UT Neutral citation number: [2011] UKUT 175 (LC)

LT Case Number: LCA/327/2010

                            TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

COMPENSATION – Land Compensation Act 1973 Part I – depreciation by physical factors caused by the use of a new road – noise, vibration, dust, artificial lighting – comparables – compensation assessed at £1,000

                                 IN THE MATTER OF A NOTICE OF REFERENCE

BETWEEN                            KENNETH CHARLES LANCELEY                          Claimant

                                                                           and

                                                 WIRRAL BOROUGH COUNCIL                   Compensating

                                                                                                                                     Authority

                                                             Re: 286 Saughall Massie Road

                                                             Upton

                                                             Wirral

                                                             CH49 4LB

                                                         Before: A J Trott FRICS

                            Sitting at Liverpool Employment Tribunal, Cunard Building,

                                                      Pier Head, Liverpool L3 1TS

                                                                 on 5 April 2011

Mr Kenneth Lanceley, Claimant, in person.

Mr E Gill, solicitor, Department of Law, Wirral Borough Council, for the Compensating Authority.

                                                                    DECISION

Introduction

1.           The claimant in this reference, Mr Kenneth Lanceley, owns a semi-detached house at 286 Saughall Massie Road, Upton, Wirral, CH49 4LB (the Property). 

2.           On 11 May 2005 the compensating authority, Wirral Borough Council, opened phase II of the Saughall Massie Road Improvement Scheme which involved the upgrade of the existing West Kirby Road from Three Lanes Roundabout to Saughall Massie Road.  Part of the works involved the construction of a new bypass to the west of Saughall Massie village. 

3.           Prior to the road improvement scheme westbound traffic had to cross Saughall Massie Bridge.  The bridge was narrow and only suitable for single lane traffic.  Vehicular movement was controlled by traffic lights.  The Property is a short distance to the east of the bridge and fronts the northern boundary of the road. 

4.           Following the works westbound traffic is directed along the new bypass which starts in the immediate vicinity of the Property.  Saughall Massie Bridge is now only used by one-way east bound traffic and is no longer controlled by traffic lights.  The old road joins the by-pass at a new junction outside Nos.294 and 296 Saughall Massie Road.  A new lay-by was constructed outside Nos.270 to 288 Saughall Massie Road, immediately to the east of the new junction.  The purpose of this lay-by was to provide off-street parking for local residents. 

5.           Mr Lanceley instructed Mr Darren Sims MRICS of Morgan & Company to act on his behalf in respect of a claim for compensation under Part I of the Land Compensation Act 1973.  Mr Sims submitted a claim on 12 May 2006 (the first claim day) in the sum of £30,000.  At the hearing Mr Lanceley, who appeared in person, claimed that “the road had caused a 10% devaluation to the property”, estimated to be £13,000, in addition to which there had been “a reduction in living standards” which Mr Lanceley estimated at £8,000.  The total compensation claimed was rounded to £20,000. 

6.           The compensating authority were represented at the hearing by Mr E Gill of the council’s Department of Law, HR and Asset Management.  He called Mr Steven McMorran MRICS, a valuer with the council’s Asset Management Section.  Mr McMorran spoke to a compensation figure of £750. 

7.           The hearing was heard under the simplified procedure.  I made an accompanied inspection of the Property on 5 April 2011 and also viewed the comparable properties cited in evidence by Mr McMorran. 

The case for the claimant

8.           Mr Lanceley explained that he had purchased the Property in April 2001 at which time there had been no indication of the proposed road improvement works.  He did not hear about them until early 2003 and by the time of a public meeting in September 2003:

“It was made clear to all residents [by the council] that the road will be constructed irrespective of any local resident objections.”

9.           The construction works caused inconvenience and Mr Lanceley said that the planning of the new works and traffic calming measures around the Property had been poorly thought out and executed. 

10.        Mr Lanceley identified a number of issues that had arisen since the opening of the new bypass:

(1)        The volume of traffic, and particularly of heavy goods vehicles, had drastically increased;

(2)        The noise from the traffic was constant, even into the late evening;

(3)        Dust from traffic was a constant irritation, particularly in the summer months;

(4)        Heavy duty traffic had damaged both the road surface and the front of the Property where a crack had appeared;

(5)        Traffic calming measures had failed to reduce traffic speed outside the Property; and

(6)        The parking lay-by was badly located and dangerous due to traffic emerging from the junction with the old Saughall Massie Road being in a blind spot.

