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UPPER TRIBUNAL (LANDS CHAMBER)
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UT Neutral citation number: [2009] UKUT 165 (LC) LT Case Numbers: ACQ/370, 371, 372, 373, 374, 377, 378, 379, 380, 410, 411, 412, 413, 414, 415, 416, 417, 418, 419, 420, 421, 426, 429, 431, 432, 435, 436, 437, 439, 440, 441, 449, 450, 451, 452, 454, 455, 456, 461, 463, 465, 466, 468, 469, 473, 475, 476, 477, 478, 479, 480, 486, 487, 488, 489, 490, 491, 493, 499, 500, 501, 502, 507, 508, 510, 511, 518, 519, 527, 531, 533, 534, 535, 539, 551, 553, 556, 557, 558, 559, 560, 561, 562, 563, 564, 565, 567, 576, 577, 578, 579, 580, 581, 582/2008 ACQ/6, 8, 10, 11, 12, 13, 14, 15, 25, 26, 28, 30, 31, 32, 33, 34, 50, 51, 52, 91, 92, 102, 104, 106, 107, 108, 109, 110, 113, 129, 132, 135, 136, 138, 140, 142, 143, 144, 146, 148, 149, 150, 159, 160, 169, 171, 172, 175, 183, 184, 185, 186, 195/2009
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TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
COMPULSORY PURCHASE – tubes of subsoil acquired for Channel Tunnel Rail Link – value – held nominal amount payable as no market for acquired property – compensation of £50 awarded in each case
IN THE MATTER OF 147 NOTICES OF REFERENCE
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BETWEEN
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(1) JIT KAUR MATHARU
(2) TAJINDER SINGH MATHARU
AND OTHERS
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Claimants
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and
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THE SECRETARY OF STATE FOR TRANSPORT
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Acquiring Authority
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Re: Subsoil beneath various properties in North and East London
Before: N J Rose FRICS
Sitting at 43-45 Bedford Square, London, WC1B 3AS on 15 July 2009
James Pereira, instructed by Cripps Harries Hall LLP, solicitors of Tunbridge Wells for the acquiring authority
The following case was referred to in argument:
R v Secretary of State for Transport ex parte Blackett [1992] JPL 1041
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© CROWN COPYRIGHT 2009
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1
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DECISION
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Introduction
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1. These are references to determine the compensation payable by the Secretary of State for Transport (the acquiring authority) arising from the compulsory acquisition of 147 subsoil interests required for the section of the Channel Tunnel Rail Link (CTRL) that passes through London in a twin bore, single track underground tunnel, referred to as “the London tunnels”. The tunnel portal in London is on railway land just outside St Pancras station. The CTRL has been built in two sections. Section 1 comprised the section of the route between the Channel Tunnel and Fawkham Junction in North Kent, where it connected with existing rail lines and trains terminating at Waterloo station. Section 1 opened in September 2003. Section 2 is the part of the route between Southfleet Junction near Ebbsfleet and St Pancras station in London and this section opened in November 2007.
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2. The claims concern subsoil acquisitions for the construction of the London tunnels in section 2 of the CTRL. The acquiring authority has taken the land required for the construction of the CRTL pursuant to service in 2001 of notices to treat and notices of entry and not pursuant to a general vesting declaration. Accordingly, title must be transferred to the acquiring authority, either following agreement between each claimant subsoil owner and the acquiring authority, or following determination of the compensation payable by Lands Tribunal.
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3. With two exceptions – the leasehold interests in the lower ground floor flat at 83 Greenwood Road, London, E8 1NT (ref. ACQ/175/2009) and the frontage to 539 Romford Road, London, E7 8AE (ACQ/138/2009) – all the claimants own the freehold interest in the land taken.
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4. The financial arrangements for the project require the acquiring authority to grant a lease of the railway and tunnels to the nominated operator in December 2009. To do so the acquiring authority must first acquire freehold title to the relevant land. The Tribunal’s determination of these references will allow the acquiring authority to acquire the land by deed poll if it is not possible to obtain the landowner’s agreement to convey or release the land.
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5. I attach an appendix, setting out each of the claims awaiting determination, and containing the Lands Tribunal case number, the property address for each unit of subsoil and the name of the claimant or claimants.
