Jersey Unreported Judgments

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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> 1998/33 - Lesquende v Planning and Environment Committee [1998] UR 33 (13 February 1998)
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Cite as: [1998] UR 33

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Court of Appeal

 

13 February 1998

 

Before: JM Collins Esq., QC, (President)

RD Harman Esq., QC, and

RC Southwell Esq., QC,

 

BetweenLesquende, LimitedPlaintiff/Respondent

AndThe Planning and Environment

Committee of the States of JerseyDefendant/Appellant

Appeal by the Defendant/Appellant against so much of the Order of the Royal Court of 17 February 1997, as held that the decision of the Board of Arbitrators should have taken into account the zoning of the Plaintiff/Respondents land for use for Category A housing.

 

Advocate WJ Bailhache for the Defendant/Appellant

Advocate MMG Voisin for the Plaintiff/Respondent

JUDGMENT

SOUTHWELL, JA:

On 11 December 1992, the Royal Court made an Order vesting certain land at Les Quennevais in the Parish of St Brelade, then owned by Lesquende Ltd, in the Island Development Committee pursuant to the Compulsory Purchase of Land (Procedure) (Jersey) Law 1961 (the 1961 Law), the price to be paid to be determined by a Board of Arbitrators (the Board) constituted under Articles 7 and 8 of the 1961 Law. The Island Development Committee is now called the Planning and Environment Committee of the States: for convenience I will refer to this Committee as "the Committee".

The Board made its Award on 5 February 1995

Pursuant to Article 12 of the 1961 Law, the decision of the Board on any question of fact is final and binding.

As to questions of law, Article 12 provides for the Board to be able to state its award in whole or in part in the form of a special case for the opinion of the Inferior Number of the Royal Court, and the decision of the Inferior Number on any such case stated is to be final and binding and not subject to any further appeal.

Neither of the parties asked the Board to state its award in the form of a special case. Instead, both the parties applied for a review by the Inferior Number of the award for alleged error on the face of the award. Probably both parties wished to avoid the limited possibilities of appeal under Article 12. I refer later to the consequences of their having taken this course.

The applications came before a Commissioner, Mr Michael Kempster QC, and two Jurats sitting as the Inferior Number of the Royal Court. The Royal Court held that, despite the terms of Article 12 of the 1961 Law, it had jurisdiction to hear and determine the parties applications on the basis of error on the face of the award. This part of the Royal Courts decision was upheld by the Court of Appeal differently constituted from the present.

On the substance of the parties applications the Royal Court quashed the Award and remitted the matter to the Board with directions as to the correct approach in law. The Committee now appeals to this Court.

Article 9 of the 1961 Law, as amended, lays down the rules for the assessment of compensation for compulsory acquisition, and provides, so far as material, as follows:

"(1)In assessing compensation, the Board shall act in accordance with the following rules:

The main relevant facts can be summarised in this way:

In accordance with Article 9(1)(b) of the 1961 Law, the price was to be determined as at the date of the vesting order, ie. 11 December 1992.

The question raised for the decision of this Court is whether the Board, in determining the price as at 11 December 1992, should take into account the fact that on 31 July 1990, (nearly 2½ years before the vesting date) the States had rezoned part of the land (Area A) for Category A housing development.

The Board is required to determine the price as at 11 December 1992, on the hypothetical basis of an open market sale by a willing seller of the land in its then condition (Article 9(1)(b) of the 1961 Law), but taking no account of the fact that the acquisition was compulsory (Article 9(1)(a)). In considering the then condition of the land the Board would naturally take account of its physical condition, of any legal factors (including e.g. any previous grant or refusal of planning permission) relating to the land or any part of it, and of any realistic potential which the land might then have for development or for alteration of its condition, but considering in this respect at the relevant date the degree of probability or possibility attaching to any such potential.

The Committee contended in the first place that the rezoning of Area A in July 1990 was an essential part of the "scheme" for the purposes of which compulsory acquisition of the land was effected, and that accordingly pursuant to Article 9(1)(a) and (b) of the 1961 Law the rezoning must be ignored by the Board.

For the purposes of this argument, reliance was placed on English authorities and Privy Council decisions on appeal from Canada, Trinidad and Tobago, and New Zealand. These authorities include:

I will return to consider these authorities later in this judgment.

Thus Mr Bailhache put as the Committee’s main submission that the "scheme" included everything in the States’ resolution of 31 July 1990, and in particular the rezoning of Area A.

Mr Bailhache had other submissions to which I will return later.

By their Respondents’ Notice Lesquende put forward a number of contentions. But for the purposes of the appeal Mr Voisin abandoned all but three, which were:

There is clearly much to be said for the main contentions on either side on the question whether the rezoning in July 1990 was or was not part of the scheme. On the one hand, the rezoning took place in July 1990, 2½ years before the vesting in December 1992, and was therefore an attribute of the land during that period. On the other hand, the rezoning in July 1990 was in the context of a resolution of the States which contemplated compulsory acquisition, and could at the least be said to be closely connected with the compulsory acquisition scheme.

