffryn Dowlais owners may have been able to gain access to the A473 opposite the Hospital entrance as of right (subject of course to planning permission) but, conversely, they may have been faced with a claim by the Council that they owned a ransom strip. This may have arisen due to their opposition to access at this point on planning grounds. I cannot accept that the Council would have waived any right to a ransom payment if one could be substantiated. Local authorities are always in need of extra funds; I accept Mr Nardecchia's submission that the Council were under a statutory duty to obtain a consideration not less than the best that can reasonably be obtained (see section 123(2) of the Local Government Act 1972).
280. Overall, the position in April 1996 regarding access was as follows. The Council's favoured location for access from the Dyffryn Dowlais site on to the A473 was at the Pen Yr Eglwys junction. There was no likelihood that access opposite The Croft would be permitted. There was a remote possibility that access opposite the Hospital entrance would be permitted. I cannot find that it should be entirely eliminated; it would be considered on its merits; but no more encouragement than this had been given. It would have been contrary to planning policies to allow an access to the Dyffryn Dowlais site at this point. There may have been a ransom situation at the Hospital entrance. If the Council could show that not all of the land conveyed in March 1968 had become part of the public highway, they would have owned land outside the highway which formed the key to junction improvement works at this point and, having regard to their statutory duty, would have sought a ransom payment. If the decision in Baylis had been known at the valuation date the purchasers of the reference land may have been encouraged to think that they could rebut a demand for ransom.
281. In these circumstances, the final question is what proportion of uplift would a purchaser of the reference land have paid, 33% as suggested by Mr Llywelyn (on the assumption that the Hospital access was available) or 50% as suggested by Mr Gibbon (on the assumption that no other access than Pen Yr Eglwys was ever considered or would receive consent), or a figure within this bracket? Clearly, the chances of obtaining planning permission for Dyffryn Dowlais with access to the A473 opposite the Hospital entrance were poor and the percentage should therefore be at or close to Mr Gibbon's figure. I have found that there was a remote possibility that access opposite the Hospital would have been allowed at the valuation date and that a ransom at this point might have been resisted. I adopt 45% of the uplift in the value of the Dyffryn Dowlais site as attributable to the reference land. This gives the land a value of £1,139,030, say £1,139,000.
282. My valuation is as follows:-

	£	£
Dyffryn Dowlais site
Residential: 32.92 acres @ £230,000 per acre		7,571,600
Public house site: 1.73 acres @ £145,000 per acre		250,850
		7,822,450
Less: 11.25% for quantum		880,026
		6,942,424
Less: for lack of planning permission, 10%	694,242
Less: abnormal costs	3,442,000	4,136,242
Value of Dyffryn Dowlais site	2,806,182	2,806,182
Less: existing use value		275,000
Increase in value		£2,531,182
Reference land
Allocate 45% of increase in value of Dyffryn Dowlais site to reference land, 45% of £2,531,182 =	£1,139,032	£1,139,032
Value of land, say	£1,139,000	£1,139,000

283. I determine that the market value of the freehold interest in the reference land under section 5(2) of the Land Compensation Act 1961 as at 27 April 1996 was £1,139,000 (one million and one hundred and thirty-nine thousand pounds). This is the compensation payable to the claimants for the compulsory acquisition of this land.
284. This decision determines the substantive issues in this reference. It will take effect as a decision for the purposes of an appeal when the outstanding issue of costs has been determined. 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 representations in writing.

Dated 28 September 2004

(Signed) P H Clarke

ADDENDUM

285. I have received written submissions on costs. The claimants seek their costs on the grounds that they are the successful party and the sum awarded is greatly in excess of two sealed offers made by the Council. They ask for their additional costs as a result of the Council's failure to lodge a skeleton argument until after the start of the hearing to be on the indemnity basis. The Council do not dispute that costs should normally follow the event but ask that there should be a proportionate reduction in the costs award because the original claim was approximately £2.3m compared to the compensation determined at about £1.1m. This was a genuine dispute and the Council did not act unreasonably.
286. I agree with the claimants that they should receive all their costs. The general rule is that a claimant whose land has been compulsorily acquired and who is successful in obtaining an award of compensation above an unconditional offer should receive his costs in the absence of some special reason to the contrary (Purfleet Farms Limited v Secretary of State for the Environment, Transport and the Regions [2003] 1 P & CR 324). The claimants have been awarded compensation reasonably close to the figure they put forward at the hearing and greatly in excess of two offers by the Council. I cannot accept that the difference between the original claim and the award (or the sum put forward at the hearing) is a special reason for depriving the claimants of part of their costs. The figure spoken to by Mr Gibbon at the hearing was included in his expert report served on the Council in April 2003, a year before the hearing. I cannot accept that the Council were prejudiced or incurred additional or wasted costs due the revision of the original claim.
287. I also agree that the claimants should receive on the indemnity basis any wasted or additional costs incurred in consequence of the Council's failure to provide a skeleton argument before the hearing. On 31 May 2002 I issued a direction that skeleton arguments shall be exchanged and lodged seven days before the hearing. The hearing dates were fixed in December 2003. No skeleton was lodged on behalf of the Council by the start of the hearing. Mr Nardecchia helpfully agreed to continue but on the second day, during Mr Horton's cross examination of the claimants' first witness, it became clear that the lack of a skeleton was creating difficulties for the witness, the claimants and the Tribunal. The Council's case, of some complexity, was largely emerging in questions put in cross examination. With the agreement of both counsel I adjourned the hearing to allow the missing skeleton to be lodged: promised for what would have been day three of the hearing but eventually lodged late in the afternoon of the next day. Effectively two days of the hearing were lost due to the Council's failure to comply with the direction of May 2002. I was told by Mr Horton that he was not fully instructed until 8 April, only 11 days before the start of the three week hearing with Easter intervening. In these circumstances I can see no reason why the claimants should not recover any wasted or additional costs on the indemnity basis due to the Council's default.
288. Accordingly, I order the Council to pay the claimants' costs of this reference, such costs, if not agreed, to be the subject of a detailed assessment by the Registrar of the Lands Tribunal on the standard basis, save for any wasted or additional costs incurred by the claimants in consequence of the Council's failure to serve a skeleton argument and list of cases not less than seven days before the hearing, which costs (unless agreed) shall be assessed on the indemnity basis.

Dated 10 November 2004

(Signed) P H Clarke