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6. The claims can be divided into three categories. First, there are those where the acquiring authority has attempted to communicate with the landowner but no response or no meaningful response has been received, or where there has been communication but the acquiring authority has been unable to complete a conveyance of the land. With one possible exception – to which I refer later – these cases do not involve untraced owners (to which Schedule 2 of the Compulsory Purchase Act 1965 applies), because in each case the acquiring authority has been able to identify the owner and that owner’s registered address.
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2
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7. Secondly, there are those cases where compensation had not been agreed at the date when the claim was referred to the Tribunal, and the landowner has subsequently agreed to convey the land but the conveyance has yet to complete. In these cases the acquiring authority is continuing to proceed with the conveyances, but it wishes to have the references determined so that if the conveyances fail to complete it can acquire the land by compulsory purchase and pay the compensation due to the landowner. The compensation payable under each draft conveyances is higher than the figure which, before me, the acquiring authority suggested was the compensation to which the claimants were entitled under the relevant statutory provisions. Counsel for the acquiring authority, Mr Pereira, informed me that in those cases where the legal formalities are completed in time to allow the Secretary of State to grant a lease of the railway in December 2009, the acquiring authority undertook to complete the conveyance at the agreed figure, notwithstanding that this might be in excess of the compensation determined by the Tribunal. Otherwise, the latter figure would be paid.
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8. Thirdly, there are six claims (ACQ/577/2008 and ACQ/52, 129, 132, 140 and 195/2009) where the people occupying the property have some legal disability that prevent them from conveying the subsoil by consent. For example, where a registered landowner is deceased but the registered title has not changed, and a relative or spouse is occupying the property.
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9. Only two claimants were represented at the hearing. Mr Raghavan Ramjith of 152 St Awdry’s Road, Barking said that he had received a sum of compensation from the acquiring authority, but his property was still affected by cracks and shaking resulting from the railway. I advised Mr Ramjith that, since the conveyance of the relevant land beneath his house had been completed and the agreed compensation paid, the Tribunal had no power to consider his property. It appears, however, that the settlement documentation permits affected owners to claim further compensation for injurious affection, provided a formal claim is submitted no later than 14 November 2009. I explained to Mr Ramjith that it was important that he complied with this dead-line if he wished to pursue a claim for injurious affection.
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10. Mr Amardeep Singh Bhatia and his wife occupy 25 Warwick Road, E12, which is owned by Mr Bhatia’s mother, Mrs Satwinder Kaur Bhatia. He was concerned about noise vibration and cracks resulting from the railway, which he thought would reduce the value of his mother’s property. Mr Bhatia had not previously expressed his concerns to the acquiring authority and no witness statement or expert report on the subject had been submitted to the Tribunal, although his mother had been invited to do so. It was agreed that the reference concerning 25 Warwick Road (ACQ/481/2008) should be adjourned, to enable the acquiring authority’s surveyor to investigate the position.
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Statutory provisions
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11. The compulsory acquisition of land for the purposes of the CTRL was authorised by the Channel Tunnel Rail Link Act 1996. The CTRL Act received the Royal Assent on 18 December 1996.
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3
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12. Section 1 of the CTRL Act authorised the construction and maintenance of the works specified in Schedule 1 to the Act (“The scheduled works”), being works for the construction of a railway between St Pancras and the Channel Tunnel portal at Castle Hill, Folkestone.
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13. Section 4(1) of the CTRL Act authorised the Secretary of State to acquire so much of the land shown on the deposited plans within the limits of deviation for the scheduled works as may be required for or in connection with the authorised works.
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14. Part II of Schedule 4 to the CTRL Act concerns the application of legislation relating to compulsory purchase. Paragraphs 2 and 3 of Part II of Schedule 4 provide that, subject to certain modifications, the Compulsory Purchase Act 1965 applies to compulsory acquisition under section 4 of the CTRL Act, as it applies to compulsory acquisition under the Acquisition of Land Act 1981, and as if the CTRL Act were a compulsory purchase order under the 1981 Act.
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15. By paragraph 3(2) of Part II of Schedule 4 to the CTRL Act, the time limit for service of a notice to treat under the Compulsory Purchase Act 1965 did not apply to the CTRL Act. Instead, section 47 of the CTRL Act provided that the time limit for the service of a notice to treat was five years from the date the CTRL Act was passed.
