UT Neutral citation number: [2010] UKUT 93 (LC)

LT Case Number: ACQ/550/2008, ACQ/212, 229, 238, 239, 246, 425/2009

                            TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

COMPENSATION – compulsory purchase – tubes of subsoil acquired for Channel Tunnel Rail Link – determination of compensation where claimants have agreed compensation but not completed conveyance – held nominal amount of £50 payable as no market for acquired property

                                 IN THE MATTER OF 7 NOTICES OF REFERENCE

BETWEEN                             (1) GRAHAM MICHAEL SCOTT

                                                           (2) ABIGAIL AHERN

                                                                 AND OTHERS                                          Claimants

                                                                           and

                                                   THE SECRETARY OF STATE                             Acquiring

                                                             FOR TRANSPORT                                       Authority

                                               Re: Subsoil beneath various properties

in north and east London and land south of Green Street, Green Road, Longfield

                                                         Before: A J Trott FRICS

                               Sitting at Harp House, 83 Farringdon Street EC4A 4DH

                                                               on 23 March 2010

Alexander Booth, instructed by Cripps Harris Hall LLP, solicitors of Tunbridge Wells, for the acquiring authority

The claimants did not appear and were not represented

The following case is referred to in this decision:

Matharu and Others v the Secretary of State for Transport Lands Tribunal [2010] RVR 49

                                                                    DECISION

Introduction

1.           These references relate to the acquisition of 6 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.  The seventh reference (ACQ/425/2009) relates to an acquisition of surface land south of Green Street, Green Road, Longfield.

2.           The acquiring authority took possession of the subsoil interests at various times from 1 September 2002, having first served notices to treat and notices of entry.  The acquiring authority wishes 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.

3.           The acquiring authority divided the claims into two categories; those where it sought a determination and those where it sought a stay of proceedings.  The five determination references were claims where the claimants had accepted the acquiring authority’s offer of compensation but where the conveyance of the land had not been completed.

Statutory provisions

4.           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.

5.           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.

6.           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 might be required for or in connection with the authorised works.

7.           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. 

8.           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.

9.           Part III of Schedule 4 to the CTRL Act contains supplementary provisions.  Paragraphs 6(1) and 6(2) of Part III of Schedule 4 provide that, for certain numbered plots, only the subsoil could be acquired by compulsory acquisition.  All but one of the references currently before me concern plots falling under paragraph 6(1), where compulsory acquisition of the subsoil only was authorised.

10.        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.

11.        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.

12.         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).

13.        Compensation in respect of any compulsory acquisition shall be assessed in accordance with the rules contained in section 5 of the Land Compensation Act 1961.  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.

References for determination

14.        Ms Amy Clare Rogers, of Cripps Harries Hall LLP, gave evidence about the background and history of the five references where the acquiring authority was seeking a determination of the claim.

15.        In the first reference (ACQ/550/2008), the claimants requested transfer documents for signature on 8 March 2010.  These were forwarded to the claimants on 9 March 2010 but on the same day the acquiring authority advised the claimants that it would nevertheless seek a determination at the hearing on 23 March 2010 in order to allow it to acquire title to the subsoil in the unlikely event that the transfer failed to complete.

16.        The remaining four claims where determinations were sought had the same claimant, Mr Mohammed Amin Uddin.  These four references were consolidated by the Tribunal under case reference ACQ/246/2009 on 4 February 2010.  On 5 March 2010 Cripps Harries Hall LLP advised the claimant that, despite agreement having been reached on compensation on 2 October 2009, the acquiring authority would seek a precautionary determination of the claims at the hearing on 23 March 2010 because the transfer documents had not been completed.  However, the transfer documents were apparently signed and returned by the claimant on 10 March 2010, although completion had not taken place by the date of the hearing.

17.        Mr Colin Smith FRICS, a Senior Director and Head of the Compulsory Purchase Team at CB Richard Ellis gave expert valuation evidence.  He was first instructed to advise in respect of CTRL in September 1995 and was instructed to deal with the acquisition of subsoil interests in Section 2 in 2007.

18.        Mr Smith produced expert reports in respect of the five references for which a determination was sought. These reports were in the same format as those presented by Mr Smith in Matharu and Others v the Secretary of State for Transport Lands Tribunal [2010] RVR 49 at paragraphs 39 to 45, and he relied upon the arguments that he had put forward in that case.  In summary he said that there was no open market value for a “tube” of subsoil some 24m below ground level as there would be no demand for it apart from the requirements of a body possessing compulsory purchase powers.  He therefore placed a nominal value of £50 upon the subsoil being acquired, regardless of the depth length or volume of land taken.

19.        Mr Smith said that he was unaware of any costs or losses arising that might have given rise to a claim under rule 6 of section 5 of the Land Compensation Act 1961.  Surveys of condition and defects that had been undertaken before and after the works showed no damage that was attributable to the effects of tunnelling.  Mr Smith also said that there was no injurious affection caused by the use of the tunnel.  He concluded, in each case, that the overall compensation was £50.  In addition to this the acquiring authority agreed to pay a total of £500 per claim in respect of legal and surveying fees.

Conclusions on the references for determination

20.        I am satisfied from the evidence that I should determine the five references listed in Appendix 1 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, severance or disturbance.  Legal and surveying fees of £500 per claim are payable in addition.  Statutory interest is payable in each reference from the agreed valuation date of 1 September 2002.

Stay of proceedings

21.        In the remaining two references the acquiring authority sought a stay of proceedings for 28 days.  In reference ACQ/239/2009 Ms Rogers said that the acquiring authority had reached an agreement with the claimant and were no longer seeking a determination at the hearing.  In reference ACQ/425/2009 the acquiring authority sought a stay of proceedings to allow the expert valuers to make a site inspection. 

22.        Neither claimant has objected to the applications and I therefore stay the proceedings in references ACQ/239/2009 and ACQ/425/2009 until 21 April 2010.

23.        I make no order as to costs.

Dated 30 March 2010

A J Trott FRICS

Appendix 1

REFERENCES FOR DETERMINATION