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England and Wales Lands Tribunal
You are here: BAILII >> Databases >> England and Wales Lands Tribunal >> Land & Property Ltd v Restormel Borough Council [2004] EWLands LCA_47_2002 (9 August 2004)
URL: http://www.bailii.org/ew/cases/EWLands/2004/LCA_47_2002.html
Cite as: [2004] EWLands LCA_47_2002
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- This is a reference to determine the compensation payable following the modification of a planning permission by the deletion of non-food retail use from the permitted development.
- Guy Roots QC and Reuben Taylor appeared for the claimants and called: (i) Peter Lacey BSc BArch RIBA, chairman of Lacey Hickey and Caley Limited, an architectural practice in Exeter and Plymouth; (ii) David Ian Stewart MA DipTP MRTPI, principal of David Stewart and Associates, a chartered town planning consultancy of Cullompton, Devon; (iii) David Anthony Tucker MSc CEng MICE MIHT, principal of David Tucker Associates, transportation planning consultants of Wilmcote, Warwickshire (incorporating the evidence of Martin Brady IEng MCIT MILT AMICE, director of Will Gannon and Smith Consulting Engineers Limited); (iv) Rodney Geoffrey Ovenden MA FRICS, a partner of Gerald Eve, chartered surveyors of London W1 and elsewhere.
- Christopher Katkowski QC and James Maurici appeared for Restormel Borough Council ("Restormel") and called: (i) Philip Lawrence Mason BSc DipTP MRTPI, formerly development control officer and now planning and control manager of Restormel Borough Council; (ii) Carl John Tonks BSc MSc MIHT, an associate director of WSP Development Limited, development transport and infrastructure consultants of Bristol; (iii) Edward William Cussen BSc FRICS, a partner of King Sturge, international property consultants, in Bristol.
- I have made an accompanied inspection of the reference land and the surrounding area; Trago Mills discount shopping centre; Atlantic Village factory outlet centre near Bideford and the town centre of Bideford.
- The parties have helpfully prepared a comprehensive statement of agreed facts and issues and trial bundles. From these documents I find the following facts.
- The reference land forms part of Victoria Business Park, situated in the district known as Victoria, close to the village of Roche in Cornwall. The nearest towns are Bodmin, St Austell, Newquay and Truro.
- Victoria Business Park occupies former farmland lying between the branch railway line to Newquay, with a station at Roche, and the A30 trunk road. The total site area is 49 acres (20 hectares). It was developed from the early 1970s, first with small units and then with some English Estates units built in the 1980s, with most of the remainder of the built area developed in the late 1980s and early 1990s with large industrial buildings, including units now occupied by St Merryn Meat Limited, St Ives plc, Westaway Plant, Brake Brothers, and Finnings. There are 13 buildings with a total gross floor area of 363,500 sq ft (34,000 sq m) on 29.65 acres (12 hectares) of land, employing about 1,250 people. Although the site of the Business Park is flat, it is on high ground and the buildings are visible from a wide area, including from some distance along the A30. A programme of landscaping and planting around the boundaries of the Business Park (the Cinderella Project) has been undertaken with European funding.
- Victoria Business Park is bounded on the north-west by the A30 trunk road. Access is from the B3274, which joins the A30 and then leads to an estate road in the form of a loop off the B3274, which it rejoins further south towards the village of Roche. Close to the junction of the B3274 and the A30 are various roadside, leisure, retail, office and industrial uses fronting the A30, including petrol filling stations, the Silken Ladder factory shop, Magnet joinery showrooms, a Little Chef and the Victoria Inn and Motel.
- The reference land has a total site area of 15.279 acres (6.183 hectares) including the estate road. It is in two parcels bisected almost equally by the northern arm of that road. The northern parcel has an area of 7.313 acres (2.959 hectares), bounded on the north-west by the A30, on the south-west by the estate road and on the west by the B3274 and junction with the A30. The parcel to the south has an area of 7.266 acres (2.939 hectares). It has two frontages to the estate road (north and south) and to the west to the B3274.
- The reference land is vacant and the claimants hold the freehold interest, with a good and unencumbered title, free from unusual or onerous restrictions, covenants or easements. After the valuation date (8 March 2000) parts of the land were sold.
- On 13 February 1987 application was made for outline planning permission for the "construction of retail store with associated access roads, landscaping and car parking" on part of the Cornwall Retail and Distribution Park, Victoria, Roche (application 87/16/00211). This application was treated as withdrawn on 11 October 1990.
- On 21 February 1990 a section 52 agreement was entered into which referred to four applications. Before any of the development referred to is brought into use, alterations to the B3274 were to be completed and a new foul water pumping station and rising main were to be constructed. Three areas were annotated "retail or industrial" and one area showed the layout and sizes of five units. This agreement superseded an earlier agreement dated 28 July 1986.
- On 12 November 1990 conditional planning permission was granted for the "erection of non-food retail units with associated car parking, etc" at Cornwall Retail and Distribution Park, Victoria, Roche (application 88/16/01654) ("the 1990 permission"). Under condition 11 the total non-food retail floor space was not to exceed 125,000 sq ft comprising a maximum of five units which shall not be subdivided but occupied by a single non-food retail operator.
- On 5 January 1994 outline planning permission (extension of time limit of the 1990 permission) was granted "for erection of non-food retail units with associated car parking etc." at Victoria Business Park (application 93/16/01385) ("the first 1994 permission"). Condition 14 of this permission was in the same terms as condition 11 in the 1990 permission.
- On 8 August 1994 outline planning permission was granted for the "erection of buildings for uses within classes B1, B2 and B8 of Town and Country Planning (Use Classes) Order 1987 and for non-food retail use together with associated car parking, services and roads" at Victoria Business Park (application 94/16/00579) ("the second 1994 permission"). Condition 18 of this permission differed from conditions 11 and 14 of the 1990 and first 1994 permissions by providing that four of the units shall not be subdivided and shall each be occupied by a single non-food retailer.
- On 13 May 1997 outline planning permission (extension of time of the second 1994 permission) was granted "for erection of buildings for use within classes B1, B2 and B8 of Town and Country Planning (Use Classes) Order 1987 and for non-food retail use together with associated car parking, services and roads" on the reference land (application 97/16/00326) ("the 1997 permission"). Condition 1 required approval to the siting, design and external appearance of the proposed buildings and to the means of access thereto before the commencement of development. Detailed plans and particulars in conjunction with the matters referred to in this condition were required to be submitted for approval within three years from the date of permission (i.e. by 13 May 2000) (condition 3). Under condition 8 a scheme of tree and shrub planting, showing landscaping proposals for the site/development, was to be submitted and approved and the approved scheme implemented within the first available planting season after the occupation of any building, or within such agreed extended period, with future satisfactory maintenance of the trees and shrubs. Condition 9 required the provision of an approved and detailed scheme of parking before any of the permitted development is brought into use. Condition 14 regulated the retail floor space and was the same as condition 18 of the second 1994 permission:-
- On 18 August 1997 an agreement under section 106 of the Town and Country Planning Act 1990 ("the 1990 Act") was completed, supplementary to the section 52 agreement of 21 February 1990. Clause 8(d) of the earlier agreement (which provided for the limitation of the total area allocated to retail uses) was released and a covenant imposed to reflect the wording of condition 18 on the second 1994 permission.
- At the valuation date no approval of reserved matters had been given under the 1997 permission.
- On 25 July 1997 the claimants and Castle Court Retail Limited applied for approval of reserved matters under the 1997 permission. The proposed development was described as "11,613 sq m factory outlet centre (class 1 non food) with associated car parking, coach park and service facilities" (application 97/16/00972) ("the first reserved matters or shopping village application"). The applicants appealed on 4 November 1997 against the non-determination of this application.
- Following earlier correspondence Restormel referred this application to the Government Office for the South West ("GOSW") on 14 August 1997 and on 22 August a direction was made on behalf of the Secretary of State for the Environment, Transport and the Regions ("the Secretary of State") under article 14 of the Town and Country Planning (General Development Procedure) Order 1995 directing Restormel not to grant permission on the application without specific authorisation.
- On 9 September 1997 amended plans were lodged with Restormel in respect of the car park layout, footpath and car park entrance. Reports to the Planning and Building Control Committee of Restormel by officers were prepared on 5 November and 1 December 1997. On 1 December 1997 the Committee resolved:-
- On 5 December 1997 Castle Court Retail Limited and the claimants made a second application for approval of reserved matters under the 1997 permission. The proposed development was described as "11,613 sq m class A1 non food with associated car parking and service facilities" (application 97/01504) ("the second reserved matters application or five units application"). A report to the Planning and Building Control Committee of Restormel was prepared and on 3 February 1998 it was resolved to defer consideration of this application, having regard to a letter from GOSW dated 29 January 1998. On 12 November 1998 the Secretary of State called-in this application for his determination.
- On 6 August 1999 the claimants applied for a variation of condition 3 of the 1997 permission to allow further time for the submission of reserved matters (application 99/16/01029). On 20 August Restormel wrote to the claimants' agent stating that counsel had advised that the determination of this application should be deferred until the decision of the Secretary of State is known on the modification order following the public inquiry. On 31 August 1999 the GOSW issued a direction under article 14 of the Town and Country Planning (General Development Procedure) Order 1995 requiring Restormel not to grant permission on this application without special authorisation.
- On 29 December 1999 the claimants lodged an appeal against the non-determination of this extension of time application. On 8 February 2000 the Planning Inspectorate stated that the Secretary of State intended to determine the appeal himself and that he was minded to suspend consideration until he has issued his decision on the modification of the 1997 permission.
- On 27 March 2000 (following the modification of the 1997 permission) the claimants applied for a variation of condition 3 of the 1997 permission as modified by the Secretary of State (application 00/16/00425).
- On 16 June 2000 Restormel wrote to the Planning Inspectorate stating that the determination of the claimants' appeal against non-determination should be held in abeyance pending the outcome of proceedings for judicial review. On 28 November 2000 the Planning Inspectorate wrote to the claimants' solicitors stating that the determination of this appeal has been deferred pending the outcome of judicial review proceedings and, that following discussions with both main parties, it has been decided to use the written representations procedure.
- On 19 and 28 March 2000 the Planning Director of Cornwall County Council wrote to Restormel responding to consultation on the application for variation of condition 3 of the 1997 permission as modified. On 27 March Restormel granted conditional planning permission in response to this application "for the erection of buildings for uses within classes B1, B2 and B8 of Town and Country Planning (Use Classes) Order 1987, together with associated car parking, services and roads" on the reference land, subject (inter alia) to a condition requiring an application for the approval of reserved matters to be made before the expiration of three years from 27 March 2001 (condition 3). Following the grant of this permission the appeal against non-determination was withdrawn.
- On 29 January 1998 GOSW wrote to Restormel indicating that the Secretary of State is considering whether to modify condition 14 of the 1997 permission or modify the permission to delete non-food retail use and to revoke the first 1994 permission. The letter requested a response and an indication whether Restormel intends to use its powers to revoke or modify the permissions. On 9 June 1998 the Planning and Building Control Committee of Restormel resolved that the Council be recommended to respond to the GOSW that the Council's decision to grant the 1997 permission was not grossly wrong and that, until the Secretary of State is able to give some indication of his views on the merits, the Council are not in a position to consider whether, having regard to his views, they should make the order. A brief response on these lines was sent to the GOSW on 10 June 1998. Subsequently, the Council adopted the Committee's decision on 22 June and the Chief Executive sent a further reply to the GOSW on 25 June 1998.
- On 12 November 1998 the GOSW stated that the Secretary of State had decided to hold a public local inquiry as to the revocation or modification of the 1997 permission and to the determination of the first and second reserved matters applications. This inquiry was held on 11-27 May 1999. On 2 February 1999 the Planning and Building Control Committee considered the second reserved matters application following a report by Mr Mason. It advised that the Council resolve that, were they to have jurisdiction to consider this application, it would be refused on the grounds that it did not comply with condition 14 of the 1997 permission and was therefore outside the terms of that permission. It further resolved that the Council oppose the approval of reserved matters in respect of external appearance and design.
- On 9 March 2000 a decision letter was issued on behalf of the Secretary of State. Under the Restormel Borough Council (Modification of Planning Permission by the Secretary of State) Order dated 8 March 2000 the Secretary of State modified the 1997 permission "to exclude non-food retail use from the permission, so that the permission relates only to 'Erection of buildings for uses within classes B1, B2 and B8 of the Town and Country Planning (Use Classes) Order 1987, together with associated car parking, services and roads'". The appeal against the non-determination of the first reserved matters application (shopping village) was dismissed on the grounds that the matters for which approval is sought are not within the terms of the outline planning permission. The second reserved matters application (five units), called-in by the Secretary of State for his determination, was refused on the grounds that the Secretary of State has decided to make the modification order and that he accepts the inspector's conclusions that there are fundamental flaws in the details of siting, design and external appearance and means of access, which raise conflicts with policies in the emerging Local Plan, and that the cramped form of the scheme and unsatisfactory servicing arrangements could worsen traffic congestion at the A30/B3274 junction and lead to rat-running through Roche.
- The Secretary of State decided not to revoke the first 1994 permission nor to modify the second 1994 permission on the grounds that these permissions have expired and are no longer capable of implementation. He wished to make it clear, however, that if the permissions had not expired, he would have revoked the first 1994 permission and modified the second 1994 permission to remove non-food retail use.
- On 24 April 2000 Councillor Parkyn and subsequently Councillor Corbett commenced judicial review proceedings to challenge four decisions of Restormel (the grant of the first and second 1994 permissions and the 1997 permission and the section 106 agreement). Councillor Parkyn acted on behalf of Restormel with the Council paying his costs. Councillor Corbett acted in his private capacity. Permission to apply for judicial review was granted on 19 May and 30 June 2000.
- Following a hearing on 14-16 August 2000 both applications were dismissed by George Bartlett QC sitting as a Deputy Judge of the Queen's Bench Division (R v Restormel Borough Council ex p Corbett and Parkyn [2001] JPL 445). Both applicants appealed to the Court of Appeal. Councillor Parkyn's appeal was dismissed by consent without a hearing. Councillor Corbett's appeal was dismissed on 2 March 2001 (R v Restormel Borough Council ex p Corbett [2001] EWCA Civ 330; [2001] 1 PLR 108).
- At the valuation date the Structure Plan was the 1997 Replacement Cornwall Structure Plan. Three policies were relevant. Policies ENV12 (local distinctiveness), TRAN 5 (journeys on foot and bicycle) and TRAN 7 (Primary and County Routes and the safe movement of traffic).
- The Draft Borough of Restormel Local Plan was placed on deposit in 1995. Proposed changes were made in December 1995 and April 1996. A public local inquiry into objections was held between June 1996 and January 1997; the inspector's report was published in 1998. Proposed modifications were then made in November 1999. Further modifications were proposed in February 2001 and the Plan was adopted in October of that year. At the valuation date seven draft policies were relevant: Policies 6 (development and design principles), 45 and 49 (disabled access and parking), 51 (site design standards and guidelines), 79 (car parking), 80 (traffic safety) and 81 (pedestrians and cyclists).
- The A30 (T) is the principal link between Cornwall and the M5. At the reference land it is a two-lane single carriageway road, widened to 10 metres to accommodate several back to back right turn lanes, serving two service stations and the B327. To the east of the reference land the A30 is dual carriageway from the Innis Downs roundabout. To the west of the reference land it is dual carriageway from Indian Queens to Carland Cross.
- A scheme was included in the Roads Programme 1987 for the improvement of the A30 to dual carriageway standard between the Bodmin and Indian Queens by-passes. In 1989 the white paper "Roads for Prosperity and Trunk Roads, England into the 1990s" confirmed that it was a National Trunk Road Programme Scheme in preparation. Work to assess alternative routes was undertaken and in February 1994 a pre-consultation conference was held to consider options for overcoming traffic problems on the A30 at this point. Various routes were discussed. The Trunk Roads in England 1994 Review confirmed that the scheme was in preparation. The Roads Review in November 1995 put the scheme preparation on hold.
- In July 1998 the white paper "A New Deal for Transport: Better for Everyone" set out the Government's integrated transport policy, a key element of which was to refocus investment in Trunk Roads to tackle some of the most pressing problems through a carefully targeted programme of improvement schemes. In July 1998 the DETR issued "A New Deal for Trunk Roads in England. South West Region", setting out the results of the roads review for the South-West Region. The A30 improvement was included under the heading "Targeted Programme of Improvements" (TPI) as follows:-
- On 10 December 1998 the DETR announce the starting dates for the schemes in the TPI for which all statutory procedures had been completed. A timetable was also given for seven additional schemes given the go-ahead in the Roads Review, including the A30 Bodmin to Indian Queens Improvement. When the TPI was published a further seven schemes had been listed, not sufficiently advanced to be considered for the TPI but which were to be progressed through their statutory procedures and, if endorsed as a result of the Regional Planning Guidance procedure process, would be taken forward without delay, subject only to the availability of funds. The date of the next statutory procedure for the A30 scheme was given as 1998–2000 (public consultation).
- In January 1999 a notice was published in the EC Journal inviting consultants to express an interest in tendering for progressing the A30 scheme. The commission was to review the work done to date in the light of Government policy, to develop options for public consultation and, if agreed, progress towards a preferred route announcement. Consultation on a northern by-pass route (the Green Route) was carried out in January and February 2000.
- On 28 March 2001 the Deputy Prime Minister announced a number of schemes to be added to the TPI, including the A30 Bodmin to Indian Queens Improvement. Having completed consultations as to route of the new road, the Government gave approval to the construction of the carriageway but the details of the selected route were not given as part of the announcement. A footnote promised that, although the road scheme would be developed using the normal statutory process, the Highways Agency's "innovative ideas for speeding them up" will be used. On 1 July 2002 the Highways Agency awarded an Early Contractor Involvement (ECI) contract for the A30 scheme. The Draft Line and Slip Road Order and the corresponding Draft Detrunking Order were published on 27 March 2003. The public local inquiry into the A30 improvement commenced on 27 January 2004. The parties agree that the Highways Agency anticipate that construction will commence in 2004-5 with estimated completion in 2006-7. The traffic volume on the A30 (T) at Roche in 1999 was about 7,551,258 vehicles, representing the annual total traffic demand and equates to an annual Average Daily Traffic Flow of some 20,688 vehicles.
- The B3274 runs between the A30 (T) and Roche, with a priority junction with the A30 at the reference land. The B3274 does not have footways close to the reference land and has signals at the bridge over the Newquay branch railway line restricting flow to one lane, in alternate one-way operation.
- On 28 July 1997 the claimants and Castle Court Retail Limited applied for planning permission for "alteration to existing junction to A30 to provide roundabout" at the Victoria Industrial Estate. This is the junction of the A30 and B3274 adjacent to the reference land (application 97/16/00971). On 22 August 1997 the GOSW issued a direction under article 14 of the Town and Country Planning (General Development Procedure) Order 1995 directing Restormel not to grant permission without special authorisation. Following a direction from the Highways Agency (on form TR110) on 28 November 1997 that permission be refused, Restormel refused permission on 4 December 1997 at the direction of the Secretary of State for Transport. This application was for a 50 metre ICD roundabout.
- There are no cycle facilities in the vicinity of the reference land.
- There are only low levels of pedestrian movement in the immediate vicinity of the reference land and only a limited number of footways serve the land.
- There are bus routes along the A30 and the B3274. At the valuation date Roche was served by First Western National service 29 on the St Austell to Bodmin route. There is a railway station at Roche, approximately 450 metres from the reference land, on the Newquay branch line.
- Under an agreement dated 18 April 1997 the claimants agreed to sell the reference land to Castle Court Retail Limited subject to clause 2 at a price of £3m plus VAT. Clause 2 required Castle Court to apply for planning permission in joint names before 1 August 1997 and to use all reasonable endeavours to obtain an acceptable planning permission. The term planning permission is defined to mean approval of all reserved matters pursuant to the second 1994 permission for a factory outlet centre on part of the property with a gross internal area for lettable retail use of not less than 125,000 sq ft with no less than 1,000 customer parking spaces (or such lesser area or number of spaces as decided by the purchaser). An acceptable planning permission is defined to mean a permission (including any related planning agreement) which is not subject to an unacceptable condition, that is to say any condition not reasonably acceptable to the purchasers and any of the conditions referred to in Schedule 3 to the agreement. Either party could rescind the agreement if an acceptable planning permission is not obtained within 12 months.
- On 18 April 1997 Castle Court Retail Limited entered into an agreement to sell the reference land to Eastlake Developments Limited subject to clauses 2-7 of the agreement for £3.5m plus a contract fee of £350,000 and VAT. Clause 2 required Castle Court to apply for planning permission before 1 August 1997 and to comply with the obligations under clause 2 of the agreement between the claimants and Castle Court referred to in the previous paragraph. Planning permission meant approval of all reserved matters pursuant to the second 1994 permission. Clause 3 required Castle Court to use their best endeavours to enter into sufficient disposal agreements, that is to say lettings in respect of at least 10,000 sq ft within the same building of a factory outlet centre with a gross internal lettable retail of not less than 75,000 sq ft and 500 customer car parking spaces (or such lesser area or number of spaces as Eastlake approve). Clause 4 allowed the Eastlake to waive certain requirements of the agreement. Clause 5 allowed either party to rescind the agreement if an acceptable planning permission has not been granted and/or sufficient disposal agreements have not been entered into within 12 months.
- On 24 May 1999 Morrison Outlets made a conditional offer (subject to contract) to take an option to purchase the reference land at a price of £4.5m. The payment for the option was £30,000.
- On 25 January 2000 Castle Court Retail Limited made two conditional offers (subject to contract) to purchase the reference land. If the Secretary of State withdrew his objection to the 1997 permission and with five years available from 15 May 1997 to develop the site, the offer was £4.5m, conditional on receipt of a satisfactory open A1 non-food reserved matters planning permission for the development of a factory outlet centre up to 125,000 sq ft with up to 1,000 customer parking spaces. If the Secretary of State varied the 1997 permission to prevent sub-division of one of the units under condition 14 then the price was £2m. On 18 February 2000 Castle Court increased the price under the first of the above offers from £4.5m to £4.75m.
- A factory outlet centre ("FOC") is a shopping centre where the units are occupied by different companies, as in a conventional centre, but the shops sell merchandise discounted from normal prices (usually at least 30% below High Street prices). This is achieved by the control exercised by the operator of the FOC and the lease provisions. FOCs usually have similar characteristics including: manufacturers and retailers trading in the same centre; well-known brand names trading in shops bearing the name facia; the goods for sale are generally seconds or end-of-line stock sold at discounted prices; out-of-town locations with a wide geographical catchment area and often with leisure facilities; short lease terms which reflect the wide control exercised by the FOC operator and the specialised form of trading.
- At the valuation date about 30 FOCs had been opened in the United Kingdom with one in the south-west at Street in Somerset. In August 2000 an FOC opened at Atlantic Village, Bideford.
- On 30 April 1999 MEPC completed the purchase of the freehold of a site of about 18 acres (7.28 hectares) in Clovelly Road, Bideford for a price of £2,666,000 plus a non-returnable option payment of £200,000. A consultancy fee of £120,000 was paid to the vendors under an agreement dated 5 may 1999.
- On 5 June 1996 outline planning permission was granted for the renewal of an earlier permission for the creation of a business park at land west of Scratchface Lane, Clovelly Road. Conditions 11 and 12 restricted the uses to classes A1, B1, B2 and B5, the retail development under class A1 being restricted to not more than half the site. On 25 March 1999 approval of reserved matters was given under this outline permission for the "construction of class A1 retail development with estate road, car parking and surface water drainage." It is agreed that this relates to a single building of 110,848 sq ft (10,300 sq m) of gross floor space for non-food retail use with 520 parking spaces.
- On 25 March 1999 conditional planning permission was granted for "class A3 restaurant, toilet, stores and offices ancillary to the proposed class 1 retail development with estate road, car parking surface water drainage" at Clovelly Road Business Park.
- It is agreed by the parties that some 5 ac (2.02 ha) of the site had planning permission for B1, B2 or B8 uses with 1 ac having permission for an A3 use (9,935 sq ft or 923 sq m) gross and management offices (4,478 sq ft or 416 sq m) gross in connection with the retail development. The total floor space was thus about 125,260 sq ft.
- On 4 February 2000 conditional planning permission was granted for the "construction of tourist facilities to compliment factory outlet retail centre including parking and storage at Clovelly Road Bideford."
- The site was developed with retail units, café and food court, an open leisure facility (Discovery Island Adventure Park) and 800 car parking spaces.
- The parties agree that the following abnormal costs were incurred in the development of Atlantic Village: cut to fill, £401,000; works to Clovelly Road, £170,000; off-site drainage, £170,000; incoming services, £230,000; suspended floor slabs, £65,000; landscape buffers, £60,000; filling for phase 2, £28,000. Total abnormal costs £1,124,000.
- Trago Mills shopping centre is situated near Liskeard, 14 miles from the reference land. It has a frontage to the A38 and the parties understand that the main building has a net internal floor area of about 180,000 sq ft of which 166,000 sq ft is available for retail use. The departments include DIY, garden centre, tools and pet care on the ground floor and carpets, clothing, furniture and furnishings on the first floor. The approximate floor space uses include: clothing, 12%; kitchen/bathroom, DIY, wallpapers and paint, tools, books, garden centre and products, saddlery and pet care, 25%; carpets, houseware, furnishings and furniture, 45%. There are also some small convenience-style shops, catering and visitor attractions. There are two other Trago Mills centres in the south-west, at Falmouth and Newton Abbot.
- On 20 February 2001 the Secretary of State granted the claimants an extension of time to 14 May 2001 to submit a claim for compensation in respect of the modification order. A claim was made on 11 May 2001 with particulars of claim dated 20 December 2001.
- On 14 March 2002 the claimants referred their claim to this Tribunal for determination. Following an order dated 13 June 2002 a reply to Heads 1 and 3-6 of the claim was made by Restormel on 27 June 2002. Following an order dated 13 May 2003 the claimants lodged further particulars of Head 1. On 22 July 2003 Restormel made an amended reply to Heads 1 and 3-6 of the claim. On 13 May and 27 August 2003 it was ordered that the hearing of Head 1 of the claim (abortive expenditure) shall be split between (i) principle and (ii) quantum and that the hearing of (i) shall take place at the same time as the hearing of Head 2 of the claim (loss or damage directly attributable to the modification order). The quantum of Head 1 shall be heard after a decision has been given on the principle with directions for a quantum hearing given as necessary after the main hearing. It was subsequently agreed that the same procedure shall apply to Head 4 of the claim (professional costs).
- The valuation date for the assessment of compensation is agreed to be 8 March 2000 (the date of the modification order), but subject to the claimants' contention that they are entitled to compensation for loss attributable to the process of making the order.
- The parties have agreed that the value of the reference land at the valuation date was £625,000 on the basis that:-
- The parties have agreed that a purchaser of the reference land at the valuation date who intended to implement the planning permission for non-food retail development would have allowed for the following costs: access £550,000 and underpass £150,000. The parties have further agreed that the differences in value between the costs of the following works relating to an FOC scheme and a B1, B2 and B8 scheme on the reference land are: surface water drainage £14,382; utilities £25,000; earthworks £41,565.
- The overall issue between the parties is the amount of compensation payable to the claimants under section 107 of the 1990 Act in consequence of the modification order dated 8 March 2000. At the hearing three heads of claim remained for determination, namely:-
- I am required to determine whether compensation is payable in principle under Heads 1 and 4 above, leaving quantum to be agreed or determined following a further hearing. Specific issues have been identified by the parties in respect of Head 2 of the claim which can be subsumed into three broad issues. First, what is the correct basis of valuation: Scenario A, as contended by the claimants, which assumes that the Secretary of State had not intervened and that approval of reserved matters under the 1997 permission had been obtained and a roundabout built or would have been built at the A30/B3274 junction by the valuation date; or Scenario B, as contended by Restormel, which looks at the actual position at the valuation date; but assumes that the Secretary of State decided not to modify the 1997 permission? Second, under the correct basis of compensation, what was the market value of the reference land under section 5(2) of the Land Compensation Act 1961 on the valuation date? Third, what is the compensation payable for the depreciation in value of the reference land directly attributable to the modification order?
- Mr Lacey said that his evidence demonstrated that, if the 1997 permission had not been modified, approval of reserved matters would have been obtained in a form which would have enabled the reference land to be used as a non-food retail centre.
- Mr Lacey said that, in February 1998, in the light of failure to obtain approval of reserved matters for the reference land, Castle Court instructed him to explore the feasibility of an FOC at Clovelly Road, Bideford, later known as Atlantic Village. This form of retail use was not conceived at the grant of planning permission. The land was sold to MEPC and developed. A leisure/tourist content was added. The principal parts of the scheme are car parking in front of the development with clear search patterns and special needs parking close to the retail entrance; perimeter landscaping; clear pedestrian routes through the car park; a covered mall; a service road and internal trucking lanes across the retail area at selected points.
- Mr Lacey responded to the adverse comments made by the inspector on the two reserved matters applications in respect of the reference land. He said that the development has been redesigned to answer her objections. The proposals benefit from the design criteria tested at Atlantic Village.
- The access to the car park from the B3274 and estate road would be an immediate left turn with a landmark granite landscape feature. The exit from the car park would not conflict with other site junctions along the estate road at the eastern end of the site. Cycle parking (50) would be provided to the north-west of the entrance piazza with access from the southern footpaths to the estate road widened to form a combined footpath and cycle path.
- Mr Lacey said that sufficient parking for an FOC must be provided. The inspector suggested parking provision in the range of 929-1,102, the lower end of this range being acceptable. It is now proposed to provide 949 spaces. Staff parking (55) would be behind the buildings with customer parking to the north between the estate road and the A30, with an overflow car park to the west of the shops with access from the service road. Adequate signage would indicate the availability of overflow parking. This parking would be minimal, 731 spaces would be provided in the principal car park with 163 in the overspill area. A secondary entrance to the overflow car park would be provided from the retail area. This car park would be to the same standard as the main car park. The customer car park would have a dedicated through route to avoid conflict between cars travelling in different directions. Special needs parking (56) would be sited closest to the principal point of entry of the spine pedestrian route. The overspill area could provide an alternative location for special needs parking. This would add a further 24 spaces to the principal car park. Mr Lacey emphasised that special needs parking could be provided at the closest point of pedestrian egress from the car park to the shops. For the least mobile customers, shop mobility vehicles could be made available. Under these circumstances, the distance from the special needs parking to the entrance to the scheme is less relevant.
- A roundabout could be provided on land within the claimants' control. This would result in a loss of car spaces but a sufficient number to maintain the TRICS figure of 889 could be accommodated on the reference land.
- As to the pedestrian and service access, Mr Lacey said that a single access point is now proposed from the car park to the entrance piazza of the retail scheme by an underpass. The principal pedestrian walkway spine would cross the car park feeder route. Dedicated footpaths and aisle crossings would provide the safest route. Signage would direct pedestrians. The car park perimeter would be enclosed by landscaped margins and fencing. It would be difficult for customers to find any other point of easy access to the retail scheme. Coach and bus set-down points would directly emulate the same feature as at Atlantic Village, which has been effective. Service access to the scheme on the southern arm of the estate road is designed to allow easy access for the largest delivery vehicles into all parts of the service area. This is achieved from the rear of the buildings with access ways via trucking routes to units along the northern face. These arrangements have been successful at Atlantic Village and at Clarks Village FOC.
- Mr Mason has expressed concern regarding the above arrangements. As to the division of the site by the estate road and the need to erect barriers to stop customers wandering onto the road, Mr Lacey said that the road was adopted in 1997 and the design of the FOC takes this into account. He accepted that a scheme for five separate units would have been laid out on both sides of the road with individual parking and servicing. However, the proposed FOC is best sited mainly on the southern side of the road. It is designed to be entered in a managed way through a single access point. The separation of car park and retail is not relevant unless this impacts on the ability to manage safe and convenient customer movements into the scheme. Even if the road did not exist all movements would be channelled to a principal point of entry. This is typical of FOCs. This single point of entry at the reference land would be an underpass. There is no fundamental planning objection to the separation of car park and retail units. No specific planning guidance or enactment has been raised as an objection.
- It will be evident from signage and past use that there is a single entrance to the shops. Landscaping around the car park and fencing will discourage pedestrians from crossing the road except by the underpass. Fencing will soon merge into the landscaping. The only effect the estate road has on the layout of the scheme is to separate the car park from the shops by 11.3 metres. The design of the car park would be the same regardless of the estate road, with safe routes of passage laid out by a footpath matrix leading to a single point of entry to the scheme. As to customers arriving by coach, there would be a breach in the containment from the estate road by the vehicle entry point but this would not be linked to the drop-down point or footpath system around the coach park and could be signed to show that this is not a point of pedestrian egress. Obvious and signed routes would be via the footpaths in the car park. It will, in many ways, be evident that the underpass is the access to the shops. Mr Lacey produced plans showing examples of channelled pedestrian movement to a single entry in shopping development at Clacton, Guildford, Bromley, Aylesbury and Braintree.
- As to design and external appearance, Mr Lacey said that the retail scheme would not require a substantial height. The buildings would be the same height as others on Victoria Business Park. The car park and perimeter landscaping would obstruct direct views of the retail development. After the landscaping has matured, the buildings would only be seen when customers' cars are close to the car park. In reply to criticisms that the layout leaves little opportunity for effective landscaping to create a locally distinctive environment or to assimilate the development into the landscape, Mr Lacey said that it is difficult to identify how landscaping can introduce local distinctiveness to a large car park. It is, however, possible to adopt features in the local landscape to produce a car park with Cornish character.
