United Kingdom Upper Tribunal (Lands Chamber)

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Cite as: [2011] UKUT 203 (LC)

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UPPER TRIBUNAL (LANDS CHAMBER)

UT Neutral citation number: [2011] UKUT 203 (LC)

LT Case Numbers: ACQ/280, 284, 285/2009. ACQ/372, 439, 443, 463, 467, 468, 487, 488, 490,

491, 495, 513, 521, 522, 523, 537, 548, 557, 561, 562, 564, 565, 568, 570/2010

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

COMPENSATION – compulsory purchase – tubes of subsoil and two slivers of land 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 27 NOTICES OF REFERENCE

BETWEEN KATHLEEN O’DONOGHUE and OTHERS Claimants

and

THE SECRETARY OF STATE Acquiring

FOR TRANSPORT Authority

Re: Subsoil beneath

26 properties in

North and East London

and small parts of Sports Ground in

East London

Before: N J Rose FRICS

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

on 12 May 2011

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

The claimants did not appear and were not represented

The following cases were cited:

Matharu & Others v The Secretary of State for Transport [2009] UKUT 165 LC

Coudrier & Others v The Secretary of State for Transport [2010] UKUT 92 LC

In Re Marylebone (Stingo Lane) Improvement Act (1871) LRA 12 Eq 389

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 acquiring authority, the Secretary of State for Transport, arising from the compulsory acquisition of 27 interests in land 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. With one exception, all references relate to the acquisition of subsoil. The claim which does not concern subsoil acquisition is reference ACQ/495/2010, which relates to the compensation payable for two slivers of leasehold land forming part of a sports ground in Newham.

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

3. The claims fall into four categories. First, there are four claims where the level of compensation is contested (ACQ/372/2010, although the claimant has not filed or served any evidence, and ACQ/280, 284 and 285/2009, where the claimants have been debarred from calling any evidence). Secondly, there are claims where the level of compensation has been agreed but determinations are sought as a precaution in case the conveyancing process does not complete. These are ACQ/463, 513, 548, 557, 561, 562 and 564/2010. Thirdly, there are claims where the acquiring authority is in communication with the relevant landowner and the acquisition of the land is progressing, but the value of the land acquired has not been formally agreed. These claims are ACQ/487, 488 and 570/2010. Fourthly, there are those claims where there has not been any or any meaningful communication with the claimant (ACQ/439, 443, 467, 468, 490, 491, 495, 521, 522, 523, 565, 568 and 537/2010).

4. References ACQ/463, 490, 491, 513, 548, 564 and 565/2010 concern freehold land and the remainder concern leasehold land where the acquiring authority accepts that the subsoil is within the leasehold interest in question.

5. No claimants appeared or were represented at the hearing. Shortly before the hearing, on 5 May 2011, Mr Dromey wrote to the Tribunal seeking further directions in connection with ACQ/280, 284 and 285/2009. In that letter, and subsequent letters on 6 and 10 May, he made the following points. The acquiring authority had not adequately described and defined the extent of the subsoil to be acquired. The acquiring authority had not complied with the Tribunal’s direction concerning filing of skeleton arguments. He and Ms Donoghue had been unable to secure legal representation at the hearing and, since they had been debarred from calling evidence, they would not be attending.

6. The background to ACQ/280, 284 and 285/2009 was set out in paras 19 and 20 of a decision of another member of the Tribunal, Mr A J Trott FRICS, dated 1 April 2010, relating to a total of 28 subsoil claims arising from the construction of section 2. Mr Trott declined to determine the three claims with which Mr Dromey was concerned, because the claimants had not been given sufficient opportunity to prepare for the hearing. It is, however, apparent from para 27 of that decision that the acquiring authority’s expert evidence on those three claims – on which it intended to rely at the hearing on 12 May 2011 – was served on 24 March 2010 on solicitors instructed by Mr Dromey. Mr Dromey therefore had adequate time to secure legal representation at the latest hearing. I am also satisfied that the acquiring authority has complied with the Tribunal’s direction to file its advocate’s skeleton argument not less than seven days before the hearing and that the notices to treat served in respect of the three claims contained a sufficient description of the subsoil required by the acquiring authority to enable compensation to be determined by the Tribunal.

