UPPER TRIBUNAL (LANDS CHAMBER)

UT Neutral citation number: [2012] UKUT 117 (LC)

UTLC Case Number: LCA/41/2011

 

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

COMPENSATION – tree preservation order – cracks appearing in house – refusal of consent to fell robinia in adjoining garden – claim for costs of underpinning works – the basis for determining causation and foreseeability – whether need for underpinning caused by robinia – whether loss or damage reasonably foreseeable when consent refused – whether reasonable steps taken to mitigate loss or damage – whether interest payable on compensation moneys and if so on what basis – Town and Country Planning Act 1990, s203

 

 

IN THE MATTER OF A NOTICE OF REFERENCE

 

BETWEEN THE KEEPERS AND GOVERNORS OF Claimant

THE POSSESSIONS REVENUES AND GOODS

OF THE FREE GRAMMAR SCHOOL OF JOHN LYON

(A CHARITY)

and

THE LORD MAYOR AND CITIZENS OF THE Compensating

  CITY OF WESTMINSTER Authority

 

Re: 147 Hamilton Terrace

London

NW8 9QS

 

 

Before: N J Rose FRICS

 

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

on 1 and 2 March 2012

 

 

 

Jason Evans-Tovey, instructed by DAC Beachcroft, solicitors, for the claimant.

Charles Mynors, instructed by Head of Legal and Democratic Services, City of Westminster, for the compensating authority.

The following cases are referred to in this decision:

Wright v Horsham District Council [2011] UKUT 319 (LC)

Vacwell Engineering Co Ltd v BDH Chemicals Ltd [1971] 1QB 88

Sempra Metals v Inland Revenue Commissioners [2008] AC 561

Bell v Canterbury City Council (1988) 56 P&CR 211

Yuanda (UK) Co Ltd v WW Gear Construction Ltd [2010] BLR 435

Duncan v Epping Forest DC [2004] RVR 213

 

 

The following cases were also referred to:

 

Perrin v Northampton Borough Council [2008] 1 WLR 1308

Rhesa Shipping v Edmunds (“The Popi M”) [1985] 1 WLR 948

Fosse Motor Engineers Limited v Conde Nast [2008] EWHC 2037 (TCC)

Loftus-Brigham v London Borough of Ealing [2003] EWHC Civ 1490; 103 Con LR 102

Wagon Mound (No2) [1967] 1 AC 617

The Heron II [1969] 1 AC 350

Siddiqui v Council of the London Borough of Hillingdon [2003] EWHC 726 (TCC)

Network Rail Infrastructure Ltd v C J Morris [2004] EWCA Civ 172

L E Jones (Insurance Brokers) Ltd v Portsmouth City Council [2002] EWCA Civ 1723

Delaware Mansions Ltd v Westminster City Council [2001] UKHL 55 [2002] 1 AC 321

Solloway v Hampshire County Council [1981] 79 LGR 449

 

 

DECISION

Introduction

1. This is a claim for compensation under section 203 of the Town and Country Planning Act 1990 (the 1990 Act) and article 9 of a Tree Preservation Order (No.530 (2004)) dated 12 November 2004 (the TPO) for losses alleged to have been incurred in consequence of a refusal of consent required under the TPO.  The compensating authority is the City of Westminster Council who, on 8 February 2005, refused consent to fell a robinia tree (otherwise known as a False Acacia) situated in front of a dwellinghouse known as 145 Hamilton Terrace, St John’s Wood, London (No.145).  The claimant is a charity known as The Keepers and Governors of the Possessions Revenues and Goods of the Free Grammar School of John Lyon.  The claimant is the freehold owner of 147 Hamilton Terrace (No.147), a dwellinghouse immediately adjoining No.145.

2. The claim is for £68,511.58, being the cost of underpinning works to the foundations of No.147, plus interest.  The compensating authority says that no compensation is payable, alternatively that compensation should be limited to £7,500.00.

3. Mr Jason Evans-Tovey of counsel appeared for the claimant.  He called two expert witnesses.  They were Ms Margaret MacQueen BSc, C Biol MSB, MICFor, MAE, an arboricultural consultant practising through OCA UK Ltd (OCA) and Mr Brian Butcher, a chartered structural engineer and director of Richard Jackson Ltd, consulting engineers.

4. Counsel for the compensating authority, Dr Charles Mynors, called expert evidence from Ms Barbara Milne BSc, DipTP, Dip Arb RFS, Tech Cert Arbor A, MRTPI, senior arboricultural officer in the compensating authority’s built environment department and Mr Bret Champion B.Eng (Hons), C.Eng, M I Struct E, ACILA, managing director of Pyle Consulting.

Facts

5. From a statement of matters agreed and disagreed and from the evidence I find the following facts.  No.147 is a part two - and part four-storey link detached house, situated on the west side of Hamilton Terrace one door south of the junction with Carlton Hill.  The four-storey section was constructed in about 1830 and the two-storey addition (on the left or southerly side) was built before 1880.  The building has subsequently been converted to form six flats.  The site slopes from the front towards the rear.  The external walls are of solid brick construction.  There is a lightwell/sunken courtyard to the front of the property approximately 2.6m deep.

6. Damage to No.147 was first discovered when new tenants occupied the property in about September 2003.  The claimant’s surveyors, Beecrofts, inspected the property on 31 October 2003 and reported on 27 January 2004.  They noted cracking and separation on the front elevation at the junction of the two-storey and four-storey sections, the width of the cracking being directly proportional to height above ground level.  The maximum crack width at high level appeared to be approximately 10mm.  On the rear elevation separation and cracking were again noted between the main building and the two-storey addition, the damage mirroring that to the front of the property.  The maximum crack width in this location was approximately 8mm.  Cracking was also noted internally in the raised ground floor flat and in the garden flat.

7. Following a claim against the building’s insurers, Norwich Union, and on the instructions of Cunningham Lindsey, loss adjusters, Mr Tim Moya of OCA carried out an arboricultural survey of vegetation close to No.147 on 6 March 2004. 

8. On 9 March 2004 a representative of CET Group Ltd (CET), also instructed by Cunningham Lindsey, attempted to dig a trial pit at the front of No.147, but was unable to do so because he was moved on by a traffic warden.  He returned to the property on 27 April 2004.  He dug a trial pit and sank a borehole (TP/BH1) at the front of the property, to the left of the front door to the ground floor flat, and a control borehole (BH2) in the rear garden.  In February 2005 two further trial pits were dug: TP/BH1 on a wall inside the store in the lower ground floor of the two-storey extension, and TP2 outside the rear wall.