It is necessary to start with the interpretation of Article 9(1)(a) and (b) of the 1961 Law, which I have already quoted.

Similar provisions were made in the English Acquisition of Land (Assessment of Compensation) Act 1919, and in a number of statutes adopted for the same purpose in other Commonwealth countries, and have been considered on many occasions, including some of the cases which I have already mentioned. To these I now turn.

In Cedar Rapids the Privy Council held that the law of Canada was the same as the law of England and stated it in this way:

The Canadian courts had been considering the position where land was taken for a hydro-electric scheme, and had held that the value of the land was a proportion of the assumed value of the whole undertaking to be created pursuant to the scheme. This decision was reversed by the Privy Council, who held that the value of the takers proposed undertaking was irrelevant. The value of the land was the open market price of the land based on what possible intended hydro-electric undertakers might pay to acquire the land. I note that the terms of the relevant statute do not appear from the report in [1914] Appeal Cases, but I assume that they were similar to those of the English Act of 1919.

The South-Eastern Railway Co case is not directly relevant, since the issue in that case concerned the compulsory purchase of part of the railways piece of land, which, it was held, was to be valued on the basis of the value of the actual land which was taken, and not as part of the value of the whole piece of land (including both the land taken and the land not taken). But the statement of principles by Eve J [1915] 2 Ch. pp258-259 (which the Court of Appeal approved) made it clear that an increase or decrease in value due to the execution of the scheme for or in connection with which the purchase is made must be disregarded.

The Fraserville case again concerned land including waterfalls taken for a hydro-electric scheme. The Privy Council held that the correct approach to valuation was to take the value of the land and the waterpower of the falls"in the physical condition in which they were found at the date of the valuation", and to add "the value of the possibilities of development of the waterfalls by storing and regulating the waters through the medium of reservoirs": see [1917] AC at p192. The Privy Council adopted, at p194, the same approach as in Cedar Rapids and stated that the substance of the principles to be applied was

The terms of the relevant statute again do not appear from the report, but I assume that they were similar to the English Act of 1919. The conclusion of the Privy Council that the ambit of the "scheme" is a question of fact was agreed here by both parties, and they both recognised that this question is one for the Board, and not for the Courts.

In the Indian case, the land (which had a plentiful supply of water) was likely to be used for the supply of water only by the Harbour Authority which was compulsorily acquiring the land. In a judgment which reviewed fully the legal principles arising from the relevant statute (a statute in different terms from the 1961 Law but having substantially similar effect) the Privy Council held that:

In the Pointe Gourde case part of the compensation sought related to the special value of stone in a quarry on the land for the purposes of building the naval base for which the land was taken. The statutory provision being considered was in similar terms to Article 9 of the 1961 Law. The Privy Council held that the additional value of the stone derived from the use of that stone for building the naval base, and therefore could not be added to the value of the land in the hypothetical open market:

Pointe Gourde was followed by the English Court of Appeal in Wilson. At [1971] 1 WLR page 309 Lord Denning MR described a "scheme" as a progressive thing, which starts vague and becomes more precise and better known as time goes on. His judgment contains this passage:

Widgery LJ at p 310 agreed and added that whenever land is compulsorily purchased this must be in consequence of some "scheme or undertaking or project", without it there would be no question of compulsory powers arising. He continued as follows:

Widgery LJ went on to conclude that:

In the Maori Trustee case the statute was in similar terms to Article 9 of the 1961 Law. The Privy Council again held that what was to be valued was the land in its present condition, physical and legal, including the present value of its potential (if any) for development in the future.

From Article 9 of the 1961 Law, to be applied or interpreted in the light of these authorities, I draw the following conclusions:

In the judgment of the Royal Court a direction was given to the Board, when making a fresh Award, that the Board should take into account the rezoning in July 1990. Though the wording of the judgment is not entirely clear (see page 12, line 6; page 20, line 34; and the note of the costs hearing), I have no doubt that this is what the Royal Court meant, and the judgment has been interpreted in this way by both parties.

In my judgment the Royal Court was, in this respect, in error. In saying this, I do not accept either the Committee’s contention that the Board should be directed to ignore the rezoning, or Lesquendes first contention that the Royal Court correctly directed the Board to take the rezoning into account on the ground that the rezoning had an independent legal effect. In my judgment whether or not the rezoning was purely part of the scheme (and therefore, to be ignored) is a question of fact for the Board to determine without direction either way by the Courts. Which partys contention the Board will ultimately accept will depend on the evidence placed before the Board. This Court has seen only the tip of the iceberg of the evidence previously placed before the Board. The newly constituted Board will have to make its own assessment of the evidence before it, and it is not for this Court to prejudge the Boards own assessment. I should mention here that Mr Voisin referred to further English cases in support of his "independent legal effect" argument. But I do not consider it appropriate to lengthen this judgment by detailed consideration of those cases.

I turn to the further arguments for the Committee eloquently put forward by Mr. Bailhache.