7. I would make two further observations concerning Mr Dromey. Firstly, in an e-mail to the Tribunal timed at 10 am on the morning of the hearing on 12 May 2011, Mr Dromey indicated his intention to appeal against the Tribunal’s order dated 23 November 2009. The relevant facts are these. On 23 November 2009 the Tribunal’s Registrar ordered that unless the claimants, Mr Dromey and Ms O’Donoghue, filed and served their Statement of Case within 21 days of the date of the order they would be debarred from calling evidence in support of their claims. No Statement of Case was served within the specified time, and so the debarring order took effect on 14 December 2010. At that time the Lands Tribunal Rules 1996 were in force. Rule 38(1) entitled a party to appeal to the President from an interlocutory direction of the Registrar within 7 days of service of notice of decision or such further time as the Registrar may allow. It is far too late, seventeen months after the Registrar’s order and 30 minutes before commencement of the substantive hearing of the reference, which had previously been adjourned on two occasions, for any such appeal to be entertained.

8. The second matter is that it is apparent from the recent communications from Mr Dromey that his main concern is the loss which he says he has suffered as a consequence of strengthening works carried out to the property by the acquiring authority’s engineers. In para 28 of his decision dated 1 April 2010, however, Mr Trott determined that, since compensation for such matters is payable by the nominated undertaker (not the acquiring authority) pursuant to paragraph 8 of Schedule 2 to the Channel Tunnel Rail Link Act 1996, it does not form part of these reference proceedings. There was no appeal against that decision, which is therefore conclusive.

9. Mr James Pereira of counsel appeared for the acquiring authority. He called expert valuation evidence from two surveyors, Mr Paul Astbury BSc (Est. Man), MRICS, a director and head of compulsory purchase at GL Hearn and Mr Colin Smith FRICS, a senior director and head of compulsory purchase at CB Richard Ellis. Mr Astbury’s evidence related to ACQ/495 and 537/2010 and Mr Smith dealt with the remainder. Mr Pereira also called expert evidence from Mr M J Ford, a building surveyor with WYG Engineering Limited, regarding the condition of 30-32 Manbey Grove and factual evidence from Mr M A Oakley, a property manager with London and Continental Stations and Property Ltd. from 1996 until November 2008 and subsequently with High Speed 1 Ltd. His evidence related to strengthening works carried out to 30-32 Manbey Grove. Finally, Mr Pereira called Ms Amy Rogers, a solicitor with Cripps Harries Hall LLP, to explain the attempts made to communicate with the claimants in references ACQ/439, 443, 467, 468, 490, 491, 521, 522, 523, 565 and 568/2010.

Statutory Provisions

10. 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.

11. 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.

12. 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.

13. 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.

14. 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.

15. 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. As previously stated, with the exception of ACQ/495/2010, all references currently before me concern plots falling under paragraph 6(1), where compulsory acquisition of the subsoil only was authorised.

16. 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.

17. 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.

18. 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).

19. 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.

20. Section 5A of the Land Compensation Act 1961 provides that no adjustment is to be made to the valuation in respect of anything that happens after the valuation date.

Acquiring authority’s attempts to communicate with claimants.