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16. Part III of Schedule 4 to the CTRL Act contains supplementary provisions. Paragraphs 6(1) and 6(2) of Part III of Schedule 4 provides that, for certain numbered plots, only the subsoil could be acquired by compulsory acquisition. All of the references currently before me concern plots falling under paragraph 6(1), where compulsory acquisition of the subsoil only was authorised.
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17. Section 7 of the Compulsory Purchase Act 1965 provides that the assessment of compensation for land taken is to have regard not only to the value of the land to be purchased but also to the damage, if any, to be sustained by the owner of the land by reason of the severing of the land purchased from the other land of the owner, or otherwise by injuriously affecting that other land.
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18. Section 9 of the Compulsory Purchase Act 1965 provides, in effect, that if a landowner refuses to covey land after the acquiring authority has tendered the compensation awarded in respect of it, it shall be lawful for an acquiring authority to execute a deed poll to vest title of land in the acquiring authority absolutely, once it has paid the compensation into court.
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19. Schedule 1 to the Compulsory Purchase Act 1965 concerns persons without power to sell their interests. Paragraph 2 of Schedule 1 to the Compulsory Purchase Act 1965 provides that it shall be lawful for all persons who are seised or possessed of or entitled to any of the land subject to compulsory purchase, or any estate or interest in any of that land, to sell and convey or release it to the acquiring authority. Paragraph 4 of Schedule 1 provides that the compensation payable for such land shall be determined by two surveyors, one nominated by
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4
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the acquiring authority and one nominated by the other party, unless compensation has been determined by the Lands Tribunal pursuant to the provision to the Compulsory Purchase Act 1965.
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20. Paragraph 9(1) of Schedule 1 provides that any sums payable under a contract or agreement with a person who is not entitled to dispose of the land absolutely for his own benefit shall be paid into court or to trustees.
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21. Paragraph 10(1) of Schedule 1 provides that when the compensation agreed or awarded by the Tribunal has been paid into court, the owner of the land, including all parties who are enabled to sell or convey the land by virtue of schedule 1, shall duly convey the land or interest to the acquiring authority when it requires them to do so. By paragraph 10(2), the acquiring authority may acquire the land by executing a deed poll if the parties in question fail to adduce good title or fail to convey the land as required by paragraph 10(1).
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22. Paragraph 1(1)(b) of Schedule 2 to the Compulsory Purchase Act 1965 provides that a surveyor member of the Tribunal may determine the compensation to be paid for any land to be compulsorily acquired from a person who cannot be found after diligent inquiry has been made. By paragraph 2, the acquiring authority may pay the compensation into court, whereupon the acquiring authority may execute a deed poll to vest the land in itself.
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23. By paragraph 4 of Schedule 2, if the person entitled to claim the compensation paid into court is dissatisfied with the valuation of the Tribunal, the question of whether the compensation was sufficient, or whether some additional sum ought to be paid into court, may be raised with the Tribunal upon written notice to the acquiring authority.
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24. By section 5 of the Land Compensation Act 1961, compensation in respect of any compulsory acquisition shall be assessed in accordance with the rules set out under section 5. By rule 2, the value of land acquired is to be taken as the amount that the land might be expected to realise if sold in the open market by a willing seller. By rule 3, the special suitability or adaptability of the land for a purpose shall not be taken into account where it is a purpose for which there is no market apart from the requirements of any authority possessing compulsory purchase powers. By rule 6, the provisions of rule 2 do not affect the assessment of compensation for disturbance or any other matter not directly based on the value of the land.
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Acquiring authority’s efforts to communicate with claimants
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25. Mr E M Kemp gave evidence about the acquiring authority’s attempts to communicate with the owners of properties affected by the compulsory acquisition. Mr Kemp is employed by Terraquest Solutions plc for whom he has worked for over twenty years, first as quality manager and then as a consultant to clients on infrastructure development projects. For the last sixteen years he has been assigned to the CTRL project. He has been property referencing data manager and has developed systems and procedures to ensure that the acquiring authority’s obligations were met during the preparation of the Parliamentary Bill, the service of compulsory purchase notices and for land acquisition transfers.
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5
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26. Mr Kemp said that, after the passing of the CTRL Act in December 1996, the information held by the acquiring authority’s agent, Union Railways Property (URP), regarding the names and contact details of the owners of property affected by the project was updated from data supplied by the Land Registry and other information received.