9. On 18 June 2004 Mr G L Martin, a consultant geotechnical engineer, reported to CET  based on the information obtained from the site investigation on 27 April 2004.  Mr Martin concluded:

“The natural soil was indicated to be a clay of very high or high/very high plasticity, with high shrinkage potential and high volume change potential.  Evidence of root activity was recorded to a maximum depth of 1.40m.  The data available at the time of the investigation indicated a zone of desiccation to a depth of at least 3.00mm in TP/BH1.”

10. CET returned to No.147 on 5 August 2004.  A further trial pit was dug at the front of the property in order to find more roots, since the previously identified roots had not been retained and classified.  This exercise identified roots of live appearance to 2mm in diameter.  On 11 August 2004 Tree Root Investigation Ltd certified that the root samples obtained from the trial pit had been alive in the recent past and originated from either a member of the Leguminosae family or Ulmus (elm).  They added that members of the Leguminosae included Laburnum, robinia and the climber, wisteria.  There was no elm tree in the vicinity of the trial pit.

11. On 11 August 2004 Mr Richard Hope, a senior chartered engineer with Cunningham Lindsey, prepared an engineering appraisal report on behalf of Norwich Union.  The report included the following observations:

 

 

“NATURE AND EXTENT OF DAMAGE”

Description and Mechanism

The principal damage takes the form of separation cracks between the two and four storey parts of the property with cracks up to 15mm in width at the time of our visit.

The indicated mechanism of movement is a drop in level of the two storey section of the property.

Significance

The damage would be placed in category 3 of the BRE Digest 251 classification i.e. moderate.

Onset and Progression

In our opinion the damage appears to be recent although there is evidence of substantial previous movement to the bin store area at the front of the property.

SITE INVESTIGATIONS

The ground investigation was carried out by CET Group Limited under the supervision of Beecroft Sons & Nicholson, Surveyors.  For details please refer to the attached factual data.

The result of the ground investigation indicates that the damage to this property has been caused by clay shrinkage subsidence, resulting from moisture extraction by various vegetation.

An arboricultural report has recommended removal of three trees as follows:

1.           London Plane within the control of the Local Authority.

2.           Shrubs within the risk address.

3.           A robinia within private third party ownership.

Unfortunately, the site investigation contractor initially failed to request root identification and hence we are currently awaiting those results.

MONITORING

Crack monitoring has shown a clear indication of the seasonal pattern of movement consistent with clay shrinkage.

CAUSE OF DAMAGE

As discussed above, it is our opinion that the damage results from clay shrinkage.

 

 

RECOMMENDATIONS

My recommendation is that the arboriculturalists continue their approach to the tree owners and, subject to a satisfactory outcome, repairs to the property should be able to proceed in the Spring of 2005.” 

12. On a date between 12 August and 9 September 2004 Mr Paul Allen, an arbotriculturist employed by OCA, prepared a desk-top study of the available evidence.  He concluded that the probable cause of the damage was clay shrinkage subsidence caused by vegetation.  He recommended the removal of a wisteria shrub growing along the rear elevation and the felling of the robinia within the curtilage of No.145 and two London plane trees on the highway footpath in front of 145 and 147, which were under the control of the compensating authority.

13. On 10 September 2004 OCA wrote to the insurance section of the compensating authority, formally requesting them to carry out works to the two plane trees in the highway.  A copy of Mr Paul Allen’s report was enclosed.  On 14 October 2004 Mr Moya amended his desk-top study prepared on 6 March 2004, omitting the recommendation to fell the plane trees in the light of the root identification certificate.

14. On 25 October 2004 Ms Milne sought advice from Mr John Gardner, a district surveyor, following receipt of conservation area notification of the proposed felling of the robinia under section 211 of the 1990 Act.  Two days later Mr Gardner reported as follows:

“Having studied the technical information submitted by OCA and looked at the external brickwork I do not agree that the settlement problems encountered on site are solely caused by the False Acacia tree.

The tree in a stage of early maturity is located within the adjoining property 145 Hamilton Terrace and is some 6 to 8m away from the closest part of the building and some 2m higher than the buildings foundations.  Because of the distance from the building and its height above the building foundations, the influence of the tree roots on the surrounding ground would be limited.

The two-storey part of the building appears to have been built at a different time from the main building and at several different stages, as the brick courses do not match.  It is at these points of junction that vertical cracks are appearing.

Crack monitoring reports have not been submitted and will be essential in indicating seasonal movement and therefore the tree’s involvement in causing settlement.  The report was not specific in the magnitude and location of the cracks, which were described as moderate and up to 15mm in width.  Further monitoring reports would therefore be required.

No other external details of the building would give me concern or that might be contributing to the problem, however it should be noted that the natural ground level slopes away from the building to the rear.”

15. A report recommending the approval of a tree preservation order in respect of the robinia by the Director of Planning and City Development under delegated powers was prepared by Ms Milne and dated 4 November 2004.  The report included the following comments under “Background”.

“1.3 The affected property lies over 2m below the level of the base of the tree, and some 7m distant from it.  The District Surveyor points out that, in view of this, the effect of the tree on the ground surrounding the affected property would be limited.

1.4        In addition, no monitoring and no soil classification tests been submitted, nor have specific details of the magnitude and location of the cracks been presented.  As such it is considered that insufficient evidence has been submitted to identify the tree as a cause of damage.

1.5        The tree is an attractive specimen in early maturity and appears to be in reasonable health.  It is clearly visible at the front of the host property use, and for a considerable length of Hamilton Terrace.  It provides useful visual amenity in the form of garden planting, complementing the nearby large London planes in the street, and is part of the characteristically verdant character and appearance of the gardens in this part of St Johns Wood conservation area.  A TPO is considered expedient in view of detriment to amenity and the character and appearance of the conservation area.

1.6        In view of the above it is considered that the removal of the tree has not been justified and a TPO is considered expedient in the interests of the amenities of the area.”

16.        The report’s recommendation was accepted and the TPO was made on 12 November 2004.

17.        On 1 December 2004 OCA wrote to the compensating authority, formally objecting to the TPO.  Under the reading “Amenity and Public Benefit” the letter said:

“Our reasons for wishing to apply to fell the False Acacia tree directly related to the consequences of the location of the trees to the damaged property.  We will be making an application under the Order to fell the False Acacia as a remedy to the subsidence damage.  A possible refusal of consent to fell will almost inevitably result in the need for underpinning the property.  All costs incurred in consequence of any refusal of consent are therefore likely to form the basis of a compensation claim against the Council under Regulation 9 of the Order and s203 of the Town and Country Planning Act 1990.  This would represent a poor use of public funds.”