21. Ms Rogers said that, in the case of the 11 references mentioned in the final sentence of para 9 above, it had not been able to secure the acquisition of subsoil by agreement due to a lack of engagement with the Tribunal proceedings by the claimants. She said that, prior to referral of each claim, save for ACQ/522/2010, ACQ/565/2010 and ACQ/568/2010, her firm had written to each claimant to afford them the opportunity to agree to transfer the subsoil to the acquiring authority by agreement before the reference was made. 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 for each claimant and/or his current legal or other representative apparent from Cripps Harries Hall’s instructions. In connection with ACQ/522/2010 there had been some confusion as to whether the claimant’s interest remained current. Once the Land Registry had confirmed that it did not consider the interest to be expired for purposes of the leasehold subsoil acquisition, the claimant was invited to agree to transfer the subsoil to the acquiring authority at the time the reference was made. In connection with ACQ/565/2010, the need to acquire an additional stratum of subsoil was established just prior to the grant of the lease of High Speed 1 on 30 September 2010, the remainder of the subsoil interest required having been acquired by agreement, but it had not been possible to complete the acquisition of the additional stratum required to date, owning to a lack of response from the claimant. In connection with ACQ/568/2010, the need to acquire the leasehold subsoil interest was identified by the acquiring authority just prior to grant of the lease of High Speed 1 on 30 September 2010, and referral to the Tribunal was made as a matter of urgency. Again, the claimant was invited to agree to transfer the subsoil to the acquiring authority at the time the reference was made.

22. On submitting the notices of references to the Tribunal, Ms Rogers ensured that relevant papers – comprising the covering letter to the Tribunal, the notice of reference and supporting Notice(s) to Treat and Notice(s) of Entry unless these had already been sent to the claimants or their predecessors in title – were copied to the relevant claimant and/or claimants, and to their legal or other representatives if it was believed that any were instructed.

Valuation evidence

23. Mr Smith said that compensation was payable in accordance with the statutory provisions set out in the Land Compensation Act 1961 s5, rules 2 (land taken) and 6 (disturbance) and the Compulsory Purchase Act 1965 s7 (severance and injurious affection).

24. In respect of the compensation under rule 2 there was no open market value basis for a “tube” of subsoil as there was no market, except for 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 more than 900 interests and the Tribunal had adopted this approach in the 26 unknown owner cases referred on 10 March 2004. The Tribunal had also adopted this approach in a total of 292 cases heard before it on 15 July 2009, 14 September 2009, 18 December 2009, 23 March 2010, 26 March 2010, 19 July 2010 and 11 August 2010. He had therefore adopted £50 in every case.

25. 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. In respect of severance and injurious affection there had been only a few complaints of 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. All of the properties, where complaints had been made, had been visited. In all cases the sound of ground borne noise and 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 value of any of the reference properties had been caused by the scheme and the compensation payable under this head of claim was nil.

26. Mr Astbury adopted the same approach as Mr Smith to the value of the subsoil in reference ACQ/537/2010. In respect of the two slivers of land having a combined area of approximately 54 m² (reference ACQ/495/2010), however, he considered that the area was de minimis in comparison with the overall leasehold playing field and had no intrinsic value. In his opinion the total compensation payable for the two areas of leasehold land should be £1. By an agreement dated 28 June 2001 the acquiring authority had made a payment of £20,000 to the claimant “on account of compensation which will be payable for injurious affection pursuant to section 7 of the Compulsory Purchase Act 1965 and/or pursuant to rule 6 section 5 of the Land Compensation Act 1961”. The claimant had not produced any evidence of any loss under these provisions, and Mr Astbury could not envisage any circumstance where such losses would exceed the amount already paid. Accordingly, he considered that no further compensation was payable under these headings.

Conclusions

27. In the light of the evidence of Ms Rogers I find that the acquiring authority has made diligent efforts to find and communicate with the owners of all the properties which are the subject to this decision. I accept the valuation evidence of Mr Smith and Mr Astbury regarding the subsoil interests and determine that the compensation payable for each of the 26 such interests is £50. So far as reference ACQ/495/2010 is concerned, however, I am not persuaded that the nominal figure of compensation which should be paid for each of the two slivers of land should be less than the £50 which has been determined for each tube of subsoil. I conclude that the compensation payable for the two small areas of the leasehold playing field which have been acquired is £100.