- If the development had progressed in a form similar to the rest of Victoria Business Park, then the large buildings would have overwhelmed the limited landscaping under the Cinderella project. There is no reason to assume that the elevations facing the existing industrial buildings should be different as these do not present a public face to customers. The elevations which are seen should, together with the landscaping, present an attractive appearance, create a sense of place and be distinctively Cornish. There is, however, no building of equivalent size with a Cornish character to act as an examplar.
- The inspector suggested the use of natural materials in building design. This can provide a solution although buildings evocative of that particular heritage would inevitably have been smaller. The massing and use of materials would therefore need to be modified while retaining clear references to the vernacular form. These might exist within a contemporary expression while still reflecting local distinctiveness. Local materials such as granite can be used to give coherence and integration between buildings and landscape by incorporation in both. Alternatively, a strong architectural statement might be made which pays less regard to the local vernacular style. This could be distinctive in form but adopt, in an innovative manner, indigenous materials. Between these extremes an architectural style could be arrived at to satisfy the local planning authority. Discussions with the authority would assist in achieving a consensus, as occurred at Atlantic Village. Building frontages, where the distinctive character would be expressed, represent a relatively small cost element within the scheme. It would be possible to find an acceptable solution within cost parameters and sufficient funds were available. The contemporary design in the Eden Project shows that buildings can be distinctive without the use of historic forms. Although the inspector made robust comments as to the design of the scheme, it was not a matter of great issue at the local inquiry. It was not a matter of cross-examination yet in her report there was a very clear statement that this was not considered appropriate.
- Mr Lacey said that he has been asked to express an opinion as to when approval of reserved matters would have been obtained if the Secretary of State had not intervened. The second application for approval of reserved matters was made on 5 December 1997. It was not determined by Restormel because it was called-in but the views of officers were given at the inquiry. If the application had not been called-in, those views would have been given in discussions which would have taken place relatively soon after the application. Little time would have been needed to make amendments to the proposals. The application could have been amended or a fresh application submitted.
- Mr Lacey said that he has also considered the hypothesis that, on 9 March 2000, the Secretary of State decided not to modify the 1997 permission but refused to grant approval of reserved matters on both applications. In these circumstances his firm could have prepared an amended application within six weeks, which would have responded to the inspector's comments and thereby removed the objections. Mr Lacey was confident of eventually obtaining approval of reserved matters.
- There are therefore two scenarios. Scenario A relates to circumstances in which the Secretary of State had not intervened with a view to making a modification order. Scenario B relates to the circumstances in which the Secretary of State decided not to modify the 1997 permission but refused approval of the reserved matters applications.
- In reply to Mr Mason's comments on Scenario A, Mr Lacey said that at the time that the Secretary of State gave notice of his intention to initiate modification procedures, no indications had been given by Restormel as to the layout and appearance of the scheme. Objection in principle to an FOC stood in the way of a dialogue on design. Only one meeting was held on 16 July 1998. The modification procedure then disrupted this process. It is inconceivable that, if the modification had not occurred, the issues could not have been resolved and reserved matters approval obtained. There would have been sufficient time to test design issues and, if necessary, to appeal. This would be the worst case. The more likely route would be a continuing discussion until agreement was reached. This is the normal and correct approach albeit within a longer timescale.
- In reply to Mr Mason's comments on Scenario B, Mr Lacey said that, from the time the Secretary of State first indicated that he might initiate modification, no dialogue with Restormel took place on reserved matters. He did not expect this to occur. Progress could only be made when the Secretary of State's decision was known. There were then nine weeks between the modification order and the end of the period for submission of reserved matters. Mr Lacey said that within this period he would have formulated a design brief and prepared a further reserved matters application. Mr Mason, through his participation at the inquiry, was aware of the applicants' design arguments. On 9 March 2000 it would have been possible to enter immediately into a dialogue with him. There would be no argument about development in principle, the design and layout issues only would remain. Both parties would be aware of the time limit and, on the assumption of reasonable co-operation and given both parties' knowledge, it seems inconceivable that an application could not have been submitted before 13 May 2000. Mr Mason agrees that a reserved matters application could have been made before this date.
- Mr Mason has not explained what he means by "the constraints placed on the scheme by the applicant which obstructs the submission of an acceptable scheme". It is believed to mean the unacceptably high costs of an agreed scheme. There is no reason to believe that such a scheme would not be accepted in terms of costs by the applicants, as occurred at Atlantic Village.
- In his Notice of Additional Evidence Mr Lacey illustrated or expanded the evidence given in his other reports. This additional evidence included eight alternative layouts. Layout 7 was identified as the best layout for an FOC, the earlier layouts representing alternative ways of providing an FOC. The first six options show layouts for different uses on the reference land (eg option 1 non-food retail park) and were used by Mr Tucker to show alternative traffic impacts. Option 7 shows five non-food retail units to the south of the estate road with floor areas of 4,000 sq ft, 6,000 sq ft, 5,000 sq ft (two units) and 105,000 sq ft respectively; car parking to the north of the estate road with an underpass link under the road; special needs parking and coach parking in a discrete area to the south of the estate road with access from the B3274 and an exit back onto the estate road with a one-way exit and entrance regime and access to the retail buildings via a small piazza, the possible provision of a leisure area at the southern end of the scheme; and separate staff parking accessed from the service road.
- Mr Lacey estimated the cost of making a reserved matters application to be in the region of £41,000 to £46,000. He acknowledged that the costs of other consultants would have raised the total cost to significantly more than £46,000. A single application was likely to have been made, rather than several applications for approval of reserved matters. In view of the short period between March and May 2000, the application would have been made by the vendor of the land rather than a prospective purchaser. There would have been one chance only to get reserved matters approval, with limited opportunity to change the application after 13 May 2000. Restormel could insist on landscaping details being submitted with design and external appearance details under condition 1 and he endorsed this preference. The ideal situation would be submission of landscaping details with the remainder of the design elements.
- Mr Stewart gave evidence as to whether, in the absence of modification, approval of reserved matters would have been obtained for a retail development generally in accordance with the scheme described in Mr Lacey's evidence.
- He referred to the 1997 permission and said that the disposal of surface and foul water (conditions 12 and 13) involve engineering solutions and he could see no reason why refusal on these matters could have been justified on planning grounds. He will not deal further with these matters.
- Mr Stewart referred to the chronology since the grant of the 1997 permission and said that two out of the three years allowed for approval of reserved matters were taken up with the modification process. In cross examination, he accepted that the first reserved matters application took 2¾ years to determine and the second took 2¼ years and that we do not know how much less time the two applications would have taken to determine in the absence of the modification order.
- By 8 March 2000 two applications for approval of reserved matters had been refused. An application under section 73 of the 1990 Act had been made for an extension of time to submit an application under the 1997 permission in respect of the B1, B2 and B8 development. On 8 March 2000, in the absence of modification, there would have been good grounds for an extension of time, at least for the time lost in the modification process. In cross examination, Mr Stewart said that, subject to one caveat, he would not have recommended a prospective purchaser in March 2000 to rely on the security of getting a fresh planning permission under section 73. The caveat is that he would have looked at the inspector's report and the Secretary of State's decision to see how he had reached the decision not to pursue his original intention to modify and would then advise the purchaser as to where the pendulum of risk might lie. It would have been open to the Secretary of State to have made an order to extend the time for reserved matters to be submitted. This is referred to in the legal assessor's report (paras 77-80).
- Mr Stewart said that, in the light of these circumstances, he has been instructed to advise whether and when approval of reserved matters would have been likely to have been obtained under Scenario A and Scenario B respectively.
- He referred to national and local planning policy documents. He said that they are only relevant to an application for approval of reserved matters to the extent that they provide guidance in relation to the approval of those matters. Mr Lacey's development scheme appears to be within the scope of the 1997 permission. Mr Stewart then commented on each of the reserved matters.
- As to siting, this is essentially a matter of looking at where the various buildings would be expected to go on the site. The land can accommodate the floorspace for which permission has been granted. The siting of the buildings on the southern part of the site accords with the relevant policies in the Structure Plan and Local Plan. In a committee report early in 1998 officers had some reservations about this siting but were prepared to recommend approval. This is reinforced in a later report of February 1999. Thus, under Scenario A, the situation in February 1998 was that officers were reporting approval to the siting of buildings. As to Scenario B, we have the inspector's report and the committee report of February 1999. The inspector's reservations regarding the placing of parking and buildings on different sides of the estate road have now been addressed by an underpass.
- Policies ENV12 in the Structure Plan and 6(2)(A) and 51(5) in the Local Plan are relevant to design and external appearance, considered by Mr Lacey. In Scenario A, Mr Stewart concluded that, on the officers' report of February 1998 and Mr Lacey's evidence, approval of reserved matters relating to design and external appearance would have been obtained. In Scenario B, the issues raised by the inspector have been addressed by Mr Lacey. On this evidence Mr Stewart concluded that reserved matters approval for design and external appearance would have been obtained. As to the means of access to buildings, dedicated cycle and pedestrian routes were not required when the 1997 permission was granted. In terms of on-site provision, it is appropriate to ensure that pedestrian access from adopted highways is safe and convenient. Also that secure cycle storage is provided. Mr Lacey has explained how a dedicated or shared cycle/footpath could be provided, if required.
- In Scenario A, in February 1998 the officers were awaiting comments from the County Surveyor and the Highways Agency. When these were later received they raised concerns regarding traffic impact but these could not be taken into account on a reserved matters application, as confirmed by the Legal Assessor (para 140). All matters subsequently raised during the modification process are addressed under Scenario B and would also have been resolved on the same basis if modification had not commenced. Mr Stewart concluded that reserved matters approval regarding access would have been obtained. In Scenario B the inspector made comments under the headings of siting and layout, car parking and pedestrian and service access arrangements. The criticism that parking and buildings were separated has been met by the provision of an underpass with a secure boundary system. For pedestrians approaching the retail units from outside or from other commercial units, access would be by footpaths that follows the inner lines of the estate road. Although the inspector suggested that the bus and coach setting-down points would be some way from the crossing, this ignores the fact that they are still closer than many of the parking spaces. There are particular reasons why bus and coach spaces should be given a higher priority in the layout. Criticism was made as to the servicing arrangements; the first reserved matters application gave most concern. The layout in the particulars of claim is based on actual experience at an FOC (Atlantic Village). Mr Brady's evidence deals further with this matter. Accordingly, Mr Stewart concluded that reserved matters approval regarding means of access would have been obtained under Scenario B.
- The relevant policies relating to landscaping are ENV12 in the Structure Plan and 6(2)(B) and 51(4) in the Local Plan. Under Scenario A, the February 1998 report said that the applicants had asked for separate discussions on landscaping. It was advised that this could be the subject of an appropriate condition. Since he anticipated a recommendation for approval of reserved matters, that would have left landscaping as an issue primarily as to the selection of species for soft landscaping and materials for hard landscaping. There is no reason to doubt that an appropriate scheme of landscaping could have been approved within a short time-frame in 1998. In Scenario B the inspector commented on landscaping. The A30 is at a lower level than the car park. It is proposed to incorporate a belt of peripheral planting to obscure the buildings from the A30. An architecturally distinct building would be viewed, set back above and behind a planting screen. The second reserved matters application showed land omitted from the landscaping for further junction improvements with the B3274. Behind was a narrow planting strip. In response to the inspector's comments, the peripheral landscaping has been enhanced and increased in width with the provision of a granite landscape feature at the entrance to the site. The additional land reserved for an A30 roundabout has been included. The landscaping width along the estate road has been increased in consequence of the new entry slip road. Additional planting strips have been provided in the car park. Mr Stewart considered that the amended planting proposals would have met the inspector's concerns in such a manner that approval would have been secured.
- The issues as to car parking relate to quantum and layout. The relevant policy is 79 in the Local Plan. This changed in 1996 to refer to a flexible approach to the level of parking. Under the Proposed Modifications of February 1999 new maximum standards for different types of development were introduced (more relevant to Scenario B). Under Scenario A, the report of February 1998 indicated that the views of the County Surveyor were awaited. Subsequent events showed that Restormel sought a lower level of parking than that proposed. Mr Brady explains in his evidence that there is no reason to suppose that approval of the level of parking would not have been obtained in the absence of the modification. Under Scenario B the inspector commented on the provision of parking. The evidence of usage at other FOCs provided a range of parking provision but it was accepted that the reference land would be unlikely to operate on the same basis as high catchment sites. Cornwall County Council suggested a range of 929 – 1,102 spaces and the inspector accepted that a figure at the lower end of the range would be likely to be sufficient. Additional parking might be provided on the A30 roundabout land. The new submission provides for 939 spaces, some on the south side of the estate road, including staff parking. This latter is not usually differentiated from customer parking in FOC schemes. The total parking provision can be compared to Atlantic Village (838 spaces including 28 staff for 10,298 sq m). Mr Brady's evidence explains that additional data became available after the local inquiry. On the new data he advises that 889 spaces would be required. These could have been provided on the site. As to the inspector's comments regarding the congested and confused layout of the car park, these criticisms have been addressed in the new layout. Mr Stewart's conclusion is that, if a further reserved matters application had been made before 13 May 2000, it would have been possible to secure approval on the basis of the revised layout within the time available. In his oral evidence, Mr Stewart expressed the view that, when talking to Mr Mason early in March 2000, it would hopefully have been agreed that parking provision was not an issue and that the parties would rely on the inspector's comments as a definitive guide. It would not be necessary to revisit the whole issue of car parking.
- Overall, in Scenario A all reserved matters could have been dealt with satisfactorily in 1998. In Scenario B it is necessary to look at the inspector's conclusions and consider how these might have been addressed in a further reserved matters application before 13 May 2000. Mr Lacey has advised how he would have met this time-frame. Mr Stewart supported the view that a reserved matters approval should have been achieved. In cross examination, Mr Stewart accepted that this reference is not a planning inquiry and that it is not possible to know which party is right on planning merits. Under Scenario B the question is what would a prospective purchaser have made of the risks, uncertainties and the probabilities as at March 2000. It is a hypothetical situation because the Secretary of State's decision would be different from the decision given. The most likely hypothetical situation is that the inspector and Secretary of State would have concluded that the 1997 permission was in breach of policy but decided that this permission was not grossly wrong and should not be taken away in the public interest. It would be wrong to assume that in Scenario B that every line of the inspector's report remained unaltered. In order not to make a modification order the Secretary of State would not have been following his own policy. There are two possible situations: an identical inspector's report but a different Secretary of State's decision or a different report and conclusions leading to a different decision.
- Mr Stewart confirmed that his opinions are the objective opinions of a planning consultant but he said that a purchaser in March 2000 would have taken an optimistic view as to the obtaining of approval of reserved matters on a revised scheme. He would probably have employed his own planning consultant. The principle of development has been resolved; only detail is outstanding and it is rare for a reserved matters application to fail completely. This would forego the outline planning permission and therefore reserved matters are not normally a major stumbling block.
- As to the subdivision of the large unit, Mr Stewart's advice would have been that subsequent subdivision could be achieved with no risk by use for a short period and then subdivision or with a small risk by immediate subdivision. The former is the safer course of action. This matter could be discussed with Restormel to see if they wish to take issue with it.
- Mr Stewart said that an appeal against refusal of reserved matters would take 16-18 weeks using the written representations procedure and 24-26 weeks with a public inquiry. In both cases the inspector would have made the decision. If the Secretary of State made the decision the process would take another 3-4 months.
- Mr Tucker provided supplementary evidence on transport matters, amplifying Mr Brady's reports and responding to Mr Tonks' evidence. Mr Tucker said that he adopted Mr Brady's reports, subject to some review and updating. His approach is on the basis of the advice he would have given to a purchaser of the reference land to enable approval of reserved matters to be obtained. It would not have included commercial advice. He disagreed with Mr Tonks' approach in this respect. Mr Brady's evidence was prepared to supplement Mr Lacey's evidence and related to access, parking and drainage.
- Mr Tucker prepared evidence of trip generation for the different uses allowed on the reference land under 1997 permission for two reasons. First, to see whether an FOC was an abnormal use compared to other permitted uses. Second, to address the specific concerns raised at the time of the reserved matters application that an FOC would produce a type and level of usage that had not been expected.
- Trip generation rates have been taken from the TRICS Database for developments open at March 2000, using morning and afternoon peaks and for 12 hour flows weekdays and weekends. In order to make a direct comparison with the traffic impact of an FOC, he has considered the first six development options prepared by Mr Lacey. His car parking assessment shows that an FOC with 950 spaces requires more spaces than the other uses (within the range 394 to 673 spaces). Traffic generation tables, however, show that all uses would generate broadly similar levels to an FOC in the weekday morning peak hour, except Option 5 which would be higher. In the weekday evening peak hour all uses other than Option 6 would generate greater levels of traffic than an FOC. A DIY store (Option 4) would generate nearly double the FOC traffic. For a 12 hour period on a weekday an FOC would generate significantly less traffic than any of the other retail options. At weekends the traffic generation from all options involving non-food retail use would be similar to that of an FOC at the peak time and throughout the day.
- These figures have been calculated using observed "garden gate" trip rates and represent the absolute level of traffic movements generated at the primary site access. For an accurate assessment of impact, consideration should be given to "pass-by" and diverted traffic. Retail uses attract this form of traffic but this is not new traffic. Employment uses do not attract pass-by trips. The above observations therefore represent a worse case comparative analysis.
- Mr Tucker's overall conclusion was that the traffic impact of an FOC on the reference land would be no greater than that for other permitted uses.
- Mr Tucker adopted Mr Brady's evidence regarding trip generation for an FOC; Mr Brady disagreed with Mr Tonks. Both referred to the TRICS Database but differed as to use and interpretation. As at March 2000 this database included four FOCs, at West Lothian, St Asaph, Dover and Fleetwood. Later, FOCs at Ashford (Kent) and Braintree were added. Historic information is available for Hornsea, Street and Jackson's Landing. When forecasting traffic generation it is good practice to use as much information as possible from similar sites. Mr Tonks has used data from only two sites, West Lothian and St Asaph. Mr Brady has used data from four sites. The use of only two sites by Mr Tonks is inappropriate. While size and location are relevant other important factors are catchment population, competition, accessibility and turnover. Mr Tucker said that Mr Brady's approach was not solely a quantitative approach, he was also looking at function and characteristics. The safest approach is to use a value judgment and look at what happens if you use all sites or only some of them. This is a robust methodology. Mr Brady said that it is necessary to examine the four sites in detail.
- Mr Brady said that St Asaph is smaller than the proposed FOC on the reference land and is a more rural location. It is not on a trunk road and has a significantly smaller catchment population. The data from this site would underestimate traffic at the reference land. Mr Tucker said that this is the only one of the four sites comparable in location to the reference land. The FOC at West Lothian is smaller than the proposed FOC on the reference land. It was the only FOC in Scotland. The influence of later competition has had a major impact on shoppers and trips. It is located between Glasgow and Edinburgh and had a catchment population of 3.2m within a 60 minutes drive time. Data from this site would overestimate the likely traffic at the reference land. Mr Brady said that West Lothian is the least comparable of the four sites. The FOC at Dover is smaller than that proposed for the reference land and is not a good comparable. The use of data from this property would underestimate the trip rate at the reference land. The FOC at Fleetwood, although of similar size, had a catchment population of 2.8m within a 60 minutes drive time. It is not a similar location. The use of data from Fleetwood would give an overestimate of traffic at the reference land. Data is now available for FOCs at Bicester and Street but these are not comparable in terms of location and catchment population.
- Mr Brady referred to the TRICS formula for combining data from several sites and said that the inclusion within the dataset of a site with small floor space and higher movements will lead to a weighting towards a higher trip rate; the converse situation can also apply. The ratio of floor space per daily trip rate for each of the four sites can be calculated. The figure for West Lothian is 61.87, the others range from 116.6 to 188.38. By using only West Lothian and St Asaph the average figure is 70.18 compared to the four sites with an average figure of 123.06. By using only two sites Mr Tonks has weighted the evidence towards a higher trip rate. Furthermore, it is clear that the use of West Lothian will have a disproportionate effect upon the trip rate, producing a higher figure. If the West Lothian data is to be relied upon with only one other site there would have to be a strong case for suggesting that both are directly comparable to the reference land, otherwise the estimated trip rate will not be appropriate. Neither West Lothian nor St Asaph are comparable to the reference land and Mr Tonks' approach therefore produces an inappropriately high trip rate. Mr Tucker produced further analysis to show the distortion produced by the use of West Lothian and one other site (Document 7). West Lothian, he said, is clearly an outlier in statistical terms.
- In contrast, Mr Brady said that his approach has been to consider as large a sample as possible in order to provide a robust traffic generation rate against the particular circumstances of each of the sites. A further matter is that a study of FOC sites in the Eighth Annual TRICS Conference paper showed that the trip rate decreases as gross floor area increases. Mr Tonks has not taken this into account. Mr Brady said that the appropriate level of traffic generation is a matter of judgment but his rate is reasonable when examined in the context of the available data. This is considered below when estimating the number of car parking spaces required, a figure produced from the traffic generation rate.
- Mr Tucker said that his evidence on parking relates to Mr Lacey's layouts in Options 7 and 8. Mr Tonks has said that 939 spaces are inadequate; he proposed 1,513 spaces, based on his trip generation. As shown in Mr Brady's evidence (summarised below) Mr Tonks' estimate cannot be relied upon.
- Mr Tucker said that there are no national or local parking standards for FOCs. It is therefore necessary to review parking requirements from an overview of demand at similar sites. He referred to information obtained for FOCs operated by McArthur Glen, Realm Plc and others. This shows that parking provision varies significantly. On average one space for every 12.16 sq m of gross floor area is provided. This produces 955 spaces for an FOC on the reference land. Observations at other sites show that the parking requirement is related to the number of shops and other facilities. The average is 21.6 parking spaces for every store. If 45 stores are provided on the reference land then 972 spaces would be required. Mr Tucker's conclusion is that about 950 car spaces would be adequate in comparison with other facilities in the United Kingdom. He referred to the consultation draft of PPG13 issued in October 1999, paragraphs 31 and 35 and particularly Annex B (maximum parking standards) which provide for a national maximum parking standard for non-food retail of one space per 20-22 sq m. Applied to the proposed FOC on the reference land this gives a range of 527-580 spaces. Mr Tucker also put in evidence a further analysis of the information referred to above which showed that at only one of the FOCs (K Village) did the actual number of parking spaces exceed the ideal parking provision. The provision of 950 spaces is consistent with the inspector's conclusion. Mr Lacey's Options 7 and 8 demonstrate that these spaces could be provided on the reference land.
- Mr Brady referred to the provision of 939 spaces on the reference land and said that the layout is in accordance with current design standards. These include: adequate static and dynamic capacity, the maintenance of low speeds, easy search paths, quick access and egress, minimal conflict with other road users and the provision of disabled parking close to the facilities. An extended slip road into the car park would provide an ample reservoir for parking vehicles, clear of the estate road.
- Mr Brady agreed with the inspector that Cornwall County Council's parking standard of one space per 30 sq m for non-food retail development is not relevant to an FOC. Reference to the TRICS 1996 Database in the inspector's report could be misunderstood. The figures quoted by her are from a paper given at the Eighth Annual TRICS Conference where surveys were undertaken at only two FOCs, Hornsea and Street, in the summer peak period. The parking ratio was 8-9.5 spaces per 100 sq m, giving 929-1,103 spaces for an FOC of 11,612 sq m (125,000 sq ft). The inspector also considered the evidence of Cornwall County Council which included only one FOC, at Bicester. This is not a fair comparison spread. After the inquiry further data became available. As at March 2000 the TRICS 43 Database was available with information from four sites. Running a programme for these properties on a peak Saturday produces a peak parking demand of 889 spaces (revised in the evidence of Mr Tucker from 801 spaces given in Mr Brady's report). Thus, the provision of 939 spaces at the reference land is more than adequate. There is scope for reduction in this parking capacity to allow for the provision of a roundabout.
- Mr Brady said that from the TRICS Database the number of car spaces required may be derived arithmetically from trip generation calculations. A daily profile can be provided which indicates peak demand. Mr Tonks' calculations of trip generation rates have been inflated by his use of only two sites, St Asaph and West Lothian. He calculated peak demand to be 1,441 spaces. He is also incorrect in calculating peak demand by reference to Saturday figures factored up to produce higher Sunday figures by reference to Sunday traffic at the Dover FOC. Sunday traffic generation there was greater than on a Saturday. No Sunday data was available for St Asaph and West Lothian. He therefore factored up the Saturday traffic generation rate for the combined two sites by the difference in the rates between Saturday and Sunday at Dover. This is inappropriate. There is no justification for the assumption that the peak assessment for the reference land would be Sunday. Saturday peak assessment days have been assessed for Hornsea, Jacksons Landing and Atlantic Village. The evidence available in March 2000 clearly suggested that Saturday is the peak day. At Bicester Sunday trips were 26% less than Saturday, at Atlantic Village 13% less on Sunday and at Ebbw Vale 22% less on Sunday. Furthermore, Mr Tonks has not said why it is appropriate to assume that Saturday to Sunday trips at the reference land would be in the same ratio as for Dover. He did not use Dover as a comparable for his Saturday peak and there is no justification for assuming that Saturday to Sunday at Dover would be the same at the reference land. Mr Tucker said that Saturday and Sunday are not necessarily good trading days in Cornwall due to holiday travelling. To take a Saturday peak and then increase it for Sunday, where there is no evidence of any additional activity in Cornwall on Sundays, seemed to be a rather surprising calculation. There is likely to be little pass-by traffic at an FOC on the reference land.
- Mr Tonks has added 5% to his parking demand for "spare capacity". This is not a requirement in Cornwall County Council Parking Guidance (1995) nor in PPG 13. Mr Brady said that he has never been asked to provide for spare capacity. There is no justification for this deduction. Mr Tucker said that all the guidance is that one should not be designing for these absolute peaks. He has never applied a 5% uplift. At any retail site in the country there will be times when they cannot provide sufficient parking. Mr Tucker said that it is normal to provide sufficient parking spaces to accommodate realistic forecast flows. Overspill parking is not usually provided as a matter of course. At times of abnormal demand parking would be controlled by marshalls. Overspill parking is not required on the reference land.
- In summary, Mr Brady stated that Mr Tonks' calculation of 1,513 spaces for the reference land is based on inappropriate trip rates, and inappropriate Sunday to Saturday factoring up by reference to Dover and an inappropriate addition for spare capacity. It is wholly out of line with the inspector's conclusions.
- As to special needs parking, Mr Tucker said that Restormel have no guidelines for FOC sites. Current good practice suggests 5% of the total, namely 47 spaces. Mr Lacey provides these in the southern part of the reference land (Options 7 and 8). This will minimise travel distances to the stores and remove the need to cross the estate road. As to the provision for coaches, Mr Tucker said that a review of coach parking at other sites suggests 12 spaces. Mr Lacey's Options 7 and 8 locate these to the south close to special needs parking. Coach set-down points would be well related to the entrance to the building without the need to cross the estate road. Mr Brady stated that the coach parking area has been designed in accordance with current design practice and checked using the Autotrack Vehicle Swept Path Prediction computer analysis and New Metric Handbook (section 9). The layout would need ease of access, turning and parking, minimising conflict with other vehicles using the estate road. This layout is similar to Atlantic Village which operates well. Mr Braidy stated that the proposed layout provides for some 8 spaces. Mr Tonks has said that 15-20 spaces should be provided but with no supporting evidence. There is no standard level for coach parking at an FOC. The agreed modal split for Atlantic Village was 89% car travel and 2% coach. A traffic impact assessment prepared by Mr Brady for Atlantic Village showed that 8 coach spaces should be provided. This was accepted. Atlantic Village is not less attractive for coach parties than Victoria Business Park, having regard to the leisure facility on the former site. At Hornsea only 1% of visitors arrived by coach and at Jackson's Landing, 2%. Seven coach spaces are provided at Bicester and 10 at Wakefield. There are no reported problems regarding coach spaces at these locations. Mr Tonks' estimate of 15-20 spaces is excessive and unsupported.
- Mr Tucker said that there are advantages in locating coach and special needs parking away from the main car park. FOC site operators do not necessarily differentiate between customer and employee parking. On the reference land, employee parking can be provided at the rear of the main retail unit with its own access.
- Mr Tucker said that the 1997 permission did not require off-site highway works. Planning permission was sought for a roundabout on the A30 and it appears that the applicants acknowledged that there would be commercial benefits. He found it difficult to understand why this application was made. You cannot apply for a roundabout on a trunk road: it has to be dealt with under section 278 of the Highways Act 1980. He would advise a client to obtain approval of reserved matters and then apply to the Highways Agency for an agreement to do further improvements. The difference between a requirement and a desire to have the roundabout is fundamental to the way in which the Highways Agency would approach a request to place a roundabout on a trunk road. This particular section of single carriageway trunk road carries high levels of traffic with a potential accident problem at the junction with the B3274. These problems have been recognised by the Agency which has been developing a scheme to by-pass this section of road. The issue in March 2000 was short-term management with a long term solution. There was clearly an overall benefit to be gained by a junction improvement.
- The application for a roundabout was refused in 1997 on a single ground. Mr Tucker said that he has considered whether planning permission could realistically have been obtained for such a roundabout in association with the development of the reference land and whether any special circumstances would have arisen in relation to a form of development which would have enabled an FOC to be located there. Mr Tonks has referred to the uncertainty regarding the building of a roundabout due to the refusal of planning permission, but, to establish whether this is correct, it is necessary to consider the likely response from the Highways Agency if the applicants had demonstrated that the traffic impact of the roundabout would not be detrimental to the safety and free flow of traffic on the trunk road.
- Mr Tucker said that Guidelines on the Control of Development Adjacent to Trunk Roads 1996 (referred to by Mr Tonks) were not formal guidance but a press notice following a Parliamentary answer by the Minister. Formal development control policy at that time was in Circulars Roads 4/88 and 6/91. These remained current until Circular 4/2001. Mr Tucker referred to paragraphs 3, 11 and 12 in Circular 4/88 and paragraphs 2 and 3 in Circular 6/91 and said that the development control policy of the Highways Agency was concerned with two matters. First, whether there is a need to create new accesses to a trunk road; second, whether a potential additional traffic impact on the trunk road can be satisfactorily mitigated. In the case of the reference land, the only issue was the amelioration of potential traffic impact. The Agency assess highway improvements on a 15 year design horizon. It is unlikely that in this case such a horizon would have created the critical conditions on the assessment or taken into account that the proposed by-pass would by then have been implemented.
- Mr Tonks refers to the additional analysis required for the proposed roundabout. This information could have been provided by the applicants in due course; the only issue is whether an acceptable scheme could have been designed. His statement that a geometric delay to through traffic by the roundabout would have been a policy objection is not accepted. This is a matter of design (see paragraphs 2 and 3 of Circular 6/91). The choice of form of junction improvement would depend on the application of the appropriate design standard (see Design Manual for Roads and Bridges and Advice Note TA 23/81, B). Based on the traffic flow figures in the evidence of Mr Tonks and Mr Brady, the appropriate form of the A30/B3274 function, even without the development of the reference land, is a roundabout. There is no policy reason for rejecting a roundabout. This would have resolved many of the existing problems and made the situation no worse for traffic on the A30. If an FOC had been located on the reference land it would not have generated any greater impact on the trunk road than other permitted development. There are no reasons why a roundabout could not have been built at the junction of the A30 and B3274.
- Mr Tucker said that he would have advised that all options for improvement of the junction should be assessed as to commercial viability. These could be a roundabout, signals or other works. The Highways Agency would have welcomed funding towards such an improvement. They would have a situation where planning permission and reserved matters had been granted, the land had been developed and the traffic was there. They would be managing a situation which they had not directed against in the first place. The procedure would be a Grampian condition onto a section 278 agreement. The Highways Agency would then use their discretion whether to build the roundabout.
- Mr Tucker disagreed with Mr Tonks' conclusion that two roundabouts are needed to reduce traffic congestion from an FOC on the reference land. He did not agree with his supporting figures (particularly queues of 350 vehicles); problems would only arise on exit rather than entry and this would lead to management of peak traffic flows.
- When Cornwall County Council commented on Mr Brady's draft TIA they were going beyond what they were asked to assess. At the valuation date no agreement had been reached on the design of the roundabout.
- As to a roundabout at the A30/B3274 junction, Mr Brady referred to the lack of a planning requirement for this roundabout. There is no doubt, however, that a roundabout would be commercially beneficial, as stated by Mr Tonks. The benefits would be: traffic calming and a reduction in speeds; safe interchange of traffic; fewer accidents. These benefits are covered in Department of Transport Guidance TD16/93. There is no absolute prohibition against roundabouts on trunk roads (see Circular 4/88, paragraphs 11 and 12). The reference land would use an existing access. In the absence of a roundabout, the traffic implications would be significantly worse and the provision of such works is therefore consistent with policy at the valuation date: they would improve the safe and expeditious movement of long distance through traffic. The A30 would therefore perform its function better. Mr Brady referred to eight existing roundabouts on the A30 in Cornwall and said that it is a feature of this road that there are roundabouts. He also referred to roundabouts on the A39 in Devon near Barnstable and Bideford. Roundabouts are put in because they are the best way of controlling junctions. Such roundabouts conserve other classes of road or development. If there had been additional traffic congestion on the A30 caused by an FOC on the reference land, the Highways Agency would have been prepared to approve a roundabout to improve safety and the free flow of traffic on the trunk road. No third party land would have been required for this roundabout. In cross examination, Mr Tucker said that, although third party land would not be required for the roundabout envisaged by Mr Brady, if a roundabout is to be provided, it would have been one requiring other land to be provided by the Highways Agency under section 23 of the New Roads and Street Works Act. This is the standard procedure. Once a section 278 agreement has been signed, the roundabout scheme would be a matter for the Highways Agency.
