UT Neutral citation number: [2013] UKUT 422 (LC)
UTLC
Case Number: ACQ/120/2011
TRIBUNALS,
COURTS AND ENFORCEMENT ACT 2007
COMPENSATION – compulsory
purchase – shop and premises – condition – cost of essential repairs to bring
into safe and lettable condition – valuation methodology – comparables –
disturbance – compensation determined at £255,000
IN
THE MATTER OF A NOTICE OF REFERENCE
BETWEEN PAUL
& CHRISTOPHER JAMES
t/a
P & C JAMES PROPERTIES Claimants
and
WELSH
ASSEMBLY GOVERNMENT Acquiring Authority
re:
221 High Street, Swansea SA1 1NW
Before:
P R Francis FRICS
Sitting
at: Neath Magistrates Court, Fairfield Way
Neath,
West Glamorgan SA11 1RF
on
22 & 23 May 2013
James Pereira, instructed
by Peter Williams & Co, solicitors of Swansea, for the claimants
Rhodri Williams QC,
instructed by Legal Services, Welsh Government, for the acquiring authority
DECISION
Introduction
1. This is a
reference to determine the compensation payable to Paul & Christopher James
(the claimants) arising from the compulsory acquisition by the Welsh Assembly
Government (the acquiring authority or WAG) of the freehold interest in 221
High Street, Swansea SA1 1NW (the subject premises). It was acquired pursuant
to the Welsh Ministers (High Street, Swansea) Compulsory Purchase Order 2009
(the CPO) which was confirmed on 3 July 2009 following a public inquiry, in
connection with a proposed mixed use redevelopment of a small part of the High
Street to comprise retail, residential, leisure and office use together with
ancillary parking and public realm improvements. A General Vesting
declaration was made on 17 August 2009, and came into effect on 16 September
2009 which is the date the keys were handed to the acquiring authority and thus
the agreed valuation date for the purposes of this reference.
2. Mr James
Pereira of counsel appeared for the claimants and called Mr Paul James together
Mr Vivian James Halloran, a local building contractor, who both gave evidence
of fact. Also called were Mr Paul Bastian BSc MRICS, principal of Paul Bastian
Associates, Chartered Building Surveyors of Gorseinon, who gave expert building
surveying evidence and Mr Henry Church MRICS, a director in the Compulsory
Purchase Team of CBRE Ltd of London who gave expert valuation evidence.
3. Mr Rhodri
Williams QC of counsel appeared for the acquiring authority and called Mr
Graham Dickenson BSc (Est Man) FRICS who had provided expert evidence in
respect of issues of disturbance, Mr Andrew Watson B Eng (Hons) C Eng MICE, a
Chartered Engineer with Atkins who had prepared reports on condition and, in
association with Faithful & Gould, an associated company of Atkins,
provided a schedule of condition, repair cost estimates and reports on tenders
received. Mr Gareth Harries BSc FRICS MCI Arb, a director of Rowland Jones,
Chartered Surveyors of Swansea, gave expert valuation evidence.
4. The
claimants’ compensation claim (prepared and submitted by Mr Church) originally assessed the value of the freehold at £480,000 (£500,000 less £20,000 for
essential repairs). In Mr Church’s expert witness and rebuttal reports, the
cost of repairs had been increased to £50,000 leaving a net claim for the
freehold of £450,000, assessed under section 5, rule (2) of the Land Compensation
Act 1961. Disbursements were also claimed under section 5, rule (6). The acquiring
authority argued for compensation amounting to £130,000 under rule (2), being
£225,000 for the freehold less £95,000 for repairs, together with disbursements.
Shortly prior to the commencement of the hearing, the parties agreed disturbance
compensation in the sum of £15,000 relating to all heads of claim together with
an occupier’s loss payment of £25,000. It was also agreed that a Basic Loss
Payment shall be paid at 7.5% of the freehold value as determined by the
Tribunal and that the claimants’ professional fees, reasonably incurred, shall
be compensated for. The issue of pre-reference costs remained live as at the
start of the hearing although no evidence was adduced, and it was agreed that
if the parties were unable to settle these, they should be subject to
determination by the Tribunal at a later date, such determination to be based
upon written representations. Confirmation was subsequently received to the
effect that this issue had also been resolved.
