England and Wales Lands Tribunal

[2004] EWLands LCA_62_2003 (20 September 2004)

LCA/62/2003

LANDS TRIBUNAL ACT 1949

COMPENSATION – tree preservation order – refusal of consent to fell – subsidence damage to house – house sold in damaged condition – measure of compensation – whether underpinning would have been necessary if trees had been removed – costs of pursuing appeal against refusal of consent – compensation assessed at £69,139

IN THE MATTER OF A NOTICE OF REFERENCE

BETWEEN

(1) ROSEMARY DUNCAN

(2) PRUDENTIAL ASSURANCE COMPANY LIMITED

Claimants

and

EPPING FOREST DISTRICT COUNCIL

Compensating Authority

Re:

46 Highfield Green

Epping

Essex

Before: The President

Sitting at Procession House, 55 Ludgate Hill, London EC4M 7JW

on 16 September 2004

Roger Lancaster instructed by Halliwell Landau of Manchester for the claimant.

Charles Mynors instructed by Colleen O'Boyle, Solicitor to Epping Forest District Council, for the compensating authority.

No cases are referred to in this decision. The following cases were cited in argument:

Bell v Canterbury City Council (1988) 56 P & CR 211

Buckle v Holderness Borough Council [1996] 2 EGLR 133


 


DECISION

Introduction

1. The claimant Mrs Duncan seeks compensation under a tree preservation order in respect of the refusal of consent to cut down two trees protected by the order adjacent to her house, 46 Highfield Road, Epping. The contention that is made on her behalf is that the house suffered damage as the result of subsidence caused by the roots of the trees and that she suffered loss as a consequence. She sold the house in 2000 at a price that reflected its damaged condition and her insurers, Prudential Assurance Co Ltd, compensated her for her loss, and they pursued in her name her appeal against the refusal of consent to fell, incurring costs in doing so. They now pursue these proceedings in the exercise of their right of subrogation. Earlier this year I determined certain preliminary issues that arose from the compensating authority's resistance to the claim.
2. The underlying facts are not in dispute. The two trees, a weeping ash and a field maple, were specified in the District of Epping Tree Preservation Order No 28/83, made by the compensating authority on 12 April 1984. Mrs Duncan bought the house, an end of terrace house built in the 1960s, in 1989. In 1997 she noticed that damage had occurred to the front porch and rear conservatory and the garden wall was also found to be cracked. She reported the damage to her insurers and they appointed Ellis & Buckle (subsequently known as Cunningham Ellis & Buckle, and later Cunningham Lindsay) to investigate the damage as loss adjusters and engineers. They appointed R M Brown Foundation Investigation Ltd to investigate the ground conditions, and that firm dug three trial pits and accompanying boreholes in December 1997. A second ground investigation was carried out in September 1998 and a factual geotechnical report was produced. The investigations showed that the property was founded on a shrinkable clay subsoil and in some locations the clay was clearly desiccated and was found to be under the influence of nearby trees. In February 1998 cracks were reported in the bathroom wall.
3. In December 1998, on Mrs Duncan's instructions, O'Callaghan Associates, a specialist firm of arboriculturists, submitted to the authority an application for consent to fell the trees. The application was not determined within the period prescribed, and in March 1999 an appeal against its deemed refusal was made to the Secretary of State for Transport, Local Government and the Regions. An inspector held an inquiry in February 2002, and he recommended that consent should be granted for the felling of the weeping ash but not the field maple. The Secretary of State, however, in a decision dated 20 June 2002 rejected the recommendation for consent, and dismissed the appeal.
4. In or around April 2000, during the long period that elapsed between the claimant's notice of appeal to the Secretary of State in March 1999 and the determination of the appeal in June 2002, the claimant sold the house to Mr R M Brown (of the firm that had carried out the ground investigations) and Mrs M Parker. At that stage no remedial works had been carried out, and the price reflected the damaged condition of the house. The claimant made a claim under her insurance policy for the reduction in market value and was paid £50,000 in settlement. In September/October 2000 the purchasers carried out works to underpin the flank wall of the house, and stabilising works were carried out to the front porch, the conservatory and the boundary wall.
5. In his report to the Secretary of State following the inquiry the inspector concluded that the damage to the porch might have been caused by the roots of the weeping ash and that the tree might cause damage in the future to parts of the house that had not been underpinned. The Secretary of State took the view that the tree's roots were not necessarily the prime cause of subsidence in the porch and that, as underpinning had been carried out in 2000 and no level monitoring had been carried out after 1999, there was no evidence of continuing movement in the property, so that the felling of the tree was not justified. In relation to the field maple the inspector concluded that it might have caused damage in the past to the flank wall of the house and to the boundary wall and probably had done so to the conservatory, but that it would not cause damage in the future to those parts of the house that had been underpinned and that the likelihood of future damage to the remainder of the house had been substantially reduced by the underpinning. The Secretary of State expressed his conclusions on the effect of the field maple in substantially the same terms.
6. Article 9 of the Order provides:

"9. Subject to the provisions of this Order, any person who has suffered loss or damage in consequence of any refusal (including revocation or modification) of consent under this Order or of any grant of any such consent subject to conditions, shall, if he makes a claim on the authority within the time and in the matter prescribed by this Order, be entitled to recover from the Authority compensation in respect of such loss or damage …."

7. In my decision of 19 January 2004 on the preliminary issues I determined as follows:

(1) The refusal for the purposes of the application of Article 9 of the Order is the deemed refusal of the council, and the relevant date for that purpose is 18 February 1999.

(2) The cost of repairing damage suffered before the date of the refusal is not itself recoverable, but, if the effect of the refusal was to increase the cost of carrying out works to repair past damage and to prevent possible future damage, the extra cost may form the subject of compensation. Similarly the fact that damage had occurred in the past may be relevant to any question of the loss of market value arising from the refusal of consent.

(3) The reasonable costs of pursuing the appeal against the refusal of consent are recoverable as a loss suffered in consequence of the refusal provided that on the facts it was reasonable to pursue the appeal.

Case for the claimants

8. The claim put forward by the claimants consisted of two elements – the diminution in the market value of the land and the professional fees incurred in pursuing the appeal against the deemed refusal of consent to fell. The diminution in the value of the land had been caused by the refusal of consent and was quantified at £50,000. It was reasonable for the appeal against the refusal to have been pursued, and the fees related to this totalled £26,024.59. For the claimants Mr Roger Lancaster said that the compensation should be determined at the sum of these two amounts less the cost of carrying out the lesser works of repair that would have had to be carried out if consent to fell the trees had been granted at the date of the refusal and the trees had been felled. The figure given for this latter amount was £5,504.88.
9. Evidence for the claimants was given by Richard Thomas, who said that he was currently practising as RTG Expert Services, having until recently been employed by Cunningham Lindsay in its Expert Services Subsidence and Buildings Defects Unit. Mr Thomas said that since 1990 he had specialised in the investigation and handling of engineering issues relating to insurance claims and he had investigated in excess of 2000 subsidence problems. He had inspected the building internally and externally in December 1999 and externally twice since then.
10. Mr Thomas said that the damage to the porch was centred on the junction with the front terrace and was indicative of a shearing action caused by differential foundation movement between the main terrace wall and the porch. The differential movement caused the main entrance door to jam, and it was adjusted in 1997 to relieve the jamming. However, it jammed again in September 1998. At the rear the tiled floor slab of the conservatory dropped relative to the skirting board that was attached to the rear terraced wall. The fall was towards the trees. The movement within the conservatory walls caused a pulling action within the roof, resulting in slippage of the polycarbonate roof sheeting. The free-standing garden wall sustained diagonal fractures, suggesting differential foundations-related movement, and it leant outwards. Damage was recorded in the bathroom, which was located adjacent to the party wall. This suggested differential movement between the party wall and the front terrace wall. There was further damage to the cross-wall, which was supported on a beam between the flank walls. Diagonal cracking above an opening and vertical fissures at junctions suggested differential movement between the two supporting flank walls.
11. Mr Thomas said that in his experience properties founded on a clay sub-soil could sustain damage due to clay shrinkage, and 80% of all damage caused by subsidence was associated with clay shrinkage subsidence caused by tree roots. There was a seasonal cycle, with moisture being abstracted from the sub-soil by tree root systems. When trees were no longer in leaf, moisture could return to the ground following rainfall, enabling it to swell again. The jamming of the door was typical of this seasonal cycle of subsidence and swelling due to tree roots. The trial pits showed that the trees responsible were the field maple, the weeping ash and horse chestnuts that were not protected by the tree preservation order and could be removed. In Mr Thomas's view the crack damage was entirely due to movement caused by the trees. In the event that the trees had been removed all that would have been required was the repair of the cracks. With the trees retained, however, underpinning was necessary in order to prevent future annual movement and an ongoing requirement to repair. Mr Thomas did not accept the suggestion that his views were inconsistent with the decision on the part of the purchaser Mr Brown, who had carried out the site investigations, to carry out underpinning works. There could well, he said, be explanations related to Mr Brown's business needs why he carried out such works without waiting for the decision on the appeal against the refusal of consent to fell.
12. Mr Thomas produced a schedule of the costs that would have been associated with an underpinning solution if this had been carried out during Mrs Duncan's occupancy. They consisted of the cost of the works themselves, professional fees, fees associated with statutory requirements, and the cost of alternative accommodation. The total was £52,5000, which was in excess of the amount of the payment that the Prudential had negotiated with Mrs Duncan. Mr Lancaster relied on this as establishing the loss that Mrs Duncan had suffered from the diminution in the value of the house in consequence of the subsidence damage.