- Mr Brady's report states that his firm were instructed to advise in relation to the design of an FOC on the reference land. Although there was no requirement to provide a roundabout, preliminary analysis showed that this would be the most appropriate means of accommodating the traffic likely to be generated by an FOC. Castle Court were willing to pay for this work. Mr Brady was instructed to prepare a traffic impact assessment (TIA). The planning application was subsequently refused but Mr Brady is satisfied that the design of the roundabout could have been agreed and accommodated on land within the claimants' control.
- Mr Brady stated that he prepared a TIA and Supplementary Report in September 1997. Mr Tucker acknowledged that Mr Brady submitted a draft TIA in August but did not send his document in final form. These reports showed that, even without an FOC, traffic from the B3274 onto the A30 would be significantly delayed with consequent queuing. This would be exacerbated by an FOC. However, it was agreed with the County Council that testing at the August peak period was inappropriate. The A30 operates well above capacity at this time. He referred to the PICADY programme and said that in reality existing queuing on a major road can make it easier for vehicles from a side road to exit onto the major road. Mr Brady said that if a roundabout is provided at the A30/B3274 junction, it would operate satisfactorily in the August 2015 test period with or without an FOC. He referred to the ARCADY programme and said that the results showed that queuing and delay on the B3274 arm would be minimal.
- Mr Brady concluded that, if an FOC went ahead without a roundabout, the traffic implications for the A30/B3274 junction would be significantly worse than if a roundabout were provided. Mr Tucker agreed with this conclusion but did not accept that there was a need for a roundabout. Accordingly, stated Mr Brady, it could have been demonstrated that the traffic impact of the proposed development would not be detrimental to the safety and free flow of traffic on the trunk road. A roundabout would be of benefit to safety and would have a minimal effect on traffic on the A30. Planning permission would have been granted.
- As to the improvement of the A30, Mr Tucker agreed that the position at the valuation date was as follows. It was accepted that there were problems on this stretch of trunk road. There were longstanding proposals to improve the situation. No preferred route had been identified, various options were under consideration. There was no funding for a specific scheme. It was not known when the scheme would come forward.
- Mr Brady referred to the A30 improvement scheme at the valuation date and to the inspector's conclusion that the normal time scale from conception to opening would be 10 years or seven years using the fast track process. At the valuation date it was reasonable to assume that, due to the European Commission's response to Cornwall's Objective 1 Plan, there would have been fast tracking and that seven years would be achievable. This has been confirmed by the current status of the project, with an anticipated start in Spring 2003 (with an inquiry) and completion in 2005 or 2006. In his rebuttal report, Mr Brady stated that it was known that a new A30 route to the north was favoured by the Highways Agency. There was a reasonable degree of certainty that the road would be improved. It was his conclusion that the dualling of the A30 was of the highest priority. When improvement works have been carried out the visibility of the reference land from the road will be reduced but it will enjoy better accessibility.
- Mr Brady stated that the A30 is not busy at all times, as suggested by Mr Tonks. The problem of queuing is confined to relatively limited times of the year, particularly the peak holiday season.
- Mr Ovenden valued the reference land at the valuation date, with the benefit of the unmodified 1997 permission under Scenario A, as follows:-
- Mr Ovenden said that he has valued in accordance with rule (2) of section 5 of the 1961 Act. He has adopted the basis of open market value as defined in the RICS Appraisal and Valuation Manual. The depreciation in value due to the modification of the 1997 permission is the difference between the value of the land with the unmodified 1997 permission and the value with the modified permission. At the valuation date there was outline planning permission but no approval of reserved matters. Application for approval had to be made before 13 May 2000. Mr Lacey's evidence is that an application could have been submitted within that time, with later determination. An alternative course would have been to apply under section 73 of the 1990 Act for an extension of time. If the Secretary of State had not made the modification order, and having regard to delays caused by the modification process, there would have been a strong case for such an extension to be granted.
- In the real world, a purchaser of the reference land on 8 March 2000 would probably have entered into an agreement conditional upon approval of reserved matters. But Mr Ovenden said that he is required to assess the market value on an unconditional sale. Following the intervention of the Secretary of State, no progress could have been made towards obtaining approval of reserved matters or in seeking other necessary consents. In the absence of the Secretary of State's intervention there would have been ample time to secure such approvals before the valuation date. It is clear from Mr Lacey's evidence that the inspector's criticisms of the second reserved matters application could have been addressed. Furthermore, in the absence of the Secretary of State's intervention, officers of Restormel would have taken part in discussions before the determination of the second application. It might have been necessary to amend it or submit a fresh one. However, approval of reserved matters would have been obtained before 8 March 2000 for a development substantially in the form described by Mr Lacey. On Mr Lacey's evidence, approval of reserved matters would have been obtained in early to mid-1998; development would have taken place before March 2000.
- In these circumstances, Mr Ovenden said that he is instructed to value the reference land on the assumption that approval of reserved matters and any other consents (eg. for a roundabout) had been obtained by the valuation date (Scenario A). His assumption is that the roundabout would have been built by the Highways Agency using the developers' contribution of £550,000. If he had proceeded otherwise, with a resultant lower value, there would be a loss attributable to the process of making the modification order which would not have been included or reflected in the valuation and depreciation in land value.
- Mr Ovenden said that from 1997 there was interest in the reference land for the development of an FOC. Under the 1997 permission the large building could have been subdivided to provide units suitable for occupation as an FOC. Four smaller buildings could also have been occupied in the same way. Consequently, he has valued the reference land as an FOC. The FOC at Mansfield was initially operated without any physical subdivision between units. An FOC can be occupied on an open-plan layout, although operators prefer unit shops. The question of allowable subdivision is a matter of law. Mr Ovenden assumed that the position is the same in both Scenarios.
- At the valuation date 30 FOCs existed in the United Kingdom. By the end of 1997 there were 19 open, of which four were newly built. Between 1995 and 2001 the number of FOCs grew from 3 to 34. At the valuation date, the FOC market was not saturated as suggested by Mr Cussen, but it was changing.
- There are five indicators of value from the reference land, namely the two contracts in April 1997 and the three offer letters in May 1999 and January and February 2000. In the contract with Eastlake the consideration must be taken to reflect abnormal costs. In Mr Cussen's analysis of this transaction he has made adjustments for abnormal costs, highway costs and for parking deficiencies, to produce a net value for the reference land of £2,763,103. This figure is at the valuation date, three years after the contract, and is inconsistent with the amount agreed in 1997. Mr Cussen's view does not sit well with his comments on growth. The consideration of £3.85m under the Eastlake contract represented market value at that time on the terms of the agreement. The difference between the considerations in the two back-to-back contracts represents the different terms of these two agreements.
- In April 1999 MEPC purchased land at Clovelly Road, Bideford which became Atlantic Village FOC. It is now agreed that this transaction is the best indicator of value for the reference land. At Bideford, in addition to the price, there was an agreement providing for a consultancy fee and overage payments. Mr Ovenden is not aware that any overage payments will be paid and has not assumed that any additional consideration in this respect will be payable to the vendor. He has, however, included the consultancy payment of £120,000 as part of the consideration, to produce a total consideration of £2,986,000. It is clear from the consultancy agreement that there is no requirement on the part of the vendor to carry out specific services in connection with this fee (see clause 3.1). Nor is there provision to alter the amount payable. Mr Ovenden said that he was told by Mr John Balchin (the consultant) that he did not do anything under the agreement and regarded it as an element in the consideration for the land. It may well be that MEPC suggested this approach because it showed that the consideration was less and it was therefore more palatable to their Board. The consultancy fee is, in effect, supplementary consideration paid for the site. The site, however, required significant on and off-site works (now agreed at £1,124,000). The costs of these works should be added to the consideration, producing an equivalent total price for the land of £4,110,000.
- When MEPC purchased in April 1999 planning permission had been granted on 13 acres (5.26 hectares) for a building of 110,848 sq ft (10,300 sq m) and 520 car spaces. Planning permission had also been granted for B1, B2 and B8 uses on the remaining 5 acres (2.02 hectares) and on 1 acre (0.4 hectares) of this land planning permission had been obtained for A3 and management offices in connection with the retail development. The total floor space with planning permission at the time of purchase was 125,261 sq ft (11,639 sq m). MEPC then obtained planning permission for A3 use on part of this site plus leisure on the remainder of the site and 300 extra parking spaces. The land was developed with 84,000 sq ft (7,804 sq m) of net retail floor space, café, food court, and open-air leisure facility (Discovery Island Adventure Park) and 800 parking spaces. The Bideford District Local Plan merely stated that the Council would "consider tourist related development on part of the site" and would seek "a particularly high standard of design of landscaping." MEPC implemented a planning permission which required a high standard of design for a leisure facility, the like of which has not been provided in any other FOC. The cost was about £2.5m. This facility is not well used. A charge is made in an attempt to recoup some return. Mr Cussen's comment that this is prominent frontage land with potential retail, leisure and roadside related uses is inappropriate. The only planning permission was for B1, B2 and B8 uses and there was merely a reference in the Local Plan to tourist related development. Had such development been permissible and viable then presumably it would have been carried out by MEPC. The effect on overall parking and site capacity would also have had to be considered.
- Mr Ovenden made a deduction of £90,000 for the 4 acres with planning permission for B1, B2 and B8 uses. He adopted a value of £45,000 per acre (£180,000) from which he deducted £80,000 for the cost of a spur road, giving a net figure of £100,000 from which he deducted 10% for deferment for construction and contingencies. The balance of the consideration for the whole site is £4,020,000 equivalent to £32.68 per sq ft of floor space in terms of main space (ITMS).
- Mr Ovenden referred to the purchases of sites at Wakefield, Braintree and Talke between April 1997 and March 1998 and valuations as at April 1998. The purchase prices ranged from £48.60 to £53.66 per sq ft ITMS. Later valuations show rising values (£62 to £73.17). These properties are in locations with substantial competition. He also referred to Whiteley Village FOC and land at Fleetwood. By the valuation date the increased interest in FOCs was concentrated on the small number of sites which were available.
- Indications of value from other FOC sites show that the prices paid in 1997 and 1998 were modest in relation to subsequent valuations, eg at Braintree, Wakefield and Talke. This is supported by the later offers made for the reference land. At the three sites just referred to the purchase prices show figures of £53.66, £48.60 and £49.42 per sq ft ITMS compared to the later valuations as at April 1998 in the Freeport Rights Issue of £73.17, £62 and £66.39. Mr Ovenden said that, had any of these sites been marketed at the valuation date, it is reasonable to assume that the price would have been substantially higher given general retail market conditions and demand relative to supply. The price paid for Whiteley Village in July 1997 of £105.44 per sq ft ITMS, although in the upper level of value evidence, is an indication of demand. The purchase of additional land at Fleetwood in February 2000 indicates the extent to which site values has risen. The planning position there is still not resolved some two and half years later.
- Mr Ovenden said that the reference land would have attracted a significantly higher value at the valuation date than the Bideford transaction for three reasons. First, because of immediate access from the reference land to the A30 and its strategic location within Cornwall. The Bideford site is accessed from a much less significant traffic route, the A39 in North Devon. Second, because of the greater permanent population accessible to the reference land within given drive times. Third, because of the substantially greater volume of tourism within given drive times at the reference land. The fact that this land is level, fully serviced and with less significant site works is reflected by the adjustment of the Bideford transaction to take account of the works there which would not be required at Roche.
- Mr Ovenden said that the reference land would probably have been developed as the next FOC in the south-west, after Street and before Bideford, in the absence of the Secretary of State's intervention and the modification order. Although he is required to value the reference land when Atlantic Village was under construction, Mr Ovenden said that he must have regard to the likelihood that, if the sequence of events which led to modification in March 2000 had not happened, then the reference land would have been developed first, and in preference to Bideford. Whether Atlantic Village would also have been developed is consequently uncertain. At the valuation date, however, any purchaser of the reference land would have had to take into account the fact that Atlantic Village was due to open in four to five months time. Even in these circumstances Mr Ovenden considered the value of the reference land to have been higher than the unadjusted purchase cost of Bideford. The market would have regarded the reference land as the more dominant regional location for an FOC, leading to a higher value. In other locations the more dominant FOC tends to have a more established range of rentals with a higher level of year round occupancy.
- Works would have been required at the reference land which were not required at Bideford. Mr Ovenden said that he is satisfied on the evidence of Mr Lacey and Mr Brady that the pedestrian underpass would have worked satisfactorily. Pedestrian and vehicle separation would have been better than that at many FOCs. There are two main relationships between parking and retail space at FOCs: those where the shops are situated round the car park and those where the car park is separate from the units with a defined route from car park to shops. A developer would have allowed for the cost of constructing a roundabout at the A30/B3274 junction in order to maximise the attraction of the reference land as an FOC. Mr Ovenden agreed with Mr Cussen that, if this roundabout was not built, a purchaser would still make a deduction of £550,000 to represent loss of trade due to the lack of a roundabout. Under Scenario B there would not have been an agreement for the roundabout to be put in place.
- Mr Ovenden also took account of Mr Brady's evidence concerning the likely period before completion of the A30 dual carriageway. He anticipated that this work would have started in January 2000. He accepted that, at the valuation date, there was uncertainty as to the line of the improved A30 and as to timing, but said that the operator of an FOC on the reference land would have expected the existing A30 to run alongside the site for the first years of operation. This is a neutral point. The position is the same under Scenarios A and B.
- Although the drive time population in the south-west is substantially lower than for some FOC locations, the superiority of the reference land in population size (particularly at the 60 and 90 minutes drive time distances) is important when adjusting the value evidence from Bideford. Furthermore, a comparison of visitor night statistics for the 90 minute isochrones for Roche and Bideford is substantially in favour of the former site. This location is well positioned to benefit from visits by people travelling between destinations. This tourist trade is not achievable at Bideford. The Eden Project has boosted tourist numbers. The level of competition from other FOCs is significantly less in the south-west than in other parts of the country.
- Mr Ovenden said that he has analysed the Bideford transaction to show £32.68 per sq ft ITMS. In March 2000 the better location of the reference land and better drive time and tourist catchment populations would have meant a significantly higher value for the reference land, even with Atlantic Village in place. Taking these differences into account, Mr Ovenden considered that a net addition of 30% to the Bideford figure is justified, producing an aggregate value of £5,310,500 for the reference land. This 30% addition reflects the physical facts at the date of valuation. Deducting the now agreed abnormal costs for the reference land (£780,947) produced an adjusted value of £4,529,553. Mr Ovenden said that this value reflects strong interest in FOCs, particularly in the south-west. The reference land would have been of interest to operators such as MEPC or Morrison Outlets. In the absence of the modification process there would have been substantial interest in the reference land. This is supported by the offers made in 2000. There was a continuing rise in the value of FOC sites throughout the late 1990s and on past the valuation date.
- The reference land had a value of £4,529,553 at the valuation date with the benefit of the unmodified 1997 permission. The value of the land with modified permission is now agreed at £625,000, giving a depreciation in value of £3,904,553.
- Mr Ovenden considered the issues relating to the advantages and disadvantage of the reference land compared to Bideford, as raised in Mr Cussen's evidence.
- He agreed that there are different general catchment populations but said that this is a minor point in relation to disposable income, where the Cornwall figures are below those of Devon. Mr Cussen makes an addition of 25% for this advantage at the reference land, while Mr Ovenden makes a 30% addition, which also reflects tourism and passing trade.
- Mr Cussen makes an adjustment of 5% to reflect the difference in time between the Bideford transaction and the valuation date and for the tighter planning controls and restrictions on the availability of FOC sites at the later date. Mr Ovenden said that his adjustment is 7.5% to reflect both points. Between 1999 and 2000 the most buoyant sectors in the retail property market showed rental growth of more than 5%. Mr Cussen is not correct in saying that there was a reasonable flow of FOC sites during the 1990s.
- Mr Cussen has identified that the reference land has a smaller immediate catchment population than the Bideford site but has made too much of this difference. It is unimportant in the context of an FOC. A deduction is not required.
- Mr Cussen makes a deduction of 10% for the effect on the reference land of Trago Mills. Mr Ovenden said that Trago Mills has a larger floor area than Mr Cussen believed. Trago Mills differs in character from an FOC. It is in the nature of a departmental retail warehouse where substantial floorspace is devoted to DIY, home improvement products, furniture and soft furnishings, all goods not normally found in an FOC. Trago Mills is primarily a destination for home improvements of various kinds. It serves a different market with little overlap. No deduction should be made for this factor. Trago Mills may benefit an FOC on the reference land by encouraging trips to Trago Mills and to an FOC on the reference land for different shopping purposes.
- Mr Cussen makes a deduction of 15% for the divided and limited site at the reference land and limited leisure facilities. Mr Ovenden said that, although he is doubtful whether any adjustment is merited for these factors, he is prepared to concede a deduction of 7.5% by comparison with Bideford. In cross examination, he said that this deduction (referred to specifically for the first time in his rebuttal report) was included in the 30% adjustment in his earlier report. This was a net adjustment. At the rebuttal stage he divided up his overall 30% and dealt with separate elements. The 7.5% adjustment is to reflect the division of the site by the estate road and the limited leisure facilities (the major element in the adjustment). Although a planning application for a restaurant, creche and ancillary facilities was made in 1997 and not determined, Mr Ovenden thought that a purchaser of the reference land would have assumed that an A1 coffee shop and other A1 facilities and a small amount of A3 floor space could have been incorporated in a subsequent application. He said that his 7.5% takes into account the £90,000 deduction in his analysis of the Bideford site and therefore his aggregate deduction is about 10% compared to Mr Cussen's deduction of 15%. Mr Ovenden said that, although buildings and car park would be on different sides of the estate road at the reference land, the manner of moving from car park to shops would be a subsidiary aspect. Customers would not be put off by the need to use an underpass.
- Mr Ovenden said that he has been advised that the approach of Mr Tonks to the provision of car and coach parking is incorrect. No reduction in site value is needed, as predicated by Mr Cussen. The size of car park considered appropriate by the claimants would not lead to the need to make any adjustment for parking deficiencies. All parking necessary can be accommodated on the reference land. It was only to accommodate Mr Tonks' larger car park that decking became an issue and gave Mr Cussen cause to make his adjustment. Under Scenario A it is to be assumed that the approval of reserved matters has sanctioned 950 car spaces. There is still some uncertainty in Scenario B.
- Mr Ovenden said that, although Mr Cussen places great weight on the assumption that a purchaser of the reference land would have reflected the limited time for resolving the reserved matters position, he has been instructed to value the land on the assumption that approval of reserved matters and any other necessary consents had been obtained prior to 8 March 2000. Mr Ovenden said that, if he had valued on Scenario B, he would have recognised that a purchaser would have paid less for the land due to uncertainty. The reason for this was the short period of time for submission of a satisfactory application for approval of reserved matters. A purchaser would have envisaged a constructive dialogue with Restormel having regard to the report to the Planning Committee in February 1998. He would have approached the short period with optimism. Having regard to this limited uncertainty and to the cost of obtaining reserved matters approval, a purchaser would have reduced his price from £4.5m to £3.25m, a reduction of about 28%. A longer period available to get approval would have reduced the uncertainty. Loss under Scenario B would be £3.25m less the agreed value for B1, B2 and B8 development of £625,000, a net loss of £2,625,000. Mr Cussen's approach to value is on a different basis. It results in a substantial discount (£1,069,052 or 38.7%). In Mr Cussen's scenario it must be assumed that the Secretary of State decided not to modify the 1997 permission. This decision would have narrowed the issues relating to approval of reserved matters, while removing uncertainty about the acceptability of the retail proposals in principle. Even if Mr Cussen's approach is correct in principle his deduction is too great.
- Mr Ovenden said that, as a valuer, he is not certain that in the absence of the modification process it is necessary to assume that there would not have been the possibility of reaching an amicable solution to the reserved matters problem relatively quickly. He accepted, however, that a purchaser would not have drawn confidence from Mr Mason's view that the reference land is a retail warehouse site not an FOC site. In Scenario A it is assumed that Mr Mason's views would have been overcome, perhaps on appeal.
- Mr Roots QC dealt firstly with matters of valuation. Both experts valued the reference land having regard to Atlantic Village, Bideford. There are other relevant FOC transactions but Atlantic Village is more comparable. The state of the market at the valuation date is in dispute: near saturation or a rising market.
- It is agreed that adjustments have to be made to the Atlantic Village transaction. The addition of a consultancy fee (£120,000) is not agreed. The consultancy agreement provides for overage, a consultancy fee and restrictions on the vendors. It is accepted that overage would have been added to the consideration, if payable. The same principle must apply to the consultancy fee. The obligation to provide services was unspecific. The proper interpretation of this arrangement is that the fee was another cost of making the land suitable for development and, like abnormal costs, should form part of the total consideration. Mr Roots made three points on the restrictions. First, it is difficult to believe that these obligations would have prevented Castle Court buying and then selling the reference land to an FOC operator. Second, the restrictions could have been avoided by the use of a different company to promote another development. Third, from the purchaser's viewpoint the consultancy fee was just another cost of acquisition. The consultancy agreement was not a sham.
- The devaluation of the total consideration for Atlantic Village is in issue. Mr Ovenden's devaluation, incorporating a deduction for four acres with only B class planning permission, is correct. There is no evidence that the hope of a permission for tourist related development generated a value similar to retail value. Different parts of the site had different planning permissions and different values.
- Following the devaluation of Atlantic Village, both valuers made adjustments to relate the price per sq ft to the reference land. To allow for different catchment populations Mr Ovenden added 30% and Mr Cussen 25%, but he then deducted 10% to reflect a lower local catchment population at the reference land. Different catchment figures have been used but the relativity between Atlantic Village and the reference land is broadly similar. As to Mr Cussen's 10% deduction for the higher local catchment at Bideford, Mr Roots made two comments. First, Mr Cussen relied on information which was unsupported and is unconvincing. Second, within the 30 minutes catchment, Roche has twice the population of Bideford. There is no justification for this additional 10% deduction.
- Mr Cussen's deduction for competition from Trago Mills is unjustified. This is a completely different operation with little overlap of sales.
- Mr Cussen's deduction of 15% for site deficiencies at the reference land reveals double counting with his later deduction (10% for parking deficiencies). This is based on the evidence of Mr Tonks; if his calculation of the parking requirement is wrong then there is no need for Mr Cussen's 10% deduction. If Mr Tonks is right, however, then the claimants do not dispute a 10% deduction. If a deduction is made on the ground that a purchaser would have paid less due to a reduction in the scale of development, this has the consequence that the allowance for site deficiencies must be reduced.
- At the conclusion of the valuation exercise Mr Ovenden's figure is £4,529,553 and Mr Cussen's is £2,763,103 but subject to a final step. Mr Cussen described his figure as what a developer would have paid with none of the deficiencies listed in his report. He is correct with regard to approval of reserved matters but the other reasons are wider. In his final step Mr Cussen adjusted the value to £1m rounded. If his valuation had produced a higher figure than £2.763m then Mr Cussen's adjustment would be higher. The points identified by him for the final adjustments are repetitive and lack precision. Many of the factors currently taken into account in the final step had already been allowed for in the valuation. Only two remained: for subdivision of the large unit in stages and for the absence of approval of reserved matters. Mr Cussen's figure of £2.76m must therefore represent the value assuming approval of reserved matters, subject only to an allowance for subdivision.
- As to the subdivision of the large unit, there is uncertainty whether retail use is necessary before subdivision. Mr Roots referred to R v Bolsover District Council ex p Ashfield District Council (1995) 70 P & CR 507, and said that this decision can be distinguished because the subdivision of one unit at the reference land is authorised by the 1997 permission but this was not the position in Bolsover. Even if there is doubt as to prior use, a purchaser of the reference land would have known that it would be feasible to open his FOC without subdivision (as happened in Bolsover (Mansfield)) and introduce it later. No allowance is necessary.
- Referring to Mr Cussen's reasons for his final allowance, Mr Roots said that three relate to approval of reserved matters and the remainder are matters of degree which can be reflected, if justified, by an appropriate allowance in the valuation. With regard to the deduction for a roundabout, Mr Cussen deducted the agreed figure of £550,000 to reflect either a reduction in trade or for a highway improvement. Mr Cussen has also made allowance for uncertainty as to the roundabout and the A30 improvement. It is clear, said Mr Roots, that both valuers have allowed for this uncertainty in the deduction of £550,000 under abnormal costs and therefore to make a further allowance is double counting.
- The conclusion from this analysis is that Mr Cussen's figure of £2.763m reflects all relevant factors except the absence of approval of reserved matters and the need to subdivide the large unit in steps. It is therefore directly comparable to Mr Ovenden's figure of £4.53m and to the figures in the 1997 contracts.
- These contracts provide no direct assistance as to the value of the reference land in the absence of approval of reserved matters nor as to the allowance to be made for this factor. They are, however, of assistance as a check on the figures arrived at by reference to Atlantic Village. The 1997 contracts reflected all the advantages and disadvantages of the reference land at that time, including the cost of the roundabout. The two contracts provide for different considerations but this can be explained by a number of factors, eg responsibility for obtaining planning permission, development of different sizes. The appropriate figure for comparison is between £3m and £3.85m under the contracts, subject to adjustments for differences of time and the building of an underpass. It must also be borne in mind that the agreed figures for the abnormal costs of earthworks, surface water drainage and utilities represent differences between FOC and B class development (the actual costs are higher). The contracts lend support to Mr Ovenden's figure and show that Mr Cussen's figure is too low. The need to obtain an "acceptable planning permission" under the contracts is of little relevance because their usefulness is in establishing market value once an acceptable planning permission has been obtained.
- Mr Roots said that reliance can be placed on the offers in May 1999 and January and February 2000, although they are of less weight. They support Mr Ovenden. The letters in 2000 have been criticised on the grounds that Castle Court were asking the claimants to recover compensation for abortive costs on their behalf and therefore the parties were not at arms-length. Abortive costs are separate from depreciation in land value. The letters demonstrate that Castle Court were waiting in the wings to develop the reference land for an FOC if modification did not occur.
- Mr Roots said that the highways evidence is relevant to the number of car parking spaces and as to congestion on the A30 (traffic attraction to an FOC, the roundabout and A30 improvements).
- As to traffic attraction, the first step is to determine the traffic that would have been attracted to an FOC on the reference land. It is common ground that information in the TRICS Database should be used. Mr Tonks relied only on data regarding FOCs at West Lothian and St Asaph. Limited data is prone to inaccuracy and is not reliable. West Lothian has little similarity with the reference land, having regard to catchment population, tourism and competition, and therefore distorts the assessments. There is no justification for excluding data regarding Fleetwood and Dover. Other sites could have been surveyed and included, eg. Ashford and Braintree. A more robust approach is to look at all the available data.
- Both Mr Brady and Mr Tonks arrived at a parking accumulation figure from traffic attraction and parking profiles from the TRICS Database. Mr Brady and Mr Tucker have identified a need for 939 or 950 car spaces; the inspector thought that 945 spaces might be sufficient for a low catchment location; Mr Tonks' figure is 1,513. This is out of line with other FOCs. The evidence of Mr Millerchip of McArthur Glen (referred to by Mr Cussen) does not support his figure. Mr Tonks' uplift for Sunday is inappropriate and without support. Traffic flows on the A30 on Sundays are 10% lower than Saturdays. Data for Bicester FOC shows 26% less traffic on Sundays. Mr Tonks' final uplift of 5% for operational space is unsupported by published guidance and the evidence of other FOC sites.
- Mr Tonks approached the assessment of car spaces on the basis of advice he would have given to an FOC operator rather than the advice he would have given to a local planning authority on an application for approval of reserved matters. Mr Mason, in his evidence as to the latter, misunderstood Mr Tonks' figures. If Mr Tonks is correct in this distinction, Restormel had no evidence as to the number of spaces reasonably required on a reserved matters application. This is probably a distinction without a difference. An operator would not have wished to pay for spaces which would be empty for most of the time. He would manage exceptional demand by marshals or signs.
- On an application for approval of reserved matters, Restormel would have been required to have regard to PPG13 and Policy 79 in the Local Plan. Both emphasised minimum parking provision. Restormel would not therefore have supported an excessive number of spaces nor imposed such a low number that there would have been serious consequences off-site at peak times. Both local planning authority and operator would have had common ground regarding parking numbers. Data from other FOCs would have been the starting point.
- The assumption by Restormel that TRICS figures relate only to customer parking is incorrect. An analysis of TRICS 1996 data shows that the range given of 929-1,102 spaces includes staff parking.
- The 1997 contracts, which include reference to 1,000 customer parking spaces, do not support Restormel's case. The contracts referred to "1,000 … spaces (or such lesser number as may be provided for in an application for planning permission)". The purpose of this clause was to provide a safeguard for the purchaser in case a planning condition was imposed which reduced the number of spaces below the number in the application to 1,000, whichever was the less. It was for the joint applicants to choose the number of spaces and insert their preferred figure in the application.
- Mr Roots said it is common ground that the 1997 permission does not require off-site highway improvements, nor does a section 106 agreement, but that an FOC on the reference land without those improvements would cause congestion on the local highway network. Mr Tonks' evidence showed that a roundabout would have produced a significant improvement to safety and the freeflow of A30 traffic. Mr Brady's evidence was to the same effect. It would be commercially desirable to improve access to Victoria Business Park from the A30. Restormel say that there would have been uncertainty as to whether the Highways Agency would have agreed to the provision of such a roundabout, having regard to the refusal of planning permission. The Agency would, however, have been under an obligation to allow a roundabout to maintain safe and expeditious movement of traffic (see paragraph 5 of Circular 4/88). It is not credible to suggest that the Agency, faced with an FOC and consequent congestion and offered money to build a roundabout, would not have proceeded with alleviation works. The precise form of those works would have been a matter for the Agency, using compulsory purchase powers, if necessary. Consequently, a purchaser of the reference land would have taken the view that, if he paid the cost, there was a high degree of certainty that the Highways Agency would provide a roundabout.
- Mr Roots said that there is no evidence to support the contention that congestion on the A30 would have had a material effect on trade or on an offer for the reference land. A purchaser would have recognised that improvement of the A30 would remedy this problem, even in the absence of a roundabout. There was a high degree of certainty that such an improvement would have been achieved shortly after the opening of an FOC. It is now agreed that improvements will commence in 2004-5 with completion in 2006-7. A new point raised by Mr Katkowski is that, following improvement, the reference land will not be visible from the A30, but there is no evidence that this would affect trade or value.
- Turning to the absence of approval of reserved matters on the valuation date, Mr Roots said that Restormel stressed the uncertainty of the position and the short time available for a reserved matters application. It would be unfair if this shortness of time of itself played any part in reducing compensation. The short period was due to the reserved matters applications being caught up in the modification process. Additional applications for approval could not have been made. Furthermore, until the committee meeting in February 1999 the claimants had no reason to think that the second application would not receive support. Officers would have had discussions; the Secretary of State would not have issued an article 14 direction. The inspector's report was not available until March 2000. The claimants have not altered their case in this respect. There was, in short, no action the claimants could have taken to progress matters.
- Although it is common ground that, in Restormel's scenario, a discount would have been made for lack of approval of reserved matters, Mr Roots submitted that it would be wrong in principle under section 107 of the 1990 Act to make such a discount because the absence of approval is attributable to the modification process. Consequently, insofar as there would be a difference in value for this reason, this is a loss which the claimants have suffered as a result of the modification order. It is recoverable as part of the compensation.
- If the right to compensation only arises out of the making of the order, and not the process leading up to the order, this would lead to injustice. Although there are no cases on the interpretation of section 107, Mr Roots submitted that loss attributable to the modification process is recoverable on the following grounds.
- First, section 107(1) gives a right to compensation for loss or damage directly attributable to the modification. This must mean compensation assessed under the principle of equivalence (Horn v Sunderland Corporation [1941] QB 26 at 40 and 49 and Director of Buildings and Lands v Shun Fung Ironworks Limited [1995] 2 AC 111 at 125C). A modification order is made following procedures over a period of time. If the time taken causes loss it would be unfair if that loss is not compensatable (see Shun Fung at 135C-139C). The claimants did not act unreasonably during the modification process by not making more applications for approval of reserved matters, as contended by Restormel (see Shun Fung). Furthermore, the claimants did not act unreasonably by failing to sell the land during the modification period. Although the decision in Shun Fung concerned business loss and not depreciation in land value, the parts of the decision referred to above demonstrate that Lord Nicholls was approaching the question of loss during the "shadow" period before acquisition as a matter of causation and that the principle he was enunciating dovetailed with the Pointe Gourde principle referred to below.