18.        On 14 December 2004 OCA submitted a formal application under the TPO to fell the robinia.  They said:

“We are arboriculturists appointed on behalf of building insurers of the above address.

It is the view of chartered engineers appointed to investigate damage that the above property has suffered differential movement and subsequent damage consistent with tree related clay shrinkage subsidence.  We enclose copies of the relevant technical reports, as itemised below:

1.     The engineer’s report describing the nature and extent of damage.

2.     The factual report of investigations, including laboratory soil test results and root identification certificates.

3.     A site plan, which locates vegetation including the tree the subject of this application.

4.     Monitoring

We believe, from the evidence supplied detailed above, we have demonstrated our two evidential tests, namely:

1.     Tree roots have encroached onto the insured’s land because:

Positive False Acacia root ID with depth of roots in TP/BH/1 to 1400 mm.  Crack monitoring has shown a clear indication of the seasonal pattern of movement consistent with clay shrinkage.

2.     Damage to the insured’s property has resulted from that encroachment:

Pattern of damage relative to the tree indicates the mechanism of movement is a drop in level of the two storey section of the property.

We understand that the tree referenced below is covered by Tree Preservation Order number 530/2004.

Please accept this letter as our formal application to undertake the works detailed below:

Tree Number Common name Specification

(as per OCA plan)

 

T2 False Acacia Fell to ground level and treat stump

Reasons for this application

1.     The above tree works are proposed as a remedy to the differential foundation movement at the above address, and to ensure the long-term stability of the building.

2.     The above tree works are proposed to limit the extent and need for expensive and disruptive engineering repair works.

3.     The above tree works are proposed to limit the duration of any claim period and therefore allow the landowner his right to the peaceful enjoyment of his property.

4.     It is the case that an alternative to felling such as pruning or significant pollarding of the tree would not provide a reliable or sustainable remedy in this case.  We do not consider that any other potential means of mitigation, such as root barriers, would be effective or appropriate in the circumstances.

5.     Repair costs will vary between £31,000 and £71,000 depending on whether the tree can be removed or has to remain.

Please provide your formal acknowledgement of this application, indicating the date of its registration and the date that any decision would in your view be due.

Please quote our reference number CA073/1872996/John Lyons Charity.

Should you wish to visit the property, please contact us in order that we may arrange suitable access.  We trust that the above information is of assistance but should you have any queries please do not hesitate to contact us.”

19.        The application was not followed by any discussions or correspondence between OCA and the compensating authority.  It was refused on 8 February 2005 in a letter dictated by Ms Milne in the following terms:

“I refer to your application for tree works at the above location.

You are advised that after careful consideration the City Council has determined to refuse consent to remove the false acacia tree situated in the front garden of 145 Hamilton Terrace NW8.

Consent is refused for the following reasons:

1.     The proposed tree removal would be detrimental to the visual amenities of the street scene, and have an adverse effect on the character and appearance of this part of St Johns Wood Conservation Area, thereby contrary to policies DES 7 & DES 12 of the City of Westminster Unitary Development Plan adopted in July 1997 and policies DES 9 & ENV14 of our replacement Unitary Development Plan (pre-Enquiry version, as subsequently modified).

2.     Insufficient evidence has been submitted to justify the proposed removal of the false acacia tree.

Informative:

1.     The Town and Country Planning Act 1990 allows that the City Council may be liable to pay compensation for costs incurred as a result of a refusal of consent, or consent with conditions, for tree works.

If you are aggrieved by this decision or the conditions imposed, you may appeal to the Office of the Deputy Prime Minister, Government Office for London …”

No such appeal was submitted.

20.        On 23 January 2005 CET dug two more trial pits – TPBH1 in the store in the two-storey addition and TP2 outside the rear elevation.  On 18 March 2005 Tree Root Investigation Limited certified that live roots of a member of the family Leguminosae had been found in the store with a diameter of 2.0mm.  They reported that roots of 0.5mm diameter found in TP2 may have been a member of the same family, but they were too immature to identify with certainty.

21.        On 1 March 2005 Cunningham Lindsey submitted a formal claim for compensation.  On 21 April 2005 the Planning Committee of the compensating authority decided to confirm the TPO with immediate and permanent effect.

22.        Works of repair, including underpinning, commenced in March 2005.

Expert evidence for the claimant

Ms MacQueen

23. In her expert report dated 25 May 2011 Ms MacQueen expressed the view that the robinia was the effective cause of damage to the property in the light of the following evidence.  The property is built on a shrinkable clay soil which is susceptible to volume change due to variation in moisture content.  Trees are the predominant cause of changes in moisture content of clay soils below foundation level.  The area of diagnosed movement is to that part of the building closest to the robinia.  Roots of the robinia were encountered in the clay soil below foundations.  There was conclusive root identification from TP1 at depths of 1400mm in 2004 using light microscopy pointing to the robinia.  The source of Leguminosae roots points specifically to the robinia because it is the closest source to the location of the August 2004 trial pit.

24. In a supplemental report dated 28 February 2012 Ms MacQueen explained why she did not consider that the claimant’s wisteria was a significant contributory factor to the damage sustained by No.147.  She noted that the OCA 2004 survey gave the following dimensions for the two members of the Leguminosae family in the vicinity of the damage: robinia 12m high, crown spread 7m.  Wisteria stem closest to the two-storey addition 4m high, stem diameter 200mm, crown spread 7m.

25. Ms MacQueen said that the NHBC classification which was applicable at the time of the application to remove the robinia described that species as having a moderate water demand.  A study by Cutler and Richardson in 1989, “Tree Roots and Buildings”, was based on data from survey cards and 1979-86 records.  It indicated that twenty cases were recorded as involving robinia and only one case involved wisteria.  There was no body of developed research literature which highlighted wisteria as a cause of root related property subsidence.  There was little available information relating to the water use of wisteria.  The wisteria may reasonably be expected to have caused localised soil drying, but it had a low energy need, relative to the dynamic mass of a tree like the robinia at No.145, to explore subsoil areas to a breadth and depth to cause differential property movement.

26. Ms MacQueen considered there was insufficient information available to confirm that species alone made significant differences between the tree and the climber in this case.  In her view the differences in water use were simply a function of size or mass of dynamic canopy material.  There was more green leaf area involved in the processes of evapotranspiration in the canopy of the robinia than in the canopy of the wisteria.  This was also a very important point when considering the relative locations of the two plants.  The robinia canopy foliage, with a mass some 3.5 times larger than the wisteria, was located to the east of No.147 in full morning sun.  The far smaller mass of wisteria foliage was located in the rear garden facing west and only intercepted the sun in the afternoon.