5. Although a
statement of agreed facts and issues had been prepared and produced by the
valuation experts, it was clear that they had been unable to come to an
accommodation in terms of floor areas. During the course of the hearing, I invited
the experts to re-visit the issue, and they were able to agree figures. This
had the effect of reducing Mr Church’s valuation of the freehold before
deductions for repairs by £60,000, leaving a net claim under this head of £390,000.
Mr Harries’ valuation pre-repairs increased by £2,000 to £227,000 resulting in
a net figure of £132,000.
Facts
6. From the
agreed facts (as amended) together with the evidence and counsel’s helpful
closing submissions dated 21 June 2013 I find the following facts. The
subject premises comprised a mid to late 19th Century mid-terraced
commercial property located on the east side of the southern end of Swansea High Street just to the north of the junction with Kings Lane. Part of the High Street
(including the location of the subject premises) was a thoroughfare between the
railway station and the principal city centre shopping area. The frontage part
of the building had accommodation on ground, first and second floors with
further attic rooms above and a basement together with, at the rear, a more
recent (c. 1930) three storey addition. The whole property was of traditional
rendered masonry construction, with timber framed, slate covered roofs finishing
to a parapet to the front, with part slate and part corrugated asbestos to the
rear slopes. There was a small enclosed rear yard, accessible only from within
the building.
7.
The ground and first floor were used for retail sales together with the
basement which was used for both retail and storage purposes. The upper floors
were available for office/storage use. The floor areas (as agreed during the
hearing) were as follows:
Ground floor 4,266 sq ft (396.32
sq m)
First floor 4,355 sq
ft (404.59 sq m)
Second floor 1,949 sq ft (181.06
sq m)
Third floor 625 sq
ft (58.06 sq m)
Basement 1,041 sq
ft (96.71 sq m)
Total 12,236 sq ft (1,136.76
sq m)
The ground floor
area, if adopting the zoning basis for valuation purposes, was agreed as:
Zone A 604.72 sq ft (56.18
sq m)
Zone B 591.91 sq ft (54.99
sq m)
Zone C 567.91 sq ft (52.76
sq m)
Zone D 533.36 sq ft (49.55
sq m)
Remainder 1,968.13 sq ft (182.84
sq m)
8. The
claimants, who are property investors, developers and commercial landlords,
acquired No 221 High Street in October 1998 in a dilapidated state and
immediately commenced a programme of refurbishment which included replastering
to the basement, ground and first floors, rewiring, suspended ceilings to the
principal trading area, repairs to the front part of the roof, new uPVC windows
and rooflights to upper floors, concreting to the rear yard and complete
internal and external redecoration. On completion of the work which took about
6 months, the premises were let to a furniture retailer who remained in
occupation until October 2006 at which time the passing rent was £18,200 pa.
9. During
2004, the claimants applied for and secured planning permission for the
conversion of part of the ground floor and the upper floors into five
residential flats, but that permission was not implemented and it was agreed by
the valuation experts that no value was to be ascribed to the development potential
over and above the premises’ existing use value.
10. After the first tenant
vacated, the subject premises were subsequently re-let to another furniture
retailer and thence to a second hand furniture dealer (at £26,000 pa) who
abandoned the building owing rent. From about November 2008 the claimants
occupied and traded from the subject premises, storing and selling bankrupt and
liquidated stock up until shortly before the valuation date.
11. In July 2009, following the
intervention of a surveyor appointed by the City and County of Swansea, the
council approached the claimants and threatened to serve a Building Notice
under section 78 of the Building Act 1984 due to concerns about the structural
integrity of the upper part of the facade and the front part of the roof. The
claimants had to arrange for the erection of scaffolding (which projected out
into the street) and the affected areas including the whole of the front wall
at second floor level were removed, leaving the upper floors open to the
elements. The erection of the scaffolding and partial demolition works served
to forestall any further action under the Building Act but prevented the subject
premises from being utilised for trading, and the claimants’ business thus
closed in July 2009, some two months before the vesting date.
Issues
12.
The issues to be determined can be summarised as:
1. The extent and cost of works required to bring the
subject premises back into a safe and lettable state of repair as at the
valuation date.
2. The appropriate valuation methodology to be
utilised: capital value per square foot as argued for by the claimants, or an
investment basis (capitalisation of estimated rental value using an appropriate
yield) as adopted by the acquiring authority.