- Second, under section 117(1) of the 1990 Act, section 5 of the 1961 Act applies to the determination of depreciation in the value of land. Rule (2) in section 5 introduces concepts from compensation for compulsory purchase, including the scheme rule (see Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown lands [1947] SC 565; Wilson v Liverpool City Council (1970) 22 P & CR 282 at 293). The "scheme" in this case is the elimination of the retail element in the 1997 permission (see Myers v Milton Keynes Development Corporation (1974) 27 P & CR 518 at 527: the valuation is to be done in an imaginary state of affairs in which there is no scheme). There is a clear analogy between the need to disregard the scheme in compulsory purchase and the need to disregard the modification process in this case. There are similarities. A modification order is a step taken by a public authority which impinges upon an owner's property. Unlike a compulsory purchase order it does not take the whole of his land but modification removes part of his property. Like compulsory purchase a modification order is the end of a process which casts a shadow over the property. If the Tribunal finds as a fact that more than two years out of the three allowed to make a reserved matters application were lost due to modification, then it would be unjust not to allow the lost time to be reflected in the compensation. The Tribunal is invited to reach findings of fact on both Scenario A and B. Which scenario is correct is a matter of law.
- Third, an interpretation of section 107 which enables loss attributable to the modification process to be recoverable is consistent with the canon of statutory construction, that an intention to take property without compensation is not to be imputed to the legislature unless expressed in unequivocal terms (Central Land Board (Liquor Traffic) v Cannon Brewery Co Ltd [1919] AC 744 at 752), and with section 3 and Article 1 of the First Protocol in Schedule 1 to the Human Rights Act 1988 (see Lithgow v United Kingdom [1986] 8 EHRR 329).
- This approach does not merely pay lip service to the valuation date, as contended on behalf of Restormel. The valuation date refers to the date at which the hypothetical buyer and seller are taken to be negotiating an open market sale as envisaged by rule (2). In compulsory purchase it is well established that, while the valuation is carried out at the valuation date, the factual circumstances may well be different (eg as in Myers). It cannot be said that agreement to the date of valuation undermines the way in which the claimants can put their case.
- If these submissions are rejected, two points are made on the assumption that Restormel's approach is followed. First, on an application for approval of reserved matters before 13 May 2000 it would have been open to the applicants to make amendments as necessary even though the time had expired for a fresh application (Inverclyde District Council v Lord Advocate and Another (1981) 43 P & CR 375; British Telecommunications Plc v Gloucester City Council (2002) 2 P & CR 512 at 522-523). Second, if the Secretary of State had not made a modification order, it would have been open to the local planning authority, or the Secretary of State on appeal, to extend the time under condition 3 of the 1997 permission for complying with condition 1. On such an application personal circumstances are a material consideration (Westminster City Council v Great Portland Estates Plc [1985] AC 661 at 670E). It is inconceivable that an extension of time would not have been granted. Otherwise, the delays in the modification process would have the effect of wholly revoking the 1997 permission. After the modification order Restormel granted an extension of time for approval of reserved matters in respect of the part of the permission which survived the order.
- Mr Katkowski has argued that Scenario A requires a counter-factual hypothesis whereas Scenario B represents the position in the real world. But Scenario B is itself based on the hypothesis that the Secretary of State did not make the modification order and Scenario A involves no greater difficulty than the exercise undertaken in compulsory purchase (see Myers).
- Mr Roots referred to the chronology from the grant of the 1997 permission and said that the whole of the period between August 1997 and March 2000 was outside the claimants' control. As to the second reserved matters application, the impression was given in February 1998 that officers of Restormel would recommend approval. It was not considered further until Mr Mason's report in February 1999. In February 1998 the applicants would have expected approval and only learned to the contrary a year later.
- If the Secretary of State had not intervened, the second application would have been approved in February 1998 or, in the event of refusal, the applicants would have been able to appeal or make a fresh application. In the case of an appeal a decision would have been received 15 months prior to 8 March 2000. What actually happened to the second reserved matters application is not a reliable indicator as to what would have happened if the Secretary of State had not intervened. If regard is to be paid to the timescale of the second application, the starting point should be 12 November 1998 (when it was called-in). From that date to March 2000 was 16 months. If an appeal had commenced in February 1998 and had taken 16 months, the outcome would have been known by mid-1999. If approval was refused there would still have been nine months to make a further application.
- There can be no doubt therefore that the modification process prevented progress being made towards approval of reserved matters until after 8 March 2000. The claimants "lost" a significant part of three year period. It would be wrong if the approach to compensation does not reflect this lost time. Scenario B fails to do so: Scenario A is the only approach which enables the Secretary of State's intervention to be set aside. The question is whether on the evidence approval of reserved matters would have been granted before 8 March 2000 if the Secretary of State had not intervened?
- Under Scenario A it is assumed that the Secretary of State had not intervened at all. There would have been ample time for applications to have been made, discussed and determined without the benefit of the conclusions in the inspector's report. It is not necessary to define, for the purposes of assessing compensation, the precise form of development for which approval of reserved matters would have been granted. A layout could have been devised which met all reasonable planning requirements (eg. Mr Lacey's Option 7). It is likely that the second application would have been considered at the committee meeting in February 1998 and either granted or refused (with a consequent appeal). Plans might have been revised after discussions with officers, before or after consideration by the committee and before an appeal.
- Mr Roots urged caution as to reliance on what Restormel did in respect of the second application as evidence of what they would have done if the propriety of the outline planning permission had not been questioned. There were numerous pressures and influences on councillors, particularly regarding compensation, where Restormel's strategy was to minimise the amount. As to Mr Mason's position, the reasons he gave for being qualified to give his evidence are those which inevitably make it difficult for him to distance himself from actual events. A fundamental review, suggested by him, was really only a way of obscuring the fact that objections to the reserved matters application could be satisfactorily addressed. He has failed to establish that any significant improvements in reserved matters could have been achieved by such a review. Mr Mason was influenced by a belief that the original planning permission was for five retail warehouses, but there is no evidence to substantiate this assertion.
- Restormel's case regarding the need for high standards of design, appearance, etc, can be contrasted with the planning permissions granted at Victoria Business Park where utilitarian buildings set in cramped layouts have been allowed (see also the agreement regarding class B value where no adjustment have been made for uncertainties as to approval of reserved matters). Mr Roots said that, if there had been an appeal against refusal of the second reserved matters application in the absence of the Secretary of State's intervention, the context would have been different from that at the 1999 inquiry. The appeal inspector may not have reached the same conclusions as the modification order inspector. The functions of the two inquiries would have been different.
- In this reference it is not necessary for the claimants to provide detailed plans and elevations, as contended by Mr Mason. It is merely necessary to show that, on the balance of probabilities, approval of reserved matters would have been obtained. Procedure in the Lands Tribunal, with the exchange of expert reports, is far removed from the procedure for approval of reserved matters, which usually comprises meetings and a dialogue. It is accepted by Restormel that the Atlantic Village FOC is "optimal". Mr Lacey designed this development and this gives credibility and weight to his evidence regarding the development of the reference land.
- Mr Roots said that it will be necessary for the Tribunal to determine whether, in the absence of modification, approval of reserved matters would have been obtained for a development suitable for use as an FOC. It is important to bear in mind the jurisdiction of a local planning authority when dealing with reserved matters. A reserved matters application must show details which are within the outline planning permission (R v Hammersmith and Fulham London Borough Council (1985) 51 P & CR 120). It is well settled that an authority is not entitled to refuse approval of reserved matters on grounds which go to the principle of the development permitted by the outline permission (Shemara v Luton Corporation (1967) 18 P & CR 520; Lewis Thirkell Limited v Secretary of State for the Environment [1978] JPL 844). There are two matters to be considered on an application for approval of reserved matters. First, is the proposal satisfactory so far as each reserved matter is concerned? If so, then the authority should not be concerned to consider whether the proposal is the best that could be achieved. If the proposal is not satisfactory, it is then necessary to consider whether the proposal is the best which could be achieved on the site for the development for which planning permission has been granted (Medina Borough Council v Proberun Limited (1960) 61 P & CR 77). It is not lawful on an application for approval of reserved matters for an authority to impose a condition requiring works on land outside the applicant's control nor to impose a Grampian condition to that effect (Medina).
- The legal assessor in the modification inquiry was right to advise that the first reserved matters application for the reference land was outside the scope of the 1997 permission and that the second application for five buildings without internal subdivision was within that permission. For the same reasons Mr Lacey's layouts are within that permission. The assessor also advised that it was not open to the local planning authority, in considering a reserved matters application under the 1997 permission, to take account of traffic or retail impact.
- Turning to the question whether the second reserved matters application would have been granted in February 1998 in the absence of intervention by the Secretary of State, Mr Roots said that it is reasonable to suppose that, in a normal atmosphere of co-operation and dialogue, any concerns raised would have been met by revisions before the application was determined. Although the applications were rejected, it is highly likely that approval of the second application would have been given in February 1998. If this is not accepted, then it must be considered whether it is likely that a fresh application would have been successful.
- On the assumption that there was a refusal by Restormel and an unsuccessful appeal, with the inspector refusing approval on similar grounds to those given by the modification order inspector, the position would then have been as follows. Reserved matters under conditions 1, 8 and 9 refer to siting, design and external appearance, landscaping and parking. Location was one matter where Restormel had not previously demonstrated any particular sensitivity. Density was not excessive in comparison with that permitted at Victoria Business Park. With proper co-operation there is no reason to believe that a layout and design could not have been achieved which would not have given Restormel grounds for refusal. On the balance of probabilities, it should be concluded that, in the absence of the Secretary of State's intervention, the application would have received reserved matters approval for a form of development suitable for an FOC.
- Restormel's hypothesis is Scenario B. This assumes that the Secretary of State gave his decision on 9 March 2000 but decided not to modify the 1997 permission. The views of the inspector are among the material considerations to be taken into account.
- Mr Roots referred to part of the judgment of Lord Asquith in East End Dwellings Company Limited v Finsbury Borough Council [1952] 2 AC 109 at 132, and said that the assumptions which follow the use of Scenario B include the following. The Secretary of State would have reached the conclusion that the 1997 permission was not "grossly wrong" and that it could be implemented with subdivision to provide for an FOC (see Bolsover). The spectre of compensation would have been lifted from Restormel and they would have approached the approval of reserved matters with more equanimity. It is likely that the Secretary of State would have granted an extension of time for the submission of reserved matters.
- As to this latter assumption, Mr Roots referred to sections 54A and 73 of the 1990 Act and said that, although it is not in dispute that a retail development on this scale on the reference land would have been contrary to the development plan, material considerations are capable of outweighing the plan. The material consideration in this case would have been that a large part of the three year period was taken up by the modification process. It is inconceivable that an extension of time would not have been granted in the particular circumstances. An application for an extension of time for the remaining B class development was made and granted, contrary to the policy and other objections of Cornwall County Council, illustrating how material considerations can outweigh policy. Even if an extension of time were not granted, the application for reserved matters approval could have been made within nine weeks. It is recognised that the 66 day period left for submission of an application is short but a purchaser of the reference land would have taken an optimistic view for the following reasons. First, it would have been reasonable to expect the co-operation of officers. Second, the changes to the layout and design in the second application to meet the inspector's comments were not fundamental. Third, the applicant would have known that he could have amended the reserved matters after the application had been made.
- As to the quantification under Scenario B of the discount for lack of approval of reserved matters, Mr Roots said that a purchaser would have taken a robust approach, perhaps allowing for the possibility that he might reduce the scale of development. Mr Ovenden's figure of £3.25m reflects this approach. If the Tribunal holds that a purchaser would have taken the view that an extension of time was likely, then the prospects of resolving the issues would increase further.
- The other two heads of claim relate to abortive expenditure and professional fees. These are to be determined in principle at this stage. The abortive expenditure claim relates to the costs of holding the reference land for the period during which it was sterilised by the modification process. It is quantified at £68,179.27. The claimants purchased the land prior to the grant of the 1997 permission and from the time when the Secretary of State intervened they were unable to obtain approval of reserved matters or to dispose or deal with the land until the Secretary of State's decision on 9 March 2000. Since the decision in Shun Fung it is well settled in compulsory acquisition that compensation may be recovered for pre-acquisition losses. This principle has been applied to the cost of holding land in the period prior to confirmation of a compulsory purchase order (Ryde International Plc v London Regional Transport [2001] RVR 59; [2003] RVR 49). These holding costs are causally connected to the making of the modification order because the claimants could do nothing with the land during the period leading up to this order. They were therefore incurred due to the Secretary of State's intervention with a view to the making of a modification order. These costs are not too remote: they were directly attributable to the Secretary of State's intervention. The losses are reasonable. The onus is on Restormel to demonstrate that the claimants have failed to mitigate their losses (Lindon Print Limited v West Midlands County Council [1987] 2 EGLR 200). Restormel have failed to identify any steps which the claimants could have taken to avoid this expenditure. It is incorrect to say that this claim must fail because it is based on notional rather than actual costs. This is a matter which refers to quantum: it does not fall for determination at this stage.
- Whether this item of claim is characterised as abortive expenditure under section 107(1)(a) of the 1990 Act or loss under paragraph (b), in principle the claimants should be compensated for the fact that they acquired an asset which was then sterilised for a significant period due to the making of the modification order.
- The claimants have also incurred professional fees in the preparation of their claim. Their entitlement to this head of claim does not appear to be in dispute. These costs are distinct from the costs of the reference (London County Council v Tobin [1959] 1 WLR 354). The sum claimed is £86,181.85.
- Mr Mason said that, if the 1997 permission had not been modified, it would have been necessary for a third reserved matters application to be made by 13 May 2000. The claimants have asserted that their layout would meet the criticisms made of the earlier applications. His evidence assesses the revised layouts to ascertain whether the reserved matters would have been approved. All reserved matters would have had to have been submitted within the time limit and all then subsequently approved.
- Mr Mason said that it would have been essential in a third reserved matters application to deal with all the reasons given by for the refusal of the earlier applications. This has not been done. The claimants would not have been successful in obtaining approval on the material submitted, principally because the layout drawing is inadequate. This has two consequences: first, all reserved matters must have been submitted by 13 May 2000; second, it is not possible to separate the layout from other matters, particularly landscaping and appearance. Mr Mason said that he could not have negotiated with the claimants solely on the basis of a revised layout drawing. Information on other matters would have been requested, eg elevations, materials, design justification under PPG1. Landscaping and car park details would need to have been submitted.
- The starting point for consideration of a third reserved matters application would have been the inspector's conclusions. She identified fundamental flaws in the siting, design and external appearance of the buildings and means of access. Mr Mason listed the proposed changes shown on revised layout drawing 97014.A.PI and commented that some of the Secretary of State's reasons for refusal of reserved matters have been addressed and some have not been addressed satisfactorily.
- As to the former, Mr Mason's commented as follows. The pedestrian underpass will help to prevent pedestrian and vehicular conflict on the estate road but a significant number of people will not use it. The relocation of the car park entrance to the west could help to relieve congestion on the estate road by providing a smoother and earlier opportunity to enter the car park. Additional parking is now shown adjoining the western entrance to the buildings but this would require visitors to pass the main car park entrance and enter through the service access. This is not practical. The circulation of the car park now follows a west to east flow but there is still only one main artery through the parking area and capacity is inadequate. The special needs parking is more closely related to the main pedestrian artery but remains on the opposite side of the estate road, requiring the use of the underpass. This is the wrong location for special needs parking. A granite feature is indicated close to the northern junction of the estate road but this is a token gesture. The scheme does not reinforce local distinctiveness.
- Mr Mason then commented on the matters in the Secretary of State's refusal which had not been satisfactorily addressed. As to siting and layout, Mr Mason said that the separation of car park and buildings by the estate road remains a fundamental flaw only partly addressed by an underpass. You cannot prevent people taking the easier route across the road. They will also use the new western car park entrance to cross to the buildings. The claimants previously indicated that some means of enclosure could prevent the crossing of the road but this is an impossible solution. The desire for people to cross directly to the western entrance would remain because the layout of the buildings is unchanged. The relocation of the car park entrance to the west of the site means that it is now impossible to prevent such pedestrian movements. Mr Mason referred to the evidence of Mr Tonks that there would be inadequate car parking leading to unacceptable queuing at the northern junction of the estate road with the B3274. The revised layout still makes no provision for cyclist.
- The evidence of Mr Tonks shows an insufficient number of parking spaces in the main car park. The car park in the south-western corner does not provide sufficient additional spaces and the entrance is the same as the service and staff vehicular entrance. This is an unacceptable location. Visitors would have to walk into the industrial estate and enter through a secondary entrance. Circulation in the main car park has been redesigned but still has only one artery. This is likely to be congested. The new location for special needs parking is unacceptable due to the distance to the nearest shops and the use of the ramps in the underpass. As part of the fundamental problem caused by the siting of buildings and car park on opposite sides of the estate road, Mr Mason referred to accessibility for people who arrive by bus or coach. Coach and bus access should be close to the main entrance. With regard to servicing, there is a long and torturous route to the turning circle and any congestion of this area would result in unacceptable reversing movements.
- Mr Mason said that the fundamental problem regarding design and external appearance is that the revised plans provide only details of layout; they do not address the reasons for refusal in the inspector's report. Mr Mason said that he would consider the problems and the requirement to redesign the scheme. Only two token gestures have been made towards addressing fundamental flaws: minor landscaping in the car park and a granite feature at the entrance.
- Although the proposed development is on an industrial estate, the site is still important. It forms part of Victoria, the first place on the A30 travelling west where a single carriage way causes a reduction in speed. The visual importance of this site is self-evident. The Cornwall Landscape Assessment refers to the industrial estate. It is essential to look beyond the immediate surroundings and consider the wider landscape context, area characterised by rough vegetation and areas of enclosed land with a small scale, intimate and sinuous field pattern. Trees are infrequent. The landscape has a strong identity and a desolate character.
- It is now important to promote local distinctiveness when considering planning applications. There was a significant change in emphasis in the 1990s. Mr Mason referred to Policy ENV12 in the Structure Plan and to the Local Plan, which recognised the need for developments to respect the character and identity of their surroundings. He also referred to PPG1, the Cornwall Design Guide (Chapter 2) and PPG6. Mr Mason said that the inspector and the Secretary of State supported his view that the proposed buildings do not have proper regard to the landscape character of this part of Cornwall. They fail to respect the local vernacular and do not provide a strong individual architectural statement. The revised layout drawing does not demonstrate that any changes are proposed. There are two fundamental flaws. First, the proposed buildings have been designed in a generic style, typical of many shopping developments. Second, the scheme has not been designed from the starting point of the landscape context nor has it been considered how it could be assimilated into the wider landscape by providing a development which promotes the individuality and distinctiveness of the area. The first and second reserved matters applications were not accompanied by a statement setting out the design principles nor has this information been provided as part of this claim. It has not been shown by the claimants that the design reasons for refusal could be overcome.
- Mr Mason said that he believed that the claimants' aspirations for the development of the reference land are unrealistic, given the site limitations. The claimants would have been unable to produce an acceptable application for approval of reserved matters on this basis. There are three points of fundamental disagreement. First, it would not have been possible to design a scheme which avoided locating the buildings and car park on opposite sides of the estate road. This problem could not be resolved, however much time was available. Second, it would not have been possible to produce an acceptable scheme by negotiation unless the claimants were prepared to compromise their aspirations. There is no evidence that this would have been likely, given the limited time available. It was not likely to have been achieved. Third, the claimants have responded to the inspector's report and Secretary of State's decision by producing a revised layout drawing which still fails to deal with the fundamental problems identified by the inspector.
- The claimant's architect and planning consultant have made it clear that the FOC scheme being pursued would not be fundamentally reviewed nor altered in concept. This involves a significant change in character from that envisaged by Restormel when outline planning permission was granted. It is from this change in character that fundamental difficulties arise with the reserved matters application. Mr Mason said that he accepts that the outline planning permission has established the principle of retail development and is limited only by conditions and the description of development in the permission. An outline planning permission cannot, however, be regarded as permitting any form of retail development. The form of the proposed development (one large and four smaller buildings) has implications for siting, design and external appearance, matters not yet approved. If the form of the proposed development gives rise to issues on the reserved matters which are unacceptable, then it is proper for Restormel (or an inspector on appeal) to refuse approval. The practical outcome is that, due to particular site constraints, the development proposed constitutes significant over-development. This is indicated in his report to the Planning Committee in February 2000 and in the inspector's report.
- The claimants' agents have, before and since the inquiry, produced piecemeal solutions only to the criticisms of the development. In each case the proposed solution would exacerbate or produce new issues affecting other aspects of the proposals. This is a classic indication that the scheme does not work and is over-development or unsuitable for the site. There has never been a return to the basic principles of a scheme in respect of design and appearance, merely a tinkering with detail. A fundamental review of the proposed development is necessary.
- Having regard to the Council's resolution in February 1999 and the later ad hoc attempts to deal with the issues raised, the likelihood of the claimants producing a satisfactory reserved matters application within their own restrictive parameters appears to be slim. It would have been necessary for an application for approval to be made by 13 May 2000 in a form acceptable to Restormel or an inspector or the Secretary of State on appeal. The first and second reserved matters applications have been rejected; the revised scheme still fails to satisfactorily address all issues. There is no evidence that a satisfactory scheme could have been produced within the time-scale.
- Mr Mason disagreed with Mr Stewart's evidence on the following matters. As to the time available to make a further reserved matters application, only two months remained and the Secretary of State would not have granted an extension of time. An application to Restormel for such an extension had not been determined at the valuation date. No appeal had been lodged. Restormel would not have granted an extension of time. Planning law and the policy framework distinguish the considerations material to such an application from those that influenced the Secretary of State in respect of the modification order. A parallel cannot be drawn. It is necessary to understand the effect on the existing permission of the failure to submit an acceptable reserved matters application within the time-limit, and the way in which an application for renewal of an existing permission must be determined. An outline planning permission becomes incapable of implementation three years from its date unless reserved matters have been approved on an application made within that period. An application to renew an outline permission made within the life of that permission is an application under section 73 of the 1990 Act "to develop land without compliance with conditions previously attached." If granted it is, in effect, a new permission. It is then appropriate to reconsider all relevant issues as to the principle of development. A proposal to develop 125,000 sq ft of non-food retail floor space on the reference land would be contrary to development plan strategy to site retail development in town centres. This is also in accordance with national policy. Mr Mason said that the matters raised by Mr Stewart would not have outweighed this policy. Even if the Secretary of State had not concluded that the 1997 permission was grossly wrong it would still have been seen to be contrary to the relevant policy framework.
- As to the site and its surroundings, Mr Mason said that design is an important consideration when determining the acceptability of detailed development proposals. He referred to PPG1 and PPG6 and said that the revised proposals do not address the significant deficiencies in the rejected schemes. They do not express the local character. The use of a granite feature is not a suitable interpretation of the local vernacular. This issue may have been resolved if the claimants had been prepared to accept a fundamentally different approach to design but they had been unwilling to compromise.
- Mr Mason said that Mr Stewart should have referred to Policies 45 and 49 in the Local Plan, which refer to the provision of convenient access for all disabilities. The issue of limited access between car park and shops is of even greater significance when applying these policies.
- Mr Mason said that siting is not a matter of looking at where the buildings would go on the site, as contended by Mr Stewart. There have been shown to be significant issues in this case arising from the poor relationship between buildings and other uses.
- Although the reference land was considered adequate for the quantum of retail floor space granted under the outline permission, this was on the basis of five retail warehouse units with relatively low associated traffic and parking. There is now considerable doubt whether the site can accommodate a development in the form of a single large box (an FOC) and four other units, with greater traffic and parking. The form of retailing now proposed cannot be satisfactorily achieved without restricting landscaping and the amenity provision. Buildings and parking on opposite sides of the estate road is unacceptable.
- Mr Mason said that he agreed with Mr Stewart, that in purely visual terms, the siting of the buildings on the southern part of the land is less likely to raise concerns regarding prominence than siting them to the north. The concern with prominence is however also due to the proposed scale and massing. As five retail units of approximately the same size, the prominence of two or three of them on the northern area would have been less likely to cause concern. But concentration of 84% of the floorspace in one building and the siting of the whole development on one part of the site have produced a scheme which will inevitably be more prominent.
- Mr Mason said that Mr Stewart referred to early discussions with Restormel but subsequent resolutions of the Council and the recommendation of the inspector show that the siting of the buildings and parking on opposite sides of the road raises issues which cannot readily be reconciled. The February 1998 report was not put to the Planning Committee and was superseded by a recommendation for refusal which was accepted. Any expectation in February 1998 that approval of reserved matters would be given was short-lived. No weight should be given to the February 1998 report.
- An underpass would not adequately deal with the fundamental problem of the location of buildings and car park on opposite sides of the road. This is an example of the piecemeal approach of the claimants where a fundamental review is required. The issues raised by the inspector needed to be dealt with comprehensively. All reserved matters should be considered in one application. All the inspector's concerns need to be overcome.
- Although it is feasible to provide for cyclists by widening the pavement and providing access to a secure area of bicycle storage, this would not be attractive to pedestrians seeking access to the buildings from the car park.
- Mr Mason agreed with Mr Stewart's view that Restormel's ability to control access at the reserved matters stage is limited, but he could not agree that all issues concerning access within the Council's control have been addressed. Particular concerns are the layout of the car park, pedestrian, coach and disabled access. They cannot be addressed without a fundamental review of the scheme.
- Mr Mason said that a principal objective of transport policy is to discourage use of the car and encourage public transport. For this reason bus and coach spaces should be given a higher priority. The inspector was right to criticise the distance between the setting down points and the crossing, which would result in visitors taking a more direct route to the buildings.
- Landscaping cannot be considered independently. The prominence of the site and the difficulties caused by putting buildings and parking on opposite sides of the road indicate a need to consider landscaping with other matters. The inadequacy of the landscaping is a matter of concern. An appropriate scheme could not have been devised within the limited time available. It is not Mr Mason's contention, and he did not believe it was in the inspector's mind, that buildings should not be seen from the A30. The concern has been that they would be seen across a large area of car park. A dense belt of planting is not an appropriate response to this criticism.
- Mr Stewart referred to "subsequent events" which showed that Restormel sought a reduced number of parking spaces. Mr Mason said there was a review of parking standards when changes were made to the Local Plan (Policy 79). The maximum number of spaces for non-food retail buildings of 125,000 sq ft is 500. However, it was agreed at the inquiry that TRICS data for FOCs indicated that a higher provision is likely to be needed. Mr Mason doubted whether agreement would have been reached on the level of parking given the overall deficiencies of layout and the unsatisfactory relationship between parking and buildings.
- Mr Mason disagreed with Mr Lacey's evidence on the following matters. It is a design imperative that the car park should not be divided from the retail buildings by an industrial estate road. The claimants have not identified any other retail development where this has been ignored. The Great Western Centre at Swindon is not comparable. Mr Mason could not say that the re-routing of the road had no merit as a solution to this problem but he could not comment as to whether this would be viable.
- The examples of parking at other FOCs given by Mr Lacey are not comparable with the proposals for the reference land. In none of them is parking separate from the buildings. As to special needs parking and bus and coach set-down points these are too far from the buildings (see PPG13).
- The view of the buildings from the A30 could not be screened by planting. Mr Mason disagreed that the highway authority were likely to favour the access solutions put forward. There has been no formal approval to indicate the attitude of this authority.
- Mr Mason agreed that parking provision would need to be sufficient for an FOC. At the time of the enquiry the TRICS Database indicated 929 – 1,102 spaces. Mr Tonks' evidence is that 939 spaces would not now be sufficient. Mr Mason did not agree with the provision of a separate overspill car park served from a point on the estate road adjoining the service access. This would cause confusion and congestion. Such a car park would reduce the potential for landscaping. The objections to split parking could not be overcome by signage. Although objections to the amount and location of parking remain unresolved, Mr Mason accepted Mr Lacey's view that the revised layout demonstrates the scope to redesign the main car park. However, the revised layout does not in itself deal with criticisms that the car park would be prone to congestion and have insufficient provision for pedestrians. This is considered further by Mr Tonks.
- As to the provision of cycle parking, Mr Mason agreed that the revised scheme showed sufficient parking to meet likely demand. A cycle route would, however, be required from the B3274. It would require a widening of the footpath on the southern side of the estate road.
- The proposed buildings in the reserved matters applications failed to respect the local vernacular and to create a strong architectural statement. The design of the buildings should be integral with the design of the landscaping. The buildings will still be seen from the A30 when perimeter planting has matured. It cannot be assumed that there is only one alternative form of development which would have been achieved on the reference land (i.e. large footplate industrial – type buildings) or what the relative visual impact would have been. The issues of design, external appearance and landscaping would have been capable of resolution given time and a relaxation of the claimants' restraints. However, those constraints, the short time available in and the fundamental issues arising from the split site, made it unlikely that a satisfactorily submission could have been achieved within the time available.
- Mr Lacey's evidence regarding landscaping suggests an approach which could have formed the basis of an agreed structure and philosophy for tree types, surface materials and a management scheme. These proposals only emerged after debate following the comments of the inspector and Secretary of State. Restormel would still be seeking improvements to the proposals.
- Mr Mason said that he does not agree that approval of reserved matters would have been obtained on the basis of a satisfactory submission by the due date, following discussions with officers. It was unlikely that the claimants would have made sufficient amendments within the limited time available to render the scheme acceptable. Fundamental changes were required – more than the claimants were prepared to contemplate. At the time of the modification there was no realistic prospect of reaching agreement on the scheme due to the time and site limitations and the constraints imposed by the claimants. Even without a time constraint, the claimants have failed to reconcile the demands of the FOC concept with the site constraints. An amended application could not have been prepared in the six weeks from 9 March 2000.
- In his oral evidence Mr Mason said that it is likely that the claimants would first have sought an in principle meeting following the modification order. This would probably have been held within two weeks. The application would then have been lodged within the remaining seven weeks and registered as a valid application. Registration takes up to one week. The views of other interested parties would have been sought. He would not have made the decision himself. Within Restormel there would have been consultation with four other officers. Externally, consultation would have been necessary with Cornwall County Council, the Highways Agency, statutory consultees, Roche Parish Council and North Cornwall District Council. When all views were known Mr Mason would have been able to meet the claimants. This would have been after the deadline for the application in May 2000. He would have raised three major concerns: the separation of the buildings from the car park, poor architectural quality and the piecemeal approach to the redesign of the scheme, which has not solved all problems and in solving some problems has created others. If he had been asked for his views on these matters by a prospective purchaser he would have thought it even more important to express his concerns.
- In reply to Mr Lacey's Report of Additional Evidence Mr Mason made the following comments. The site context is not the industrial buildings on the land but the wider landscape of the area. The fact that, even after the significant time available to the claimants, their approach is still at odds with the site context as understood by Restormel. This is a further illustration of the difficulty the claimants would have faced in producing an acceptable scheme within the limited time available.
- Mr Lacey's examples of policy interpretation by Restormel are selective. Policies ENV 12 in the Structure Plan and 6 in the Local Plan are rigorously applied. None of the examples given can be compared with the development of a large single retail unit. Mr Mason commented in detail on the various developments referred to by Mr Lacey. No evidence has been put forward by Mr Lacey to support his claim that Restormel have been inconsistent in their application of any policies. Each case was considered on its merits.
- Mr Mason said that the relevance of Mr Lacey's eight alternative options is not accepted. If he were able to find that any one of these options (with the exception of 7 and 8) would have been likely to satisfy Restormel's standards and meet approval without amendment, this would only establish what might have been possible, had the claimants abandoned their primary aspiration for the site. It is only possible to comment on the alternative layouts in general terms. Mr Mason commented on each of the options. As to preferred Option 7, he said that, although this scheme appears to address some of the criticisms made regarding Drawing PL13, it introduces new concerns. These relate to the relationship of special needs parking and coach drop-off and parking areas. The separation of mother and baby parking from the main car park raises the question of adequacy at peak periods. During the holiday months these spaces are likely to become full requiring unsafe manoeuvring to join potentially queuing traffic into the main car park. Furthermore, its juxtaposition with coach parking and shared manoeuvring space raises new safety issues. The introduction of another access off the B3274 close to the junction with the service road is unacceptable.
- Mr Mason said that Mr Lacy's additional plans showing pedestrian movement and special needs parking do not add anything to his understanding of these matters and to his earlier objections. The fencing plan merely illustrates fencing positions but does not take the matter further. The car park fill pattern plan does not add to an understanding of the way in which visitors would be likely to fill the car park. Mr Mason did not take issue with the proposed cycleway and footpath route. He said that sign A on plan 8 is too close to the junctions with the A30 and the estate road and would be likely to cause confusion. The plan showing servicing route does not add anything to the case.
- Mr Mason said that Mr Lacey's further evidence regarding Cornwall's mining heritage confirms his opinion that an acceptable application for approval of reserved matters could not have been made in the time available. This evidence has been prepared more than three years after the modification order but the architectural approach is still fundamentally flawed. It is a "theme park" approach and as unacceptable as the previous "maritime" approach. The correct approach is to understand the immediate landscape character and use it to assimilate buildings designed to "lift one's spirit". This has been missed. Solutions have been found to this problem elsewhere in Restormel, eg the gateway building to the Eden Project and Careleze Yard, St Austell.
- As to the examples of pedestrian connection between parking and shopping elsewhere, Mr Mason said that there is insufficient detail to enable him to comment in depth on those particular developments. It is clear that most relate to town centres, which are not comparable with the proposed development of the reference land. Although Mr Lacey has referred to examples of situations where parking is separated from shopping by an industrial estate road he has failed to produce examples. Mr Mason said that he is unable to judge whether any of the examples in this later evidence are satisfactory in their own context. Even if they are it would not affect his judgment that, at the reference land, the arrangement is not acceptable.
