UT Neutral citation number: [2010] UKUT 291 (LC)

LT Case Numbers: ACQ/481, 503, 509, 513, 515, 516, 517/2008

ACQ/027, 103, 105, 112, 114, 131, 134, 240, 242, 243, 257, 258, 261, 269, 270, 271, 273, 275, 316, 318, 326/2009

                            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 determined at £50 in each case

IN THE MATTER of 28 NOTICES OF REFERENCE

BETWEEN                                SATWINDER KAUR BHATIA                                             

                                                                 AND OTHERS                                          Claimants

                                                                           and

                                                   THE SECRETARY OF STATE

                                                             FOR TRANSPORT                      Acquiring authority

                                              Re: Subsoil beneath various properties

                                                         in North and East London

                                                       Before: P R Francis FRICS

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

                                                                            on

18 December 2009

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

The following cases are referred to in this decision:

(1) Jit Kaur Matharu (2) Tajinder Singh Matharu and Others v The Secretary of State for Transport Lands Tribunal [2009] UKUT 165 (LC) (unreported)

(1) Kulraj Aytan (2) Ishraj Aytan (3) Jasraj Aytan and others v The Secretary of State for Transport [2009] UKUT 194 (LC) (unreported)

                                                                    DECISION

Introduction

1.           These references relate to the acquisition of 28 subsoil interests by the Secretary of State for Transport (the acquiring authority) that were required for the construction of the Channel Tunnel Rail Link (CTRL) as it passes in a twin bore single track tunnel underneath north and east London.  This part of the CTRL is referred to as section 2 and runs from Southfleet Junction near Ebbsfleet to St Pancras Station in London.  Section 2 was opened in November 2007.

2.           The acquiring authority took possession of the subsoil interests at various times from 1 September 2001, having first served notices to treat and notices of entry.  They wish to grant a lease of the railway and tunnels to the nominated operator, but cannot do so without first acquiring the freehold interest in the relevant land.  The Tribunal’s determination of the references will enable the acquiring authority to acquire the land by deed poll if it is unable to reach agreement with the freeholder and/or mortgagee.

3.           The claims in these references were divided into three categories. Firstly, 9 claims where the landowner has agreed to convey the relevant interest, and the conveyance is progressing but as at the hearing date remains uncompleted.  In these instances, a determination is required as a safeguard in the event that a proposed conveyance proves abortive, or does not proceed sufficiently quickly to allow completion within the requisite time scale.   Secondly, 18 claims where claimants have not agreed to transfer their interest, and have failed to provide a properly pleaded statement of case despite the directions of the Tribunal dated 2 October and 26 November 2009.  The November directions advised the claimants that the matter would proceed to the 18 December hearing if no statement was filed.  In three of these (ACQ/509/2008, ACQ/513/2008 and ACQ/134/2009), the claimants have alleged cracking to their properties since the references were made, and investigations have been carried out by the acquiring authority’s appointed building surveyors/engineers, WYG Engineering Ltd.  Expert evidence in this regard was given by Martin Robert Ford MABE.   Thirdly, one case (ACQ/318/2009) where, following a recent transfer of title, no response has been received from the new owner, despite the acquiring authority’s efforts to establish communication.  Amy Clare Rogers, a solicitor with Cripps Harries Hall of Tunbridge Wells produced a signed witness statement relating to the acquiring authority’s attempts in that regard.

4.           Mr Colin Smith, FRICS, a senior Director and Head of the Compulsory Purchase Team at CB Richard Ellis gave expert valuation evidence in respect of all the references.   

5.           Only one of the claimants attended the hearing: Mr Iftiaz Mohammed Ali of 25 Torrens Road, London E15 4NA (ACQ/517/2008).  His was one of the claims that fell into the second category, in that no properly pleaded statement of case had been served.   He was given the opportunity to state his case orally, but declined to be sworn.   He said that a recorded delivery letter had been sent to the acquiring authority (although they had no record of its receipt on their file), and he had also advised the solicitors, in two telephone conversations, that the offer of £50 was unacceptable.  The property had been purchased, he said, in order to build an extension and undertake a loft conversion, but now that a tunnel was to be located only 65 feet below the house, he could not do the work because of the risks of settlement and structural movement occurring.   There would also be noise and vibration when the trains started running.   In his view, £30,000 to £40,000 was appropriate compensation.                 

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.        Paragraph 10(1) of Schedule 1 of the 1965 Act provides that when 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) of Schedule 1 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 duly convey the land as required by paragraph 10(1).

15.        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 it.  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 land.