11.        Mr Lanceley said that in his opinion the Property had been devalued due to the disturbance to what had previously been a semi rural location and a peaceful environment.  The Property was now fronted by a major arterial road (described by Mr Lanceley as like “overlooking a motorway”) with its associated traffic noise, light and dust pollution and increased hazards.  Mr Lanceley noted that the council had recently sent him, unsolicited, an application form to reduce the Property’s council tax assessment.  He took this as an admission by the council that the works had devalued the Property.

12.        Mr Lanceley also identified what he described as an erosion of his standard of living which had caused him and his family stress and anxiety.  He could no longer make full use of his front garden due to the nuisance of the traffic and had lost the uninterrupted views of open countryside.  The front windows could no longer be opened in summer due to the traffic noise. 

13.        Two companies had approached Mr Lanceley about representing him in submitting a compensation claim.  He decided to instruct Morgan & Company.  Mr Sims had not visited the Property or discussed the claim with Mr Lanceley and Mr Lanceley had rejected proposed settlements for £250, £500 and £750 which he considered to be wholly inadequate. 

The case for the compensating authority

14.        Mr McMorran explained the background to the scheme and gave details of property sales at or around the first claim day.  These sales were of semi-detached houses in Saughall Massie Road (Nos.274, 276 and 296) and in streets on the adjoining estate to the rear.  He said that the houses on the estate were similar to the Property and their sale enabled a comparison to be made between properties directly affected by the new bypass and those which were unaffected by it.  Such a comparison showed that there was no discernible difference between the two types of property and no clear reduction in value as a result of the scheme. 

15.        Notwithstanding this evidence the council had accepted that there might have been a small effect on the value of properties in Saughall Massie Road due to physical factors caused by the use of the new road.  Mr McMorran explained that the owner of No.296 Saughall Massie Road had to reduce his asking price by £5,000 in order to effect a sale and Mr McMorran had agreed with Morgan & Company that approximately one third of this amount (£1,750) was attributable to the scheme.  This figure had been settled as compensation.  Mr McMorran said that the effect of the scheme lessened as one moved eastwards (towards No.286).  Traffic now queued outside the front of No.296 at the newly created junction of the bypass with the old road, just east of Saughall Massie Bridge.  This did not affect No.286. 

16.        Mr McMorran referred to a letter dated 6 April 2009 written by Mr Sims to Mr Lanceley setting out the council’s offer of compensation in the sum of £750.  In this letter Mr Sims said:

“After discussions with the council’s valuer I understand this offer is his final opinion without referring the matter to the Lands Tribunal.  The Lands Tribunal would be a third party determination based on sales evidence where sales of the subject properties are similar to those on the estate to the rear.  This would suggest there is very little impact in your location based on market evidence.”

Mr McMorran understood this letter to mean that the scheme had no impact on the value of No.286. 

17.        Mr McMorran produced traffic counts that showed a 26.6% increase in total traffic on Saughall Massie Road between April 2001 and May 2009.  The general increase in traffic in Great Britain on this class of road between 2001 and 2009 was said by the council’s Technical Services Department to be 12.5%, giving a net increase due to the scheme of 14.1%.

18.        New lighting was provided on the bypass that minimised any light overspill.  The existing lamp standards outside the Property and in the immediate vicinity were not changed as part of the scheme. 

19.        Mr McMorran said that the council had taken into account the impact of the new road on the environment and on neighbouring houses.  This was reflected in traffic calming measures such as a 30 mph speed restriction (previously 60 mph), the installation of a Toucan crossing, improved pedestrian and cycling facilities, a lay-by for the use of local residents to park their cars and the use of a noise reducing road surfacing system.  Furthermore the Property was now slightly further away from the carriageway than it had been previously.

Conclusions

20.        The burden of proof lies with the claimant to show that the Property has been depreciated by physical factors caused by the use of public works.  The physical factors are noise, vibration, smell, fumes, smoke and artificial lighting and the discharge onto the Property of any solid or liquid substance. 