3. The freehold value calculated in accordance
with my conclusions as to methodology, taking into account the condition and
level/cost of repairs required.
I deal firstly with Messrs James and
Halloran’s evidence of fact before summarising the respective parties’
evidence, argument and submissions relating to the first issue. After setting
out my conclusions on that, I turn to the question of valuation methodology and
thence to the valuation.
Mr James’ evidence
13.
Mr James set out the history of his and his brother’s acquisition of the
subject premises and the background to the dispute from their perspectives in a
comprehensive witness statement, and a second statement rebutting the acquiring
authority’s experts’ proofs of evidence. He said that P & C James
Properties was in the business of property investment, acquiring and letting
premises that were suitable to their portfolio. They also deal with bankrupt,
liquidated and salvage stock, catering equipment and antiques and art which
they acquire and dispose of both privately and in auctions which they run.
The company has, over almost 30 years, acquired properties of varying types
including theatres, listed buildings, commercial and residential units, HMOs,
public houses and land. They normally buy run down and dilapidated properties
which they refurbish and then let.
14.
The subject premises, Mr James said, were considered to be an ideal
addition to the portfolio when they came onto the market in 1998 as
opportunities to acquire large vacant freeholds in the city centre were
extremely rare. They were advised by the selling agents that there were
several other interested parties, but they were successful and exchanged
contracts in October 1998. Mr James said that they subsequently discovered
that the other interested parties had been Swansea Arts Forum and Swansea
Housing Association (SHA) which is now known as Coastal Housing Group (CHG).
Within 24 hours of exchanging contracts, they were approached by a Mr Tristham
of SHA who offered to buy the subject premises at a price of £115,000 which
would have produced an immediate profit of £30,000. This was refused, but it
was suggested that if an improved offer was made very soon, prior to the
imminent commencement of the proposed refurbishment works, it would be
considered. However, an improved offer of £135,000 was only made some three
months later, by which time the subject premises had been refurbished at a cost
of some £50,000. Mr James said that Mr Tristham expressed disappointment at
the claimants’ refusal to sell and made an intimidating statement to the effect
that SHA would acquire the subject premises eventually, it being a case of “not
if, but when.” During 2000, SHA submitted a planning application for the
development that included the subject premises and which was to become the CPO
scheme following a revised, extended, application made in 2004.
15.
It was during 2004 that the claimants obtained planning consent for the
provision of 5 flats within the building, and Mr James said they had every
intention of implementing it; however with the rumours abounding in respect of
the proposed CPO, they decided to wait and see before embarking upon the
project. In November 2004, the claimants received the first approach from a
Mr Tim Raine of the Welsh Development Agency (WDA) (now subsumed into the
WAG). Mr Raine had already approached the tenants of the shop and premises
advising them that they should consider relocating. Following discussions with
Messrs James, Mr Raine made an offer for the freehold of £250,000 during 2005.
This was refused.
16.
With the rumour mill in full swing, and the publication of the draft CPO
in 2007, Mr James said that it became impossible to find replacement tenants
for the subject premises once the former tenants had vacated, and the whole of
the southern end of the High Street was becoming run down with many empty and
dilapidated premises in the vicinity. It was then that Mr Church of CBRE was
appointed to act as the claimants’ agent in negotiations with SHA in respect of
the impending compulsory acquisition.
17.
Following the letting difficulties, the brothers decided to open and
trade from the subject premises themselves, which they did in November 2008. By
this time Mr Raine had increased his offer (through CBRE) to £400,000 inclusive
of disturbance costs. This was again refused. A revised, final offer was made
in December 2008 at £500,000 but there were conditions attached including the
need for a survey and any necessary repair costs to be deducted, and also a cap
on disbursements at £5,000. Mr James said these offers were confusing and
appeared to be “a smoke and mirrors type of business” from which it was
impossible to define precisely what they would be receiving. Mr James said
that he had formally objected to the CPO at the public inquiry that was held
during 2008, and during cross examination of Mr Raine it had been admitted that
Mr Raine had not been transparent in respect of his negotiations to acquire the
property, and that those negotiations had not been in line with the
requirements set out in Circular NAfW 14/2004.
18.
