England and Wales Lands Tribunal

[2004] EWLands BNO_14_2004 (19 November 2004)

BNO/14/2004

LANDS TRIBUNAL ACT 1949

BLIGHT NOTICE – land protected from development by proposals for a relief road – whether blight notice and counter-notice valid and if counter-notice valid, whether that objection to blight notice well founded – determined blight notice and counter-notice valid but counter- notice not well founded – Town and Country Planning Act 1990 sections 150(1)(b) and (c) and 151(4)(g)

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN

JUANITA LORRAINE GENNARD

Claimant

and

BRIDGNORTH DISTRICT COUNCIL Respondent

Re: Northgate Garage, Northgate, Bridgnorth,

Shropshire WV16 4EX

Before: P R Francis FRICS

Sitting at: Telford County Court

Telford Square, Malinsgate, Telford, TF3 4JP

on

10 November 2004

M J Cooksey, for the claimant with permission of the Tribunal.

T Clark, Head of Legal Services, Bridgnorth District Council, for the respondent.


 


DECISION

1. This is a reference under section 153(1) of the Town and Country Planning Act 1990 ("the 1990 Act") to determine whether the objection of Bridgnorth District Council ("the respondent") served under section 151 of the 1990 Act on 11 February 2004 to the Blight Notice served by Mrs J L Gennard ("the claimant") under section 150 of the 1990 Act on 19 December 2003 is well founded or justified. The original notice related to land and buildings at Northgate Garage, Northgate, Bridgnorth ("the subject property") and asserted that the whole of the property was blighted land within paragraphs 2 or 13 and 15 of Schedule 13 to the 1990 Act. The land is shown as being affected by a proposed new highway in the Bridgnorth Local Plan which was adopted by council resolution in September 1994. The counter-notice objected to the notice under section 151(4)(g) of the Act on the ground that the conditions specified in subsection (c) of section 150(1) of the Act have not been fulfilled.
2. Section 150(1) states:

"150-(1) Where the whole or part of a hereditament or agricultural unit is comprised in blighted land and a person claims that-

(a) he is entitled to a qualifying interest in that hereditament or unit;

(b) he has made reasonable endeavours to sell that interest [or the land falls within paragraph 21 or paragraph 22 (disregarding the notes) of Schedule 13 and the powers of compulsory acquisition remain exercisable]; and

(c) in consequence of the fact that the hereditament or unit or a part of it was, or was likely to be, comprised in blighted land, he has been unable to sell that interest except at a price substantially lower than that for which it might reasonably have been expected to sell if no part of the hereditament or unit were, or were likely to be, comprised in such land,

he may serve on the appropriate authority a notice in the prescribed form requiring that authority to purchase that interest to the extent specified in, and otherwise in accordance with, this Chapter."

Under section 151(4)(g) of the 1990 Act the grounds upon which objection made in a counter-notice to a notice under section 150 include:

" (g) that the conditions specified in paragraphs (b) and (c) of section 150(1) are not fulfilled".

3. "Blighted Land" is defined in section 149(1) as land falling within any paragraph of Schedule 13. The respondent accepts that the land was blighted. It was not disputed that the claimant has a qualifying interest in the subject premises (section 150(1)(a)) and, during the course of the hearing, the respondent accepted that the claimant had made reasonable endeavours to sell her interest, thus satisfying paragraph (b). However, it was the respondents case under (c) that even if the notice was not deemed defective by the claimant's failure to mention that she had been unable to sell the land at a figure that, were it not for the blight, might have been achieved, the reason she had failed to sell the land was due to her aspirations as to value being excessive. The value being ascribed to the property was based upon a residential development scheme that was unacceptable in planning terms and could never, in reality, be achieved. The claimant argued that were it not for the blight, there was every likelihood that a sale which had been agreed at £750,000, subject to planning, would have proceeded to completion. In determining the issue, therefore, if I do not accept the respondent's initial argument, I need to consider the evidence relating to the alleged value of the land.
4. However, in doing so, I consider it would be helpful here to restate what was said to Mrs Gennard in a letter from the Tribunal dated 26 April 2004 in connection with the respondent's application for the matter to be dealt with as a preliminary issue (which was refused). The letter said (in part):

"In blight notice proceedings the claimant's interest is not valued for the purpose of assessing compensation. The effect of a decision in the claimant's favour is that the council would be deemed to be authorised to acquire the interest compulsorily and to have served notice to treat. The proceedings are at the acquisition stage, and the question of compensation, if it arises, only arises later."