27. Ms MacQueen also responded to the allegation that it would be highly unusual for a root of the robinia to be found at 3.25m depth.  She quoted from Dr Martin Dobson’s paper – “Tree root systems”, 1995, which stated that “all trees can develop a deep root system (2-3m) if soil conditions allow.”  In answer to the suggestion that the garden boundary wall and its foundations, between No.145 and 147, were a considerable barrier to tree root growth, Ms McQueen referred to Dr Dobson’s observation that “roots meeting such obstacles are typically deflected by them and once clear of the obstruction they often resume their original direction of growth.”  In Ms MacQueen’s view the roots of the robinia had clear physiological ability to grow to seek sufficient subsoil moisture to satisfy the tree’s growth requirements.  This included the ability to grow beyond the foundations of the boundary wall.  The compensating authority had now granted permission to remove the robinia because it had grown to apply sufficient direct force to the wall as to dislodge the brickwork.  That lateral pressure was a result of the root plate exerting lateral forces by the circumferential growth of roots adjacent to and under the wall.

28. As for the suggestion that the distance of the robinia from the 2004 trial pit was on the outer limit of its potential zone of influence Ms MacQueen said that, at a lateral distance of 8.5m from the property, the location fell within the 90% of cases covered by the Cutler and Richardson (or Kew Root) survey which were located closer than 10.5m. In any event, literature published subsequent to the Cutler and Richardson survey warned against treating its maximum distances as the absolute maximum distances to which roots of trees could grow.

29. Finally, Ms MacQueen referred to an article published in the Arboricultural Journal in 2011 which considered 12,800 files relating to subsidence claims between 2002 and 2005.  This study did not produce any cases of wisteria being involved in causing property damage.

 

 

Mr Butcher

30. In his expert report dated May 2011 Mr Butcher said he was in no doubt that the site investigations showed that the two-storey addition had moved as a result of the influence of vegetation.  This conclusion was supported by the following factors: the crack width monitoring indicated a cyclical pattern of movement, the maximum width being reached in autumn after closing in the preceding spring; the presence of clay of undoubted high shrinkage potential beneath the foundations; the presence in the August 2004 trial pit of live roots from a member of the family Leguminosae; the occurrence of damage in late summer/early autumn, a time of year when damage associated with tree root subsidence typically becomes apparent; no evidence of leaking drains being the cause of movement to the property at any time.

31. Mr Butcher noted that the April 2004 investigation comprised the assessment of moisture contents for the full depth of BH1 and for the determination of Atterberg limits at the undersides of foundation at 1.5m and 2.5m.  In situ vane testing was also undertaken, as was soil suction testing on samples between 1m and 3m.  For comparison purposes identical tests were carried out on samples taken from BH2 to the rear.  Based on the moisture content profiles the moisture content of the samples from BH1 were consistently less than of those in BH2.  Soil suction pressures in BH2 were less than in BH1 and shear strengths measured in situ were notably less in BH2 than in BH1.  He concluded that, relative to BH2, the site investigation indicated the presence of desiccation beneath the foundations to the front of the property.

32. In respect of the investigations undertaken in February 2005 the moisture content profile in the store was less than that in the rear.  The soil suction profiles did not merge, the shear strength of the clay to the store being higher than that to the rear.

33. In Mr Butcher’s opinion the results of the site investigations confirmed the presence of desiccation beneath the foundations of the property, more significantly to the front.  Although the results might not be conclusive he had no doubt that the results of the monitoring in 2003 and 2004 were consistent in showing movement which was typical as the consequence of moisture extraction from clay subsoils by vegetation.  The occurrence of subsidence in Hamilton Terrace was not uncommon.  He had been involved since the mid 1990s with claims in respect of Nos. 142, 130, 86, 58 and 30 relating to the influence of Lime, Plane and robinia trees.

Expert evidence for the compensating authority

Ms Milne

34. Ms Milne’s expert report was dated 17 June 2011.  She said that, on receipt of the section 211 notification, she visited the site on 8 October 2004 and subsequently consulted the district surveyor.  She assessed the amenity value of the robinia.  She considered it to be an attractive specimen in early maturity in reasonable health.  It was clearly visible at the front of No.145 and for a considerable length of Hamilton Terrace, providing useful visual amenity in the form of garden planting, complementing the nearby London Planes in the street, and forming part of the characteristically verdant character and appearance of the gardens in this part of the St John’s Wood conservation area.  She did not think that sufficient information had been submitted to implicate the robinia in the damage to No.147.  Accordingly, she recommended that a TPO be made to protect it.

35. Ms Milne re-inspected the tree following receipt of the application to remove it under the terms of the TPO.  On the basis that Cunningham Lindsey’s report dated 11 August 2004 implicated other vegetation in the movement of the property, and that the movement described in the report did not suggest that movement was occurring towards the robinia, and taking into account the views of the district surveyor, Ms Milne considered that there was still insufficient information to implicate the robinia in the movement.  As for the crack monitoring information  Ms Milne said that, whilst this suggested that minor seasonal movement might be occurring, this was insufficient to enable her to conclude that the robinia was the cause of the cracking at No.147.  Similarly, the moisture content and suction profile information contained in the CET factual report of investigation did not implicate the robinia in the movement of the property.  She therefore recommended that consent for its removal be refused.

36. Ms Milne referred to a number of documents which were not submitted with the application.  In each case she observed that, if the document had been submitted as part of the application, “it would have allowed the Council to obtain a fuller picture of the [claimant’s] views of the cause of damage.”  (In the case of the crack monitoring the words “cause of damage” were replaced with “mechanism of movement”).

37. Ms Milne said that the root identification of 11 August 2004, which was submitted as part of the application for consent to fell the robinia, was not a positive identification of the roots of robinia.  It was of one root of less than 0.5mm of either a “Member of the family Leguminosae or Ulmus (elm).”  It was possible that the root identified from the trial pit at the front of the property belonged to the robinia, but if so it would be highly unusual, given the change in level and distance involved.  She added:

“I also consider it possible that the roots belong to the wisteria, and whilst I consider it to be unusual, I am not able to discount it.

I consider that analysis of DNA of this root would have confirmed whether it belonged to either the wisteria or the robinia.  The absence of a positive root identification represents insufficient evidence to conclude that the continued presence of the robinia would cause damage to 147 Hamilton Terrace.”