Case for the compensating authority

13. The case for the compensating authority was that compensation was payable to reflect the amount actually paid by the Prudential to Mrs Duncan less an amount representing, firstly, the likely cost of the additional works necessary to protect the building from future damage in the event that the trees had had to remain and, secondly, the element in the diminution in market value arising from the uncertainty created by the deemed refusal. Mr Charles Mynors for the compensating authority accepted both that it was reasonable for Mrs Duncan to have sold the house when she did and that £50,000 represented the diminution in its value caused by the subsidence damage. As the case was originally advanced, the amount of compensation was quantified at £18,750, the difference between the £50,000 and the cost of the necessary works, as the council had had them costed (£31,750). In his witness statement, the compensating authority's witness, Christopher Neilan, said that this was the amount that they were prepared to offer. However, reference in the course of the hearing to other elements not included within the £31,250, for example professional fees and VAT, led Mr Mynors to contend that these also should be deducted. The effect of this would have been to reduce the amount of compensation to the point at which nothing or very little was payable.
14. At the start of the hearing the compensating authority did not accept that anything was payable in respect of the cost of pursuing the appeal, other than such costs as had been incurred by Mrs Duncan prior to her sale of the property. Mr Mynors argued that, once the property had been sold, no decision on the appeal could have had any effect on the amount of compensation that could be claimed and, therefore, it was not reasonable to continue with the appeal thereafter. In the event Mr Mynors accepted that abandonment of the appeal at the time of the sale of the house (April 2000) would have meant that it would then have been too late to make a claim for compensation because more than twelve months (the time limit laid down in Article 11(2) of the order) would have elapsed from the date of the refusal (18 February 1999). He contended instead that the claimants should have done the minimum necessary to maintain the appeal, and that compensation should be limited to the costs that would have been incurred in doing so.
15. No expert evidence was called on behalf of the compensating authority. Two witness statements by Mr Neilan had been filed, and he gave evidence. He said that he was employed by the compensating authority as a landscape officer and arboriculturist and he made his statements on the basis of his own knowledge, from information contained in the council's files and as the case officer in charge of the case. It was factual evidence relating to background matters, the inspector's report and the Secretary of State's decision on the appeal, and the work carried out by Mr Brown. He made comments related to the schedule of costs contained in the claimants' claim. At the hearing Mr Mynors sought permission to call as an expert witness Mr P J Skelsey, a consulting structural engineer. Mr Mynors said that Mr Skelsey would give evidence in relation to certain letters that he had written. These letters were in the trial bundle and in them he had expressed views on the causes of damage to the house and the remedial works that were needed. I refused permission. I had on 19 July 2004 issued directions as to the filing and service of expert evidence, but no expert report had been filed on behalf of the compensating authority. It did not seem to me acceptable that expert evidence should be given other than on the basis of a report that had been prepared by an expert having his duty to the Tribunal in mind (and which consequently contained the necessary declaration) and which had been served on the other party. In any event Mr Mynors's skeleton argument that was before me placed no reliance on any views of Mr Skelsey.
16. As advanced by Mr Mynors, the case for the compensating authority was that the works that were required simply to rectify damage already caused were clearly uncompensatable and the best evidence of what such works consisted of was to be derived from the works actually carried out by Mr Brown in September/October 2000. He was, said Mr Mynors, an informed professional, having carried out the site investigation works. He had received a benefit in the form of the reduced purchase price. He of all people would have known that it would be foolish to carry out works in advance of a decision by the Secretary of State if that decision might render them unnecessary. It followed that the works that were in fact carried out by Mr Brown could be presumed to be those that would have been necessary even if the Secretary of State had subsequently granted consent. In his decision the Secretary of State had said that the works that had by then been carried out made it unnecessary to remove the trees.