Mr James then proceeded in his witness statement to set out paragraph
9.5 of the Inspector’s report following the inquiry which summarised the
allegations of lack of negotiation and underhandedness on the acquiring
authority’s part. In cross examination, he admitted that that paragraph was
not the Inspectors conclusions, but his summary of the proceedings as they
related to pre-CPO negotiations. Paragraph 12.20 of the Inspector’s report set
out his conclusions on this aspect. It read:
“12.20 As to [the James’] case against
the CPO, it is clear that there has been much contact between them and,
initially, Swansea Housing and, more recently, the [Acquiring Authority].
Offers have been made to secure the objectors’ interests in the plots.
Whether those offers were reasonable or not is not a matter on which I could or
need to form a view but it is clear to me that while the Objectors have firm
opinions about the merits or otherwise of the project, the gap between the
parties is essentially financial. To my mind the dialogue which has taken
place between them could not be viewed as other than amounting to negotiations
and accusations of under handedness do not change that conclusion. Circular
NAfW 14/2004 exhorts acquiring authorities to acquire land be negotiation
wherever practicable and I believe that the [Acquiring Authority] has
endeavoured to do so on this occasion.”
19.
It was a fact, Mr James said, that Mr Raine had revealed at the public
inquiry that the District Valuer had attributed a value of £400,000 to the
subject premises, and £300,000 to No. 222 High Street. However, despite the
council’s currently stated case that £95,000 was required to repair the
building, the valuation prepared by Mr Harries was for only £130,000. That was
ludicrously low, would be nothing like sufficient to acquire a like replacement
and indeed was barely enough to buy a small house. It seemed to the claimants
that they were being singled out unfairly and their suspicions were supported
by the fact that they were refused access to inspect the other properties that
the council purchased in connection with the scheme, and despite repeated
requests, the council had resolutely refused to disclose the prices paid or the
bases of their settlements.
20.
Turning to the approach from the council regarding the alleged
structural instability of the front façade, Mr James said they took immediate
steps to arrange scaffolding and to carefully take down the affected parts of
the structure as they were able to do this at reasonable cost. If they had
ignored the notice, the council would have carried out the work and they would
have carried out an extremely expensive belt and braces exercise for which they
would have had to pay a much higher sum than they could get it done for
themselves.
21.
In respect of the council’s schedule of repairs and cost estimates, Mr
James said it appeared that Faithful and Gould had adopted a “text book”
approach to the physical condition of the subject premises and the work that
they alleged to be necessary to put it back into sound, weathertight and
lettable condition was seriously overstated. Their recommendations, Mr James
said, were far removed from the practicalities of what works were actually
needed to continue with the reasonable use of the building especially as their
report seemed to ignore the substantial refurbishments that had been
undertaken. It was particularly galling that it was being suggested the
property needed a complete rewire when, in fact, that had only recently been
carried out. The electricity was connected and working when the subject
premises were handed over to the council – as the photographic schedule
produced at the time proved, and as Mr Bastian had confirmed, and there was no
logical explanation for the council’s suggestion that the swithchgear had been
“ripped out”. The situation and works required were as set out in Mr Halloran’s
witness statement, and Mr Bastian’s expert witness report. They would have
been organised by the claimants, who would have arranged for an estimate, and
supervised the works themselves. There was no need for the appointment of
professional over-seers, and the list of allegedly required preliminaries set
out in the council’s report was simply ludicrous. Mr James said that he and
his brother adopted a hands-on approach and were perfectly capable of
organising and overseeing the works themselves, as this was part of what they
regularly undertook in respect of their property portfolio.
22.
Although he admitted he was not a valuation expert, Mr James said that
he found Mr Harries’ zoning approach to be confusing and inconsistent, and
there were errors such as the fact that the basement had always been used for
retailing, but he attributed no value to it. Mr Harries had also not made any
allowance for the premium value of being able to obtain a vacant city centre
freehold. Mr James said that in assessing whether a prospective investment
property “stacked up” in terms of the price being quoted, he always analysed
the price on a capital value per square metre (as Mr Church had done) after
taking into account all relevant factors such as condition, development
prospects and location. Mr Harries’ valuation appeared to have been coloured
to a large extent by Faithful and Gould’s report, and produced in a fashion
that did not reflect the reality of the situation, or the type of purchaser who
would be interested.
Mr Halloran’s evidence
23.