38. Ms Milne commented on the root found below foundation depth in TP1 of CET’s investigation on 25 February 2005.  This did not demonstrate whether it originated from the robinia or the wisteria, but DNA analysis would have confirmed the position.  However bearing in mind the location of the trial pits, and the relative distances of the wisteria and robinia from TP1, Ms Milne considered it likely that the root identified emanated from the wisteria at the rear of the property.  She considered it highly unlikely that it belonged to the robinia.

Mr Champion

39. Mr Champion’s expert report was dated 20 June 2011.  He said that all the crack width monitoring locations indicated very minor seasonal movement.  Nevertheless the monitoring did not demonstrate a specific mechanism of movement sufficient to confirm the potential influence of the robinia. Bearing in mind the significant distortions to the property, its complex structural layout and the numerous trees and other vegetation that surround it, accurate level monitoring was essential and should have been undertaken and submitted as part of the application.  The root sample from a member of the Leguminosae family could have originated from the large wisteria to the near of No. 147.  Moreover, the depth of the foundations was in the annual drying out zone as detailed in the Building Research Establishment Digest 240.  Accordingly, seasonal wetting and drying and the influence of minor vegetation could have contributed to the seasonal movement, particularly to the rear bearing in mind the sloping ground.

40. Mr Champion accepted that, at first sight, the graphical plot for TP/BH1 following the site investigation on 27 April 2004 appeared to indicate desiccation of the soil samples recovered from BH1 compared to BH2.  Within BH2, however, the soil suctions increased with depth and, at 3.0m, the soil suction result for BH2 was similar to that for TP/BH1.  He pointed out that roots were noted in TP/BH1 to a depth of 1.4m and in BH2 to 0.6m.  It was therefore unclear why there should be desiccation beneath those depths and, in particular, why there should be a significant increase in desiccation within BH2 below 2.0m.

41. Mr Champion said that, based on the NHBC guidelines for new housing construction, the theoretical zone of influence of the robinia did not extend under the foundations of No.147 even assuming a level site.  Given that the foundations of the building in this case were 2.0m lower than the robinia, it was even more unlikely that the root recovered from the underside of the foundations on 5 August 2004 originated from the robinia.

42. Referring to the engineering appraisal report prepared by Cunningham Lindsey on 11 August 2004, Mr Champion said that it made no mention of the drop in level in the region of 150m of the two-storey section of No.147.  He considered that the failure to take these distortions into account was very serious, as it affected the design of the site investigations and the whole approach adopted by Cunningham Lindsey and OCA thereafter.  In his opinion any engineer reasonably experienced in subsidence investigation would have identified from the outset that the 150mm drop was very unlikely to be related to the action of trees, and that there must have been another cause.

43. Mr Champion suggested that it was possible that the deep-seated desiccation at levels well below the roots noted in the soil samples was responsible for the 150mm drop.  He considered that a further engineering review of the results of the laboratory testing should have been undertaken before the application to fell the robinia was submitted.

44. The robinia was positioned 2.0m higher than the foundations.  If the desiccation to a depth of at least 3.0m was caused by the robinia, its roots must have been extending to a depth in excess of 5.0m.  The NHBC standards was perhaps the document most commonly referred to by engineers to assess the zone of influence of trees.  Based on those standards it was difficult to envisage that the zone of influence of the robinia extended to such depth.  This called into question the relevance of the desiccation indicated by the laboratory testing when assessing the alleged zone of influence of the robinia.  In view of this and the presence of wisteria at the same level as the foundations, DNA testing of the roots should have been undertaken.  The claimant’s failure to do so was a serious omission.

45. Mr Champion referred to the damage recorded by Beecrofts during their survey on 27 January 2004.  This showed cracking in the region of 8 to 10mm at the junction of the front and rear elevations to the two-storey section.  Such cracking was indicative of en masse movement of the two-storey section relative to the four-storey section, in line with the 150mm distortions, and not rotation of the two-storey section towards the robinia.  Mr Champion considered that Cunningham Lindsey should have designed the site investigation to ascertain why the 150mm distortions had occurred and to discover whether the cause was a continuation of the consolidation and compaction of weak or made up ground, and/or the influence of the wisteria to the rear.

46. Mr Champion summarised the position by saying that it would have been possible to identify the specific causes of the movement of the building if the claimant had undertaken further deep borehole investigations, trial pit investigations to the rear of the two-storey section, testing of undisturbed (rather than disturbed) soil samples, DNA testing of roots and accurate level monitoring.  The identification of the specific causes of movement was not possible on the basis of the available information.

The Entitlement to Compensation

47. Section 203 of the 1990 Act provides that

“A tree preservation order may make provision for the payment by the local planning authority, subject to such exceptions and conditions as may be specified in the order, of compensation in respect of loss or damage caused or incurred in consequence –

(a)   of the refusal of any consent required under the order, or

(b)  of the grant of any such consent subject to conditions.”

48. The TPO in this case was made in accordance with the model order in the Schedule to the Town and Country Planning (Trees) Regulations 1999, in the form in which those Regulations were originally enacted.  Article 6 of the TPO provides, so far as relevant:

“An application for consent to the cutting down, topping, lopping or uprooting of any tree in respect of which this Order is for the time being in force shall be made in writing to the authority and shall …

(c) contain a statement of the applicant’s reasons for making the application.”

Article 9 provides, so far as relevant:

“(1) If, on a claim under this article, any person establishes that loss or damage has been caused or incurred in consequence of

(a) the refusal of any consent required under this order … he shall, subject to paragraphs (3) and (4), be entitled to compensation from the authority…

(4) In any [case other than the refusal of consent for felling in the course of forestry operations], no compensation shall be payable to a person …

(b) for loss or damage which, having regard to the statement of reasons submitted in accordance with article 6(c) and any other documents or other evidence submitted in support of any such statement, was not reasonably foreseeable when consent was refused or was granted subject to conditions;

(c)   for loss or damage reasonably foreseeable by that person and attributable to his failure to take reasonable steps to avert the loss or damage or to mitigate its extent…”

Issues

49. The issues are these:

1. Was the need for underpinning caused or incurred in consequence of the refusal of consent to fell the robinia?

2.  Is the compensating authority able to avoid paying compensation because the loss or damage was not reasonably foreseeable in February 2005?

3.  Is the compensating authority able to avoid paying compensation because the loss or damage was attributable to the claimant’s failure to take reasonable steps to avert it or mitigate its extent?

4.  What is the amount of compensation, if any?

5.  Is the claimant entitled to interest on any compensation that may be payable, and if so at what rate and for what period?

