UT Neutral citation number: [2010] UKUT 299 (LC)

LT Case Number: ACQ/337, 342, 344, 357, 376, 377, 390, 406, 407, 408, 409, 411, 412, 415, 419, 420, 421, 422, 423, 431, 479/2010

                            TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

COMPULSORY PURCHASE – tubes of subsoil acquired for Channel Tunnel Rail Link –whether compensation payable for leases created after service of notice to treat – value – held nominal amount payable as no market for acquired property.

                                IN THE MATTER OF 21 NOTICES OF REFERENCE                        

BETWEEN                       OBSIDIAN FG LIMITED AND OTHERS                    Claimants

                                                                           and

                                                   THE SECRETARY OF STATE                             Acquiring

                                                             FOR TRANSPORT                                      Authority

                                 Re: Subsoil beneath various properties in East London and Essex

                                                         Before: N J Rose FRICS

                                  Sitting at 43-45 Bedford Square, London, WC1B 3AS

                                                               on 11 August 2010

James Pereira, instructed by Cripps Harries Hall, solicitors of Tunbridge Wells for the acquiring authority

The claimants did not appear and were not represented

The following cases are referred to in argument:

Re Marylebone (Stingo Lane) Improvement Act (1871) LR 12 Eq

Mercer v Liverpool, St Helen’s and South Lancashire Railway Company [1903] 1 KB 652 (CA) Mercer v Liverpool, St Helen’s and South Lancashire Railway Company [1904] AC 461 (HL) Bradford Property Trust v Hertfordshire County Council (1974) 27 P & CR 228 (LT)

                                                                    DECISION

Introduction

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 21 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.

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.  This is the seventh decision of the Tribunal relating to compensation for subsoil interests acquired for the construction of London tunnels in section 2.  The previous decisions were dated 2 September 2009 (N J Rose FRICS), 2 October 2009 (A J Trott FRICS), 4 January 2010 (P R Francis FRICS), 30 March 2010 and 1 April 2010 (A J Trott FRICS) and 17 August 2010 (N J Rose FRICS).

3.           I attach an appendix, setting out each of the claims awaiting determination, and containing claim number, the Lands Tribunal case number, the property address for each unit of subsoil and the name of the claimant or claimants.

4.           The claims fall into three categories.  First, there is a single freehold claim (number 1).  Secondly, there are leasehold claims where the leases were in existence at the time of service of the notices to treat (number 2-4, 6-9, 12, 13, 15-21).  Thirdly, there are ‘new lease’ claims, where the leases only came into being after service of the notice to treat (numbers 5, 10, 11 and 14).

5.           Mr James Pereira of counsel appeared for the acquiring authority.  None of the claimants appeared or was represented.

Statutory provisions

6.           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.

7.           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.

8.           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.

9.           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. 

10.        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.

11.        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.

12.        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.

13.        Section 9 of the Compulsory Purchase Act 1965 provides, in effect, that if a landowner refuses to convey 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. 

14.        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.

Evidence

15.        Mr Pereira called factual evidence from Mrs Amy Rogers, who is the solicitor who submitted the references to the Tribunal on behalf of the acquiring authority.  Mrs Rogers explained the attempts made by her firm  and the acquiring authority to communicate with the claimants under claim 5,7,9-12,15,16 and 21.  In the remaining cases the claimants had accepted an offer from the acquiring authority, but the Tribunal’s determination was required in case the subsoil could not be transferred to the acquiring authority by agreement within a reasonable period.  She also described the steps which had been taken to provide copies of the notice of reference and supporting documents to the claimants, and to their legal or other representatives if she believed that any were instructed.

16.        Mr Pereira also called Mr Colin Smith FRICS, a Senior Director and head of compulsory purchase at CB Richard Ellis.  Mr Smith said that there was no market for a tube of subsoil except for a body processing compulsory powers.  It followed that a nominal amount was payable.  The amount adopted for the CTRL project was £50, regardless of the length, volume and depth of the interest acquired.  He was not aware of any costs or losses arising and the amount payable for disturbance under rule 6 was therefore nil.  He considered that there had been no diminution in the value of retained land by reason of severance or injurious affection.

“New leases”

17.        Mr Pereira said that, in respect of leasehold interests which were created after notice to treat had been served, the acquiring authority would be content with an award of £50 for each claim.  That position needed to be considered, however, in the light of the law relating to such interests.  He referred in this connection to the following cases Re Marylebone (Stingo Lane) Improvement Act (1871) LR 12 Eq, Mercer v Liverpool, St Helen’s and South Lancashire Railway Company [1903] 1 KB 652 (CA) Mercer v Liverpool, St Helen’s and South Lancashire Railway Company [1904] AC 461 (HL), Bradford Property Trust v Hertfordshire County Council (1974) 27 P & CR 228 (LT).  Mr Pereira submitted that, in the light of these authorities, the Tribunal might include that the owners of the “new leases” were not entitled to compensation.

Conclusions

18.        In the light of the evidence of Mrs Rogers I am satisfied that all reasonable steps have been taken to notify the claimants under claim numbers 5,7,9-12,15 and 21 that their claims had been referred to the Tribunal and that they would be determined by reference to the acquiring authority’s valuation evidence alone if they did not serve a Statement of Case within a period of six (or, in 3 cases, five) weeks, and that no such Statements of Case have been served.  I accept Mr Smith’s evidence and determine that the compensation payable in respect of each claim in the first and second categories described in para 4 above should be £50.  As for the ‘new lease’ claims, I am satisfied by reference to the authorities cited by Mr Pereira that the leaseholders are not entitled to compensation, and I therefore determine the compensation payable in each case to be nil.

19.        I make no order as to costs.

Dated 20 August 2010

N J Rose FRICS

Appendix

ACQ/337/2010 and 20 others

Appendix to Lands Tribunal decision dated 17 August 2010