- Even if the whole of the three year period for reserved matters had been available to the claimants, Mr Mason thought that the fundamental design problems of the claimants' FOC could not have been overcome. Under the outline permission some form of retailing and design approach could have been found to fill that permission but not in the form proposed by the claimants. An outline planning permission granting permission in principle does not mean that any form of development would be acceptable.
- In cross examination, Mr Mason acknowledged that in February 1998 the claimant's would have been given the impression by the report that the second reserved matters application was likely to be recommended for approval. They would only have learnt to the contrary at some time after February 1999 when looking at his later report.
- Mr Mason agreed that the 1997 permission can be construed to mean an arrangement of building in sizes from (at one extreme) a building of 125,000 sq ft through a host of different sizes in up to five buildings. That is, however, not what the Council anticipated for the site. They anticipated a non-food retail warehouse development, five units each with its own car parking. As confirmed by the evidence given at the modification inquiry, at the grant of permission Restormel did not envisage an FOC development nor was this mentioned to them by the applicants.
- Mr Tonks said that his evidence represents the advice he would have given to a potential operator of an FOC on the reference land. It was not aimed at achieving approval of reserved matters but at achieving an FOC which operated satisfactorily.
- Mr Tonks considered levels of traffic attraction associated with retail development at the reference land. He said trip attraction for the proposed developments has been forecast for only the critical mode. The car will cater for most trips. Forecasts have been prepared using the TRICS Database. Traffic generation assumes average observed rates of attraction. The location of the reference land on the A30 and distant from a local catchment population would generate a higher than average private car mode split. The operational impact on the local infrastructure may be higher than the values calculated.
- Mr Tonks said that his analysis considers trip generation rates for FOCs of similar size, located outside urban areas, for a weekday, Saturday and Sunday. The vehicle trip numbers for the weekday afternoon peak and Saturday and Sunday peak (in and out) are: 113/223, 843/680 and 929/1088 respectively. To reflect the high volume of traffic on the A30 a higher than average proportion of pass-by traffic attraction has been assumed, namely 45% compared to the usual figure of 30%. This may reduce the resultant operational requirements for local infrastructure. The traffic attracted to the FOC has been distributed with a bias towards the A30.
- Mr Tonks said that his operational analysis (on the assumption of no highway improvements) has three scenarios: no development, an FOC and a non-food retail warehouse. There are two key determinant characteristics: the ratio of flow to capacity (RFC) and maximum queue lengths. Where traffic flows exceed 85% of capacity (an RFC of 0.85) junction operation becomes erratic and small fluctuations in traffic flow generate significant increases in queuing and delay. A facility which operates at above 85% of capacity does not have sufficient spare capacity to cater for short period increases. In general, a junction with an RFC of 1.0-1.1 is likely to be capable of improvement by minor geometric works to increase capacity. An RFC in excess of 1.1 suggests that more significant works may be required.
- Mr Tonks said that preliminary capacity analyses have been undertaken for each peak hour in order to examine the comparative operational implications of retail warehousing and an FOC. An inherent weakness in this approach is that it underestimates queue lengths and delays. For an FOC maximum RFCs of nearly 3 are forecast, generating queue lengths of 200 vehicles leaving the site. Simultaneously, the right turn from the A30 approaches its ultimate capacity with an RFC of 0.94 and 10 vehicle queue lengths. This is an unacceptable level of operation. Significant works would be required to overcome this lack of capacity and maintain an acceptable level of operation. In addition, demand exceeding capacity is likely to have developed, thus presenting existing queues at the start of the analysis period, not accounted for in this preliminary examination. To assess the implications, further tests have been undertaken.
- In the preliminary peak hour assessments, the junction of the B3274 and the northern estate road operates comfortably within capacity for a non-food retail development. But with the proposed FOC this junction would have RFCs of 1.9. This is significantly in excess of capacity, generating queues of over 350 vehicles leaving the site.
- Mr Tonks said that further analyses have been undertaken to analyse cumulative build-up of queues and delays. These show that the existing B3274/A30 junction, with an FOC on the reference land, would be operating with demand in excess of the theoretical capacity for large parts of the year. In the autumn delays would peak at 25 minutes per vehicle and exceed five minutes for six hours every Saturday. Vehicles would need to queue for up to 25 minutes to pass through the junction. This would be an unacceptable delay. Unacceptable levels of junction operation are forecast to occur for 559 hours of the year. This would occur at times of highest traffic demand, coinciding with the busiest trading periods. If the 45% pass-by traffic assumption is reduced the resultant queues and delays would significantly increase.
- Mr Tonks said that he therefore believed that, in the absence of geometric improvements, the operational constraint of the A30/B3274 junction would severely affect the commercial vitality of the proposed FOC. It is unlikely that an operator would consider the forecast levels of operation at this junction to be acceptable. His advice to an operator would have been to improve the highway network to reduce delays.
- Additional sensitivity tests were carried out assuming lower levels of traffic attraction. These all resulted in RFCs in excess of 1.1 for lengthy periods, creating severe problems with operational capacity and restraints on the viability of the FOC.
- To remedy the unsatisfactory situation and to accommodate levels at the FOC, new roundabouts would be required at the A30/B3274 junction and also at the junction of the northern estate road and the B3274. These are the minimum highway improvements which an operator would require. The introduction of a roundabout on the A30 would improve the free flow of traffic on this trunk road and improve safety.
- Local guidance on parking provision is included in the Local Plan, which requires one space per 30 sq m of non-food retail area, equating to 387 spaces for the reference land. FOC development had not been considered at that time. There were no fixed requirements for parking levels within national policy documents at the valuation date. Statutory guidance required parking to be sufficient to accommodate the predicted levels.
- Retail operators consider customer parking to form an essential component of their development. They wish to maximise parking provision. An examination of typical parking levels associated with FOCs has been undertaken by comparing cumulative vehicular arrival and departure profiles for a 24 hour day. This uses traffic surveys in the TRICS Database. The average peak parking accumulation is estimated to be 1,441 for an FOC on the reference land. But there needs to be an allowance for operational space, reducing the time spent searching for available spaces. This is typically specified as 5% additional capacity and raises the level of parking to 1,513 spaces. Mr Tonks said that he is regularly asked to provide 5% uplift to allow for the operational use of a car park. Static capacity means meeting the maximum forecast demand; dynamic capacity is reflected in the uplift. There is a difference between these two capacities. The steps taken by Mr Tonks to arrive at his estimate of 1,513 spaces were: identification of the appropriate trip attraction rate, application of daily profile rates for arrivals and departures to get parking accumulation figures for weekdays and Saturdays, application of an uplift for Sundays and the addition of 5% dynamic capacity. Various FOC car parks suffer from significant overdemand which would constrain the number of customers and turnover. Review of the data in the TRICS Database shows that factors other than retail catchment can have significant implications for traffic attraction, ie. accessibility and visibility from major highways. Mr Tonks would have advised that overspill parking be provided for use during busy periods.
- Mr Tonks referred to an e-mail dated 10 December 2003 from Mr Millerchip of McArthur Glen which identified an ideal requirement of 1,000-1,500 parking spaces per 100,000 sq ft. The average at this range produces a parking requirement at the reference land of 1,562 spaces.
- On the basis of 25 sq m per car space this produces a total parking requirement of 3.8 hectares. In addition there should be 180 staff parking spaces. Reference to all FOCs on the TRICS Database identifies staffing of one employee per 29 sq m. This suggests 400 employees at the reference land requiring 190 spaces (allowing for 90% car sharing and 1.9 persons occupancy per car). By reference to the West Lothian and St Asaph FOCs the requirement would be 234 spaces. These calculations suggest staff parking in the region of 200 spaces. It is common in FOCs for staff to park in the customer car park but at the reference land this is already inadequate.
- The total amount of parking could not be accommodated on the reference land without a decked multi-storey car park. The loss of site area to infrastructure improvements would result in further pressure on parking space, increasing the requirement for decking. Parking for a non-food retail warehouse development could be provided in a surface car park. The split nature of the parking illustrated on the indicative site layouts would generate additional circulatory movements when the car parks are operating at capacity.
- Mr Tonks said that the size and layout of the coach park is of concern. The proposed FOC is likely to be attractive to touring coaches resulting in the need for more spaces. At Atlantic Village there are eight coach spaces. The FOC at Roche is 10% larger and situated on a trunk road. It is likely to be a more attractive venue. A minimum of 15 coach spaces should be provided; a 20 space coach park would not be unrealistic. This would further reduce the land available for a car park. A 15 space coach park would take 0.25 hectare, reducing the car park by 60 spaces. The proposed layout for 8 coaches allows insufficient manoeuvring space. With sufficient space the coach park allows for only 4 coaches. Evidence on behalf of Cornwall County Council at the public inquiry identified a potential Sunday demand for 67 coaches.
- Mr Tonks said that he agreed with Mr Brady's assessment of requirements and best practice for the design of car parks but did not accept that these have been met at the reference land.
- As to adequate static and dynamic parking capacity, Mr Tonks said that the location of the reference land would attract a high proportion of passing traffic. It is a tempting break point for travellers on the A30. Major factors which control the traffic attraction of an FOC are accessibility, visibility and static and dynamic catchment.
- Accessibility by car is controlled by many factors, including proximity to, and ease of access from, a major road and the traffic demand on that road. The level of demand on the major road is indicative of the catchment served by that road and controls the level of exposure of the site to passing traffic. High levels of traffic demand can lead to queuing and congestion and increase journey times.
- The retail catchment of the reference land is geographically significant. There are low residential populations within the 60 and 90 minutes drive times. There is, however, a high volume of pass-by traffic on the A30. Mr Tonks set out in tabular form key characteristics of six FOCs and the reference land. He said that undertaking a more detailed review of traffic on the A30 in the vicinity of Victoria Business Park has enabled identification of the proportional traffic increase during the summer. The automatic traffic counter located on the A30 at Mount Pleasant identifies monthly average daily traffic flows ranging from 16,669 in January to 28,197 in August. There is a significant (70%) increase in pass-by traffic during the summer. Comparison of the Victoria Business Park data with that from the M8 at Harthill demonstrates the significant seasonal influx of traffic into Cornwall on the A30. Thus, the level of seasonal pass-by traffic at the reference land represents a unique characteristic of the site which would result in significant volumes of short stay pass-by trade, particularly in the summer. This must be catered for by the provision of an adequate car park.
- To forecast accurately the potential traffic attraction of an FOC on the reference land it is essential that the sites in the TRICS assessment used for comparison purposes reflect as closely as possible the characteristics of the reference land. These include: rural location, poor public transport, low levels of competitive comparison retail and a high potential for pass-by trips. There are no FOCs on the TRICS Database which accurately reflect all these characteristics. Only two are located outside an urban environment, St Asaph and West Lothian. The latter has similar characteristics to Roche. The significant variation in trip attraction between these two sites demonstrates the influence of specific individual development characteristics, retail provision and levels of competition. The reference land is more visible from a trunk road than St Asaph and West Lothian, with more pass-by trade. Application of the data from these two sites results in a potential maximum parking provision of 1,441 vehicles (static demand). To this figure must be added 5% for dynamic capacity, producing a total of 1,513 spaces. The provision of only 939 spaces would be insufficient on every Saturday and Sunday throughout the year. Unless additional parking is provided an FOC on the reference land of the proposed size could not operate. Having regard to the inspector's report, an operator who wished to cater for the full potential of the site would provide in excess of 1,102 spaces.
- Mr Tonks referred to the planning application for a roundabout at the junction of the A30 and the B3274. This remained separate from other applications. It would appear to present a clear acknowledgement of the requirement for highway improvement to ensure an acceptable level of operation for the proposed FOC. Permission was refused on the direction of the Highways Agency. To overcome the first ground (inadequate junction geometry) it would be necessary to use third party land to improve deflection of through traffic and/or significantly increase the inscribed circle diameter of the roundabout. As to the second ground of refusal (implications concerning freeflow on the A30), this is a matter of principle and cannot be overcome by engineering means.
- The development control role of the Highways Agency is defined in Control of Department Adjacent to Trunk Roads; Guidelines for the Highways Agency (July 1996). Under paragraph 3 a traffic impact assessment (TIA) should be carried out initially and at 15 years. A solution which leaves the trunk road network no worse off should be accepted. The role of the Agency is to promote the efficiency and safety of trunk roads. The proposed roundabout, however, would primarily benefit the B3274 at the expense of trunk road traffic. Furthermore, it would be necessary to provide significant deflection of through traffic. It is unlikely that a roundabout which provided insufficient deflection would be allowed by the Agency or Cornwall County Council. In order to increase deflection at a roundabout it is usual to increase the size or offset the junction from the centre line of the through route. In both cases this would increase the required land-take for the junction. Thus, the proposed roundabout would present a dis-benefit to through traffic on the A30 and would not leave the trunk road network no worse off had the development not proceeded. The roundabout is therefore unlikely to have been permitted on policy grounds.
- When the roundabout application was considered by the County Council additional information was required following submission of a draft TIA. This was not received and no agreement was reached with regard to the design and operational implications of the roundabout. At that time Cornwall County Council considered that the application "conflicts with current policies, and that any technical objection is only subsidiary to the overall view of the Cornwall County Council." No technical agreement had been reached with the County Council regarding the design and operation of the roundabout and the Council did not agree with the claimants' expert's conclusions regarding the operation of the existing junction and concluded that further improvements were necessary. No improvement of the junction of the B3274 and the estate road was proposed. A roundabout at this junction would also be appropriate. In the light of the above there was little prospect of achieving a roundabout at the A30/B3274 junction within the foreseeable future. The B3274 is the responsibility of Cornwall County Council but the proximity of the estate road junction to the A30 would have been of interest to the Highways Agency. It is unlikely that they would have allowed a roundabout at this location due to the probability of queuing impacting on traffic on the A30. Issues of highway access in the wider sense remained in dispute.
- Mr Tonks referred to the failure by the roundabout applicants to satisfy the Highways Agency regarding the safety and freeflow of traffic on the A30. Significant additional work was required. At the valuation date there was little prospect of agreement with Cornwall County Council. Their advice to the Highways Agency would have been a recommendation that the roundabout should not be permitted.
- The 1996 Guidelines referred to above represented the basis of advice by the County Council to the Highways Agency. Mr Tonks referred to Mr Tucker's references to Circulars 4/88 and 6/91 and said that the 1991 Guidelines still required the operation of the trunk road to be no worse off than if the development had not been permitted. A roundabout in this location would benefit the side road but not the trunk road.
- Mr Tonks said that he did not dispute that the construction and operation of an FOC on the reference land without a roundabout would cause congestion which, in time, would lead to the Highways Agency to require the improvement of the junction to remove the trunk road congestion. However, an FOC operator would have been aware of the uncertain duration of this procedure and the commercial implications of high levels of congestion during the first crucial years of FOC operation.
- There is no certainty that the A30 will be de-trunked or when this may happen. Even if de-trunking occurs the road will become the responsibility of Cornwall County Council who have advised against a roundabout.
- As to Mr Tucker's suggestion that the Highways Agency could have compulsorily acquired third party land for a roundabout if the claimants offered a section 278 agreement, Mr Tonks said that the applicants did not follow this route and at the valuation date there was no prospect of achieving the improvement and insufficient time to do so. A section 278 agreement is needed in order to obtain planning permission. Furthermore, this stretch of the A30 does not have a bad accident record and the B3274 junction does not operate sufficiently poorly to warrant improvement in the absence of further development on Victoria Business Park.
- Mr Tonks said that, although the County Council did not require testing of unconstrained summer traffic demand levels in the TIA for the roundabout application, they did require further analysis by the applicants. The limiting link capacity of the A30 is significantly higher than the traffic demand levels in the draft TIA of August 1997. It is clear that, although main-line queuing traffic was not adequately accounted for in the computer analysis undertaken, its effects will be to impact significantly on travel time on the A30, for through traffic and for vehicles to or from the proposed FOC. Congestion and frustration significantly increase accident risk. These difficulties would become well-known to regular customers to the FOC and impact upon commercial performance.
- As to the timing of the proposed A30 improvements, Mr Tonks said that, although the European Community Objective 1 status had been approved at the valuation date, there was no evidence regarding timing and alignment. He referred to a letter dated 29 October 2002 from the Highways Agency which confirmed that the contract and preferred alignment only entered the public domain since the valuation date. The advice which Mr Tonks would have given to a purchaser of the reference land would have been that it was widely acknowledged that the A30 should be improved but schemes have been in the pipeline for some years and there are seven options for improvement, but no funding and no certainty that any of these schemes will come forward. In the Spring of 2000 the Highways Agency issued a publication confirming that public consultations were still underway with a view to identifying the preferred improvement option.
- Mr Tonks said that the proposed service arrangements create conflict between service vehicles and customer overflow and staff car parking. Mr Brady has compared the proposed servicing arrangements with Atlantic Village. Servicing at Atlantic Village operates successfully but there is an inability to service externally units on both sides of the central spine which leads to lengthy trolley distances. There is a necessity for out of hours servicing and there are lengthy trolley distances from service vehicles to store. This may be acceptable at Atlantic Village but is not ideal for a major retail venue.
- The provision of an underpass will only remove pedestrian and vehicle conflict if its use is controlled. There would be a temptation for visitors to cross the road and not use the underpass. Mr Tonks did not disagree with Mr Tucker's comments regarding a signal controlled crossing, but he noted the inspector's comment that this would be undesirable.
- Mr Tonks said that he did not accept that the figures regarding the traffic impact of alternative development options proposed by Mr Tucker had any relevance. These options are generally unrealistic in planning terms. The only development of relevance is Option 7 and the only relevant analysis periods are the weekday evening peak hours and the Saturday and Sunday peak hours. Mr Tonks criticised Mr Tucker's figures on three grounds. First, that his analysis does not consider the adequacy of parking provision at the sites he has examined. Second, that he has not looked at the influence of other modes of transport. Third, that his method of calculation is flawed in his use of data from the TRICS Database. Mr Tucker has used all the sites in the TRICS Database with no consideration as to their relevance to the reference land. A smaller, focussed selection of data is likely to produce a more accurate result, reflecting site specific characteristics.
- Mr Cussen's valuation of the reference land under Scenario B is as follows:-
- Mr Cussen then reduced his end figure to £1,625,000 on the grounds that a purchaser would not risk more than £1,000,000 above the agreed value of £625,000 for B1, B2 and B8 development. Mr Cussen's alternative valuation on the claimants' basis (Scenario A) comprised the agreed value for B1, B2 and B8 development (£625,000) plus a higher element of risk value, £1,250,000, to produce a value of £1,875,000.
- Mr Cussen referred to past events and drew the following conclusions. The reference land was on the market for an extended period. Planning permission for non-food retail warehousing was granted in 1988 but there was little prospect of the site being taken up as a retail park. The land did not have planning permission for an FOC and two or three steps would be required to implement this use. Planning permission has been refused for a roundabout on the A30 and a planning application for a restaurant, crèche and other facilities was not determined. Highway issues associated with an FOC presented major problems.
- There is no evidence that planning control regarding FOCs was more restrictive in 2000 than in (say) 1996. Only a limited number of FOCs can be accommodated. By the valuation date the market was nearing saturation, although there was probably potential for an FOC in Cornwall. There is no evidence to support the assertion that the FOC sites at Braintree, Wakefield and Talke would have sold for higher prices at the valuation date. The price paid for Whiteley Village in 1997 is unhelpful. The Fleetwood transaction does not point to a rise in values.
- The contracts for the purchase of the reference land were conditional on the grant of planning permission and subject to time limits and other criteria. The purchaser had a wide discretion whether to proceed. More active marketing would not have increased the prices. These set a maximum figure. To relate them to the valuation date the uplift in value would have been little more than 5%. The later offers are simply offers to enter into an option and are subject to contract. The latest offers from Castle Court were not at arms-length evidence.
- The only feasible retail use of the reference land under the unmodified 1997 permission was as an FOC or discount outlet centre, which vary considerably. There is no purpose-built FOC in Cornwall. An FOC on the reference land would serve a more limited population than many of the established centres. The attraction at Roche is tourists but this is seasonal. Advantages are: strategic access, prominence, planning permission and tourist population. The disadvantages are: highway capacity, split site, limited site area, shape, competition, little prospect of destination or tourist facilities, limited immediate catchment, lack of clarity in the planning permission and the need to implement an FOC by stages.
- The claimants' scheme represents close to the optimum achievable for an FOC of 125,000 sq ft. There are, however, major drawbacks, including two plots with an underpass, lack of a magnet store, insufficient parking, inadequacy and uncertainty regarding junction and highway improvements, inadequate coach and staff parking, inadequate servicing and lack of tourist facilities. These would have reduced the price. It might be possible to achieve a more satisfactory layout by reducing the floorspace and parking requirements, with an effect on value. The need for highway improvements was a major drawback and would have led to a reduction in price. The applicants would not have pursued their roundabout proposal if an improved junction had not been commercially necessary. Severe congestion would have resulted if an FOC had been built without highway improvements.
- Mr Cussen referred to the comparable valuation evidence and said that he took issue with Mr Ovenden's interpretation of a number of transactions but broadly concurred with his use of the Bideford transaction. This is the most relevant comparable, although there is one major difference, the leisure facility. His analysis of the Bideford transaction differs from that carried out by Mr Ovenden. He saw no reason to include the consultancy fee in the price, although he would have included overage payments (if made) as representing part of the consideration for the land. The consultancy fee was for services and for the restrictions placed on the vendors. He rejected Mr Ovenden's deduction of £90,000 for the five acres with planning permission for B1, B2 and B8 development. Consent was later obtained for a leisure facility on this land and, at the date of purchase, there was every prospect of such a permission, see the Bideford District Local Plan and a letter from the Director of Planning at Torridge District Council. He said that he was advised by MEPC that they were given encouragement by the local authority in this respect. From the layout granted planning permission it is difficult to envisage anything other than an extension to the FOC on the five acre site. It is unrealistic to say that a vendor would have sold this land at less than £20,000 per acre. Part of this area was needed to make up the necessary parking for the FOC. Mr Cussen also referred to the consultancy agreement and the drawdown provision. The fact that this land can be drawn down at nil cost (if used for leisure use) indicated that the potential use and its value were reflected in the price at the outset. The price paid for the development as a whole should be spread across the whole site area.
- Applying the analysed Bideford transaction to the reference land, Mr Cussen made adjustments for the advantages and disadvantages compared to Bideford. For the larger general catchment population of the reference land in the 30, 60 and 90 minutes drive times, Mr Cussen made an addition of 25 per cent. He took into account that disposal income in Cornwall is less than for Devon. The Bideford transaction was 11 months before the valuation date and Mr Cussen made an addition of 5%, although no evidence can be found to identify rises in value. He made no further allowance for more restrictive planning policy at the valuation date. As to the advantages of Bideford compared to the reference land, Mr Cussen made three adjustments. First, a deduction of 10% for the significantly larger population in the 15 minutes drive time for Atlantic Village (27,321) compared to the reference land (13,290). This is significant because the greatest level of retail spending is concentrated in the immediate catchment area. The population of Bideford is five time that of Roche. Mr Cussen was advised by a director of Realm, operators of Atlantic Village, that a significant portion of turnover is very local. Mr Cussen's second adjustment is a deduction of 10% for the effect of Trago Mills, a major retail outlet, which has the characteristics of an FOC. Their catchment areas would overlap. Third, the design of an FOC on the reference land would be severely compromised by the split site, limited site area and shape. To reflect these deficiencies Mr Cussen made an allowance of 15%.
- Mr Cussen said that adjustment is required to reflect the adverse highway circumstances as identified in the evidence of Mr Tonks. It was possible to proceed with an FOC without highway improvements but in practice unworkable. Deficiencies would have deterred some purchasers or would have been reflected in the price. At best a developer would have made a significant deduction from site value to reflect either the reduction in trade and/or an allowance for future highway improvements that might have been enforced on the authorities to counter major disruption caused by an FOC. These would have been costs and uncertainties as to whether the roundabout could have been built and on what land and potential loss in site area leading to a reduction in area available for development. An allowance for off-site highway works has now been agreed at £550,000. In cross examination, Mr Cussen said that this figure would have been less than the significantly higher figure for disruption of trade. A developer would have deducted the lower level of cost.
- As to the improvement of the A30, Mr Cussen said that there was uncertainty regarding timing and route which would have adversely affected the value. A purchaser would have been faced with an indefinite period of congestion with continuing resistance from the Highways Agency to the carrying out of improvements for the satisfactory working of an FOC.
- The claimants' provision for parking (950 spaces) is less than the 1,000 spaces needed under the conditional contracts to purchase and Mr Tonks' estimate of 1,513 spaces. A car park of this size would require decking at a cost of over £10m and makes an FOC of the size proposed questionable. A developer could have implemented the unmodified 1997 permission with a reduced number of car spaces but this would exacerbate congestion and reduce the attraction for shoppers. In practice, a developer would have been expected to reduce the size of the development and the car park with an adverse effect on demand and value. To reflect this reduction in scale Mr Cussen deducted 10% from his site value of £3,070,115.
- Mr Cussen referred to the lack of approval of reserved matters at the valuation date and the expiry of the three year period on 13 May 2000. A purchaser would have reflected this position in his bid. Mr Cussen's valuation is on the assumptions that an application for approval of reserved matters would not have been to determined by 13 May and that the period for determination would not have been extended. Factors taken into account are: the fact that an FOC is fundamentally different to the retail development proposed in the outline planning permission; there were major deficiencies in the two reserved matters applications; technical issues relating to utilities and infrastructure had to be resolved; an FOC development was contentious and controversial; the Highways Agency were unwilling to consider improvements to the trunk road hierarchy. Under the 1997 permission subdivision after construction would be necessary with consequent complication, delay and increased costs. There was uncertainty due to the limited time in which to lodge a reserved matters application. This would have had a significant effect on value. Factors affecting value included: the relative disadvantages of the reference land for an FOC, layout, highway and parking issues, the limited time to resolve reserved matters, and the implementation of an FOC in at least two stages.
- In view of the uncertain position a purchaser would have offered the agreed B1, B2 and B8 value (£625,000) plus an uplift of at best half the difference between that value and the value of the land with the unmodified 1997 permission. In his oral evidence Mr Cussen said that a purchaser would not risk more than £1m above the B1, B2 and B8 value, giving a total price of £1,625,000.
- Mr Katkowski QC referred to sections 107, 117 and 118 of the 1990 Act and said that, although section 117(1) applies the valuation rules in section 5 of the 1961 Act, it does not require the wholesale importation of the compulsory purchase code. Rules must be modified for the different context. Any claim for "loss or damage" or "abortive expenditure" must be directly attributable to the making of the modification order (Loromah Estates Ltd v Haringey London Borough (1978) 248 EG 877).
- He said that the only feasible retail use under the 1997 permission is for an FOC or discount outlet centre. This permission was in outline with a time limit for the submission of reserved matters. There are problems regarding the scope of the permission and the reserved matters. These would have created uncertainty at the valuation date with a significant reduction in the value of the reference land.
- Although the valuation date is agreed, there is a dispute as to the proper approach to value. Scenario A is on the hypothesis that the Secretary of State has not intervened and assumes that approval of reserved matters was obtained before the valuation date. Scenario B refers to events as they actually occurred but on the assumption that the Secretary of State decided not to modify the 1997 permission. Scenario B is correct. It produces a value that is rooted in the circumstances at the valuation date. Scenario A only pays lip service to that date. It assumes imaginary circumstances. It requires counter-factual assumptions unsupported by the evidence.
- It is not accepted that, as a matter of law, it would be wrong to make a discount for the absence of approval of reserved matters due to the intervention of the Secretary of State. Progress could have been made during the modification process towards approval of reserved matters. The claimants pursued two applications. The modification order did not sterilise the land; other applications could have been made; the reference land could have been sold. The claimants have recast their case in terms of mitigation and now say that it was reasonable for them not to pursue matters during the modification process. This does not support the adoption of Scenario A. Scenario B does not lead to injustice. If the Secretary of State's decision had been made after the last date for the submission of reserved matters, no compensation would have been payable because there would have been no loss at the valuation date.
- There is no analogy between the "shadow period" leading to a compulsory purchase order (see Shun Fung) and the period before a modification order. Even if such an analogy existed this would not apply to the value of land but to other losses, eg abortive expenditure.
- It is argued for the claimants that the Pointe Gourde principle applies. The scheme is said to be the elimination of the retail element in the 1997 permission. This argument is flawed. The limiting words in section 117 do not require the wholesale importation of the compulsory purchase code. Elimination of the retail element in the 1997 permission cannot be a scheme. A compulsory purchase order cannot be a scheme (J A Pye (Oxford) Ltd v Kingswood Borough Council [1998] 2 EGLR 159); there must be a scheme underlying the order. There is no scheme underlying a modification order. It is not "a step taken by a public authority which impinges on a landowner's property". This is too general and does not support the importation of the no-scheme world. Furthermore, this is not "a process … which cast a shadow over the property."
- The claimants contend that their interpretation of section 107 of the 1990 Act is consistent with the canon of statutory construction that property is not to be taken without compensation. There is a right to compensation under this section and there is no breach of the canon if loss has not occurred. The claimants are only entitled to compensation for the actual depreciation in land value. Furthermore, there is no breach of Article 1 of Protocol 1 of the European Convention on Human Rights, which cannot be said to require compensation where there is no loss. Governments have a wide margin of appreciation regarding the measure of compensation (Pine Valley Developments v Ireland (1991) 14 EHRR 319; Baner v Sweden (1989) 60 DR 128 at 142; Trailer and Marina (Leven) Limited v Secretary of State for the Environment, Food and Rural Affairs and English Nature [2004] EWHC 153 (Admin)).
- Scenario B is supported by the facts and evidence. It can be readily understood because it is rooted in actual facts. Scenario A cannot readily be understood or applied. It is incorrect to say that progress on the approval of reserved matters could not have been made during the modification process. Scenario A involves counter-factual assumptions which fly in the face of the evidence, eg. that approval of reserved matters had been obtained for Mr Lacey's Option 7.
- Mr Katkowski referred to the Bideford comparable and the adjustments needed to relate it to the reference land. He said that the consultancy fee does not form part of the consideration. MEPC purchased the site before entering into the consultancy agreement. Under that agreement price and fee are distinguished. The agreement is not a sham. It provides for services and restrictions by, and on the part of, Castle Court. It would be wrong to adjust the consideration for the part of the site with B class planning permission. MEPC paid an overall price for an FOC site with potential for leisure development. The contract documents do not show that MEPC paid less for the B class land. The Local Plan indicated that part of the site was suitable for leisure development and MEPC made a planning application shortly after their purchase. It is unlikely that Castle Court sold part of the land at a lower price. As to the other adjustments, Mr Katkowski said that overall it is hard to credit Mr Ovenden's approach which is that the severely restrained and some sub-optimal reference land would have been 30% more valuable than the virtually optimal FOC at Atlantic Village. Mr Cussen's adjustment of –5% is more accurate.
- Under Scenario B, in the real world there was considerable uncertainty regarding the potential to build and operate an FOC on the reference land. The claimants' actual loss can only be assessed on the basis of realities. These include the short period between the valuation date and the last date for submission of reserved matters, uncertainty and the likelihood that an extension of time would not be granted. Every pound paid for the land over the agreed B class value would have been at risk. It is likely that the application for approval of reserved matters would have been made by the vendor, who had no experience of FOCs and, that due to cost and time, only one application would have been made.
- The claimants contend that an application could have been amended after the time limit for a fresh application had expired. Mr Katkowski said that there is no case law dealing with amendments to a reserved matters application: the authorities relied upon by the claimants relate to amendments to planning applications. The principles governing such amendments are set out in British Telecommunications plc v Gloucester City Council [2002] 2 P & CR 33 at paras 26-41. The basic test is whether the amendments are substantial. The proper course is to refuse an amendment of significance. The scope for amendment on appeal is more limited where an application is still before the local authority. This is important with regard to Scenario B. These principles would not have provided comfort to a purchaser of the reference land. A reserved matters application is not an application for planning permission (R v London Borough of Bromley ex p Barker [2002] Env LR 25) and the same principles would not necessarily apply to an amendment to a reserved matters application, particularly having regard to the time limits in the 1990 Act. Any amendments would have had to be within the scope of the reserved matters application: the claimants could not have significantly altered a flawed scheme by amendment.
- The reserved matters application would have had to overcome the criticisms by the inspector and the Secretary of State. Conditions in the 1997 permission required, in effect, that all reserved matters (including landscaping, parking and drainage) are to be considered with siting, design and external appearance. Indications of approval in 1997 and 1998 on behalf of Restormel were made by a planning officer who was subsequently suspended, replaced by Mr Mason and then left the Council. Prior to the planning inquiry Restormel had resolved to oppose the two applications for detailed consent. A purchaser of the reference land would not have relied on these earlier indications of approval. Any new applications may have proceeded to appeal or call-in. The planning merits of a reserved matters application are subjective and it is difficult to predict the outcome. Meetings with Mr Mason to discuss reserved matters may not have been possible in the short time available. At most only one meeting could have been held. Mr Mason's views may not have been made known until the after the final submission date. Concerns related to the divided site, lack of architectural quality and incremental changes which have improved some parts of the scheme while making other parts worse. The claimants are wedded to an FOC which has fundamental difficulties. All these matters must be distilled through the mind of a purchaser; they would have created uncertainty and resulted in a lower bid for the land.