Conclusions

Issue 1 and 2  – Causation and foreseeability

50.        It will be convenient to consider the first two issues together.  Dr Mynors submitted that a claim for compensation following the refusal of consent to fell a TPO protected tree was different from the position which arises in a nuisance action for damages for harm to a building said to have been caused by a nearby tree.  In such an action, typically property damage has in fact occurred, and must be repaired – and often the harm will continue to occur unless prevented.  The dispute is therefore as to who has to pay for it.  The issue is thus merely causation.  In a TPO compensation case, by contrast, the question is not just causation – although that is of course important – but also whether it was foreseeable to the planning authority at the time that it made the decision that the continuing presence of the tree in question would be likely to cause damage in the future.  The issue is thus foreseeability as well as causation, and the analysis of past damage is only relevant evidentally to establish the likelihood of continuing damage in future.  Clearly, the need to carry out works for the rectification of past damage to a building cannot possibly be “in consequence of a decision by the authority to refuse consent” (see Duncan v Epping Forest District Council [2004] RVR 213 at [17]).

51.         Dr Mynors submitted that, whilst it was necessary for the claimant to establish that continuing damage to No.147 in the future would occur in consequence of the retention of the robinia as a result of the refusal of consent, that causation could only be established on the basis of what was or should have been foreseeable to the compensating authority at the time it made its decision to refuse consent, since anything that was not foreseeable had to be excluded by virtue of article 9(4)(b). 

52.        Dr Mynors referred to Wright v Horsham District Council [2011] UKUT 319 (LC), in which I considered briefly whether, for a matter to be foreseeable by a compensating authority, it needed to have been raised in the initial application or whether, as argued by the claimant in that case, it would be nonsensical to ignore evidence arising after the decision to refuse consent.  I said that I was inclined to accept the latter, but I explicitly declined to decide the point (paras 71 to 73). 

53.        In Dr Mynors’s submission the dichotomy posed in that way was a false one.  The question of what was or was not within the contemplation of the planning authority was to be determined “having regard” to “the information supplied with the application for consent”, not solely “on the basis” of such information.  Thus it was necessary to look principally at the information supplied with the application, but also at anything else that was or should have been available to the authority at the time of the decision.  Relevant items in either case might include both case-specific information – such as level monitoring, crack monitoring, root identification, soil samples and visual inspection – and more general information, such as technical literature, British standards, professional guidance, and so on.  But it was not appropriate to look at anything that was not available to the authority at the time.

54.        In reply Mr Evans-Tovey said that both section 203 and article 9(1) were concerned with the cause of the loss and damage in respect of which compensation was being claimed, and in particular whether it was caused by or incurred in consequence of the refusal of any consent.  They were not concerned with foreseeability, which was a different issue.  Article 9(4), on the other hand, was distinct and different from article 9(1).  It did not provide a ground or the basis for a claim for compensation.  It provided certain limited defences.  It was not concerned with causation of the loss or damage, which was the domain of article 9(1).  It was concerned with the lower threshold of reasonable foreseeability and mitigation.

55.        In Mr Evans-Tovey’s submission the compensating authority had wrongly conflated article 9(1) matters and article 9(4)(b) matters into one question or one point.  The two articles, although related, were distinct provisions, addressing different issues, with different requirements, tests and standards and different applicable dates.

56.        In my judgment the correct analysis of the legal position is as follows.  Compensation is payable for loss or damage caused or incurred in consequence of the refusal of consent to fell the tree (article 9(1)).  It is for the claimant to establish that such loss or damage was caused or incurred and that it was caused or incurred in consequence of the refusal of consent.

57.        It is not suggested that any physical damage occurred after the refusal of consent.  In effect, the basis of the claim is that the continued presence of the tree roots created a risk of subsidence damage occurring in future, that in the light of such risk it was appropriate to carry out works of underpinning, and that the claimant had such works carried out in March 2005.  The relevant loss or damage is the cost of the underpinning works (not, as Mr Evans-Tovey suggested in argument, the dehydration of the sub-soil and ongoing inhibition of rehydration).  It is a claim for the cost of preventive works.  Evidence of past damage to the building is relevant only to the question whether there was a risk of subsidence damage occurring in future.

58.        The test of causation for the purposes of the present claim must be whether it was reasonable for the claimant to have had the works carried out when it did.  If it was not reasonable to have had the works carried out the cost was not caused or incurred in consequence of the refusal of consent.

59.        Whether it was reasonable to have had the works carried out must depend on (a) the degree of risk of future subsidence occurring and (b) the appropriateness of underpinning as a response to that risk.  Both those matters fall to be considered as at the time the works were put in hand.  Thus, for example, a relatively low risk of damage that would be hugely expensive to repair might make it reasonable to incur modest costs in carrying out preventive works.  If it did, the loss suffered in incurring those costs would have been caused by the refusal of consent.  While (a) above involves the consideration of foreseeability, the question is one of the degree of risk; and causation is only established on the basis of (a) and (b) together.  In relation to the cost of the works the claimant needs to establish (c) that the works in their nature and extent were reasonable and (d) that the cost was reasonable.  The above analysis applies where the claim is for the cost of preventive works.  Where the claim is for the cost of works for remedying damage that has occurred (and of course such a claim can only be founded on damage that has occurred after the refusal of consent) the questions that arise are (i) was the damage caused by the tree and (ii) in the absence of the refusal would the tree have been felled before it caused the damage?  In addition (c) and (d) need to be established.  Article 9(4)(b) provides a defence for the compensating authority where the loss or damage was not reasonably foreseeable at the time when consent was refused.  Where the claim is for the cost of remedial works the question will be whether the physical damage was reasonably foreseeable.  Where the claim is for the cost of preventive works the question is whether it was reasonably foreseeable that (a) and (b) would be established.  With these considerations in mind I turn to consider whether, when the works of underpinning were undertaken in March 2005, there was a risk of future subsidence if the robinia was not felled, and if so the extent of such risk.  For that purpose it is necessary to establish the cause of the previous damage (I consider the appropriateness of underpinning below).

60. I deal firstly with the engineering evidence. Mr Evans-Tovey submitted in closing that Mr Champion’s evidence had been less than satisfactory.  I am afraid that I consider that submission was well-founded, for the following reasons.

61. In paragraph 4.3.4 of his report Mr Champion described the failure by the claimants to undertake DNA testing of the foundation roots as “a serious omission”.  In cross examination he admitted that he had no personal experience of DNA testing in 2004 and he had not investigated whether such testing was in use at that time.  In paragraph 4.3.1 of his report Mr Champion criticised OCA’s application for consent to fell the robinia on the grounds that it did not make it clear why removal of the robinia was necessary and that this was “unreasonable”. Mr Champion has never submitted such an application himself – that is the arborculturist’s province.  OCA are arboriculturists.  Mr Champion’s willingness to express a firm critical view on an area not properly within his field of expertise was not suggestive of an objective approach.  Mr Champion also referred, in the course of his oral evidence, to without prejudice discussions with Mr Butcher, even though he was aware of the without prejudice rule and the claimant’s solicitors had previously objected to reference to those discussions being made.