Acquiring authority’s case

16.        Mr Pereira said that the acquiring authority seeks a determination of all 28 claims in the nominal sum of £50 each, in accordance with the valuation evidence of Mr Smith, and in line with the decisions relating to a large number of earlier claims that had been before the Tribunal in (1) Jit Kaur Matharu (2) Tajinder Singh Matharu and Others v The Secretary of State for Transport Lands Tribunal [2009] UKUT 165 (LC) (unreported) and (1) Kulraj Aytan (2) Ishraj Aytan (3) Jasraj Aytan and others v The Secretary of State for Transport [2009] UKUT 194 (LC) (unreported).   He said that, to date, around 1044 interests had been acquired by agreement out of a total of 1550 separate land interests that were required.  

17.        In respect of claim ACQ/318/2009 relating to 33 Oriel Road, London E9 5SG, Mr Pereira referred to Ms Rogers witness statement dated 16 December 2009.  That statement set out the attempts made by the acquiring authority and its solicitors to communicate with the claimant (in all the other claims, communication has been established).   Ms Rogers said that the acquiring authority became aware of a change in ownership of the property on 8 September 2009, and wrote to the new owner, Nazife Murat, on 10 September, making its standard offer of compensation in return for the transfer of the subsoil.    At the Lands Tribunal hearing on 14 September 2009 the substitution of the previous owner’s name as claimant with Mr Murat was sought and duly made. 

18.        Cripps Harries Hall wrote to Mr Murat again on 22 September copying to him the Notice of Reference papers that had been served on the previous owner, together with the expert valuation report of Mr Smith, advising him that the proceedings would be progressed to a further Tribunal hearing in the absence of a response within 21 days.  By its decision of 2 October 2009 ((1) Kulraj Aytan (2) Ishraj Aytan (3) Jasraj Aytan and others v The Secretary of State for Transport [2009] UKUT 194 (LC)(unreported)), the Tribunal directed Mr Murat to file and serve a statement of case by 12 October.   By further order of the Tribunal dated 19 November 2009, additional time was given for the statement of case (until 26 November), failing which the case would be determined at the hearing on 18 December.   No response has been received.

19.        Ms Rogers went on to confirm that statements of case had not been received in respect of any of the other 27 claims, the subject of this hearing.

Survey evidence

20.        Mr Martin John Ford is a building surveyor with WYG Engineering Limited and is a Member of the Association of Building Engineers with almost 35 years experience of the effect of ground movement on buildings.  He has worked on the Channel Tunnel Rail Link project since the start of its construction in 2001.  He explained that his company inspected all the properties within the likely settlement contour before tunnelling works began in the vicinity in order to obtain a photographic record of their condition.   Cracks in walls and ceilings were inspected, along with damage to the fabric of buildings, hardstandings and boundary walls.   After the tunnelling works were completed, WYG made a further inspection in order to record the condition again before the railway opened.   Where owners claimed that their property had been damaged by the works, WYG were asked to undertake a second re-inspection.   All reports were in the same format (illustrated by reference to case ACQ/509/2008), and WYG were only asked to comment upon whether any damage was due to the construction of the tunnels, not whether it was due to the subsequent operation of the railway.

21.        In the three cases before me where second re-inspections had been made (ACQ/509/2008, ACQ/513/2008 and ACQ/134/2009), Mr Ford said it had been concluded that there was no evidence to suggest any movement or structural damage had occurred as a result of the tunnelling works.

22.        In respect of Mr Mohammed’s property, Mr Ford confirmed that his experience extended to questions of foundation design and the construction of extensions.   He said that there was a possibility that ground movement could occur during the construction process as indeed it had in some other locations, but any settlement would have stabilised by 2004 at the latest.   There was no evidence to suggest that any movement was occurring now, and there was no reason, in his view, why the local planning authority should refuse permission for the required extension (subject to policy requirements) because there was a tunnel a considerable distance below the house.   Mr Ford said that he had attended the claimant’s property initially in 2003, but had been refused access.  No subsequent complaint had been made, and neither had there been a request for an inspection.

Valuation evidence

23.        Mr Colin Smith FRICS who, in addition to his position within CB Richard Ellis, is currently chairman of the Compulsory Purchase Association, gave expert valuation evidence.  He was first instructed to advise in respect of the CTRL in September 1995, and in connection with acquisition of sub-soil interests in Section 2, in 2007.   He said that compensation was to be assessed in accordance with the statutory provisions set out in the Land Compensation Act 1961, section 5, rule (2) (land taken), rule (3) (special suitability or adaptability) and rule (6) (disturbance), together with the Compulsory Purchase Act 1965 (severance and injurious affection).  