Therefore, any reference to the value of the land (whether it be specific, or a range of values) in this decision is solely for the purpose of determining the issue at hand and, if I were to find for the claimant, not for determining the compensation to be paid to her.

5. Mr Cooksey said in opening that, aside from the arguments in respect of the claimant's reasons for objecting to the counter- notice, that notice was, in any event, invalid. He pointed out that the wording in it said: "The ground on which objection is taken is, under section 154(1)(g) of the said Act, that the conditions specified in subsection (c) of the section 150(1) have not been fulfilled." Section 154(1)(g), he said, refers to subsections (b) and (c), and by omitting reference to (b) the exact wording that was required by statute had not been followed. He said that (b) and (c) were conjoined by the word "and" and could not, therefore, be taken in isolation. Mr Clark said in response that the notice was served under section 151(4)(g) and that in turn referred to both (b) and (c) of section 150(1). There was nothing, he said, to stop the council taking issue with only one of those subsections.
6. I determined this preliminary question in favour of the respondent. It is clearly not the effect of para (g) that objection can only be made if both of the conditions (b) and (c) are not fulfilled. The authority may object on the basis that one or other of them is not fulfilled, and, if they do, it is obviously desirable that the counter-notice should identify which is the condition they say is not fulfilled. That is what the counter-notice in this case did - it said that (c) was not fulfilled. Mr Cooksey's contention that, to be valid, it should also have said that (b) was not fulfilled, even though the authority might accept that it was fulfilled, is unsustainable. The counter notice was, in my judgment, valid.
7. Mr William George Parr is the claimant's father, and produced a witness statement setting out the history relating to her ownership of the land, and the sequence of events that led to the blight notice being served. His evidence was not challenged, and he was not called for cross-examination. Mr Parr explained that he was a director of W G Parr (Properties) Ltd and, as former owner of the subject property, had sold it to Carter Developments Ltd ("Carter") in 1999 as they were undertaking a land assembly exercise in connection with a major supermarket development scheme that included construction of the Whitburn Street – Northgate link road. That proposed road was to run alongside the western boundary of the subject property. During the negotiations for the sale, Carters indicated that they also wished to buy the car park to the rear of, and serving the Bear Inn which was owned by the claimant. As the Northgate Garage land was not, in fact, needed and was also surplus to the relief road requirements it was agreed to transfer the subject property to Mrs Gennard in exchange for the pub car park, and that transaction took place on 29 November 1999. The land was to provide 18 parking spaces for the pub and did so until the claimant disposed of the Bear Inn on 16 July 2001.
8. Mrs Gennard retained the subject property, but as it was now surplus to requirements, she asked Mr Parr to market it for her. He said that the Bridgnorth Local Plan Policy BRID 19 adopted in September 1994 included the words: "Proposals for office and/or residential development of land at Northgate Garage not required for highway or other purposes will normally be permitted." Policy TT1 said: "Routes of the following proposed new roads will be protected from development:- Whitburn Relief Road." However, as the line of the road had been altered in the Carter scheme and did not affect the subject property, this was not seen as a constraint. As a consequence, he contacted Emco Contracts Ltd who in an offer letter to the claimant dated 22 February 2002, agreed to purchase the land in the sum of £750,000 subject to contract and subject to receipt of planning permission for a proposed 3 storey development of 17 flats.
9. To the surprise and disappointment of the proposed developer and the claimant, Emco's outline application was refused on 17 June 2002 for the following reasons:

1. The siting of the proposed development would be on land safeguarded for the construction of the Whitburn Street Relief Road and would prejudice options for the provision of that road, contrary to Local Plan policy TT1.

2. The proposed access arrangements in the absence of the proposed road shown on the scheme drawings are inadequate and unsatisfactory due to the narrow width and alignment of the available land and would be likely to give rise to conditions detrimental to highway safety and would detract from the residential amenities of the adjacent flats, contrary to Local plan policy D1.

3. The siting of the proposed development would be likely to detract from the Bridgnorth Conservation Area and its setting due to the wide span of the archway to the building, the square gable end adjacent to 20 Northgate and the lack of information on the design and external appearance of the proposed flats to illustrate that the siting proposed would not unduly constrain flexibility at the design stage to ensure that the development did not harm the character and appearance of the Conservation Area or the visual amenities of the area.

The proposed development would prevent vehicular access from Northgate to a large area of land containing lock-up garages and a commercial garage building, prejudicing the use of these buildings and future options for this visually important land adjoining the Conservation Area.