Conclusion

17. The claim put forward, as I have said, consisted of two elements, the diminution in the value of the land and professional fees related to the appeal against the deemed refusal of consent to demolish; and it was accepted on behalf of the claimants that the former amount ought to be reduced by the cost of those repairs that would in any event have been required if the trees had been felled. The amount of claim as the diminution in value, £50,000, was the amount that the claimant insurers agreed to pay the claimant landowner under the terms of the insurance policy to reflect the damage to the buildings from subsidence. Mrs Duncan had sold the house in April 2000 with the damage unrepaired and the appeal against the deemed refusal of consent still pending. It does not seem to me that the amount agreed between the two claimants could be regarded as reliable evidence of the diminution in value, and Mr Lancaster called no valuation evidence. Mr Mynors, however, as I have said, accepted on behalf of the council both that it was reasonable for Mrs Duncan to have sold the house when she did, thus suffering the loss in value, and also that £50,000 was the measure of that loss in value. In view of this agreement, therefore, I find that the diminution in the value of the house in its damaged state and with the two trees retained was £50,000, and there is no need for me to consider the costs of repair that the claimants referred to in support of that figure. The measure of the claimants' loss (leaving aside for the moment the professional fees) will consist of that amount less whatever cost of repair Mrs Duncan would have had in any event to incur if consent to fell had not been refused.
18. It was in relation to this latter amount that the principal difference between the parties arose. The evidence of Mr Thomas was that removal of the trees would have removed the cause of the subsidence damage, so that only the repair of the cracks would have been necessary. The compensating authority's case was that removal of the trees would not have avoided the need to carry out underpinning works. This contention was not based on any expert evidence. It relied on the argument that Mr Brown, who carried out the underpinning works in September/October 2000, would not have done those works if he had thought that removal of the trees, for which consent was being sought on appeal, would have rendered them unnecessary.
19. I see no reason to reject the evidence of Mr Thomas, who explained both the mechanism of the damage and the basis for his judgment as to its cause. I do not find compelling the inference that the compensating authority suggest should be drawn from the fact that Mr Brown carried out underpinning works without waiting for the appeal decision. Mr Brown was not called to give evidence. He had, it appears, bought the house at a reduced price in April 2000 in order to repair it and sell it on. It is not known what he thought of the prospects of the appeal succeeding (he might, accurately, have expected that it would fail) or when the appeal decision might be forthcoming or what cash flow considerations were present in his mind. There are quite clearly other possible explanations for his decision to carry out underpinning works in advance of the appeal decision than a view on his part that they would be necessary even if the trees were removed. I accept the evidence of Mr Thomas that only the repair of the cracks would have been necessary if consent to remove the trees had not been refused, and I accept his assessment of the cost of these repair works, £5,504.88. It is this amount that falls to be deducted from the diminution in value of the house, giving £44,495.12 or, say, £44,500.
20. As to the professional fees incurred in the pursuit of the appeal, I accept, as Mr Mynors did, that it was necessary for the claimants to pursue the appeal in order to keep the claim alive. On the other hand I do not think that it was unreasonable for them to do more than simply to keep the appeal in existence. It was wholly reasonable for them to seek to contest on the merits the council's case that the roots of the protected trees were a relatively minor cause of the damage to the house. They could reasonably have felt that to have let that case go by default could adversely affect their chances of reaching in due course a fair settlement of the compensation claim. Moreover they would have left themselves open to an award of costs if they had not advanced evidence of substance in support of the appeal. The claim contained a breakdown of the fees, which the claimants said had been incurred in pursuit of the appeal. They totalled £26,024.59, but they contained two items, the fees of Merricks, solicitors, which, I was told related to advice on compensation. It does not appear, therefore, that these amounts, together amounting to £1,385.56, were reasonably incurred in relation to the appeal, and a deduction should be made accordingly. There was no dispute as to the reasonableness of the other fees, given the appropriateness of pursuing the appeal in the way that they did. The amount allowable under this head is accordingly £24,639, and this falls to be added to the £44,500 referred to in paragraph 19 above.
21. I determine the amount of compensation at £69,139. The parties are now invited to make submissions as to costs, and a letter relating to this accompanies this decision. This decision will take effect when, but not until, the question of costs has been determined.

Dated 20 September 2004

George Bartlett QC, President

Addendum on Costs

22. I have received representations on costs. The claimants ask for their costs of the reference. The compensating authority do not resist this. The compensating authority must pay to the claimants their costs of the reference, such costs if not agreed to be assessed by the Registrar on the standard basis.

Dated 10 November 2004

George Bartlett QC, President