First, he drew attention to the wasted time and money spent in the long hearings before the Board and the Royal Court, and asked for the assistance of this Court, with particular reference to the Privy Councils decision on the costs, in limiting the scope for re-argument and the deployment of a fresh case by Lesquende. Such submission attracts little sympathy. The waste of time and money has resulted substantially from the failure of both parties to adopt the statutory procedure laid down in the 1961 Law, in Article 12, a matter to which I refer later.

Secondly, he asked this Court to decide that no Board acting reasonably could decide as a matter of fact that the rezoning was not an integral part of the compulsory purchase scheme. This argument was in my judgment without merit. This Court has seen far too little of the evidence before the first Board to be able to reach any conclusion on this question of fact. Furthermore, it will be necessary for the parties to run their cases differently before the second Board, and this Court could not prejudge the second Boards determination on the evidence which will be placed before it.

Thirdly, while disclaiming any reliance on any legal doctrine of estoppel, he asked this Court to decide that

Point (a) is, in my view, misconceived. It is clear that "the Board" as appointed under Articles 7 and 8 has an ad hoc existence for the purpose of deciding the particular question of compensation placed before it by the Inferior Number of the Royal Court on the application of the Greffier. Two members of the particular Board are appointed by the Inferior Number from a permanent panel created by the Superior Number. They sit with a chairman (an advocate or solicitor) appointed on each occasion to the particular Board by the Inferior Number. The only continuing body is the panel appointed by the Superior Number from which two members are appointed to each Board. The Board does not have any permanent existence. The first Board, having made its Award, became functus officio. Its Award has been quashed, and there is no appeal against the quashing by the Royal Court. The second Board once appointed by the Royal Court on the Greffier’s application will have to decide the compensation afresh, applying the relevant Regulations then in force.

Point (b) is similarly misconceived. Provided that the parties comply with the 1961 Law and the relevant Regulations, they will be free to run different cases from those cases they have previously run, and indeed they will probably have to, in the light of the rejection of some of the contentions previously made.

In my judgment it is important that this should be the conclusion. It is essential that hearings before the second Board are not dominated by wasteful pleading points, and that the next Award is not vitiated potentially by misconduct of the second Board in preventing the parties from putting forward the cases they wish to put forward, however different from the cases previously put forward.

Accordingly Mr Bailhaches third argument fails. I am glad to be able to reach this conclusion which is in the interests of both parties.

There are two further matters which I wish to mention.

The first matter is that much time and money was spent before the Board and the Royal Court in considering what the position might be if the questions had arisen for decision in England and Wales. That was in my judgment a waste of time and money. I trust that in the further hearings before the Board the parties will concentrate their contentions on the relevant facts to be found by the Board and the determination of the price within the framework of Jersey Law.

The second matter is this. The 1961 Law lays down in Article 12 a statutory procedure by way of case stated for the determination of relevant points of law by the Inferior Number of the Royal Court, which is to be the final determination of such points. Clearly this procedure was laid down so as to avoid the proliferation of arguments and the further appeals which have occurred so far in this case, and to enable the party whose property is acquired, and the States and the public of Jersey as the acquirers, to reach a speedy and relatively cheap determination of the compensation payable.

In the present case the Royal Court and a differently constituted Court of Appeal have held that there is an additional potential jurisdiction to set aside an award for error of law on its face, and have in the particular circumstances been prepared to exercise a discretion to allow points of law to be pursued in this way, rather than in accordance with the statutory procedure. But the parties cannot assume that a similar course would be permitted on a second occasion. As the Court of Appeal stated in paragraph 50 of its judgment:

If the parties were to attempt to ignore the statutory procedure a second time, it is not improbable that the Courts of Jersey would reject such an attempt and hold that the award of the Board was final and binding in law as well as in fact. It is hoped that the parties will now appreciate that their procedural problems derive substantially from their having ignored the statutory procedure, and having secured instead the quashing of the Award, leaving them, after long legal battles, with no such clear findings of fact as would be required for the stating of a case, and only limited resolution of relevant legal questions.

Finally, I want to state my considerable indebtedness to Mr Bailhache and Mr Voisin for their clear and succinct submissions.

COLLINS, JA: I agree.

HARMAN, JA: I agree.

 

Authorities

Compulsory Purchase of Land (Procedure) (Jersey) Law, 1961

Cedars Rapids Manufacturing & Power Company -v- Lacoste [1914] AC 569

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

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

Fraser -v- City of Fraserville [1917] AC 187

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

Wilson -v- Liverpool Corporation [1971] 1 WLR 302

Maori Trustee -v- Ministry of Works [1959] AC 1

Island Planning (Jersey) Law 1964 and amendments

Melwood Units Pty -v- Commissioner for Roads [1979] AC 426

Housing (General Provisions) (Jersey) Regulations, 1970

Building Loans (Jersey) Law, 1950

Building Loans (Miscellaneous Provisions) (Jersey) Regulations, 1961