62. I accept Mr Butcher’s opinion that the following matters, considered together, suggest on the balance of probabilities that movement to the two storey section of the property has occurred as a result of the influence of vegetation:

(i)    The presence of clay of high shrinkage potential beneath the foundations.

(ii)  The occurrence of damage in late summer/early autumn, a time of year when damage associated with tree root subsistence typically becomes apparent.  (Mr Butcher said, and I accept, that in a high value street such as Hamilton Terrace, the damage was likely to have been reported very soon after it appeared.)

(iii) The presence of desiccation beneath the foundations of the property, more significantly to the front.  (I accept Mr Butcher’s view that the absence of tree roots below 1400mm in TP/BH/1, dug on 27 April 2004, does not necessarily mean that such roots were not present at greater depth in the close vicinity.  Mr Champion’s opinion as to whether or not there was desiccation oscillated during the course of the proceedings and I attach no weight to his evidence on this issue).

(iv)Internal and external crack width monitoring indicates a seasonal pattern of movement, which suggests vegetative action.  (I accept Mr Butcher’s evidence that level monitoring was not common at the relevant time and note that the need for such monitoring was not suggested by the district surveyor in his report in October 2004).

(v)  The presence of live roots from a member of the tree family Leguminosae.

63. Mr Butcher also considered that, on the balance of probabilities, the cause of the foundation movement, and the damage to No.147, was subsidence as a consequence of moisture extraction by the robinia.  Ms Milne did not agree that the robinia was the effective cause of the damage.  In the schedule of matters agreed and disagreed which was finalised shortly before the hearing she expressed the view that roots from the wisteria to the rear of the property could have extended to the front of the property.  She thought it would be highly unusual if the Leguminosae roots found in the site investigation were from the robinia.

64. In the course of cross examination Ms Milne accepted that it would be unusual to find wisteria roots travelling all the way from the rear of the property to BH1 at the front.  She added this:

“Given that Leguminosae roots were found at the front of the property, and the evidence shows they must emanate from either the robinia or the wisteria, given the relative height of the robinia above the trial pit and the fact that the wisteria was growing at about the same level puts some doubt in my mind that the robinia is the cause.  It must be one of them, but given the height that the robinia is growing above trial pit level and the fact that the wisteria is growing at the same foundation level makes me consider that, whilst both are improbable, it is difficult to make my mind up.”

65. Ms McQueen’s view was that roots in the trial pit at the front of the property were likely to have come from the robinia and that they extended under and beyond the foundations of the front wall.  This was based upon the fact that the robinia is a tree capable of causing much greater movement than the wisteria, because it is a larger plant requiring more energy to support it and to hold up its large canopy mass, and also requiring much more water than the wisteria.  Ms McQueen’s evidence was unshaken in cross examination and I accept it.

66. The above conclusions have been based on the evidence produced at the hearing before me.  I refer below to a number of documents which were produced in evidence but had not been provided to the compensating authority at the time it refused consent.  The absence of such provision is not relevant to article 9(1), because the additional information was in the hands of the claimant and/or its advisers at the date the underpinning works started, and the degree of risk of further subsidence and the appropriateness of underpinning are to be considered at that date.  It is also necessary, when determining causation, to decide whether the extent and cost of the works carried out to No.147 were reasonable.  I consider these matters under issue 4 below. 

67. I now turn to the question of foreseeability which arises under article 9(4)(b), that is whether, on the basis of the information available to the compensating authority when it refused permission, there was a risk of future subsidence due to the retention of the robinia, and that underpinning would be appropriate as a response to that risk.

68. Of the material relied upon by the claimant at the hearing, three items were not available to the compensating authority in February 2005.  First, the results of the further investigations carried out by CET in February 2005.  These results did not significantly alter the information which was before the compensating authority in February 2005 so far as concerns the position at the front of the property.  Rather, they corroborated in general terms CET’s earlier investigations by confirming dehydration under the extension.  The earlier investigations had identified soil type, plasticity, desiccation, and the presence of tree roots, and the subsequent investigations identified the family Leguminosae.  The second item of unavailable evidence comprised the results of the crack monitoring after the summer of 2004.  It was agreed by the arboricultural experts, however, that the monitoring results that the compensating authority had in February 2005 showed seasonal movement.  Although the maximum extent of the movement of cracks to the end of 2004 was greater (5.28m) than that to July 2004 (3.14mm), both sets of readings showed that there had been seasonal movement, indicative of vegetative action.  The third item of evidence not submitted at the date of the planning refusal was the survey by Drain Tech Ltd dated 4 January 2005.  This report did not add materially to the information before the compensating authority because, as Ms Milne accepted, drain damage would be inconsistent with the seasonal movement identified by the crack monitoring.

69. In addition to these three documents Dr Mynors identified two others which the claimant did not submit to the compensating authority at all.  The first was a report dated 30 July 2004 to Cunningham Lindsey by Beecrofts, commenting on CET’s site investigation works on 27 April 2004.  Dr Mynors emphasised that this report continued to refer to damage caused by “trees” in the plural but, as is clear from page 3, the report was prepared without the benefit of the root identification certificate, which effectively eliminated the two plane trees (the wisteria is a shrub, not a tree).

70. Finally, Dr Mynors pointed out that OCA’s amended arboricultural summary report dated 14 October 2004, which omitted the previous recommendation to fell the plane trees, had not been made available to the compensating authority at the time of its decision.  I do not consider that this omission is significant.  The compensating authority had received details of CET’s investigations, as well as OCA’s letters dated 1 and 14 December 2004.  The amended summary report added nothing material to the information contained in those documents.

71. I therefore conclude that, considering the matter based on the information available to the compensating authority on 8 February 2005 (and I accept Dr Mynors’s submission as to the extent of such information that is material), the damage to No.147 was caused by the robinia.  It follows that the material available to the compensating authority when it decided to refuse permission to fell was sufficient to show, on the balance of probabilities, that there was a real risk of further subsidence in the future.  In their letter of objection to the TPO dated 1 December 2004 OCA informed the compensating authority that refusal of consent would almost inevitably result in the need for underpinning.  There was no cogent evidence to suggest that that warning was unreasonable.  A reasonable compensating authority would therefore have foreseen the risk of future subsidence and the consequent need for underpinning. 