10. Mr Parr said that as a result of the uncertainty caused by this refusal, Emco decided not to appeal and also advised him that approaching other builders would be "a waste of time". By this time, Carters had gone into administration, so there was no opportunity to sell the land back to them. He said that he continued to monitor developments relating to the proposed adjacent supermarket development and it was evident there was considerable interest. He had negotiations with both Sainsbury's and Somerfield Stores but no offers were forthcoming. In late 2002 he was approached by Mercian Developments Ltd who appeared to be in the market to set up a supermarket development site and then sell it on. They offered £700,000 and requested an option to buy at that price. In November 2002 an option agreement for three months was entered into between Mercian and the claimant in the sum of £5,000. It was renewed once for a further 3 months at another £5,000 but subsequently lapsed. Immediately following the lapsing of the option, on 30 April 2003, an offer was received from Richard Baddeley & Co, Chartered Surveyors who were then acting for Mercian at a price of £118,427. Mr Parr said that that offer was rejected as a "try on".
11. Mr Robin Nettleton FRICS is a chartered surveyor, and senior partner in Nock Deighton, Auctioneers, Valuers and Surveyors of Bridgnorth. As the claimant's expert he produced a valuation of the land as at December 2003, the date the blight notice was served on the council. Having an intimate knowledge of the area, and having inspected the subject property and considered the application for residential development submitted by Emco, he concluded that the site clearly demonstrates the ability to provide a development of seventeen 1 and 2 bedroom flats – even if the access has to be altered to Northgate rather than the new relief road that has not yet been built. Having regard to sales of comparable properties at Lavington Court, St Mary's Court and 58/59 High Street, Bridgnorth he produced a residual valuation that gave a site value for residential purposes. In his view, the reasons for refusal of the Emco application relating to design, access and Conservation Area concerns were matters of detail that were capable of resolution. It was to be noted that the planning officer did not suggest anywhere in his arguments for refusal that the proposal constituted an over-development of the site. The valuation was thus:

17 units at an average resale price of £132,500 =	£2,252,500
Less
Build cost 1,105 sq m (total) at £650 per sq m	£ 718,250
Finance cost, say	£ 135,000
Marketing and fees, say	£ 120,000
Development profit, say 20%	£ 450,000
Contingency	£ 22,000
	£1,445,250
Residual value	£ 807,250

Mr Nettleton said that a "prudent" value for the site was £765,000 at December 2003, thus supporting the offer that had been initially received from Emco in 2002.