24.        In all cases, Mr Smith had written to the owners of the relevant land to try to arrange an inspection in order to establish whether or not there was any discernible ground borne noise or vibration arising from the passage of trains using the CTRL.   In some cases he was able to make an internal inspection, and in others he was not.   Copies of his expert witness reports on each of the reference properties were provided to the Tribunal.  They were prepared in a standard form and, in respect of claim ACQ/134/2009, his conclusions were illustrated thus:

“10.       In respect of compensation under rule 2 (land taken) there is no open market value basis for a ‘tube’ of subsoil as there is no market, except for a body possessing compulsory purchase powers.   It follows that a nominal amount is payable and the amount adopted for the CTRL project is £50, regardless of the length, volume and depth of the interest acquired.   This has been agreed in excess of 800 interests and the Tribunal adopted this approach in the 26 unknown owner cases referred on 10 March 2004.   I therefore adopt £50 in this case.                

11.          I am unaware of any costs or losses arising [to the claimant] and the amount in respect of disturbance under rule (6) is nil.

12.          In respect of severance and injurious affection, the property has been visited in order to ascertain whether there is any discernable ground borne noise and/or vibration arising from the passage of trains through the tunnels.   I am able to confirm that the experience during the visit suggests no diminution in value would arise….

13.          The overall compensation payable is, therefore, £50.”

He confirmed that this view had been adopted in all the other cases, and, in respect of injurious affection, the Tribunal was reminded of the evidence he gave in [2009] UKUT 194 (LC).  At para 31 it was recorded that he said:

“Ground borne noise and vibration from the operation of CTRL was barely discernible.   Mr Smith said that the passage of a high speed train took about three seconds and that any noise was like a “loud tummy rumble”.   On one inspection he said that the whirring of an electricity meter was louder than the noise of the train.   He said that such noise and vibration was well below a level that would give rise to a diminution in the value of the property.”

Copies of the expert witness reports had been sent to each of the claimants.

25.        Mr Pereira said that in ACQ/134/2009, the acquiring authority had received an email from the claimant, Sachin Kainth, purporting to be a statement of case, on 12 October 2009.   A copy was provided and it was the acquiring authority’s view that it did not constitute a properly pleaded statement of case and should not be seen as such.  It referred to some cracking, and the requirement for “some money” (unspecified) for repairs.   

26.        In respect of Mr Mohammed’s property, Mr Smith that the Notices to Treat and Notices of Entry were served on the previous owners in 2001.   Since January 2002 the previous owners and the current claimants were sent various letters and communications, examples of which were provided to the Tribunal.   There had been no written communication in return.   On 15 May 2008, Mr Smith wrote to the claimants seeking an appointment to visit the property in advance of his preparation of the expert witness report relating to it.  This prompted a response, and an inspection was arranged for 11 July.   On arriving at the property he was, however, refused entry. 

27.        In his report, he said (at para 12):

“In respect of severance and injurious affection, whilst I did attend the visit as requested, I was not permitted entry inside the property and have been unable to ascertain whether there is any discernible ground noise and/or vibration arising from the passage of trains through the tunnel.   At the time of the visit the claimant was not present and I believe the property was occupied by a tenant.   The tenant could not speak English and was unable to provide any information as to the effects of the scheme.  I tried to contact the claimant by telephone, but was unable to reach him.  However, no complaints have been received from these claimants.”

He went on to conclude, as in all the other cases, that no compensation under this head was due.

28.        Mr Mohammed accepted that he had not made any formal complaints, other then the two telephone calls that he had referred to, and admitted that he had not read Mr Smith’s report.     Mr Smith pointed out that at the commencement of his oral evidence Mr Mohammed had referred to “when the trains start running”.  This, he said, corroborated the view that there must be no discernible noise or vibration, as the trains have now been running through the tunnels since 2007.

29.        Mr Smith confirmed that Mr Mohammed was aware of the fact that claimants who agree to the transfer are offered a further £500 towards their legal and surveyors fees, on top of the nominal £50 for the value of the land taken.

30.        Mr Pereira said that, in ACQ/261/2009, the claimant had written to Cripps Harries Hall and the Lands Tribunal on 1 December 2009 suggesting that, whilst he did not want any money, two first class rail tickets to Paris or Brussels for each year that he remained in the property would be adequate recompense.

Conclusions

31.        I accept the evidence of Mr Smith, and am satisfied that each of the 28 cases listed in the attached Appendix 1 should be determined in the sum of £50 in respect of the open market value of the subsoil taken. No compensation is payable in respect of injurious affection or severance.

32.        Mr Ford’s evidence regarding the three cases where second re-inspections have been undertaken is accepted, and no further compensation is therefore payable in respect of the alleged damage.

33.        Mr Mohammed had failed to produce any evidence to support his claim (ACQ/517/2008), and I agree that Mr Kainth’s email (ACQ134/2009) did not constitute a properly pleaded statement of claim.  I am also satisfied from Ms Rogers’ evidence that sufficient and diligent enquiries were made to communicate with the claimant in ACQ/318/2009. 

34.        I make no order as to costs.

                                    DATED 4 January 2010

                                    P R Francis FRICS

APPENDIX 1