- In addition to these uncertainties there is the uncertainty whether the 1997 permission would permit the erection of an FOC. A detailed application for such a development has been rejected by the Secretary of State (the first reserved matters application). Restormel would have been able to contend that the only acceptable layout would be for a retail warehouse park.
- The evidence regarding parking shows that a purchaser would have regarded the reference land as sub-optimal in its ability to provide sufficient surface-level customer parking. Accordingly, he would have reduced his bid.
- The parties have agreed a deduction for a roundabout on the A30 but there is uncertainty whether the Highways Agency would have agreed to these works. Planning permission has been refused; the Agency has the whip hand (under section 278 of the Highways Act 1980); there was a possible need to acquire third party land. A purchaser of the reference land would have reduced his bid for these uncertainties.
- There was similar uncertainty regarding the improvement of the A30. Although the reference land benefits from nearness to this trunk road, a purchaser would approach this benefit with caution having regard to the proposed improvement. At the valuation date there was no preferred alternative route, no funding and no published firm date for the commencement of the scheme. In the light of these uncertainties a purchaser would have lowered his bid.
- The 1997 permission does not permit an FOC. A purchaser of the reference land would have to take an indirect route to this objective. It is agreed that at least two steps are needed: to obtain approval of reserved matters and then build the large unit. It is uncertain whether a third step is necessary, namely use of the unit (undivided) before subdivision. This point was left open in Bolsover. An FOC requires unit shops. A purchaser would be uncertain as to how many intervening steps would be required to achieve this subdivision and would reflect this uncertainty in his bid. At the modification order inquiry the claimants accepted that an FOC would have to be implemented in stages. They seek to withdraw this concession but it is not now open to them to dispute this matter. The effect of section 284(1)(f) and (2)(a) of the 1990 Act is to prevent a modification order being "questioned in any legal proceedings whatsoever." This statutory bar applies to these proceedings and to the reasoning concerning matters of law underlying a modification order, which in this case included the legal assessor's report (which included a finding on this matter).
- Mr Ovenden referred in his evidence to the possibility that a developer would reduce the size of the FOC. This was contemplated in the 1997 Eastlake contract. This is not the same point as represented by the valuers' deductions of 7½% or 15% for deficiencies of site. This is a separate element of uncertainty. A purchaser would have had doubts about the ability of the reference land to accommodate 125,000 sq feet with parking and would have adjusted his bid accordingly.
- There was no prospect of Restormel or the Secretary of State granting an extension of time for the submission of reserved matters or granting a new retail planning permission. The law relating to extensions of time for the submission of reserved matters under section 73 of the 1990 Act and relevant case law, eg. Pye v Secretary of State for the Environment [1998] 3 PLR 72, and the law relating to "personal circumstances" (sections 54A and 70 of the 1990 Act) all point to this conclusion. Under section 73 of the 1990 Act an application can be made to vary conditions on a planning permission. The courts have held that the effect of a successful application under section 73 is that a fresh planning permission is granted. Before the grant of such a permission all material considerations must be taken into account as at the time of the decision. The significance of this legal framework is that a purchaser at the valuation date would have known that Government policy concerning out-of-centre retail development had hardened unfavourably to developers. A section 73 application would have had to be referred to the Secretary of State for possible call-in. He concluded in modifying the 1997 permission that need did not exist for an FOC on the reference land; that the sequential test had not been met; that there would be an unacceptable impact on various town centres; and that the reference land was poorly located for public transport. Against this background it is impossible to say that a purchaser would have placed any reliance on a section 73 application. He would have known that the only route to an FOC on the reference land was through reserved matters.
- The effect of all these risks and uncertainties is that a purchaser of the reference land would have limited the amount he would have bid for the land above the agreed value for B class development of £625,000. Mr Cussen put this maximum overbid at £1m, a valuation of £1,625,000 compared to Mr Ovenden's valuation on this basis of £3.25m. This is over-optimistic and unreal. The correct amount of depreciation in land value is £1m.
- Mr Katkowski said that risks and uncertainties still exist in the claimants' Scenario A, namely parking, the roundabout, the A30 improvement, the steps needed to achieve an FOC and site deficiencies. These factors would have depressed the price. Mr Cussen's figure of £1.875m (a loss of £1.25m) is more realistic than Mr Ovenden's value which relies heavily on the 1997 contracts and subsequent offers. Scenario A is both wrong in law and untenable on the evidence.
- As to the principle of the claim for abortive expenditure (holding costs), Mr Katkowski said that the claimants' case is on the basis that the reference land was effectively sterilised during the modification process. This is erroneous in fact. The claimants rely on the decisions in Shun Fung and Ryde. Mr Katkowski accepted that Ryde is authority for the proposition that pre-acquisition holding costs are recoverable in compulsory purchase. It is not accepted that this proposition can be imported into the context of a modification order. In the period before a compulsory purchase order a claimant is forced to hold his land due to the "shadow" of the order. That is not the position where modification is proposed. There are many ways in which an owner can deal with and dispose of his land. For this reason the claim must fail. Even if Ryde is applicable, the sums claimed are not recoverable for three reasons. First, they are not causally connected to the making of the modification order. Second, they are too remote to be directly attributable to the modification. Third, the losses could have been avoided by a reasonable person. Essentially, this claim fails because the losses claimed are notional and not actual. This is not a quantum issue but goes to the recoverability of the claimed loss as a matter of principle.
- As to the claim for professional fees, Mr Katkowski said that it is not disputed that this is a proper head of claim (Tobin). All that is required of the Tribunal at this stage is to decide in principle that this is a claim open to the claimants, but in the absence of much requested further information it is impossible for the Tribunal to assess whether any or all of the sums now claimed fall within the principle in Tobin and are otherwise recoverable. The question of quantum should be deferred.
- I look first at the relevant statutory provisions. Section 107(1) of the 1990 Act provides that:-
- Section 117(1) of the 1990 Act applies the rules in section 5 of the 1961 Act to the assessment of compensation for the revocation or modification of a planning permission:-
- Three heads of claim are outstanding in this reference: abortive expenditure, depreciation in land value and professional fees. I am required to give a decision in principle on the first and third heads; under the second head (depreciation in land value) the amount is in issue. I deal first with this head of claim.
- There are three issues for determination. First, what is the correct basis of valuation, Scenario A or Scenario B? Second, on the correct basis of valuation what was the market value of the reference land under section 5(2) of the 1961 Act on 8 March 2000? Third, what is the compensation payable for the depreciation in land value directly attributable to the modification order?
- Both bases of valuation necessarily assume that the modification order has not been made and that the reference land is to be valued with the benefit of the unmodified 1997 permission. The claimants' basis (Scenario A) further assumes that the Secretary of State had not intervened at all and that before the valuation date approval of reserved matters under the 1997 permission had been obtained for a form of development substantially, but not necessarily precisely, in accordance with the layout described as Option 7 in Mr Lacey's Notice of Additional Evidence, and that, in accordance with Mr Ovenden's evidence, the roundabout at the A30/B3274 junction had been, or would have been, built. Restormel's basis (Scenario B) looks at actual events and circumstances up to, and at, the valuation date but with the assumption that the Secretary of State decided on 8 March 2000 not to modify the 1997 permission. The material difference between these two bases is the claimants' assumption that, contrary to the actual position, approval of reserved matters had been obtained before the valuation date and that the roundabout would have been built. The valuers agree that the absence of reserved matters approval and the uncertainty regarding the roundabout would have reduced the value of the land.
- Section 107(1)(b) of the 1990 Act requires compensation for depreciation in land value to represent "loss or damage which is directly attributable to the … modification." What is the correct basis of valuation: Scenario A, with the important assumptions that approval of reserved matters had been obtained and the roundabout secured prior to the valuation date, or Scenario B, which makes no such assumptions and is more firmly rooted in the real world? I look first at the chronology for the period between the grant of the 1997 permission and the date of the modification order.
- The 1997 permission was granted on 13 May 1997 with a period of three years for the submission of reserved matters. The claimants and Castle Court applied on 28 July 1997 for approval for a shopping village with parking and servicing (the first reserved matters application). They also applied on the same date for planning permission for a roundabout at the A30/B3274 junction. Following correspondence the reserved matters application was referred by Restormel to the GOSW and on 22 August the Secretary of State made an article 14 direction prohibiting the grant of permission on these applications without special authorisation. On 4 November 1997 the applicants appealed against the non-determination by Restormel of the first reserved matters application. On 4 December 1997 Restormel refused planning permission for the proposed roundabout. There was no appeal. The claimants and Castle Court made a second application for approval of reserved matters on 5 December 1997, for 11,613 sq m of class 1 non-food retail with parking and servicing. This application was called-in by the Secretary of State on 12 November 1998.
- On 29 January 1998 the GOSW wrote to Restormel seeking a decision as to whether the Council intended to use its powers to revoke or modify the first 1994 permission and the 1997 permission. Restormel replied on 25 June 1998. On 12 November 1998 the GOSW indicated that the Secretary of State had decided to hold a public local inquiry and this was held on 11-27 May 1999. The inspector's report is dated 27 July 1999.
- On 6 August 1999 the claimants applied for a variation of condition 3 of the 1997 permission to allow further time for the submission of reserved matters. On 20 August Restormel stated that the determination of this application should be deferred until a decision on modification by the Secretary of State. On 31 August the GOSW issued an article 14 direction in respect of this application. The claimants appealed against non-determination on 29 December 1999 and on 8 February 2000 the Secretary of State indicated that he was minded to suspend consideration of this application until after his modification decision.
- On 9 March 2000 the Secretary of State issued his decision letter modifying the 1997 permission, dismissing the appeal against non-determination of the first reserved matters application and refusing the second reserved matters application.
- Mr Roots submitted that, as a matter of law, I should adopt Scenario A for several reasons. First, he said that it is necessary to give effect to the fundamental principle of equivalence in compensation. In Horn v Sunderland Corporation [1941] QB 26, Scott LJ said (at 40):-
- The principle was confirmed in Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111, where Lord Nicholls referred to the provisions for compensation for compulsory acquisition and said (at 125 C):-
- In my judgment, two matters are relevant. First, equivalence requires compensation for actual loss, neither more nor less. Second, actual loss is not open-ended but circumscribed by law, e.g. by reference to the measure of value (open market value and not value to the owner for the loss of land or land value) and by reference to concepts such as causation, remoteness and reasonableness in respect of consequential loss (see Shun Fung at 126 A-H). I am not persuaded that the principle of equivalence in itself necessarily indicates that Scenario A is the correct basis of compensation, although I accept that it is the test to be applied to the amount of compensation awarded: does it represent the claimants' loss, neither more nor less?
- Second, Mr Roots likened the loss of land value caused by the absence of approval of reserved matters to compensatable loss incurred during the shadow period between the start of a compulsory acquisition and the taking of the land. This is linked to the scheme rule in compulsory purchase. He relied on the decision in Shun Fung and submitted that "modification" in section 117(1)(b) refers to the whole process of modification, not just the order.
- In Shun Fung the claimants operated a mini-mill business on land in Hong Kong which was acquired (resumed) for development as a new town. Part of their claim was for losses to the business before resumption due to the threat of that resumption. This claim was allowed on appeal by the Privy Council (Lord Mustill and Lord Slynn dissenting). This part of the decision, and the principle underlying it, relate to consequential business loss and not to depreciation in land value consequent on the threat of acquisition. Mr Katkowski said that, although this principle may apply by analogy to losses during the period leading up to the modification order (e.g. abortive expenditure), it cannot apply to land value by requiring it to be assumed that approval of reserved matters had been obtained by the date of valuation. In short, there is a distinction between consequential loss or expenditure before the date of the modification order and the value of land at that date. I agree that Shung Fung does not directly apply to land value.
- Mr Roots, however, also linked his submission regarding pre-modification losses to the scheme rule in compulsory purchase, a rule which applies to the value of land. This link is made in Shun Fung (at 135G-136B and 138 B-E). Mr Roots argued that the rules in section 5 of the 1961 Act are applied (subject to necessary modification) to the assessment of land value by section 117(1) and (2) of the 1990 Act. Rule (2) in section 5 introduces concepts in the law of compensation for compulsory purchase, including the scheme rule (see Pointe Gourde at 572). The scheme is a question of fact (Wilson v Liverpool City Council (1970) 22 P & CR 282 at 293) and, in this reference, it is the elimination of the retail element in the 1997 permission. Of the three year period for the submission of reserved matters, over two years were lost as a result of the modification process and must be disregarded. Although the valuation date is agreed it is well settled in compulsory purchase that the actual position at that date may be different from the position to be assumed for the purposes of assessing compensation (see eg Myers v Milton Keynes Development Corporation (1974) 27 P & CR 518 at 527). Although I find that Mr Roots' submissions have some force I reject them for the following reasons.
- I do not accept that section 117(1) and (2) of the 1990 Act, by applying the rules in section 5 of the 1961 Act, necessarily apply the scheme rule. These rules are to have effect "so far as applicable and subject to any necessary modifications." The draftsman of section 117(1) clearly envisaged that they may not wholly apply or may require modification to relate them to the different circumstances of a modification order. Although the scheme rule may be regarded as a gloss on the definition of market value in rule (2), I cannot accept that it necessarily applies to the assessment of land value in this case. In my judgment, it falls within the excluding words "so far as applicable" in section 117(1). The characteristics of a scheme in compulsory purchase make it inappropriate to a modification order, for the following reasons.
- The scheme rule is usually defined by reference to the well-known formulation by Lord McDermott in Pointe Gourde (at 572):-
- In Bolton Metropolitan Borough Council v Tudor Properties Limited [2000] RVR 292, Mummery LJ referred to (at 294):-
- In my judgment, in the same way that acquisition under a compulsory purchase order cannot be a scheme underlying the acquisition, modification of a planning permission under a modification order cannot be a scheme. Both acquisition and modification are administrative acts, not schemes or projects or undertakings. In my judgment, the scheme rule in compulsory purchase does not apply in this reference.
- The next two reasons put forward by Mr Roots for the use of Scenario A can be taken together. Both relate to the right to compensation. He argued that section 107 of the 1990 Act should be interpreted to enable the loss attributable to the modification process to be recoverable. He said that this is consistent with the canon of statutory construction that an intention to take property without compensation should not be imputed to the legislature. In Central Control Board (Liquor Traffic) v Cannon Brewery Co Ltd [1919] AC 744, the Board compulsorily acquired licensed premises under emergency legislation passed in 1915. The right to compensation was in dispute. The Board contended that the owners were not entitled to compensation other than such sum as may be awarded by an act of grace out of public money. The owners successfully claimed that they were entitled as of right to compensation under the Lands Clauses Consolidation Act 1845. Lord Atkinson referred to the canon of construction of statutes that (at 752):-
- Allied to this submission, however, Mr Roots referred to the Human Rights Act 1998 ("the 1998 Act"). Section 3(1) requires that:-
- The effect of Article 1 was explained in Lithgow v United Kingdom (1986) 8 EHRR 329 at para 106:-
- Domestic governments have a wide margin of appreciation. In Trailer and Marina (Leven) Ltd v Secretary of State for the Environment, Food and Rural Affairs [2004] EWHC 153 (Admin),Ouseley J said (at para 63):-
- Mr Roots argued that section 107 of the 1990 Act must, under section 3(1) of the 1998 Act, be interpreted to mean that, in accordance with Article 1 of the First Protocol, a person's property may not be acquired or his rights extinguished without full compensation. An interpretation of section 107 that could eliminate the right to compensation for depreciation in land value, if the Secretary of State had delayed his modification decision until after the end of the three year period for submission of reserved matters, would be unjust and contrary to the 1998 Act. This follows Mr Roots' submission that, although the modification order was made a short time before the last date for submission of reserved matters, the Secretary of State could have given his decision after that date, leaving the claimants with no opportunity to submit a further reserved matters application. This would be a loss of land value directly attributable to the modification, which Restormel say would not be compensatable.
- In support of his submissions Mr Roots referred to the decision of the European Court of Human Rights in Lithgow. This was an unsuccessful claim that compensation for nationalisation under the Aircraft and Shipbuilding Industries Act 1977 was grossly inadequate and in breach of Article 1 Protocol No.1. The Court referred to the need to achieve a "fair balance" between the general interest of the community and the protection of an individual's fundamental rights and then said (at para 121):-
- Mr Katkowski submitted that Article 1 of Protocol 1 does not give a right to compensation where there is no loss and that domestic governments have a wide margin of appreciation as to the measure of compensation. He referred to three authorities.
- In Pine Valley Developments Limited v Ireland (1991) 14 EHRR 319, the applicants purchased land in reliance on an existing planning permission. This was subsequently held by the Irish Supreme Court to have been ultra vires and a nullity ab initio. The applicants complained of a violation of Article 1 of Protocol No.1. This was rejected. Although the planning permission gave the applicants at least a legitimate expectation of being able to carry out the proposed development, and this was a component part of the property, and there had been an interference with the applicants' possessions under Article 1, the annulment of that planning permission was not a deprivation of possessions. It was a control of use. The Court said (para 56 at 356):-
- I agree with Mr Katkowski that this decision indicates that modification of a planning permission constitutes control of land use and not deprivation. A similar result follows from the other two decisions referred to by him. In Baner v Sweden (1989) 60 DR 128, an admissibility decision, the applicant owned land which included lakes which were fished by him and his household and employees. The public were not allowed to fish but in 1985 legislation permitted licence-free fishing by everyone. No compensation was payable, there being no loss of income from the grant of licences. The Commission decided that, given the State's wide margin of appreciation, the interference with the applicant's property right was justified under the terms of the second paragraph of Article 1 of Protocol No.1. It stated (at 142):-
- In Trailer & Marina Ouseley J dismissed an application for judicial review seeking a declaration that parts of the Wildlife and Countryside Act 1981 were incompatible with Article 1 of Protocol 1 on the grounds that compensation was not payable for loss caused by refraining from carrying out prohibited activities under the Act. He said (para 80):-
- I am not persuaded that, by reference to the rule of statutory construction in Cannon nor by reference to section 3 of the 1998 Act and Article 1 of Protocol 1, I am required to interpret section 107(1)(b) of the 1990 Act by adopting Scenario A as the basis of valuation. Loss of value due to lack of approval and uncertainty regarding reserved matters and the uncertainty regarding the roundabout and A30 improvements can, in my judgment, only fall within section 107(1)(b) if it is directly attributable to the modification. As a matter of law, I do not think that I am required to adopt Scenario A as the basis of valuation for the reasons set out above. In my judgment, the question whether modification has caused a particular loss of land value is essentially a question of fact, to be decided within the legal framework that the loss must be directly attributable to the modification. I now therefore consider the basis of valuation as a question of fact, Mr Roots having also argued that Scenario A is correct on the facts.
- Mr Roots argued that the process leading to the modification order had the effect of preventing any real progress being made towards approval of reserved matters until after 8 March 2000. The claimants lost a significant part of the three year period. The land was effectively sterilised during the modification process. In February 1998 there was an officer's report recommending approval of the second reserved matters application. It was not until one year later that they had reason to believe that it would not be granted. If the Secretary of State had not intervened, approval of reserved matters, either granted by Restormel or on appeal, would have been obtained by mid-1999 at the latest. Scenario A, with its assumption of approval of reserved matters by the valuation date, gives effect in this assumption by setting aside the Secretary of State's intervention. The whole of the loss of value consequent on the modification process is thus compensatable as required under section 107(1)(b) of the 1990 Act.
- At first glance Mr Roots' submissions are attractive. However, on closer analysis of the facts, I feel bound to reject them. The essential issue here is causation: was the depreciation in land value at the valuation date, which reflected uncertainty regarding approval of reserved matters, the roundabout and A30 improvement, a loss directly attributable to the modification, or was it a loss caused by other factors? If the former then I agree that Scenario A is the correct basis of valuation. If, however, other factors were the reason for the absence of approval of reserved matters by the valuation date and the consequent depreciation in value, then Scenario B is the correct basis. In my judgment, other factors were the effective cause of the lack of reserved matters approval and consequent reduction in value.
- It must, I think, be borne in mind that the 1997 permission remained in force in its original unmodified form between the grant in May 1997 and modification in March 2000, a period of some two years 10 months, almost the whole of the three year period allowed for submission of reserved matters. It was open to the claimants to make any number of reserved matters applications during this period. There were no impediments, in law or in fact, to the making of such applications. The costs of such applications would have been recoverable as compensation on subsequent modification (section 107(1)(a) and (2) of the 1990 Act). I accept that the obtaining of approval on an application became more complicated after the commencement of the modification process, but it did not prevent further applications. The claimants made two such applications. They could have made further applications: they chose not to do so. They pinned their hopes on these applications, which they supported fully at the public local inquiry. They were represented by a solicitor; Mr Stewart and Mr Lacey gave expert evidence. They were unsuccessful. Both applications were refused. Furthermore, the claimants did not appeal against the refusal of permission for a roundabout at the A30/B3274 junction nor did they submit a further application.
- If the Secretary of State had not intervened I do not agree with Mr Roots' submission that approval of reserved matters would have been obtained by mid-1999. It is difficult to predict with any accuracy what would have happened in the absence of modification but I think that the chronology might have been as follows.
- The first reserved matters application was made on 28 July 1997, greeted with concern, referred to the GOSW and an appeal was lodged in December 1997. The second reserved matters application was made on 5 December 1997. In the absence of modification this application would have been called-in by the Secretary of State. If this had occurred early in 1998 the Secretary of State would have announced his intention to hold a public local inquiry in respect of both reserved matters applications shortly after and, having regard to the length of time which actually elapsed, this would have taken place in about September 1998. The inspector's report would have been completed some two to three months later and the Secretary of State's decision given in the spring of 1999. Both applications would have been refused, as actually happened.
- The claimants would then have had approximately one year to prepare a further application or applications and obtain approval of reserved matters in order to comply with the assumption under Scenario A that approval had been obtained by the valuation date.
- A three year period for the submission of reserved matters is relatively short, even without the complications of modification. In the best of circumstances there is always some risk that approval to a satisfactory form of development, within the principle of the outline permission and the conditions attached, may not be obtained on a submission within the three year period. If only just over one year remained for a satisfactory submission, that risk was very much greater. The risk was also greater where, as in this case, the outline permission had become controversial and the development for which approval was sought under the reserved matters differed from that envisaged when the outline permission was granted. Condition 14 of the 1997 permission, incorporating the unexplained addition to the wording of the corresponding condition (condition 18) in the second 1994 permission, became a controversial provision and the subject of some investigation (see Corbett and Parkyn at paras 36-39). The claimants sought to obtain approval in their first and second reserved matters applications for a shopping village and five retail units (FOC) under an outline permission which more readily related to a retail warehouse park. It was always going to be difficult to obtain approval under this permission for the form of retail development required by the claimants. This is seen in the evidence of Mr Mason, the planning officer at Restormel who became responsible for dealing with this matter. He was resistant to an FOC on the reference land and had doubts as to whether such a development could be accommodated on the land within the scope of the 1997 permission. In the first stage of the judicial review proceedings the Deputy Judge noted that the first reserved matters application (the shopping village) "was greeted with consternation by members of the council, by Cornwall County Council and by others, who thought that such a development would do severe damage to the shopping centres of nearby towns" (para 9). The application was subsequently found by the legal assessor at the modification and reserved matters inquiry to be outside the ambit of the 1997 permission. The second reserved matters application did not apparently cause the same concerns but an FOC on the reference land clearly conflicted with the relevant policies in the development plans, and national policy guidelines in PPG6 and PPG13 (see para 15 of the Secretary of State's decision letter dated 9 March 2000).
- In short, it would not have been easy to obtain approval of reserved matters for an FOC on the reference land even without the modification process. To do so within the year remaining would have been difficult. I cannot accept the optimistic picture painted by the claimants' witnesses, of co-operation between the claimants and officers of Restormel, with helpful meetings leading to a trouble-free grant of approval for an FOC. In my judgment, the claimants would have persisted with an FOC scheme unacceptable in detail to Restormel in the remaining period of about one year leading to the valuation date. Approval would not have been obtained, from Restormel or on appeal within this period, and the position at the valuation date would have reflected the actual position at that time.
- In my judgment, the claimants' failure to obtain approval of reserved matters was not caused by, or directly attributable to, the modification, but to their inability to put forward for approval an acceptable form of development and to their failure to put forward further schemes, as they were able to do and which might have obtained approval. It may be said that the claimants failed to mitigate their loss by pursuing two unsatisfactory applications and by not pursuing other modified applications which might have been successful. In my judgment, it cannot be said that the depreciation in land value at the valuation date due to lack of approval of reserved matters and uncertainty regarding the roundabout and A30 improvement was directly caused by the process of modification. It is not a loss which is directly attributable to the modification under section 107(1)(b) of the 1990 Act, justifying the adoption of Scenario A as the basis of valuation. This loss should not be included in the compensation payable under section 107. To do so would put the claimants in a more favourable position than that which actually existed, namely by assuming that they had approval of reserved matters and for the roundabout. Furthermore, I do not think that the favourable officer's report to the Planning Committee meeting on 3 February 1998 is a reason for accepting Scenario A. This was no more than an officer's recommendation. It was not put to the Committee. It might not have been accepted by the Committee or the Council. The modification process then intervened but I cannot find a direct causal connection between this report and the loss of land value, justifying the use of Scenario A.
- My decision on the first question is that, as a matter of law and fact, I should not depart from the actual position at the valuation date, save for the need to make the necessary assumption that the 1997 permission had not been modified. Accordingly, I find that Scenario B is the correct basis of valuation. I will make an alternative award on the basis of Scenario A.
- I turn now to the second issue: under Scenario B what was the market value of the reference land on 8 March 2000? Section 117(1) of the 1990 Act provides that the rules in section 5 of the 1961 Act shall have effect for the purposes of assessing compensation under a modification order "so far as applicable and subject to any necessary modifications." It is common ground that rule (2) applies:-
- It is agreed that the consideration for the purchase of the Bideford site was £2,866,000 and that abnormal costs of £1,124,000 should be added to this figure.
- The first item in dispute is a consultancy fee of £120,000 under an agreement dated 5 May 1999. Mr Ovenden has treated this as part of the consideration. This agreement was made after completion of the purchase of the land on 30 April 1999. The parties are MEPC Bideford Limited (owner), Castle Court Retail Limited (consultant) and MEPC Plc (surety). Castle Court were also vendors of the land. Clause 3.1 of the agreement provides that Castle Court shall, until a date 24 months after practical completion of MEPC's development of the land (the valuation date), "provide such assistance and advice to the Owner as may be reasonably necessary for the proper fulfilment of the obligation to provide consultancy services in accordance with this Agreement". The term "consultancy services" is not defined. Under clause 3.2, "in consideration of the provision of assistance and advice by" Castle Court to MEPC, MEPC shall pay to Castle Court (1) 24 monthly payments of £5,000 (£120,000), and (2) the "Profit Share" (as defined). This latter payment was referred to at the hearing as an overage payment. It is agreed that no such payment has been made but, that if it had, it would be treated as part of the consideration for the land. Clause 3.4 provides that the contract is the for the provision of services by Castle Court and should not constitute a contract of employment. Under clause 4.1 and 4.2 Castle Court were prohibited from acting with prejudice of the success of the development and from disclosure of financial details or confidential information. Clauses 12.2 and 12.3 provide that the agreement is personal to MEPC and Castle Court.
- I do not agree with Mr Ovenden that the monthly payments under this agreement form part of the consideration for the land. The agreement was made after completion of the purchase. There is a distinction in clause 3.2 between the monthly payments and the Profit Share and, although the latter (if paid) might be treated as part of the price, the monthly payments are, in my judgment, for "assistance and advice" ("consultancy services") and in consideration for the restrictions in clause 4.1 and 4.2. I cannot find any indication in the agreement that these payments form part of the consideration for the land. Clause 3.1 clearly states that the consultant shall provide services and clause 3.4 expressly refers to "a contract for the provision of services". Mr Ovenden said that, having spoken to Mr John Balchin (the representative of Castle Court acting as consultant), he thought that the consultancy fee might have been dealt with separately to make the price "a little bit more palatable to the Board" of MEPC. I cannot accept this explanation. MEPC are a major property company. I do not believe that their Board would have agreed to pay £2,866,000 for the land but would have been reluctant to pay another £120,000, which was therefore disguised as a consultancy fee in a separate agreement made after completion. Furthermore, I give no weight to the other evidence from Mr Balchin that he did nothing under the agreement and that he regarded the monthly payments as part of the consideration. He did not give evidence at the hearing. For these reasons I make no addition to the price for the consultancy fee.
- The second item in dispute in the analysis of the Bideford transaction is Mr Ovenden's deduction of £90,000 for the four acres of land with planning permission for B1, B2 and B8 uses. Mr Cussen made no such deduction but analysed the total consideration over the whole site. Details of the planning permissions granted at and after purchase in April 1999 are set out in paragraphs 54-7 above. It is not in dispute that a net area of four acres had planning permission for B1, B2 and B8 uses at that time and that subsequently (on 4 February 2000) planning permission was granted for leisure use on the land (Discovery Island).
- I agree with Mr Cussen that the four acres with B class permission should not be treated separately; the total consideration should be devalued by reference to the total floor space. In the Bideford Area Local Plan (adopted in June 1994) Policy AP4 (C) provides for retail (A1) and business uses (B1) on land south of Clovelly Road allocated for a business park "but [the Council] would also consider tourist related development on part of the site" (see also para 9.4.6). A letter dated 26 February 2002 from Mr D A Hall, Principal Planning Officer (Development Control) of Torridge District Council refers to this policy, and confirms that tourism uses would have been acceptable in principle and that MEPC would have been expected to receive encouraging advice in this respect. On purchase I do not think that MEPC expected to be restricted to B class uses on part of the site. There was the prospect of leisure development, as part of the FOC, as actually occurred when they obtained planning permission in February 2000 and then spent £2.6m on this part of the development. Mr Ovenden accepted that there is no evidence to show that MEPC agreed to pay a lower price per acre for the four acre site. It is unlikely that the vendors would have agreed to sell this land for only £90,000 (or £22,500 per acre) and the remaining 12 acres for £2,776,000 (or £231,333 per acre). The true position is, in my judgment, that the parties agreed an overall price for the whole of the site.
- My total consideration for Bideford is £3,990,000 comprising the agreed consideration (£2,866,000) plus abnormal costs (£1,124,000). Both valuers have devalued the consideration by reference to the total floor space as reduced into terms of main space (ITMS) (an agreed figure of 123,022 sq ft). On this basis my total consideration represents £32.43 per sq ft.
- Both valuers applied this price per sq ft to the reference land by reference to the permitted development of 125,000 sq ft. This produces a gross unadjusted figure for the land of £4,053,750. Both valuers then made adjustments for the differences between the two sites.
- The first is for different catchment populations. Mr Ovenden added 30% for the larger catchment population at the reference land with no allowance for the smaller immediate catchment compared to Bideford. Mr Cussen made two adjustments: an addition of 25% for the larger overall catchment population at the reference land offset by a 10% deduction for the smaller local catchment, a net addition of 15%.
- The parties have not agreed the catchment populations within 30, 60 and 90 minutes drive times for the two sites but they have agreed figures on alternative assessments. The claimants have used population assessments prepared by Illumine; Restormel have used figures prepared by Experian. The alternative figures for Bideford are:-
- Although catchment population figures are not agreed both Illumine and Experian, show that the reference land has larger catchment populations in each drive time, ranging from 1.6 to 3.3 time greater on the Illumine figures and from 1.7 to 3.1 on the Experian figures. The valuers are close in their overall additions, 30% and 25%. Mr Cussen, however, has also made a deduction of 10% for the larger population in the 15 minutes drive time for Bideford compared to the reference land, 27,321 at Bideford and 13,290 at Roche. This larger immediate catchment population is due to the nearness of the town of Bideford to Atlantic Village, which, said Mr Cussen, has five times the population of Roche.
- The addition for greater catchment is largely a matter of impression: what view would a purchaser of the reference land have taken when preparing his bid? On the figures I agree with Mr Cussen's addition of 25% for the greater overall catchment population at the reference land and the greater number of tourist nights and I agree that this should be offset by a deduction for the greater local population at Bideford. However, I think that Mr Cussen's 10% deduction is too high; I adopt 5%. My net overall addition is therefore 20%. Although of minor importance, this also reflects the lower disposable income in Cornwall compared to Devon.
- The next adjustment is for time and planning: Mr Ovenden made an addition of 7.5%, Mr Cussen 5%. This adjustment reflects three matters: for changes in value between the Bideford transaction in April 1999 and the valuation date, for more restrictive planning controls over the same period and for a more restricted supply of FOC sites between these dates. The difference between the valuers is small. For the period between April 1999 and March 2000 there is little evidence as to changes in FOC land prices, as to planning control and as to the availability of sites for FOC development. On the limited evidence I think that a 7.5% addition is too high; I adopt Mr Cussen's figure of 5%.
- The next adjustment is for the effect of competition from Trago Mills: Mr Ovenden has made no adjustment for this factor, Mr Cussen has made a deduction of 10%. Trago Mills is situated near Liskeard, about 14 miles from the reference land. I inspected this property, described in promotional literature as a family shopping and leisure park "with over 45,000 cut-price bargains from Tin Tacks to Oriental Silk Carpets." It can be described as a discount shopping centre. It is in a converted mill; there are no individual shops, as in most FOCs, but large areas are allocated for sales of different types of goods, particularly bulky goods such as DIY products, carpets and furnishings and a garden centre.