12. Mr Nettleton said that Mercian and Tesco Stores Ltd had eventually submitted a revised planning application for a retail food store, a retail non-food DIY store, construction of car parking and the Whitburn Street – Northgate Link Road. That application included the subject property. In October 1993 the application was presented to the Special Development Control Committee with a recommendation to grant permission subject to a referral to the Secretary of State as a departure, a section 106 Agreement and conditions. The subject property was an essential part of the scheme being required in its entirety to provide a servicing area for one of the new stores and the new line of the relief road.
13. It was clear, therefore, Mr Nettleton said, that the site has been blighted following the refusal of planning permission for residential development, with the best offer forthcoming being £118,427 against a true value of in excess of £750,000.
14. In cross-examination, whilst accepting that in his residual valuation he may not have allowed sufficient for communal areas, he insisted that his construction costs were for a high quality development that reflected its location immediately adjacent to the Conservation area. The fact that the indicative plan in Emco's outline application showed access off the proposed relief road, and in the 'no-scheme world' that road would not exist was not, Mr Nettleton said, be insurmountable. He had taken advice from an architect, Roger Tweedale, who was confident that the site, even with access off Northgate, would support at least 17 units – possibly up to 2 more. In terms of his valuation, Mr Nettleton said that if he were instructed to offer the subject property in the market for residential development in an un-blighted state, he would have builders 'beating down his door' at that sort of price.
15. Mr Cooksey said in closing that it was inconceivable that anyone in their right mind would enter into an option to purchase (as Mercian had done) at a cost to them of at least £10,000 if they did not genuinely intend to proceed to purchase at the agreed price. Also, Emco had agreed a purchase price of £750,000 on the premise that planning permission would be forthcoming for the envisaged development. Again, they would not have gone to the trouble and expense of submitting such an application if they did not think there was a chance of it succeeding – and if it had, that was the price they were prepared to pay.
16. Mr Anthony Haddock MRICS is an associate director in Thomas Lister, Chartered Surveyors of Birmingham, and has 14 years experience in dealing with compulsory purchase and compensation valuations. On the instructions of the council he produced a valuation and comments in response to Mr Nettleton's appraisal. He said that it was his understanding that the subject property was traversed by a right of way to land at the rear, and any development proposals would have to take this into account. The access off Northgate was inadequate and even if a re-design to move the access point from the relief road (shown in the Emco application) was feasible, the provision of 17 units on a site that extended to only 0.15 acres would be a massive over-development. According to Mr Nettleton's calculations each unit would average no more than 562 sq ft of accommodation which was small, especially for 2 bedroom units. The site is also partly within the Conservation Area, and immediately abuts two Grade II listed buildings. Mr Nettleton's build costs were, therefore, understated in Mr Haddock's view. He also said that Mr Nettleton had not given specific comparable sale prices to justify his estimated average resale price of £132,500 per unit and in his opinion, more realistic figures were £101,250 for 1 bedroom units and £120,000 for 2 bedroom flats.
17. Mr Haddock went on to say that Mr Nettleton's residual valuation had not taken account of design fees, site decontamination costs (for which he thought a provisional sum should be applied), a contribution to the cost of the relief road (£30,000) and to art and development (Local Plan policy P10) or stamp duty and acquisition fees. Mr Nettleton's other costs were, he thought, reasonable. Mr Haddock's assessment of the value using Mr Nettleton's figures, and his own additions brought the residual value to £761,000 which he accepted was close to Mr Nettleton's final figure. However, it was his case that the site would only support a maximum of 10 flat units and his own residual valuation on this basis amounted to £120,000.
18. In cross-examination, Mr Haddock accepted that he had little if any experience of the residential market in Bridgnorth, and he acknowledged the fact that a developer had agreed to pay £750,000 for the land if planning permission for 17 units was obtained. He also acknowledged that no third party right of way existed across the land, but said that the restrictions on development of the site caused by the relief road meant that, in any event the site could not support the extent of development envisaged by Mr Nettleton. However, he conceded that if it were not for the blight, there would be no contribution to the relief road. In that case his valuation became £150,000 which, he had to concede, was significantly more than had been offered by Richard Baddeley & Co. It was also pointed out to Mr Haddock that none of the site falls within the Conservation Area, although it does immediately abut it.
19. Mr Paul Walker is Director of Development Services at Bridgnorth District Council. He explained that whilst it was the council's view that the notice served by the claimant was 'generally' in prescribed form, and stated that reasonable endeavours had been taken to dispose of the property, the notice did not state, as it clearly should have done, that the claimant had been unable to sell her interest in the subject property at a price substantially lower than that which it might reasonably have been expected to sell. In view of the deficiency in the notice the council served a counter-notice on the basis that the claimant had failed to fulfil the conditions specified in subsection (c) of section 150(1) of the 1990 Act. He said that if I were not minded to accept that view, the following should be taken into account.
20. The planning policies applicable to the subject property under the Bridgnorth District Local Plan are considered to include H1: Settlements appropriate for new house building; CN5: Setting of listed buildings; CN6: New building in Conservation Areas; CN20/21: Archaeology; TT1 Route safeguarding of new roads; BRID19; Northgate Garage redevelopment and BRID21: Bus standings and passenger facilities. Mr Walker said that whilst it is not disputed in policy terms that the subject property could in principle be used for residential purposes, careful consideration should be given to the reasons for the refusal of the Emco application (the number of units proposed therein being the basis for Mr Nettleton's valuation). It was Mr Walker's view that the scheme as presented was of poor quality. Were an application to be pursued it would have to be of substantially better quality bearing in mind the land immediately adjoins the Conservation Area. The reasons for refusal concerning matters of design, access and Conservation Area would not be capable of resolution as simply as Mr Nettleton had suggested, and a very much higher quality proposal would have been required. Thus his residual valuation was considered to have been built on unsafe foundations, and could not be justified. No revised application has been submitted, and the applicant made no attempts to appeal the council's decision.
21. In cross-examination, Mr Walker accepted that there had been no indication given in the reasons for refusal that the Emco proposals were considered to represent over-development of the site but, he said, the concept of over-development is not specifically enshrined in Town and Country planning law.

Conclusions

22. Firstly, I deal with Mr Walker's initial argument that the claimant's failure to specifically state in the original blight notice that she had been unable to sell the property at a price other than one that was substantially below its market value made the notice defective. Under section 150(1) a blight notice must be in the prescribed form (Schedule 2 to the Town and Country Planning Act General Regulations 1992). Para 4 of that Schedule provides for it to be stated:

"4. (1) [EITHER] I/We have made reasonable endeavours to sell my/our interest in that property, and details of those attempts are set out in [Schedule 3 to/the letter accompanying this Notice. [OR] The powers of compulsory acquisition relevant for the purposes of paragraph 21/22 of Schedule 13 to the Act remain exercisable.