Mr Halloran is a self-employed general builder with over 30 years
experience in the industry. He said that he had been approached by the
claimants in July 2009 to quote for the rebuilding of the upper section of the
front wall of the subject premises and to install new glazing. It was intended
that the new façade should be built off two substantial oak beams crossing the
frontage at first floor level which, although showing some signs of the effects
of damp ingress were, in his view, with some minor repair, perfectly
satisfactory and not in need of replacement. He said he had carefully
inspected the beams, and had “tested” their strength and condition with hammers
and crowbars. He did not agree with the acquiring authority’s expert’s
suggestion that those beams needed to be replaced with steel lintels - indeed, the
council’s building surveyor, Mr Brian Perman, had stated at a site meeting on
13 July 2009 that he was happy that the beams could be built off, but requested
that “Acrow” adjustable props should be inserted to the upper floors to support
the floors above whilst the rebuilding works were being effected. The
intention was that these should rest upon the aforementioned oak beams and, Mr
Halloran said, it would have been foolhardy to suggest that if the beams had
been suspect. Further props would be placed below the beams, down to basement
level, just during the reconstruction works.
24.
In the light of the fact that by the time of his visit the scaffolding
that the council had demanded was already in place, Mr Halloran said that this
would make his job much easier and quicker, and he calculated that all the
necessary works could be completed within one week. He quoted £10,196 which
was simply for replacing and re-glazing the façade and repairing and connecting
in the front section of the original roof. It did not allow for demolition of
the existing damaged façade which had already been done.
25.
In connection with the scaffolding, Mr Halloran said that although the
way it had been constructed gave the impression that it was propping up the
building, that was not, in fact, the case. Its construction had been at the
council’s insistence, and its intrusion into the main High Street roadway
seemed to be unnecessary. It merely gave access for the required demolition
and reconstruction works to the upper part of the front façade.
26.
In cross-examination, Mr Halloran accepted that he had no specific
engineering qualifications, but said the job for which he quoted was relatively
simple and straightforward. If the oak supporting beam did have to be
replaced, as per the council’s expert report, then he accepted it would become
a much larger and more expensive job.
Issue 1: The extent and cost of works
27.
The parties had gone to considerable lengths (and cost) in terms of the
evidence produced to support their respective positions on this issue. At the
commencement of the hearing, the claimants’ argued for a reduction from the
freehold value assuming the subject premises to be in sound and lettable
condition of £50,000. This was based upon the schedule of condition prepared
by Mr Bastian within days of the valuation date, whereby he had estimated the
cost of repairing the front wall at about £18,000 + VAT and the other required
internal works at about £10,000 + VAT, together with some additional costs
which Mr Bastian had not factored in. The acquiring authority, through the
evidence of Mr Andrew Watson, supported by actual tender figures that had been
provided by Contract Services Ltd, said the total cost of works should be
allowed in the sum of £95,000.
28.
During the course of the hearing, the parties’ experts agreed costs for
the essential repair works to the front façade at £35,464 as per Contract
Services’ tender figure. In addition, the £10,000 that Mr Bastian had allowed
for a number of other works (as itemised in a table at paragraph 2.2.1 of Mr
Watson’s rebuttal report) was agreed. This brought the agreed items to a total
of £45,464 – which, according to the claimants, left approximately £4,500
“headroom” towards other costs (based upon Mr Church’s adopted overall £50,000
deduction for repairs). However, excluding the now agreed sum, the remaining
required works amounted, according to the acquiring authority to some £48,600.
Thus, by the end of the hearing, the sum remaining in issue was just short of
£50,000. The acquiring authority, in an attempt to resolve the matter, had
made an open offer to compromise the whole cost of works issue at £72,500 –
which it transpired was approximately midway between the £95,000 sought by them
and the £50,000 adopted by Mr Church. However this was rejected by the
claimants and the offer was thus withdrawn.
29.
The partial agreement on costs of works means that a detailed summary
and analysis of the building surveying experts’ reports and evidence is
unnecessary, and I just concentrate therefore on the remaining matters in
dispute under this head. Firstly, Preliminaries. The claimants assess
this at £1,450 to cover the mandatory “Construction Phase Health and Safety
Plan” at £200, security (50% of Contract services’ estimate of £1,800 and waste
collection at 5 % of £700). As Mr James had said, purchasers of this type of
property do not normally undertake all the preliminary works that had been set
out in the acquiring authority’s evidence and anything that needed doing, they
would undertake themselves or delegate at little cost.
30.