- I find the Trago Mills operation to be different from that of an FOC. Trago Mills specialises in DIY products, kitchens and bathrooms, paints, wallpapers, etc and carpets and home furnishings. There is a large department selling pet food in bulk and a garden centre. From my inspection of Atlantic Village FOC and the details put in evidence of other FOCs, it is clear that most specialise in the sale of clothes and footware and to a limited extent, gifts. At Trago Mills the sale of clothes occupies only 12% of the floorspace whereas my analysis of the shops selling clothes and footwear at five FOCs chosen at random ranges from 51% to 71% of the units. DIY goods, pet supplies and garden centres are not usually found in FOCs. I do not think that Trago Mills would compete with an FOC on the reference land. With the choice of visiting Trago Mills or an FOC at Roche, a potential customer seeking DIY products, pet supplies and a garden centre or wishing to purchase carpets and home furnishings, would go to Trago Mills and would be unlikely to find those goods at an FOC at Roche. A potential customer looking for clothes, footwear or gifts, however, would go to an FOC on the reference land. Although Trago Mills sells clothes the choice is limited, unlikely to be as wide as in an FOC on the reference land. In my judgment there would be little overlap in goods sold at the two centres. Trago Mills would not compete with an FOC on the reference land and I make no adjustment under this head.
- The last general adjustment is for the deficiencies of the reference land compared to the Atlantic Village site. Mr Ovenden deducted 7.5% and Mr Cussen deducted 15%. There is a large measure of agreement as to the deficiencies of the reference land: a divided site and limited site area with little space for leisure facilities. Mr Ovenden said that he also took into account his 90% adjustment at Bideford; Mr Cussen additionally referred to the shape of the reference land.
- From my inspection I agree that the reference land is an inferior site for an FOC compared to Bideford. A particular disadvantage is the division of the land by the estate road serving Victoria Business Park. The reference land has a smaller site area and a less convenient shape. I find Mr Ovenden's deduction of 7.5% to be too low and Mr Cussen's 15% marginally too high. I allow 12½% for the deficiencies of the reference land compared to Atlantic Village.
- The overall adjustment for the reference land compared to Bideford is an addition of 12.5%. This increases the value from £4,053,750 to £4,560,469. The parties have agreed a deduction for abnormal costs of £780,947, reducing the value to £3,779,522, subject to two further possible adjustments, for parking deficiencies and for the lack of approval of reserved matters and other uncertainties at the valuation date.
- As to the parking deficiencies of an FOC scheme for the reference land, Mr Ovenden made no deduction, Mr Cussen deducted 10%. Mr Ovenden's approach is that, under Scenario A, it is to be assumed that approval of reserved matters had been given for 950 car spaces, as proposed by the claimants. The approach of Mr Tonks is wrong: 950 spaces are sufficient and can be accommodated wholly on the reference land. A larger decked car park would not be necessary. Mr Cussen's 10% deduction is on the basis that 950 spaces would be less than the 1,000 spaces required under the conditional contracts and considerably less than Mr Tonks' estimate of 1,513 spaces, requiring either the prohibitive cost of a decked car park or a reduction in the size of the development.
- The evidence regarding parking falls into three categories: the inspector's report following the modification inquiry, the contracts and offers for the reference land, and the expert evidence given at the hearing in this Tribunal.
- The inspector's conclusions on parking are contained in paragraph 4.60 of her report. The first reserved matters application (shopping village) included provision for 945 spaces for customer parking which the inspector said "falls at the lower end of the TRICS 1996 database requirement of between 929 and 1,102 spaces and may be sufficient for a location where the catchment population is relatively low." The second application (five units) included provision for 796 spaces which the inspector said "would appear to be insufficient if the development were to be subdivided to operate as a FOC."
- In the contract dated 18 April 1997 between the claimants and Castle Court the development envisaged was an FOC with a gross retail area of not less than 125,000 sq ft together with not less than 1,000 customer parking spaces or such lesser area or number of spaces as the purchasers may decide. The contract of the same date between Castle Court and Eastlake Developments included a smaller development of 75,000 sq ft and not less than 500 customer car parking spaces or such lesser area or number of spaces as the purchasers may decide. The offer by Castle Court dated 25 January 2000, as revised on 18 February, was conditional upon receipt of a satisfactory planning permission for development of an FOC of up to 125,000 sq feet gross internal area with up to 1,000 customer parking spaces.
- As to the expert evidence, Mr Lacey's Option 7, put forward as the most suitable scheme by the claimants, proposed a total of 949 car spaces, including staff parking. Mr Tucker's evidence was that 950 spaces would be adequate having regard to the parking provided at other FOCs. On behalf of Restormel, Mr Tonks emphasised the need for adequate parking, essential to the commercial success of an FOC, and calculated that 1,513 customer spaces would be required with 200 spaces for staff parking. This greater provision would be needed to cope with peak demand.
- In considering the parking requirements for an FOC on the reference land, Mr Tonks concentrated on an operator's views as to the amount of parking commercially needed and Mr Tucker concentrated on the level of parking required for approval of reserved matters. Mr Roots observed in his final submissions that this is "probably a distinction without a difference." I agree and, in the absence of a clear planning policy relating to a specific number of car spaces required, I will follow the operational requirement approach. (Policy 79 in the Local Plan provided a maximum number of spaces for non-food retail use, of 1 per 25 sq m i.e. a maximum of 464 spaces for the proposed FOC on the reference land, which the parties agree would not apply).
- In my judgment, the parking provided at existing FOCs is the best guide to the level of parking which a purchaser would consider to be required at the reference land. This is the approach adopted by Mr Tucker and is to be preferred to the analytical approach used by Mr Tonks, by reference to traffic generation, peak demand, length of stay, etc, which has produced a level of parking out of line with existing parking at operational FOCs. Mr Tonks, however, also referred to the parking provided at other FOCs and I consider this evidence. I also think that Mr Tonks' approach is unsatisfactory on some matters of detail, namely his use of only two out of the four FOCs in the TRICS Database (neither directly comparable to the reference land); his calculation of alleged peak Sunday demand at the reference land by reference to the relationship between Saturday and Sunday parking at the Dover FOC, which was otherwise not included in his calculations, and with no evidence to show that Sunday demand in Cornwall was the peak demand as in some other areas; and the lack of supporting evidence for his 5% end addition.
- I now consider the evidence regarding parking provision at operational FOCs but start with a note of caution. This analysis is clearly only as accurate as the underlying data and I have reservations as to the accuracy of the information regarding floor areas. Mr Tucker's figures relating to Cheshire Oaks FOC were shown to be wrong and subsequently corrected. I note that he has used a gross floor area of 100,000 sq ft for Atlantic Village, a figure which differs from the area agreed by the parties (total 125,260 sq ft, 110,848 sq ft of retail). In both cases, my analysis uses the correct or agreed figures. It is not clear whether Mr Tucker's gross floor areas represent the total floor area at each property or the retail area. Despite these qualifications, however, I think that the number of FOCs considered means that a reasonably accurate indication can be made of the parking required at the reference land, bearing in mind that each FOC considered would differ from the reference land in such matters as catchment populations, car ownership, public transport, size, competition, etc. Nevertheless, the size of the survey provides, in my view, useful data to establish a bracket of parking likely to be required at the reference land, which can be filtered through the mind of a prospective purchaser in the formulation of his bid for the land. For the purposes of this particular exercise, it is not necessary to establish an exact number of parking spaces for the reference land.
- I start by considering the parking provided at Atlantic Village. The parties have agreed a retail floor area of 110,848 sq ft with 800 customer parking spaces. These figures show a parking ratio of 1 car space for every 139 sq ft of retail floorspace, giving a figure for the 125,000 sq ft of retail space proposed at the reference land of 899, say 900, car spaces.
- I turn now to Mr Tucker's analysis of the parking provided at 13 FOCs. He divided them into three groups: McArthur Glen, Realm and others. There are effectively six properties in the McArthur Glen group of FOCs and, making an adjustment for the corrected Cheshire Oaks figures, produced evidence of 1 car space for every 127 sq ft with a range of 104 to 150. There are five FOCs in the Realm category and, making an adjustment for the agreed Atlantic Village figures, show an average of one car space for every 130 sq ft and a range of 60 to 175. The remainder comprises two FOCs with an average of one car space for every 113 sq ft and a range of 100 to 125. The overall average for all these properties is one space per 115 sq ft and, if the lowest and highest figures of 60 and 175 outside the general bracket of figures are excluded, the average is one space for every 116 sq ft. Applied to the reference land this gives a parking requirement of 1,078 spaces with a range (excluding the highest and lowest figures) of between 833 and 1,250.
- Mr Tonks analysed seven FOCs. The average is one car space for every 137 sq ft of retail floor space with a range of 63 to 197. Disregarding the highest and lowest figures outside the general bracket, the average is slightly increased to 139 with a band of 118 to 159. Applied to the reference land this gives a parking requirement of 899, say 900 spaces, with a range of 786 to 1,059 spaces.
- Combining all this evidence, but excluding the four outside the general bracket, produces an average figure of one car space for every 131 sq ft with a range of 100 to 159. Applying these figures to the reference land gives a parking requirement of 954 spaces with a range between 786 and 1,250.
- To summarise the position therefore the evidence indicates the following parking requirements for an FOC of 125,000 sq ft retail floorspace on the reference land:-
- It is clear from the above analysis that Mr Tonks' figure of 1,513 parking spaces is wholly outside the bracket of parking provided at FOCs throughout the country. I reject it as unlikely to be provided by an operator of an FOC on the reference land. In Mr Lacey's Option 7,949 spaces can be provided and the conclusion I have reached is that a purchaser of the reference land in March 2000 would, having regard to the importance of adequate parking to the success of an FOC, have considered a total of 949 spaces to be marginally too low. It is at the lower end of the TRICS 1996 Database (929-1102), it is below the figure of 1,000 spaces for 125,000 sq ft in the contracts and offers, it is below the average figure in Mr Tucker's selection of FOCs (1,078) and below the average figure in the combined selection of FOCs (954). It is above the indication of 900 spaces for the reference land given by Atlantic Village but the figure for that property of 800 spaces for 110,848 sq ft does not include separate staff parking. Accordingly, I conclude that a purchaser of the reference land at the valuation date would have reduced the price he was willing to pay to reflect his concern regarding the adequacy of car parking (including the need to provide staff parking). I reject Mr Cussen's deduction of 10%, which is based on the need to provide 1,513 spaces, as too high. I adopt a deduction of 2.5%. This reduces the value from £3,779,522 by £94,488 to £3,685,034.
- I now deal with the final valuation adjustment, for lack of approval of reserved matters and uncertainty. Under Scenario B both valuers have made an end deduction for these matters. Mr Ovenden reduced his primary valuation of £4,529,553 to £3,250,000, a deduction of £1,279,553 or about 28.5%. He said that a purchaser would have paid less for the land due to the uncertainty caused by the short time available for submission of a satisfactory application for approval of reserved matters. He would however have approached this short period optimistically with the assumption that an early approval would be given. Mr Cussen reduced his valuation from £2,763,103 to £1,763,103 (on a mathematical basis) and then to £1,625,000, a total deduction of £1,138,103 or 41.2%, although he calculated his mathematical end deduction by reference to a 50% uplift of the difference between the agreed value for B class uses (£625,000) and his valuation of £2,763,103. His end deduction reflects the uncertain position at the valuation date: approval of reserved matters could not have been obtained by 13 May 2000 (with no extension of time likely for further applications), there were problems in obtaining approval for a development fundamentally different to that granted under the outline planning permission, there were problems regarding roads and infrastructure and use and subdivision would be needed before the development could be used as an FOC. A purchaser would not have risked a sum in excess of £1,000,000 more than the value for B class uses.
- In my judgment, this end deduction should cover the uncertainties relating to lack of approval of reserved matters and the short period between March and May 2000 in which to lodge a satisfactory application; the provision of a roundabout at the junction of the A30 and B3274 (and possibly also at the B3274 and estate road junction); and the proposed improvements to the A30. The essential question is what deduction a purchaser of the reference land would have made in his bid for the uncertainties as to these matters at the valuation date?
- I look first at approval of reserved matters. Under Scenario B it is to be assumed at the valuation date that the Secretary of State decided not to modify the 1997 permission and (as in fact happened) dismissed the appeal against the non-determination by Restormel of the first reserved matters application and refused the second called-in reserved matters application. Thus, the valuation to be made as at 8 March 2000 is on the basis that the 1997 permission was still in force but there was no approval of reserved matters under condition 3, which required an application to be submitted within three years, i.e. by 13 May 2000. On the date of valuation there was only the short period from 8 March to 13 May in which to make an application leading to approval of reserved matters.
- I consider now the uncertainty surrounding approval of reserved matters, as it would have been perceived by the vendor and purchaser on a hypothetical sale of the reference land in March 2000.
- The development approved under the 1997 permission is for buildings for use within classes B1, B2 and B8 "and for non-food retail use" with associated car parking, services and roads. It is an outline permission; approval of siting, design and external appearance of the proposed buildings and means of access thereto being required before development is commenced, with submissions of details for approval within three years, i.e. by 13 May 2000 (conditions 1 and 3). Condition 14 restricted the permitted retail use to 125,000 sq ft in a maximum of five units, "four of which shall not be subdivided and shall each be occupied by a single non-food retailer." It is common ground that the fifth unit can be subdivided. The claimants' preferred scheme, Option 7, shows units of 4,000, 5,000 (2), 6,000 and 105,000 sq ft. The 1997 permission was an outline planning permission which in principle allowed a mixed development of B class buildings and uses and non-food retail development with specific restrictions on the latter as to total floorspace, maximum number of units and the occupation of four of the units.
- An application for approval of reserved matters must be within the scope of the outline planning permission. In Heron Limited v Manchester City Council [1978] 1 WLR 937, Lord Denning MR said (at 944):-
- The 1997 permission specifies two broad categories of permitted development for the reference land (B1, B2 and B8 uses and non-food retail use). The two applications for approval of reserved matters and Mr Lacey's Option 7 relate wholly to retail development. No issue has been raised by Restormel as to whether a valid application for reserved matters can relate solely to one of the permitted uses (retail). It is "a matter of fact and degree for them to decide" (Hammersmith at 132). It is, however, a point which they could take and one which may persuade a purchaser to proceed with caution. In short, it is element of uncertainty.
- The 1997 permission did not specifically grant consent for an FOC, a form of development which, in my judgment, would require for its commercial success, the physical subdivision of the largest of the five buildings into individual shop units. This introduces another element of uncertainty, namely the number of steps required to achieve this sub-division. I was referred to R v Bolsover District Council ex p Ashfield District Council (1995) 70 P & CR 507. It is not necessary to recite in detail the facts and decision; it is sufficient to say that outline planning permission was granted for a retail park incorporating five units and that subsequently an application for approval of reserved matters was made showing five units but with 80 front doors and 73 rear or servicing doors to be provided as part of the development. It was the developer's intention to subdivide the five units into some 70 units to form an FOC. In judicial review proceedings one of the issues was whether the five buildings could be subdivided without prior retail use. It was an issue left open for future decision. Owen J said (at 519):-
- Thus, the uncertainty facing a purchaser of the reference land in March 2000 was whether development and use as an FOC under the 1997 permission required two or three steps: construction and then physical subdivision and use or construction and then retail use and then physical subdivision. It is not for me to decide this issue but it is clear that there is doubt as to the position under planning law. I think that doubt remains although the 1997 permission does not specifically prohibit subdivision of one of the units. This uncertainty would have affected a purchaser when making his bid for the land, particularly if he took the view that he might have to institute a retail use before subdivision. An application for approval of reserved matters showing the subdivision of one unit may have been rejected by Restormel on the grounds that it was outside the scope of the 1997 permission (see Bolsover in relation to application 432, which indicated 70 units, objected to by Bolsover and subsequently withdrawn, of which Owen J said (at 511): "Although I am not required to decide this, it seems that 432 was not within the ambit of that permission."). This is the second area of planning uncertainty which existed in March 2000.
- It is common ground that at the valuation date there was only a limited period for the submission of reserved matters, from 8 March to 13 May. Although it is not in dispute that theoretically more than one application for approval of reserved matters could have been made before 13 May (see Heron at 943), it was acknowledged by Mr Lacey (rightly in my view) that in practice only one application would have been possible within the time available. Thus, the landowner or a purchaser at the valuation date had effectively one chance only to get the required approval of reserved matters under the 1997 permission. Although the application had to be made before 13 May, approval could be given after that date. If the application was refused, either by Restormel or on call-in or appeal, the 1997 permission would lapse. A purchaser of the reference land on 8 March 2000 would therefore have perceived considerable uncertainty in this respect, even if he thought that his development scheme would ultimately obtain approval.
- The claimants say that this uncertainty could have been mitigated in two ways: by later amendments to a submitted reserved matters application and by an application for an extension of time.
- As to amendments to a reserved matters application after the time limit has expired, counsel agreed that there is no English authority directly in point. It was, however, an issue in a Scottish case, Inverclyde District Council v Lord Advocate and Another (1981) 43 P &CR 375, where, in the House of Lords, Lord Keith said (at 397):-
- Section 93(4)(b) of the 1990 Act is in the same terms as section 40(7)(b) of the Town and Country Planning (Scotland) Act 1972 referred to above. In British Telecommunications Plc v Gloucester City Council [2001] EWHC Admin 1001; [2002] 2 P & CR 33, Elias J, dealing with the analogous point of amendment of an application for outline planning permission, held that, in the circumstances, an amendment to the application was properly made on the grounds that it was not substantial and having regard to the fact that consultations would take place.
- In the light of the above I agree that some of the uncertainty arising out of the limited opportunity for submission of a successful application for approval of reserved matters would be removed by the possibility of subsequent amendments. They could not, however, be substantial nor could they have the effect of altering the character of the application. Any amendment would also have required the co-operation of Restormel, in accepting it as within the guidance in Inverclyde and British Telecommunications, co-operation which a purchaser of the reference land may well have been doubtful of receiving.
- As to an extension of time, this would have required an application under section 73 of the 1990 Act to vary condition 3 in the 1997 permission, giving in effect further time in which to submit reserved matters. Section 73 of the 1990 Act provides as follows:-
- In Pye v Secretary of State for the Environment [1998] 3 PLR 72, Sullivan J considered conflicting authorities on the operation of this section. He went back to first principles and said that a section 73 application is an application for planning permission and, in making a decision, it is the duty of the local planning authority to have regard to the development plan (which brings into play section 54A of the 1990 Act) and to any other material considerations (including the practical consequences of imposing a condition on the grant of planning permission) (at 85B). A decision under section 73(2) leaves the original planning permission intact and unamended, which remains as a baseline (at 85H). Where a section 73 application is made within the original time-limit for submission of reserved matters for a modest extension of time, while implementation of the permission is still possible and not precluded by section 93(4) of the 1990 Act, the role of the local planning authority in considering the conditions subject to which permission should be granted will be more confined than in the normal case of the determination of a planning application. But, where the section 73 application is to alter a condition or extend the period for submission of reserved matters, where the original permission has become incapable of implementation, then the position is different. The authority is not required to ignore the practical consequences generally of imposing a different condition. It must have regard to the factual circumstances at the time (at 86E-87E). Sullivan J concluded that he endorsed the approach adopted in R v London Docklands Development Corporation ex p Frost (1996) 73 P & CR 199.
- In this earlier decision Keene J said in relation to an application to vary a time condition for submission of reserved matters (at 207):-
- The above guidance shows that a section 73 application should be considered having regard to the factual circumstances at the time and having regard to the development plan and any other material considerations at that time. For an application to extend a condition limiting the period for submission of reserved matters, the question to be considered is: should this planning permission be allowed to continue in force beyond the original dates contemplated? This is a question which may go to the principle of development and is to be judged at the time of application.
- It is common ground that a section 73 application to extend the time for submission of reserved matters in respect of the reference land would have been called-in by the Secretary of State and that, if granted, it would have been a new planning permission. The above guidance shows that matters of policy and other material considerations should be taken into account when determining such an application. Mr Roots said that it is inconceivable that such an application would have been refused having regard to the time lost by the modification process, a personal circumstance which could be taken into account as a material consideration. Mr Katkowski argued that, on the evidence, there was no prospect of the Secretary of State granting such an application and creating a new retail planning permission.
- I agree with Mr Katkowski. The Secretary of State's objection in principle to the proposed retail development on the reference land is clearly seen in his decision letter dated 9 March 2000. Although the following paragraphs were written in the context of his decision to modify the 1997 permission, the same policy considerations would have applied to a section 73 application to extend the life of the 1997 permission:-
- Applying the test in Docklands, the Secretary of State is likely to have concluded that the 1997 permission should not be allowed to continue in force beyond the original dates contemplated. Even if the modification process could be considered to be a material consideration (and I have found that the claimants were not prevented from pursuing further applications for approval of reserved matters), I do not think that the Secretary of State would have allowed it to outweigh the clear policy objections to the retail development proposed on the reference land. My conclusion is that a purchaser of the land March 2000 would not have relied on the possibility of a successful section 73 application.
- Finally, under reserved matters, I consider the perception of a purchaser of the reference land at the valuation date as to the likelihood of obtaining approval of reserved matters and the difficulties he would have faced at that date.
- The law is not in dispute and I can refer to it briefly. An application for approval of reserved matters is not a planning application. An outline planning permission gives the right to develop in accordance with the conditions attached and subject to consideration of reserved matters, which matters cannot be used by a planning authority to frustrate the right to develop. The authority is bound to act in accordance with the principle of development established by the outline permission. A planning authority cannot resile from the outline planning permission (R v London Borough of Bromley ex p Barker [2002] Env LR 25 631 at 645 and 650; Lewis Thirkwall Ltd v Secretary of State for the Environment [1978] JPL 844 at 847). Conversely, it is not open to an applicant to alter the development permitted under the outline permission by submission of reserved matters for a different form of development (Shemara Ltd v Luton Corporation (1967) 18 P & CR 520). Whether a submission of details for approval meets the requirements of a condition in the outline permission depends on the circumstances of each case, but the correct test as to whether submitted details of access met a condition requiring such submission was whether the access was the best means of vehicular access which could be achieved on the site (Medina Borough Council v Proberun Ltd (1990) 61 P & CR 77.
- The following policies were relevant to reserved matters at the valuation date. In the 1997 Replacement Cornwall Structure Plan, Policy ENV 12 provided for local distinctiveness to be respected in the siting and design of new developments including materials and landscaping; Policy TRAN 5 required new developments to make provision for pedestrians and cyclists, and to be compatible with the safe movement and management of traffic having regard to Primary County Routes; direct access onto Primary Routes is to be avoided (Policy TRAN 7). At the valuation date the Local Plan was the Draft Borough of Restormel Local Plan. Policy 6 required new developments to respect the character and identity of their surroundings. Policies 45 and 49 required suitable access for people with disabilities and for disabled parking to be provided close to buildings. Policy 51 set out design standards and guidelines for new industrial and commercial development. Policy 79 required development proposals to provide parking to meet minimum essential operational needs subject to maximum provision according to use. (The parties agree that the maximum provision of one space per 25 sq m for non-food retail in the Plan would not apply to an FOC). Policy 80 provided that development would only be permitted where additional traffic can gain access to, and be accommodated on, the road system without undue environmental, operational or safety problems. Policy 81 required new developments to cater for cyclists and pedestrians.
- On 9 March 2000 the Secretary of State rejected the first and second reserved matters applications and accepted the inspector's conclusions. These were:-
- I heard much planning and highways evidence regarding the claimants' schemes, particularly Mr Lacey's Option 7. It must, however, be borne in mind that this is not a planning inquiry: I am not required to decide whether approval would, or should, have been given to this development or any other scheme. I decline therefore to make detailed findings on the expert evidence on planning and highways. To do so would be to take on the role of the local planning authority, inspector or Secretary of State. My task is to determine the value of the land. It is to establish the relevant facts at the valuation date and then filter them through the minds of vendor and purchaser to arrive at the price they would have agreed on a hypothetical sale on 8 March 2000. When considering the basis of valuation above I dealt with the problems of obtaining approval of reserved matters, within a limited period or at all. My conclusions as to the difficulties also have relevance to this part of the decision.
- My overall conclusion on approval of reserved matters is that a purchaser of the reference land on 8 March 2000 would have accepted that there was considerable uncertainty as to whether he could obtain approval of reserved matters under the 1997 permission to allow the development of an FOC on the land. Two unsuccessful attempts had been made to obtain reserved matters approval, both severely criticised and rejected. Only some two months remained to submit a further application. Although amendments of an insubstantial nature could be made after submission, there was no prospect of an extension of time being granted under section 73 of the 1990 Act to create a fresh planning permission. The 1997 permission was originally granted for what was believed to be a retail warehouse park, not an FOC. As a matter of law it is not clear whether the subdivision of the largest unit, necessary for the commercial success of an FOC, would have required two or three steps for implementation (construction and subdivision or construction, use and subdivision). The 1997 permission was for a mixed use development not a wholly retail development. The planning officer directly concerned was opposed to the principle and detail of the claimants' preferred schemes. A purchaser would have been cautious as to the grant of approval by Restormel and would have expected the application to be called-in or decided on appeal, with consequent delay and expense. All these uncertainties would have led him to reduce his price for the land. I will consider the amount of this reduction after I have considered the other uncertainties, for the roundabout and A30 improvements.
- I look next to the position regarding the roundabout or other works at the junction of the A30 and B3274, the second area of uncertainty. In the valuations of Mr Ovenden and Mr Cussen, and in my valuation, there are included in the deductions for abnormal costs a figure of £550,000 (described as access), which I was told is the agreed cost of a roundabout or other works or the agreed loss of trade or value if this junction remained unimproved. The further deduction now considered is for the uncertainty regarding these works and the effect of that uncertainty on the price.
- It is common ground that junction improvements were are not required under the 1997 permission, nor were they required under any planning agreement. Subject to approval of reserved matters, the 1997 permission could have been implemented without works to the A30/B3274 junction. But it is also common ground that the construction of an FOC on the reference land would have caused traffic congestion in the absence of the improvement of this junction. The extent of this congestion is in dispute. In July 1997 the claimants and Castle Court clearly considered that it was expedient to improve this junction: they applied for planning permission for "alteration to existing junction to A30 to provide roundabout." This was refused by Restormel on 4 December 1997 at the direction of the Secretary of State for Transport on the grounds that "the applicants have not demonstrated to the satisfaction of the Highways Agency that the traffic impact of the proposed development would not be detrimental to the safety and free flow of Trunk Road traffic."
- The position at the valuation date was that the improvement of the A30/B3274 junction was not required under a planning permission or planning agreement but that a purchaser of the reference land would have allowed £550,000 for this improvement and would have known that the absence of this work would cause congestion likely to affect the operation of an FOC on the land. He would have been aware that planning permission had been refused for a roundabout.
- I heard a great deal of technical evidence, principally from Mr Tucker and Mr Tonks, as to the need for a roundabout, traffic congestion and the likely attitude of the Highways Agency. Again, I should emphasise that this is not a planning inquiry and I am not required to say whether the Agency would, or should, agree to this roundabout. My task is to consider how a prospective purchaser would have viewed the position at the valuation date and how it would have affected his bid for the reference land. In my judgment, two principal areas of uncertainty would have been perceived.
- The first is whether the Highways Agency could, having regard to their decision in 1997, be persuaded that a roundabout (or other improvement) should be provided at the junction of the A30 and B3274 at the developers' cost. A subsidiary uncertainty is when this work would have been carried out (if agreed), before or after the opening of an FOC on the reference land. A further complicating factor, which would probably have delayed a decision, is the uncertainty regarding the improvement of the A30 at this point, a matter which I consider below. A purchaser would have known that the improvement of this junction was essential to the commercial success of an FOC; traffic congestion in the early months or years of operation would have seriously affected retail trading. In my judgment, it is highly unlikely that a purchaser would have taken the risk of building and opening an FOC without an improved junction, built or, at least, agreed. It was suggested that the hand of the Highways Agency could be forced by opening an FOC without a roundabout with consequent congestion which would have become so severe that the Agency would have been forced to act. I do not think that a purchaser would have risked taking this course of action. The Agency had the whip hand (as Mr Katkowski rightly put it); the works would have to be provided under an agreement under section 278 of the Highways Act 1980, where there is no appeal.
- The second area of uncertainty is that, even if agreement could have been reached regarding the improvement of the junction, the scale of the works would not have been known at the valuation date. In particular, it would not have been known whether the works could be carried out within the highway, or whether they would have encroached onto the reference land (with consequent loss of parking or development) or whether they required third party land (with possible delays for negotiations or compulsory purchase).
- I should also mention that there would have been uncertainty whether a roundabout or other improvement was required at the junction of the B3274 and the estate road. A purchaser may well have taken the view that such an improvement would be necessary for the commercial success of an FOC.
- These uncertainties would have led a purchaser to reduce his price for the land. I consider below the amount of the overall deduction for uncertainties.
- I now consider the third area of uncertainty, the proposed improvement of the A30 in the vicinity of the reference land. This can be dealt with shortly; paragraphs 36 to 43 above set out the facts before and after the valuation date. The parties have agreed that the Highways Agency anticipate that the improvements will commence in 2004-2005 with estimated completion in 2006-2007. Funding was not in place at the valuation date.
- There are two areas of uncertainty here. The first is the timing of the proposed improvement. Although start and completion, as anticipated by the Highways Agency, are agreed, these works (as with all or nearly all highway improvements) have a histsory of slippage and delay. A purchaser of the reference land at the valuation date would have faced an uncertain position regarding timing. Secondly, the nature of the improvement, the proposed route, was not known. This was (and still is) another element of uncertainty. It is common ground that the location of the reference land alongside the A30 is advantageous to an FOC development. If the route of the A30 is changed (and a possibility is that it will be realigned to run to the north of the present line) and the A30 is de-trunked at the reference land, these charges may well have a detrimental effect on an FOC on the land. These uncertainties would also have persuaded a purchaser of the reference land to proceed with caution, leading to a reduction in his bid.
- In the light of the uncertainties relating to lack of approval of reserved matters, the roundabout or other works at the A30/B3274 junction and the improvement of the A30, I now consider the overall end deduction for the uncertainty factor. In Scenario B both valuers have made such a deduction: Mr Ovenden 28.5%, Mr Cussen 41.2% (although he calculated his deduction by reference to the uplift between B class value and FOC value). In my judgment, a purchaser of the reference land at the valuation date would have made a substantial reduction in price for the uncertainties discussed above. He would have done this by a deduction from the value after the parking adjustment (£3,685,034). I find that he would have reduced this figure by 40%, producing a value of £2,211,020, say £2,211,000. This is the market value under section 5(2) of the 1961 Act of the freehold interest in the reference land as at 8 March 2000 with the benefit of the unmodified 1997 permission. In summary it is as follows:-
- It remains to compare my valuation with the contracts and offers. A direct comparison cannot be made with the figures in the contracts and offers because my valuation reflects the parking deficiency and planning uncertainties, most of which did not exist in the contracts and offers. My valuation figure to compare is £3,779,522 with a deduction for uncertainties regarding the roundabout and the A30 improvements which would also have been present in the contract and offer figures. I put the deduction for these uncertainties at 15% giving my valuation figure to compare with the contracts and offers of £3,212,594, say £3,212,000.
- The contracts and offers are summarised in paragraphs 47 to 50 above. I do not find the conditional offers helpful, due mainly to their lack of any binding form and their conditional nature, but the two contracts can be compared with my valuation.
- In the contract between the claimants and Castle Court the price of £3m reflected the value of the land in April 1997 with planning permission and reserved matters approval for an FOC with a gross retail area of not less than 125,000 sq ft together with not less than 1,000 customer parking spaces (or such lesser area or number of spaces as decided by the purchaser). The uncertainties regarding a roundabout and the A30 improvement would have been reflected in this price. It does, however, require adjustment for the difference in prices between April 1997 and March 2000 and for the underpass. In my valuation I adopted a 5% uplift in values for the period between April 1999 and March 2000, but I have little reliable evidence for the period April 1997 to March 2000. Mr Cussen said there was a rise in values of little more than 5% during these three years, although in his adjustment of a transaction at Bridgend he assumed a 5% per annum increase over four years. Doing the best I can with the very limited evidence, I adopt a 10% increase in value between April 1997 and March 2000. This increases the £3m price to £3.3m. Mr Cussen said in his evidence, and Mr Roots accepted in his closing submissions, that the parties in 1997 would probably not have contemplated the construction of an underpass and therefore £150,000 should be deducted from the contract consideration, reducing it to £3,150,000, slightly less than my comparable value figure of £3,212,000.
- In the contract between Castle Court and Eastlake in April 1997 the price increased to £3.5m but there are a number of differences between the contracts including a requirement that Castle Court use their best endeavours to let at least 10,000 sq ft. This obligation would have some value, although it is impossible to say what reduction should be made for this additional element. I do not think that the contract fee of £350,000 should be treated as part of the consideration: clause 9.1 of the agreement expressly provides that it shall not form part of the purchase price. Adjusting the £3.5m price by increasing this figure by 10% for the increase in values and deducting the cost of the underpass increases it to £3.7m.
- The overall bracket of values provided by the two contracts is therefore between £3.15m and £3.7m, with greater weight to be given to the £3.15m figure in the first contract. My comparable value of £3.212m is within this bracket and closer to the more reliable first contract figure. In my judgment, therefore, my valuation is not out of line with the contract evidence.