(2) In consequence of the fact that [part of] the hereditament/agricultural unit was, or was likely to be, comprised in blighted land, I/we have been unable to sell my/our interest except at a price substantially lower than that for which it might reasonably have been expected to sell if no part of the hereditament/unit were, or were likely to be, comprised in blighted land."

The notice served by the claimant said:

"4. I have made reasonable endevours (sic) to sell my interests in that property and details of those attempts are set out in Schedule 3 to this notice.

5. I therefore require you to purchase my interest in the property…."

Schedule 3 set out details of the attempts that had been made to sell the interest.

23. The notice thus omitted para 4(2), and the question is whether that omission renders the notice invalid. In my judgment it does not do so for the reason that the notice in all other respects told the council what it needed to know, and it could assume that the claimant was relying also on para 4(2) particularly so as she had given some detail about her attempts to sell in Schedule 3 of the notice. It is in my view self-evident that, having confirmed that she had made reasonable endeavours to sell to three different parties, and having advised the council that she required them to purchase the property, the claimant had been unable to sell at anything other than a price which was less than would have been achieved had the property not been blighted.
24. I now turn to the principal issue. The question is simply, it seems to me, was the offer from Richard Baddeley & Co at £118,427 (the "benchmark" figure that I referred to at the hearing) a figure that, were it not for the blight, one which would have been exceeded? From the evidence, I conclude that the Baddeley offer, being the product of what has been accepted as the claimant's reasonable endeavours to sell, was the best price obtainable in the circumstances. Mr Cooksey submitted in closing that Mr Haddock's admission that his valuation of the land should have been stated as £150,000 because he should not have allowed a £30,000 contribution to the relief road, proved the claimant's case without the need even to consider Mr Nettleton's valuation. He said that, although nowhere near the value attributed to the land by Mr Nettleton, that revised valuation was some 26% more than Baddeley's offer, and it was accepted by Mr Haddock that that was "significant". I deal with Mr Cooksey's submission on this point later.
25. I find I can attach little weight to Mr Haddock's evidence. His opinion that the subject property could only support a maximum of ten units did not appear to be based upon any detailed analysis of the site's potential and seemed to me to be a 'stab in the dark'. Mr Nettleton's residual valuation was constructed from the plan that had been submitted with the Emco application and I acknowledge that, in terms of sites such as this, he has substantial local knowledge. Whilst I am mindful of the council's arguments regarding the merits of the application and tend to agree that to cram 17 units on such a small area of land and provide the necessary communal areas, parking and access requirements (Mr Nettleton having admitted that his allowance for communal areas may have been insufficient) was optimistic, I do think that a revised scheme for more than 10 but less than 17 units would have found favour. In reaching that conclusion, I also take account of the fact that there was no indication in the refusal or the planning officer's report to the council that the number of units shown on the indicative plan submitted with the application was more than the site could reasonably accommodate.
26. The council has acknowledged that the subject property could reasonably be utilised for residential purposes, and there is no doubt in my mind that, for the reasons given above, had a revised application been submitted for a high quality and sympathetic (to the Conservation Area) scheme for say 12 – 15 units, a permission would have been forthcoming. The value of the land would therefore be significantly more than Mr Haddock was suggesting (even in his revised valuation) and very much closer, in my view, to the sum that was originally offered by Emco. Even if I were proved to be wrong, and the site could only, indeed, accommodate 10 units as suggested by Mr Haddock, and his revised valuation were correct (which for the above reasons, I do not think it was) that figure is significantly more than the "best offer" obtainable. Thus, I conclude that Mr Cooksey's submission on this point is correct, and the claimant's case is proved.
27. It follows that I am satisfied the claimant has shown that the respondent's objection to the blight notice is not well founded, and the objection is therefore not upheld. This decision determines the substantive issue in this reference and shall take effect when, and not before, the question of costs has been determined. A letter accompanying this decision sets out the procedure for costs submissions in writing.

DATED 19 November 2004

(Signed) P R Francis FRICS

ADDENDUM

28. I have received formal submissions on costs from the compensating authority and, details of costs incurred from the claimant. The compensating authority said that this was a case where there should be no order for costs, or alternatively, if I find the claimant should have her costs, only a partial award should be made.
29. It is clear from the substantive decision that the claimant succeeded, and there are no grounds, in my judgment, for her being deprived of her reasonable costs in the reference. I therefore determine that the compensating authority shall pay the claimant's reasonable costs, such costs, if not agreed, to be subject to a detailed assessment by the registrar.

DATED 4 January 2005

(Signed) P R Francis FRICS