The acquiring authority’s figure was £15,050 to include the above items
together with contractors’ accommodation, health safety and welfare provisions
and other safety related aspects. These were the standard building contract
preliminaries which, Mr Watson said, any contractor would build into his
project costs. However, he acknowledged that some minor savings could
inevitably be made although he had little experience of working with purchasers
of the type described by Mr James, and could not therefore comment upon the
specific items that the claimants might undertake themselves. As to project
management, which Mr James had said he would undertake himself, Mr Watson said
this was a cost that did not form part of the preliminaries and would have been
separately identified. Thus, there was little room for manoeuvre on this issue.
31.
During the course of exchanges on this issue, I indicated that my
preliminary view was that a realistic figure for preliminaries was likely to be
“somewhere in the middle” of the figures the parties were arguing for. I fully
accept Mr James’ evidence that some savings could be made by undertaking
certain matters themselves. However, there is no evidence that all, or a
majority of, purchasers of this type of property would be in a position to make
such savings or to undertake certain preliminary aspects themselves. The fact
is that preliminaries are nowadays a not insignificant part of any building
project, particularly in respect of health and safety issues to which all
contractors have to adhere. Doing the best that I can on the evidence, I
conclude that a reasonable sum for preliminaries on this project, which is in a
high profile position on the High Street, and thus where there are
considerations as to public safety, traffic management and the like, would be
£10,000.
32.
The next disputed issue related to scaffolding. Mr Bastian said
that he had allowed £2,000 for this in his £10,000 rounded estimate of costs
(referred to above). The acquiring authority had estimated this item at
£4,080. It was submitted that as there was some £4,500 of “headroom” built
into Mr Church’s £50,000 figure, it was not necessary to make any addition to
the claimant’s figure to allow for scaffolding. I accept this and therefore
make no additional allowance under this head.
33.
Mr Bastian had allowed £1,500 for electrical works on the basis that
there was little that needed to be done, particularly as the subject premises
had been completely rewired when the claimants acquired the building. Mr
Watson argued for £15,068 based upon the bill of quantities prepared by
Faithfull and Gould following the survey and report that had been obtained from
Jadon Electrical which recommended a complete rewire. The state and condition
of the electrical wiring on the valuation date remains a mystery due to the
conflicting evidence of those who carried out inspections on, or immediately
after that date. It is clear from Mr Bastian’s evidence, and the photographs
accompanying his report that the supply was connected and working on 14
September 2009, and Mr James was adamant that the electricity was still
switched on and working when the keys of the subject premises were handed over
on 16 September 2009. Faithful and Gould’s report indicates that the system
was intact, and their inspection took place on the valuation date. It is only
the Jadon Electrical report that suggests the distribution boards had been
removed, and that the supply had been cut. Their inspection was on 24
September, just over a week after the vesting date.
34.
I am satisfied that the system was operational on the vesting date, accept
Mr James’ evidence that the wiring had been extensively renewed not many years
previously, and Mr Bastian’s opinion that £1,500 would suffice as a sum for any
necessary repairs and upgrading.
35.
Finally, on this issue, is the question of replacement glazing. Mr
Bastian allowed £1,000 based upon Mr Halloran’s estimate for the replacement of
six upper floor windows. The acquiring authority bases its figure of £14,404
on the specification produced by Faithful & Gould which included
replacement of the shop front window – but this was not specifically costed by
Contract Services. Although Mr Watson had not been specifically involved in
this aspect, he said that single glazing would not have complied with building
regulations, and double glazed units would have been required. I can see no
reason why the shop window should form part of the cost of repair, and accept
the claimants’ argument that it was perfectly adequate for its purpose.
Accepting that double glazed units or secondary glazing would be needed to
those upper floor windows that had to be replaced, I think Mr Bastian’s figure
was somewhat light, and assess this element at £3,000.
36.
The figure that should be deducted from the valuation of the subject
premises to reflect the essential and necessary repairs becomes:
Agreed items £45,464
Preliminaries £10,000
Electrical works £
1,500
Glazing £
3,000
£59,964
- say £60,000.
Issue 2 - Valuation methodology
37.