Issue 3 - Mitigation

72. In para 30 of its reply the compensating authority asserted that, if any loss or damage was suffered as a result of its refusal of permission, it was in whole or part attributable to the claimant’s failure to take reasonable steps to avert the loss or mitigate its extent, in particular by removing other vegetation or taking other steps to prevent or limit further damage.  In evidence Ms Milne said that the claimant had failed to mitigate its loss by not providing the compensating authority with a fuller picture and Mr Champion said that a further application should have been made, showing that the damage had not been caused by seasonal wetting and drying or the influence of other vegetation.

73. I am not persuaded that the claimant has failed to mitigate its loss.  There was no evidence to suggest that further subsidence would have been avoided if other vegetation had been removed.  I am not satisfied that seasonal wetting and drying was a material cause of the damage to No.147.  Moreover, Ms Milne accepted in cross examination that the further information which she said should have been provided would have made no difference to the compensating authority’s decision.  It follows that the claimant’s failure to provide a fuller picture or make a further application did not cause its loss.

Issue 4 – Compensation

74. The amount of compensation suggested by Mr Butcher at the hearing was £68,511.58.  That figure does not include any of the cost of repairs to the superstructure.  The quantum of individual items making up this figure was not challenged in cross examination.  The compensating authority, however, relies on the letter from OCA accompanying the application on 14 December 2004, which suggested that repair costs would vary between £31,000 and £71,000 depending on whether or not the robinia could be removed.  Dr Mynors said that this made it plain that the additional repair costs would be no more than £40,000.  It was clearly foreseeable that there would be some professional fees to add to that.  But that was the amount that would have been foreseeable by the authority at the time it made the decision to refuse consent, assuming that any compensation was payable in principle.

75. The letter of 1 March 2005 (shortly after the decision) from Cunningham Lindsey indicated that the likely costs to be claimed would be £41,000 for underpinning, plus £5,000 for superstructure repairs, £5,500 for fees and £12,000 for rent.  In Dr Mynors’s submission that showed that the original figure for repair costs included an element of superstructure repairs, so that the underpinning cost would have been £35,000.  Superstructure repairs would be to repair past damage, and so would not be allowable.  The maximum amount of any claim foreseeable by the compensating authority at the time of the decision was therefore £40,500 (£35,000 plus £5,500.  No element of loss of rent was included in the final figure claimed of £68,511.58).

76. Mr Champion emphasised that the underpinning which was carried out was to the whole of the two-storey section of the property whereas, if the robinia was a contributory factor, only underpinning to the front elevation to the two-storey section would have been justified.  He estimated the cost of such work to be £6,000.  To this he added fees of £1,500, making the maximum amount which could be legitimately claimed, if the claim was sound in principle, £7,500.

77. Mr Evans-Tovey forcefully resisted the suggestion that the quantum of compensation claimed was not recoverable because it was not reasonably foreseeable.  He submitted that the article 9(4)(b) defence concerned reasonable foreseeability of “loss or damage”, not damages.  Accordingly, the article 9(4)(b) defence did not concern reasonable foreseeability of the quantum of damage or compensation, only the foreseeability of the type of damage.  Moreover, the suggestion that the amount of compensation was restricted to the estimate contained in OCA’s letter dated 14 December 2004 required the Tribunal to accept the “startling proposition” that no reasonable person would have foreseen a final cost in the construction industry exceeding an initial pre-tender estimate.

78. In support of his submission on this issue Mr Evans-Tovey referred to Vacwell Engineering Co Ltd v BDH Chemicals Ltd [1971] 1QB 88.  There it was known that a particular chemical manufactured and supplied by the defendants was liable to react with water, but on this particular occasion there was a violent explosion which caused extensive damage to the premises.  A minor explosion was foreseeable, but an explosion of the magnitude that did occur was not foreseeable.  Nonetheless, the defendants were held liable for the full extent of the damage.  At p110 Rees J said:

“the explosion and the type of damage being foreseeable, it matters not in the law that the magnitude of the former and the extent of the latter were not.”

79. I respectfully adopt that judgment as a correct statement of the law applying to the assessment of compensation in cases such as the present.  In fact, in this case the extent of damage was clearly foreseeable in view of OCA’s reference to underpinning in their letter dated 1 December 2004.  I accept Mr Butcher’s evidence that underpinning design is a matter of engineering judgment and that the works specified by Beecrofts were reasonable.  I find that the costs incurred by the claimant were reasonable and that there is no reason to reduce them merely because they exceeded the estimate put forward by OCA when the application was submitted.

Issue 5 - Interest

80. The claimant also seeks interest.  Mr Evans-Tovey said that Sempra Metals v Inland Revenue Commissioners [2008] AC 561 demonstrated that interest was recoverable on damages at common law.  He also referred to Bell v Canterbury City Council (1988) 56 P&CR 211, in which the measure of compensation payable under a 1969 model order was considered by the Court of Appeal.  At 216 Russell LJ said:

“In my view the diminution in the value of the land was a natural and probable consequence of the refusal of consent, within the contemplation of the local authority refusing consent.  It was not too remote and was, therefore, recoverable”.

At 219 Slade LJ said:

“The only question therefore is whether, on its true construction, article 9 does render compensation payable in respect of such depreciation.  The language of the article is very broad and, subject to what is said below, I can see no sufficient grounds for restricting its meanings so as to exclude compensation in respect of this particular category of loss.”

81. On the basis of Bell Mr Evans-Tovey submitted that “compensation” within both s203 and article 9 was wide enough to include interest.  He said that lawyers used various rates for interest including the special account rate, the Judgment Act Rate and a variant of the base rate. The commercial court has historically awarded interest at between 1 and 3% over base rate (Yuanda (UK) Co Ltd v WW Gear Construction Ltd [2010] BLR 435 per Edwards-Stuart J at [87](4)).  Interest may be simple or compound.  The claimant seeks simple interest at 2% over the applicable base rate from time to time, which Mr Evans-Tovey submitted was reasonable.  While some large expenditure was incurred before 14 July 2005 and some smaller expenditure was incurred thereafter, the claimant seeks interest on the compensation sum from 14 July 2005, being a reasonable, appropriate and practical single date from which to calculate  interest.  The claim for interest was not contested.

Result

82. The compensation payable to the claimant is £68,511.58 together with simple interest from 14 July 2005 at 2% per annum.  A letter concerning costs accompanies this decision, which will become final when the question of costs is determined.

 

 

Dated 3 May 2012

 

 

N J Rose FRICS