- I now give my alternative valuation on the assumption that Scenario A is the correct basis of valuation. On that basis approval of reserved matters would have been obtained at the valuation date and the roundabout built or at least agreed. The only uncertainty would have been the timing and location of the A30 improvement. Mr Ovenden made no deduction for this limited uncertainty but, in my judgment, a purchaser would have made a small reduction in price. I put this at 5% compared to my larger deduction of 40% for the major uncertainty comprising reserved matters, roundabout and A30. My figure before final adjustment of £3,685,034 should be reduced by £184,252 to £3,500,782, say £3,500,800 which I determine was the value of the reference land on 8 March 2000 under Scenario A.
- Before moving to my third question under this head of claim I should refer to a matter which arose out of Mr Ovenden's evidence regarding the use of the RICS Red Book for statutory valuations. In his expert report he said (para 3.4):-
- I turn now to my third question, what is the compensation payable for the depreciation in land value directly attributable to the modification order? The parties have agreed that this is to be calculated by deducting the agreed value of the reference land with the modified 1997 permission (£625,000) from the value of the land with the unmodified permission, which I have found to be £2,211,000. Accordingly, I determine that the compensation payable for the depreciation in land value under Head 2 of the claim is £1,586,000 (one million five hundred and eighty-six thousand pounds). If I am wrong in my use of Scenario B as the basis of valuation then my alternative award of compensation under this head would be £2,875,800 (£3,500,800 less £625,000).
- I now deal with the claim for abortive costs. I am asked to determine whether compensation under this head of claim is payable in principle, leaving quantum to be subsequently agreed or determined. The claim is £68,379.27 described as interest and bank charges being holding costs claimed on the basis that the reference land was sterilised as a result of the process of making the modification order beginning with the Secretary of State's letter in January 1998.
- Section 107(1) of the 1990 Act gives a right to compensation for "expenditure in carrying out work … rendered abortive by the … modification", and for "loss or damage which is directly attributable to the … modification. " Section 117(1) of the Act applies the rules in section 5 of the 1961 Act " so far as applicable and subject to any necessary modifications" to the assessment of compensation for the modification of a planning permission. Mr Roots referred to the decisions in Shun Fung and Ryde and contended that the claim satisfied the three tests of being causally connected to the modification, not too remote and reasonable. Mr Katkowski contended that this claim is erroneous in fact: the reference land was not sterilised by the modification; the amounts claimed are notional, not actual. Even if Shun Fung and Ryde apply, the claim does not satisfy the three tests referred to above.
- In Shun Fung, Lord Nicholls considered a claim for loss of profits incurred in the shadow period before resumption, where there existed a threat of acquisition, and said (at 137H):-
- In Ryde, Judge Rich QC, sitting as a member of the Lands Tribunal, applied the guidance in Shun Fung to allow a claim on compulsory purchase for holding costs, namely interest on the sum borrowed by the claimants to buy the land and erect buildings (retirement homes), for the period after the date when, but for the acquisition, the claimants would have sold the buildings or the site until the date when possession was taken by the acquiring authority. The claim was made under rule (6) of section 5 of the 1961 Act.
- I find myself in difficulty in dealing solely with the principle of this head of claim, which contains matters of fact on which I have insufficient evidence. In my judgment, determination of this item of claim requires decisions of fact and law. I do not think that I can take the question of principle further at this stage, other than to say that this head of claim may be recoverable in principle under section 107(1) of the 1990 Act provided there was a causal connection between the modification and the loss claimed; that the loss was not too remote; and that the claimants acted reasonably to mitigate their loss. These are largely matters of evidence. Whether the claimants can recover all or any of their holding costs and, if so, the amount, will depend on the application of these three tests to evidence relating specifically to these costs and the claimant's conduct thereto. I have made some observations on the claimants' position during the modification process but I think that they should be given the opportunity to put forward further evidence specifically directed to this matter.
- The parties are agreed that professional fees arising out of the modification are recoverable in principle. I agree. The amount claimed is £86,481.85. Whether the claimants can substantiate such a claim and, if so, the amount recoverable will again depend on the evidence and the application of the three tests in Shun Fung.
- I will stay this reference for three months to allow the parties to negotiate a settlement of the claims for holding costs and professional fees, but either party may apply to reinstate the proceedings. If agreement cannot be reached I will issue directions for the conduct of the reference in relation to outstanding matters. I will defer submissions on costs until the outstanding heads of claim have been agreed or determined, unless one or both of the parties request that I now deal with the costs of the recent hearing.
[2004] EWLands LCA_47_2002 (9 August 2004)
LCA/47/2002
LANDS TRIBUNAL ACT 1949
COMPENSATION – modification of planning permission by deletion of retail use from permitted development – depreciation in land value – no approval of reserved matters at valuation date – basis of valuation – whether it is to be assumed that approval granted – compensation for depreciation in land value, £1,586,000 – abortive costs – professional fees – Town and Country Planning Act 1980, ss 73, 107(1)(2), 117(1); Land Compensation Act 1961, s5.
IN THE MATTER OF A NOTICE OF REFERENCE
BETWEEN
LAND AND PROPERTY LIMITED
Claimants
and
RESTORMEL BOROUGH COUNCIL Compensating
Authority
Re:
Land at Victoria Business Park,
Victoria, Roche, Cornwall
Before: P H Clarke FRICS
Sitting at 48/49 Chancery Lane, London WC2
on 1-4 December 2003, 2-5 February and 1-3 March 2004
(with closing submissions in writing received on 12 and 22 March 2004)
Guy Roots QC and Reuben Taylor instructed by Stephens and Scown, solicitors, for the claimants
Christopher Katkowski QC and James Maurici instructed by Sharpe Pritchard, solicitors, for the compensating authority.
The following cases are referred to in this decision:
R v Restormel Borough Council ex p Corbett and Parkin [2001] JPL 445
R v Restormel Borough Council ex p Corbett [2001] EWCA Civ 330; [2001] 1 PLR 108
R v Bolsover District Council ex p Ashfield District Council (1995) 70 P & CR 507
Horn v Sunderland Corporation [1941] QB 26
Director of Buildings and Lands v Shun Fung Ironworks Limited [1995] AC 111
Pointe Gourde Quarrying and Transport Co Limited v Sub-Intendent of Crown Lands [1947] AC 565
Wilson v Liverpool City Council (1970) 22 P & CR 282
Myers v Milton Keynes Development Corporation (1974) 27 P & CR 518
Central Land Board (Liquor Traffic) v Cannon Brewery Co Limited [1919] AC 744
Lithgow v United Kingdom [1986] 8 EHRR 329
Inverclyde District Council v Lord Advocate (1981) 43 P & CR 375
British Telecommunications Plc v Gloucester City Council (2002) 2 P & CR 512
Westminster City Council v Great Portland Estates Plc [1985] AC 661
R v Hammersmith and Fulham London Borough Council ex p Greater London Council (1985) 51 P & CR 120
Shemara v Luton Corporation (1967) 18 P & CR 520
Lewis Thirkell Limited v Secretary of State for the Environment [1978] JPL 844
Medina Borough Council v Proberun Limited (1960) 61 P & CR 77
East End Dwellings Company Limited v Finsbury Borough Council [1952] 2 AC 109
Ryde International Plc v London Regional Transport [2001] RVR 59; [2003] RVR 49
Lindon Print Limited v West Midlands County Council [1987] 2 EGLR 200
London County Council v Tobin [1959] 1 WLR 354
Loromah Estates Limited v Haringey London Borough (1978) 248 EG 877
J A Pye (Oxford) Limited v Kingswood Borough Council [1998] 2 EGLR 159
Pine Valley Developments v Ireland (1991) 14 EHRR 319
Baner v Sweden (1989) 60 DR 128
Trailer and Marina (Leven) Limited v Secretary of State for the Environment, Food and Rural Affairs and English Nature [2004] EWHC 153 (Admin)
R v London Borough of Bromley ex p Barker [2002] Env LR 25
Pye v Secretary of State for the Environment [1983] 3 PLR 72
Waters v Welsh Development Agency [2004] UKHL 19 [2004] 1 WLR 1304
Bolton Metropolitan Borough Council v Tudor Properties Limited [2000] RVR 292
Sporrong and Lonnroth v Sweden [1982] 5 EHRR 35
James v United Kingdom (1986) 8 EHRR 123
Chapman v United Kingdom (2001) 23 EHRR 18
Fredin v Sweden (1991) 13 EHRR 784
Heron Limited v Manchester City Council [1978] 1 WLR 937
R v Docklands Development Corporation ex p Frost (1996) 73 P & CR 199
Yorkshire Traction Co Limited v South Yorkshire Passenger Transport Executive [2003] RVR 67
DECISION OF THE LANDS TRIBUNAL
FACTS
Reference land
Planning permissions and agreements
"The total floor space to be used for non-food retail purposes shall not exceed 125,000 square feet in area comprising a maximum number of five units, four of which shall not be subdivided and shall each be occupied by a single non-food retailer.'
Other conditions related to the completion of development in accordance with approved plans; commencement of development; petrol/oil interceptors; development close to existing sewers; surface water drainage; storage of goods and equipment; electricity and telephone cables; and foul water drainage.
Applications for approval of reserved matters
(i) "that in the appeal against the non-determination of the application for approval of reserved matters, the Council's case should include a legal submission that the application does not comply with Condition No. 14 of the outline planning permission granted on 13 May 1997;"
(ii) "with regard to application No. 97/16/00972, for the non-food shopping village, the Planning Inspectorate be advised that this Authority does not support the application on the basis of unsuitable design, layout, landscaping and highway/traffic implications."
Modification of 1997 permission and determination of reserved matters applications
Subsequent litigation
Development plans
A30 and B3274 roads
"… preparation work will continue to progress the following to remove a bottleneck on the A30 in Cornwall to enable it to be taken forward without delay subject to full appraisal and the views of the regional planning conference:
A30 Bodmin – Indian Queens Improvement"
Other transport facilities
Contracts and offers relating to the reference land
Factory outlet centres
Atlantic Village, Bideford
Trago Mills
Claim for compensation
Valuation
(i) the modification order had been made and therefore the land had planning permission only for B1, B2 and B8 development;
(ii) it was reasonable to expect to obtain promptly approval of reserved matters for a development with approximately 40% site cover;
(iii) there were no abnormal costs.
ISSUES
(i) Head 1 – abortive expenditure, the cost of holding the reference land for the period during which it was said to have been sterilised by the process leading up to the making of the modification order, £68,379.27;
(ii) Head 2 – depreciation in the value of the reference land, £3,904,553;
(iii) Head 4 – professional costs, £86,481.85.
CLAIMANTS' CASE
Evidence
| Bideford | £ | |
| Consideration (agreed) | 2,866,000 | |
| Add | ||
| Consultancy fee | 120,000 | |
| Abnormal costs (agreed) | 1,124,000 | |
| Total consideration | 4,110,000 | |
| Deduct | ||
| Non-retail land | 90,000 | |
| Consideration for retail land | 4,020,000 | |
| Divided by 123,022 sq ft ITMS | 32.68 | |
| Reference land | ||
| 125,000 sq ft @ £32.68 | 4,085,000 | |
| Adjustments:- | ||
| Larger catchment | + 30% | |
| Differences in time & planning | + 7.5% | |
| Deficiencies of site | - 7.5% | |
| Net adjustment | + 30% | 1,225,500 |
| 5,310,500 | ||
| Deduct | ||
| Abnormal costs (agreed) | 780,947 | |
| Value of reference land | £4,529,553 | £4,529,553 |
Submissions
RESTORMEL'S CASE
Evidence
| Bideford | £ | |
| Consideration (agreed) | 2,866,000 | |
| Add | ||
| Abnormal costs (agreed) | 1,124,000 | |
| Total consideration | 3,990,000 | |
| Divided by 123,022 sq ft ITMS | 32.43 | |
| Reference land | ||
| 125,000 sq ft @ £32.43 | £4,053,750 | |
| Adjustments:- | ||
| Larger catchment | + 25% | |
| Differences in time & planning | + 5% | |
| Local catchment | - 10% | |
| Effect of Trago Mills | - 10% | |
| Deficiencies of site | - 15% | |
| Net Adjustment | - 5% | 202,687 |
| 3,851,062 | ||
| Deduct | ||
| Abnormal costs (agreed) | 780,947 | |
| 3,070,115 | ||
| Deduct | ||
| Parking deficiencies, 10% | 307,012 | |
| 2,763,103 | ||
| Deduct | ||
| Effect of risks & uncertainties | 1,000,000 | |
| 1,763,103 |
Submissions
DECISION
"… where planning permission is … modified by an order under section 97, then if, on a claim made to the local planning authority within the prescribed time and in the prescribed manner, it is shown that a person interested in the land …. –
(a) has incurred expenditure in carrying out work which is rendered abortive by the … modification; or
(b) has otherwise sustained loss or damage which is directly attributable to the … modification,
the local planning authority shall pay that person compensation in respect of that expenditure, loss or damage."
Subsection (2) deals with expenditure on plans:-
"For the purposes of this section, any expenditure incurred in the preparation of plans for the purposes of any work, or upon other similar matters preparatory to it, shall be taken to be included in the expenditure incurred in carrying out that work."
"For the purpose of assessing any compensation to which this section applies, the rules set out in section 5 of the Land Compensation Act 1961 shall, so far as applicable and subject to any necessary modifications, have effect as they have effect for the purpose of assessing compensation for the compulsory acquisition of an interest in land."
Subsection (2) applies the section to compensation payable in respect of depreciation of the value of an interest in land.
DEPRECIATION IN LAND VALUE
Basis of valuation
"The word 'compensation' almost of itself carried the corollary that the loss to the seller must be completely made up to him, on the ground that, unless he received a price that fully equalled his pecuniary detriment, the compensation would not be equivalent to the compulsory sacrifice."
Later he referred to the "…. principle of equivalence which is at the root of statutory compensation, the principle that the owner shall be paid neither less nor more than his loss" (at 49).
"The purpose of these provisions, …, is to provide fair compensation for a claimant whose land has been compulsorily taken from him. This is sometimes described as the principle of equivalence. …., a claimant is entitled to be compensated fairly and fully for his loss. Conversely, and built into the concept of fair compensation, is the corollary that a claimant is not entitled to receive more than fair compensation: a person is entitled to compensation for losses fairly attributable to the taking of his land, but not to any greater amount. It is ultimately by this touchstone, with its two facets, that all claims for compensation succeed or fail."
"It is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition."
A scheme has also been referred to as an "undertaking" or "project" (see Wilson at 293). The question in this reference is whether the elimination of the retail element in the 1997 permission under the modification order can constitute a scheme for the purposes of the Pointe Gourde rule? I do not think that it can. The modification order is an administrative act, complete in itself and not linked to, or in furtherance of, any underlying scheme. In my judgment, a scheme must be a physical occurrence, e.g. the building of a road or other development. It cannot be an administrative process leading to an administrative order (as in a modification order) although a scheme can comprise an administrative process leading to an acquisition and to a scheme or project of development. In Waters v Welsh Development Agency [2004] UKHL 19, Lord Nicholls said (at para 58):-
"A scheme essentially consists of a project to carry out certain works for a particular purpose or purposes."
"… an underlying scheme of development, in consequence of which the compulsory purchase order was made."
In Pye this Tribunal found that the scheme underlying the acquisition was "the completion of the link road by acquiring the reference land." On appeal this finding was attacked by the appellants. Buxton LJ said (at 162M-163A):-
"[Counsel for the appellants] argued that the tribunal's decision was flawed on two separate grounds. First, the tribunal had erred in law in failing to appreciate the distinction between the acquisition and the scheme underlying the acquisition. Second, the decision was perverse, because given that the link road had been a proposal since 1971, the only reasonable finding for the tribunal was that the link road as a whole was the reason for the acquisition of the reference land.
As to the first of these criticisms, I agree that the 'scheme' cannot be the acquisition itself. So to hold would not only be logically inconsistent with Pointe Gourde, but also inconsistent with statements, such as that in Wilson and in Pointe Gourde itself, that the scheme must underlie the acquisition. But that is not what the tribunal did hold. It held in terms that the scheme for the furtherance of which the land was acquired was the completion of the link road. The acquisition was a necessary precondition to that completion, but on no view was it, or was it held by the tribunal to be, the same thing as the scheme of completion."
"… an intention to take away the property of a subject without giving to him a legal right to compensation for the loss of it is not to be imputed to the Legislature unless that intention is expressed in unequivocal terms."
In my judgment, this canon of statutory construction relates to the right to compensation and not to the amount nor to the basis to be used in assessing the amount. It is not in dispute that the claimants are entitled to compensation for depreciation in land value. The basis of assessment and amount are in dispute. I do not find this canon of construction of assistance. The claimants have suffered a loss of land value by the modification of the 1997 permission and a right to compensation is given by section 107 (1)(b) of the 1990 Act for "loss or damage which is directly attributable to the … modification." I do not think that those words must necessarily be interpreted to require the loss or damage to be assessed on the basis of hypothetical circumstances, as in Scenario A. As I explain below the additional loss of land value under Scenario A was not attributable to the modification process but to other factors.
"So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights."
Convention rights include Article 1 of The First Protocol (set out in Part II of Schedule 1 to the Act):-
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."
"The Court recalls that Article 1 in substance guarantees the right of property. In its judgment of 23 September 1982 in the case of Sporrong and Lonnroth, the Court analysed Article 1 as comprising 'three distinct rules': the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, is concerned, amongst other things, with the right of a State to control the use of property. However, the Court made it clear in its James and Others judgment of 21 February 1986 that the three rules are not 'distinct' in the sense of being unconnected: the second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule."
"This is an area in which a wide margin of discretion should be accorded to the decisions of the legislature and the executive. Although the margin of appreciation accorded to national decisions by the ECtHR is not the same conceptually as the area of discretion afforded by the Courts to the decisions of Parliament and of the Government, the width of the margin of appreciation accorded in such cases by the ECtHR is an indication of the appropriate width of the area of discretionary judgment accorded to the decisions of Parliament and of the executive. It is plain from decisions on the controls of the use and development of land, and in environmental policy generally, that a wide margin of appreciation is accorded by the ECHR to national decisions. Sporrong and Lonnroth v Sweden [1982] EHRR 35, which in part involve a control of use and Chapman v UK [2001] 23 EHRR 18, which concerned the enforcement of planning controls so as to prevent a gypsy from living on her land within the Green Belt, both refer to the 'wide' and 'broad' margins of appreciation which such national decisions enjoy."
"The Court further accepts the Commission's conclusion as to the standard of compensation: the taking of property without payment of an amount reasonably related to its value would normally constitute a disproportionate interference which could not be justified under Article 1. Article 1 does not, however, guarantee a right to full compensation in all circumstances, since legitimate objectives of 'public interest', such as pursued in measures of economic reform or measures designed to achieve greater social justice, may call for less than reimbursement of the full market value.
In this connection, the applicants contended that, as regards the standard of compensation, no distinction could be drawn between nationalisation and other takings of property by the State, such as the compulsory acquisition of land for public purposes.
The Court is unable to agree. Both the nature of the property taken and the circumstances of the taking in these two categories of cases give rise to different considerations which may legitimately be taken into account in determining a fair balance between the public interest and the private interests concerned."
"There was no formal expropriation of the property in question, neither, in the Court's view, can it be said that there was a de facto deprivation. The impugned measure was basically designed to ensure that the land was used in conformity with the relevant planning laws and title remained vested in Healy Holdings, whose powers to take decisions concerning the property were unaffected. Again, the land was not left without any meaningful alternative use for it could have been farmed or leased. Finally, although the value of the site was substantially reduced, it was not rendered worthless, as is evidenced by the fact that it was subsequently sold in the open market.
Accordingly, as for example in Fredin v Sweden, the interference must be considered as a control of the use of property falling within the scope of the second paragraph of Article 1."
"It follows from the case-law of the Convention organs that as regards deprivation of possessions there is normally an inherent right to compensation (Eur.Court HR, James and Others judgment of 21 February 1986, …, and Lithgow and Others judgment of 8 July 1986 …). However, in the Commission's view such a right to compensation is not inherent in the second paragraph. The legislation regulating the use of property sets the framework in which the property may be used and does not, as a rule, contain any right to compensation. This general distinction between expropriation and regulation of use is known in many, if not all, Convention countries.
This does not exclude that the law may provide for compensation in cases where a regulation of use may have severe economic consequences to the detriment of the property owner. The Commission is not required to establish in the abstract under which circumstances Article 1 may require that compensation be paid in such cases. When assessing the proportionality of the regulation in question it will be of relevance whether compensation is available and to what extent a concrete economic loss was caused by the legislation."
"I regard Baner as showing what the general but not necessarily universal position is in relation to a control of use. Compensation for it is not inherent in the Convention, control of use legislation does not 'as a rule' contain provision for compensation. Given the fact-sensitive nature of the ECtHR jurisprudence however it would be foolhardy to treat a general statement as one which permitted of no exceptions, until the degree or nature of the control had become such as to amount to expropriation. Nor does the Court express itself in such a way. It is better to say, drawing on the article by David Anderson QC 'Compensation for Interference with Property' [1999] EHRLR 544 that there is no presumption in favour of compensation in a control of use case, and that its availability is one of the factors relevant to whether a fair balance has been struck between the public interest and an individual's rights. The payment of compensation would generally support a finding of non-violation but many instances existed where a fair balance had been struck notwithstanding the absence of such provision."
He then concluded (paras 83-84):-
"In my judgment, that contention of Mr Maurici's is well founded. In James, …, the ECtHR held in para 54:
'The Court further accepts the Commission's conclusion as to the standard of compensation: the taking of property without payment of an amount reasonably related to its value would normally constitute a disproportionate interference which could not be considered justifiable under Article 1. Article 1 does not, however, guarantee a right to full compensation in all circumstances. Legitimate objectives of 'public interest', such as pursued in measures of economic reform or measures designed to achieve greater social justice, may call for less than reimbursement of the full market value. Furthermore, the Court's power of review is limited to ascertaining whether the choice of compensation terms falls outside the State's wide margin of appreciation in this domain.'
Although compensation terms in an expropriation case are material to whether the relevant balance had been struck fairly, if full market value was not required there because of countervailing legitimate objectives of a public interest nature, even more so does that argument apply in relation to interference by way of control of use."
Market value of reference land
"The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise:"
Scenario B reflects the position in the real world at the valuation date, subject only to the necessary assumption that the Secretary of State decided not to modify the 1997 permission. On this basis Mr Ovenden's valuation is £3,250,000 and Mr Cussen's valuation is £1,625,000. Both valuers arrived at their figures by analysing the sale of land at Clovelly Road, Bideford, later developed as Atlantic Village, then applying their analysis to the reference land. Mr Ovenden also sought to justify his valuation by reference to the contracts and offers for the reference land. I will follow the common approach.
| Drive Time | Illumine | Experian |
30 minutes |
0.090m |
0.073m |
| 60 minutes | 0.210m | 0.155m |
| 90 minutes | 0.880m | 0.348m |
The alternative figures for the reference land are:-
| Drive Time | Illumine | Experian |
30 minutes |
0.180m |
0.123m |
| 60 minutes | 0.700m | 0.486m |
| 90 minutes | 1.410m | 0.945m |
It is agreed that the number of tourist nights in the 90 minutes drive time for Bideford is 22,362,700 and for the reference land 43,029,600.
(i) TRICS 1996 Database (referred to by the inspector), 929 to 1,102 spaces (with her comment that 945 spaces is at the lower end of the range and may be sufficient for a low catchment situation).
(ii) The contracts and offers envisage parking for 1,000 cars for an FOC of 125,000 sq ft retail floorspace.
(iii) Atlantic Village indicates 900 car spaces for the reference land.
(iv) Mr Tucker's selection of FOCs (excluding the highest and lowest) indicates 1,078 spaces with a range of 833 to 1,250.
(v) Mr Tonks' selection of FOCs (excluding the highest and lowest) indicates 900 spaces for the reference land with a range of between 786 and 1,059.
(vi) The combined selection of FOCs in (iv) and (v) above indicates that 954 spaces are required on the reference land with a range between 786 and 1,250.
"When an application is made for approval of a reserved matter, the application must be within the ambit of the outline planning permission and must be in accordance with the conditions annexed to the outline permission…. If the applicant desires to depart in any significant respect from the outline permission or the conditions annexed to it, he must apply for a new planning permission."
In R v Hammersmith and Fulham London Borough Council ex p Greater London Council (1985) 51 P & CR 120, Glidewell LJ said (at 130):-
"What is necessary where there is an application for approval of detail, there having been an outline permission which specifies a number of purposes or uses, is to decide, to use Lord Denning MR's words at the beginning of the passage I have just quoted, whether the application is 'within the ambit of the outline planning permission.' If, for instance (which is not this case), the application for approval of detail shows some added uses, it will often be easy to say: 'That is not within the ambit of the outline'. But where the application for approval of detail omits one or more of the uses, it seems to me to be more difficult to decide the question."
"Whether there can legally be a division of five buildings, which have been constructed as five shops but never used as shops, into 70 shops without there being any development of land may still be argued. It will involve asking whether the shop is used as a shop merely because it has been erected as a shop. It will be for Bolsover to consider this problem if this problem presents itself. It seems that certainly the present intention of BAA is to subdivide without there having been any use of the units as shops if use connotes the actual offer of goods for sale. However, as was argued for BAA, it is only possible with the objective approach which is required to consider the problems created at each stage of construction or change."
"This is not a field in which technical rules would be appropriate, … The planning authority must simply deal with the application procedurally in a way which is just to the applicant in all the circumstances. That being so, there is no good reason why amendment of the application should not be permitted at any stage, if that should prove necessary in order that the whole merits of the application should be properly ascertained and decided upon. There is, however, one obvious limitation upon this freedom to amend, namely that after the expiry of the period limited for application for approval of reserved matters … an amendment which would have the effect of altering the whole character of the application, so as to amount in substance to a new application, would not be competent. In this context it is to be noted that section 40(7)(b) of the Act 1972 provides: 'an application for approval of a reserved matter, if it is made after the date by which the conditions require it to be made, shall be treated as not made in accordance with the terms of the permission.' This makes it clear that application for approval of all reserved matters must be made before the date fixed by the conditions. So an application which dealt with some only of the reserved matters could not competently be amended after that date so as to deal also with others."
"(1) This section applies, subject to subsection (4), to applications for planning permission for the development of land without complying with conditions subject to which a previous planning permission was granted.
(2) On such an application the local planning authority shall consider only the question of the conditions subject to which planning permission should be granted, and –
(a) if they decide that planning permission should be granted subject to conditions differing from those subject to which the previous permission was granted, or that it should be granted unconditionally, they shall grant planning permission accordingly, and
(b) if they decide that planning permission should be granted subject to the same conditions as those subject to which the previous permission was granted, they shall refuse the application.
(3) Special provision may be made with respect to such applications –
(a) by regulations under section 62 as regards the form and content of the application, and
(b) by a development order as regards the procedure to be followed in connection with the application.
(4) This section does not apply if the previous planning permission was granted subject to a condition as to the time within which the development to which it related was to be begun and that time has expired without the development having been begun."
"The statute, in section 73(2), does confine the local planning authority to considering only the matter of the conditions on the permission. That may, with some conditions such as a noise level condition or an hours of work condition, appear to confine the authority's consideration within a relatively narrow compass, although even then it is to be recognised that the planning authority is still able to consider the conditions as a whole and not merely the one or two which the applicant may wish to have varied. But when the condition in question is one imposing a time-limit for application for approval of reserved matters or for beginning development, the scope of matters to be considered in relation to conditions will be defined, in effect, by the question: should this planning permission be allowed to continue in force for a period of time beyond the original dates contemplated? That is, to all intents and purposes, the same question which arises on a renewal, however that renewal is sought. And the Secretary of State's guidance in renewal cases, such as in paragraph 60 of Circular 11/95, would be relevant. It is potentially a question which may go to the principle of a development to be judged in the current situation at the time when the application for variation is under consideration."
"15. … He accepts the Inspector's reasoning and conclusions, that at the time permission 97/326 was granted, the proposals were in clear conflict with the relevant policies and provisions in the development plan …; with national policy guidance in PPG6 and PPG13 on the location of large scale retail development and in relation to the failure to comply with the requirement to adopt a sequential approach to site selection … He further agrees with the Inspector's appraisal of the likely retail impact on nearby town centres … and he has no doubt that whether in the form of 5 retail warehouses or a factory outlet village, the development of 11,613 sq m of out-of-centre retail floor space would materially harm the vitality and viability of the centres of Truro, St Austell, Newquay and Bodmin and undermine the strategy for future investment in these and other town centres in Cornwall. In his view, the development would thereby undermine the aims of national and local policies to sustain and enhance existing town centres.
16. Turning to the issue of need, the Secretary of State concludes that there is no need for a development of five retail warehouse units, nor any requirement for such units to be sited at this out-of-centre location, for the reasons given by the Inspector… In his view, the same considerations on need would have applied to the five non-food retail units granted permission under ref 93/01385 if this had not been time-expired. In relation to the proposed factory outlet village, he accepts that such a facility in the County would widen the range and choice of quality comparison goods for Cornish residents and thereby meet a qualitative need. However, for the reasons given by the Inspector …, he is satisfied that the potential exists to meet any such need in a number of alternative, more central locations which would be consistent with the objectives of national policy guidance for sustaining and enhancing town centres. He accordingly finds no justification for the facility to be located at Victoria. These considerations would also have applied to the permission 94/00579, if this had not been time-expired. In reaching these conclusions, the Secretary of State notes the Inspector's view … that there has been little change in Government policy on large-scale retail developments since 1997. However, he considers it also necessary to take into account the Parliamentary statement made on 11 February 1999, …, which was intended to add to and clarify the guidance in PPG6, particularly in relation to the requirement for proposals in edge-of-centre or out-of-centre locations, which are not in accordance with the development plan strategy, to demonstrate both the need for additional facilities and that a sequential approach has been applied to site selection. That statement also recognised the need to search for sites in centres appropriate to the catchment the development seeks to serve.
17. Finally, the Secretary of State agrees with the Inspector's conclusion … that there is no evidence of there having been any material considerations taken into account at the time the permission was granted which would have outweighed the clear policy conflict…."
"5.15 … that there are fundamental flaws in the siting, design and external appearance of the proposed buildings and the means of access thereto in both of the schemes which are the subject of the reserved matters applications. The failure of both proposals to reflect the character of the area conflicts with Policy ENV12 of the CSP and Policies 6 and 51 of the Deposit Draft BRLP and the failure to make satisfactory provision for pedestrians and cyclists conflicts with Policy TRAN5 of the CSP and Policy 81 of the BRLP.
"5.16 Furthermore, the cramped form of both of the schemes and the unsatisfactory servicing arrangements could worsen problems of congestion at the A30/B3274 junction, likely to result from either a 'non-food shopping village' or 5 retail warehouses, and lead to 'rat running' through Roche, by impeding the flow of traffic using the estate road."
| £ | ||
| Bideford | ||
| Consideration (agreed) | 2,866,000 | |
| Abnormal costs (agreed) | 1,124,000 | |
| Total consideration | 3,990,000 | |
| Divided by 123,022 sq ft ITMS | 32.43 | |
| Reference land | ||
| 125,000 sq ft @ £32.43 | 4,053,750 | |
| Adjustments:- | ||
| Catchment (general & local) | + 20% | |
| Differences in time & planning | + 5% | |
| Effect of Trago Mills | nil | |
| Deficiencies of site | - 12.5% | |
| Net adjustment | + 12.5% | 506,719 |
| 4,560,469 | ||
| Deduct: abnormal costs (agreed) | 780,947 | |
| 3,779,522 | ||
| Deduct: parking deficiency, 2.5% | 94,488 | |
| 3,685,034 | ||
| Deduct: uncertainties, 40% | 1,474,014 | |
| 2,211,020 | ||
| say | £2,211,000 |
"I consider that it is appropriate that my valuation should be in accordance with rule 2 of section 5 of the 1961 Act and I have adopted the basis of Open Market Value as defined in the RICS Appraisal and Valuation Manual, …"
As it happened, Mr Ovenden's adoption of the Red Book definition of open market value (which differs from the statutory definition as explained in case law) did not have any practical consequences in this reference. I draw attention, however, to the need for considerable caution in this respect and repeat the observations I made in Yorkshire Traction Co Ltd v South Yorkshire Passenger Transport Executive [2003] RVR 67 at para 67:-
"I would add that as a general rule I think it unlikely that the Red Book has any part to play in the valuation of land acquired on compulsory purchase. The definition of open market value in the Red Book is not the same as open market value in rule (2) as explained by the courts and in this tribunal. I would urge valuers engaged in the assessment of compensation to look first at the statutory compensation provisions and the substantial body of case law and only to have recourse to the Red Book to fill any gaps in compensation law and practice (as in Shevlin). Even then great caution should be exercised when applying the Red Book to compensation, a subject which it is not intended to cover."
Depreciation in land value
ABORTIVE COSTS
"To qualify for compensation a loss suffered post-resumption must satisfy the three conditions of being causally connected, not too remote, and not a loss which a reasonable person would have avoided. A loss sustained post-scheme and pre-resumption will not fail for lack of causal connection by reason only that the loss arose before resumption, provided it arose in anticipation of resumption and because of the threat which resumption presented."
PROFESSIONAL FEES
CONCLUSION
DATED: 9 August 2004
(Signed) P H Clarke