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27. Some 1,550 separate land interests had to be acquired in respect of the London tunnels, and 3,770 notices to treat and notices of entry were served. URP had an ongoing relationship with the Land Registry and was informed about changes in ownership affecting the project. This system was in place and operating between 1996 and February 2007. Some 1,044 land interests had been acquired by agreement, and approximately 250 references were pending before the Lands Tribunal, including those with which I am currently concerned. The remainder are subordinate leasehold interests and cases that are still being progressed by URP.
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28. The construction of the railway was carried out in two phases. Before the start of section 2 a letter (SS1) was sent to all those owners (or their successors) who had received a Parliamentary notice regarding subsoil acquisition when the CTRL Bills were submitted in 1994 and 1995. The SS1 letter enclosed a schedule describing the property affected by the tunnels in which URP believed the landowner had an interest, and sought clarification of this ownership. The purpose of this letter was to re-open communication and to update URP’s records from any responses received.
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29. With further information available regarding the precise alignment of the route, a second letter (SS2a) was sent to owners of property directly above the tunnels, from whom subsoil would be acquired. The mailing list had been updated using all the information received from responses to the SS1 letter. The SS2a letter included an offer to purchase the subsoil by agreement. The offer was repeated in the SS3 letter to recipients who had not responded to earlier correspondence. The offer was £50 for the transfer of the subsoil, plus a flat sum of £250 to cover the claimant’s legal costs and £250 to cover the claimant’s surveyor’s costs involved in the transfer. Alternatively, the claimant could opt in advance for his actual fees to be reimbursed, and these would be paid provided they were reasonable.
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30. The SS4 letter was sent out in phases to inform owners of property above the tunnels about the serving of the notices to treat and notices of entry and to ensure that URP’s records were as up to date as possible prior to service of the notices. A form was attached to confirm the current interest and, if it was not returned, Mr Kemp’s staff followed up the SS4 letter by further letter or by telephone call.
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31. Notices to treat and notices of entry were served during 2001. It was decided to put a caution on the affected titles as a mechanism to ensure that any future owners would be aware of the tunnels and the notices to treat. The SS5 letter was sent to advise owners of the land directly above the tunnels of this process before the cautions were registered in 2002.
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32. After construction started on the tunnels in 2002 the SS6 letter was sent to relevant owners repeating the offer to purchase the subsoil. After that a few bespoke letters were sent
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6
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out by the acquisition manager, mainly to limited companies in cases where he believed he might be able to progress negotiations personally.
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33. Shortly before the testing of trains was due to start on the new railway, it was decided to write again to owners repeating the offer to purchase the subsoil before preparing references (SS8). This letter produced a larger response than anticipated and a further letter was sent to owners (SS9).
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34. Throughout this process the best information available was used to prepare the mailing lists. Updates to the database were made as they were received from the Land Registry or from responses to the letters and other inquiries. Records of the pro-forma letters sent to the owners were kept as hard copies and/or on electronic database. If at any time post was returned undelivered, URP attempted to contact the relevant owners by checking the Land Registry title entries again, and writing to the occupier of the property if appropriate.
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35. A small number of claimants in the current references owned more than one property, so more than one reference had been made for them. If such claimants had already been contacted about one property before acquiring another property, the pro-forma letters concerning the second property were not sent if the time for sending these pro-formas had passed. The property owner would already have been sent the earlier correspondence, albeit in respect of his first property.
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36. URP provided information to their solicitors, Cripps Harries Hall LLP, regarding the pro-forma letters sent for each case during the preparation of the paperwork for the references. Mr Kemp said that, for all the current references, the acquiring authority knew who the claimants were from Land Registry records and information provided from other sources and had attempted to contact the claimants using the best information available at the time.
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37. I also heard evidence from Mrs A C Rogers, a solicitor with Cripps Harries Hall LLP, who has referred all the current references to the Tribunal. She said that, in addition to the attempts by the acquiring authority to contact claimants described by Mr Kemp, Cripps Harries Hall wrote to each claimant prior to referral to the Tribunal to afford them a further opportunity to agree to transfer the subsoil to the acquiring authority by agreement. This letter was sent to each claimant at the address of the property affected, each claimant’s address according to the Land Registry title entries to the property where this differed from the property address, and to any other contact address apparent from Cripps Harries Hall’s instructions.