28. I make no order as to costs.

Dated 20 May 2011

N J Rose FRICS

APPENDIX TO LANDS TRIBUNAL DECISION DATED 20 MAY 2011
Lands Tribunal case number ACQ/:	Subsoil beneath property at:	Claimant(s):
280/2009	30 and 32 Manbey Grove, London E15 1EX	Kathleen O'Donoghue and John Dromey
284/2009	30a Manbey Grove, London E15 1EX (leasehold)	Kathleen O'Donoghue
285/2009	32a Manbey Grove, London E15 1EX leasehold)	John Dromey
372/2010	286 Ripple Road, Barking, Essex IG11 7RW (leasehold)	Dorell Armando Alman
439/2010	27 Edmeston Close, London E9 5TJ (leasehold)	Raphael Roberts
443/2010	39 Edmeston Close, London E9 5TJ (leasehold)	Hopley Limited
463/2010	6 Mallard Court, 54a Morris Avenue, London E12 6EU	Pakir Mohamed Rajia Beevi
467/2010	Flat A, 4 and 5 Roman Way, Islington, London N7 8XG (leasehold)	Paul Devonshire
468/2010	59 Davidson Terraces, Windsor Road, London E7 0QT (leasehold)	Sarzamin Ahmed
487/2010	Electricity Substation 60754 at Blake Avenue, London (leasehold)	EDF Energy Plc (formerly London Electricity Plc)
488/2010	Substation 60005 at EDF Energy Networks, Atherton Road, London (leasehold)	EDF Energy Plc (formerly London Electricity Plc)
490/2010	Frontage to 482 Romford Road, Forest Gate, London E7 8AP	Ayesha Master
491/2010	2 Mallard Court, 54a Morris Avenue, Manor Park, London E12 6EP	Amarjit Singh
513/2010	Land on the west side High Street North, East Ham, London	Fairhold (Yorkshire) Limited
521/2010	The Famous Cock Tavern, 259 Upper Street, London N1 1RU (leasehold, title number NGL791464)	Barracuda Pub Company Limited
522/2010	Part of the Ground First and Second Floors of The Hedgehog and Hogs Head, Upper Street and Cellar forming part of the Hedgehog and Hogs Head (now known as The Famous Cock Tavern) (leasehold, title number 407141)	Unique Pub Properties Limited
523/2010	Part of the Cock Tavern, 259 Upper Street, London N1 1RU (leasehold, title number NGL792560)	Barracuda Pub Company Limited
548/2010	75 Newington Green Road, London N1 4QU	Peter Ambrose Towey and Carmel Ann Towey
557/2010	Canonbury Automatic Telephone Exchange, 1-3 Highbury Grove, Islington, N5 1HJ (leasehold, title number NGL811462)	British Telecommunications Plc
561/2010	Canonbury Automatic Telephone Exchange, 1-3 Highbury Grove, Islington, N5 1HJ (leasehold, title number NGL811891)	British Telecommunications Plc and Autumnwindow No 2 Limited
562/2010	Canonbury Automatic Telephone Exchange, 1-3 Highbury Grove, Islington, N5 1HJ (leasehold, title number NGL811890)	Autumnwindow Limited
564/2010	16 Highbury New Park, London N5 2DB	16 Highbury New Park Limited
565/2010	14 Highbury New Park, London N5 2DB	14 Highbury New Park Limited
568/2010	27 Eldred Road, Barking, IG11 7YH (leasehold)	John Olorunsuyi
570/2010	Transformer Chamber, Kingsland Shopping Centre, Dalston Cross, Dalston (leasehold)	London Electricity Plc - now EDF Energy Plc
495/2010	Leasehold land being playing fields situate at Barrington Road, Newham – note not subsoil	The Trustees of Ramgarhia Sikh Sports Limited
537/2010	Playing fields situate at Barrington Road, Newham (leasehold)	The Trustees of Ramgarhia Sikh Sports Limited