21.        In his evidence Mr Lanceley referred to the inconveniences associated with the construction of the new road.  Part I of the Land Compensation Act 1973, under which this claim is brought, is concerned with the use of public works and not their construction.  Mr Lanceley’s claim includes a sum in respect of “a reduction in living standards” and the stress and anxiety to the claimant’s everyday life (and that of his family) which the use of the new road has caused.  Compensation under Part I of the 1973 Act is limited to the deprecation in the value of an interest in land and is not payable for personal losses.

22.        The claimant makes a number of assertions in respect of the deprecation in the value of the property but has produced no evidence to support them.  He originally appointed Mr Sims of Morgan & Company to negotiate compensation on his behalf but he did not accept Mr Sims’ recommendation in April 2009 that the sum of £750 be accepted.  Mr Lanceley said that he disagreed with his surveyor’s opinion of depreciation and instead gave his opinion, “based on discussion with local estate agents”, that the value of his house had been devalued by 10% or £13,000.  Mr Lanceley did not identify the estate agents to whom he referred and did not adduce any evidence in support of his valuation. 

23.        The evidence produced by Mr McMorran suggests that the value of the Property on the first claim day was approximately £145,000.  The evidence of sales of other houses on the estate that were not affected by the new road is broadly consistent with this figure which suggests that there has been no significant depreciation in the value of the Property caused by the use of the public works.  This appears to have been the conclusion reached by Mr Sims, who was then acting for the claimant, in April 2009. 

24.        The traffic counts provided by the council were not taken at or near the first claim day and therefore they are only of limited value.  They show a significant increase in the volume of traffic (one seventh) after allowing for the general increase in vehicle movements over the same period.  There was no breakdown of the traffic between cars, lorries and other vehicles.  There are two further relevant factors on the issue of traffic noise.  Firstly, Mr Lanceley says that there are now many more heavy goods vehicles using the road than there were previously.  Secondly, Mr Lanceley says that the speed of the vehicles passing the Property is now faster.  Although there is now a 30 mph speed limit the traffic formerly had to slow down and/or stop at the traffic lights at Saughall Massie Bridge. 

25.        Although a noise reducing surface was installed as part of the works, the compensating authority produced no before and after noise surveys but relied instead upon predicted noise levels which showed no significant increase in noise. 

26.        I accept Mr Lanceley’s view that there has been a significant increase in traffic along Saughall Massie Road.  It is plausible, but not demonstrated, that there are now more heavy goods vehicles passing outside his house.  The increased level of traffic movements and their associated noise is likely, in my opinion, to have influenced a bidder in the market at the first claim day.  Mr Lanceley says that the increase in traffic, particularly heavy traffic, has caused a nuisance from dust and, through vibration, caused a crack to appear in the front wall of his house and that of his neighbour at No.284.  There is no evidence that the cracks were caused by the use of the public works or, from the site inspection that dust was a particular problem. 

27.        I have considered the other evidence adduced by Mr Lanceley and, in particular, the letter from the council about a possible reduction in the council tax assessment and the petition of support that he obtained from his neighbours.  In my opinion these do not have any relevance to the determination of compensation in this reference. 

28.        The council have conceded that there has been a minor depreciation in the value of the property due to physical factors caused by the use of the new road.  I think that they were right to do so.  Mr McMorran explained that the council had offered more to the owners of the houses to the west of the Property because they were closer to the new junction and were thus affected by queuing traffic.  I am not persuaded by this argument which in my opinion owes more to a rationalisation of the negotiated settlements than it does to an objective assessment of the factors affecting the value of the properties.

29.        Nevertheless considering the evidence as a whole, and having particular regard to Mr McMorran’s evidence of house sales in the local area, I conclude that the value of the Property was only depreciated marginally due to the physical factors caused by the use of the new road and I determine the compensation payable to be £1,000.

30.        The reference was heard under the simplified procedure where costs will only be awarded if there has been an unreasonable failure on the part of the claimant to accept an offer to settle, or if either party has behaved otherwise unreasonably, or the circumstances are in some other respect exceptional.  Neither party suggested unreasonable behaviour or identified any exceptional circumstances and I make no award as to costs. 

Dated 9 May 2011

A J Trott FRICS