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38. On submitting the notices of reference to the Lands Tribunal, Mrs Rogers ensured that relevant papers – comprising the covering letters to the Tribunal, the notice of reference and the acquiring authority’s expert’s valuation report – were copied to the relevant claimant and/or claimants, and to their legal and other representatives if any were instructed. In some cases, these papers were also copied to legal advisors or surveyors who appeared to have been instructed in the past, where it seemed that they had been substantively involved in advising the claimant or claimants in connection with the compensation claim.
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7
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Valuation evidence
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39. Mr C D Smith FRICS, currently chairman of the Compulsory Purchase Association, gave expert valuation evidence on behalf of the acquiring authority. He has had more than 35 years experience of compulsory purchase and compensation and has dealt with numerous motorway and trunk road schemes, railway and airport projects. He is a senior director and head of compulsory purchase at CB Richard Ellis, based in Wimpole Street, London.
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40. Mr Smith was first instructed to advise in respect of the CTRL in September 1995 and he was instructed to deal with the acquisition of subsoil interests in section 2 of the project in 2007. During the period from 1997 to date he has led a team of valuers dealing with acquisitions for section 1 of the project, which included acquisitions for the North Downs Tunnel, which lies to the north of Maidstone.
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41. Mr Smith said that compensation was payable in accordance with the statutory provisions set out in the Land Compensation Act 1961, section 5, rule 2 (land taken) and 6 (disturbance), and the Compulsory Purchase Act 1965, section 7 (severance and injurious affection).
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42. In respect of compensation under rule 2, Mr Smith considered that there was no open market value basis for a “tube” of subsoil as there would be no demand, except from a body possessing compulsory purchase powers. It followed that a nominal amount was payable and the amount adopted for the CTRL project was £50, regardless of the length, volume and depth of the interest acquired. This had been agreed in respect of in excess of 800 interests, and the Tribunal had adopted that approach in the 26 unknown owner cases referred on 10 March 2004. He therefore adopted £50 in every case.
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43. Mr Smith said that he was unaware of any costs or losses arising from any of the acquisitions and the amount payable in respect of disturbance under rule 6 was therefore nil.
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44. As for severance and injurious affection, there had been complaints about ground borne noise and/or vibration arising from the passage of trains through the tunnels. There had been only a few such complaints throughout the entire length of the tunnels within section 2. In each case the property concerned had been visited – nearly always by Mr Smith and on two or three occasions by his colleague, Mr Sayer. In all cases the sound of ground borne noise vibration was barely discernible and, in Mr Smith’s opinion, was well below the level at which any diminution in value would arise. He therefore concluded that no diminution in the value of any of the properties had been caused by the scheme and that the compensation payable under this head of claim was nil.
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45. At the time tunnelling took place in 2003 a number of properties experienced some minor cracking. The appearance of minor cracking in a limited number of properties was consistent with expectations of what would occur at the time the tunnel boring machine passed beneath. Most of this damage was made good by the acquiring authority in 2003 and 2004, and sometimes a payment was made in lieu. Some additional complaints about cracking were made subsequently and the acquiring authority’s surveyors made a further inspection in each
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8
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case. Where the cracking had become worse, or had been identified for the first time but was considered to have been caused by the tunnel, additional payments had been agreed with the owners. The properties concerned were the subject of claims ACQ/370, 378, 379, and 440/2008 and ACQ/110, 146, and 150/2009. With these exceptions, which had been settled by agreement, Mr Smith concluded that no diminution in the value of any of the properties had been caused by the scheme and that the compensation payable under this head of claim was nil. He therefore considered that the overall compensation payable was £50 for each property.
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Conclusions
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46. In the light of the evidence of Mr Kemp and Mrs Rogers I find that the acquiring authority has made diligent enquiries to find and communicate with the owners of all the properties which are the subject of this decision. I accept the valuation evidence of Mr Smith and determine that the compensation payable in respect of each of the 147 subsoil interests is £50. In one case, ACQ/132/2009, the acquiring authority has managed to discover the address of only one of the two owners of the property. On the basis that the provisions of paragraph 1(1)(b) of Schedule 2 to the Compulsory Purchase Act 1965 apply to that property my determination of the compensation payable in that case is made also pursuant to that paragraph.
47. I would record that Mr Pereira undertook on behalf of the acquiring authority that interest at the statutory rate would be paid in every case with effect from 1 September 2001, the first tunnel boring having commenced in the course of that month.
48. I make no order as to costs.
Dated 2 September 2009
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N J Rose FRICS
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