Mr Church said that he dealt with commercial property throughout England and Wales, and whilst he did not have an intimate knowledge of the Swansea market or
particular retail experience, he said the subject premises were a typical
tertiary property investment, with a retail element - this description together
with comparables relied upon in analysis having been agreed with Mr Harries. His
assessment of value was based upon a capital value per sq ft adjusted to
reflect the costs and risks associated with the requisite essential repairs and
generally putting the building into lettable condition. He said that bearing
in mind the type of property and the type of purchaser in the market place (of
whom the claimants were typical), this method was far more appropriate than the
investment method that had been adopted by Mr Harries. That, he said, would be
used for sound retail investments such as city centre premises that were fully
or partially let and that would be of interest to property companies, pension
funds and other long-term investors who seek stable, long-term investments at
low yields.
38.
Mr Church said that using a zoning approach, especially where the retail
area was limited as a proportion of the overall floorspace, and multiplying the
rent by an appropriate number of years purchase, ignores many fundamental
attributes or detractions to the property’s value. Those include the rarity of
freehold properties like the subject premises, the volatility within the rental
market for this type of property, the rent potentially achievable and the
chances of future development or of acquiring neighbouring property. His
preference for capital value per sq ft was based upon the admittedly limited
number of no-scheme freehold transactions which reflected the prices actually
achieved for this type of property in open market transactions. If the
investment method was applied to these sales (using the VOA’s floorspace
information and Mr Harries’ £15 psf ITZA rental level) and his yield of 9.5%,
these transactions devalue to give yields of 2.5% to 6.0% which are out of step
with the market and prove freehold properties have a premium value over
investments. However, in undertaking an alternative valuation based upon Mr
Harries’ preferred methodology, it was his view that the rental value ITZA was
£17.50 psf and the appropriate multiplier would be 8.5%. I consider his
valuations in detail further below.
39.
In his evidence, Mr Harries maintained a consistent and unbending
argument that the valuation of commercial retail premises was traditionally
undertaken by preparing an estimate of rental value, based upon open market
lettings and from rent reviews on comparable properties within the locality,
applying any relevant adjustments (such as quantity allowance) and then
capitalising the product by using an appropriate yield. He said that whilst
he had considered adopting a rental value per sq ft based upon the overall
floor area, as used in valuing department stores and very large retail units,
he had concluded that the zoning basis was the most appropriate in situations
such as this – that also being consistent with the method used by the Valuation
Officer in non-domestic rating assessments. On the basis of rental evidence that
he had been able to obtain he concluded in his expert report dated 30 May 2012 that
the subject premises had a rental value of £15 psf ITZA and an appropriate
yield to apply was 9.5%.
40.
As to Mr Church’s approach, Mr Harries said that this was not used by
valuers in the market place, especially where, as the agreed comparables
relating to open market transactions showed, there was considerable
inconsistency in sale prices. He said that in his 26 years experience of
valuing retail properties he, and other valuers, always use the investment
basis whatever the circumstances. Indeed, in this matter, the original
valuation carried out for the claimants by their previous valuers, Dawsons, on
20 April 2005, was calculated precisely on this basis. If there was no tenant
in place, Mr Harries said, it had to be assumed, from comparable rental
evidence, what a new tenant would pay. Any allowance for voids would be taken
into account in the yield.
41.
Mr Harries said that Mr Church, in his report, tended to largely ignore
the limited number of transactions of which there was evidence at the valuation
date, relying principally upon his analysis of the sale of 25 High Street.
This was wholly inappropriate particularly as the properties were of markedly
different sizes and layouts. A straight comparison on this basis was, he said,
totally meaningless whereas use of the zoning/rental value method would iron
out such differences.
42.
Mr Church had also referred to the fact that, although sold with vacant
possession, no. 25 had been the subject of a lease commencing in 1999 at a
rental, reviewed to £11,500 pa in 2004, that equated to £15 psf ITZA – that
being the figure that Mr Harries had used in his valuation of the subject
premises. Whilst it was acknowledged that there had been little movement in
the market between the review date and the valuation date, Mr Harries pointed
out that in applying that figure without adjustment to the subject premises
produced a rental value of £25,000 pa, which at Mr Church’s 8.5% yield gave, on
the investment basis, a value of £295,000 – very different from the amount
being claimed (Mr Church’s main report para 51). However, no quantum
allowance had been made by Mr Church, whereas Mr Harries said he had allowed
20%, which would reduce the rental value, and thus the capital value still
further.
43.
Mr Harries went on to say that he failed to understand Mr Church’s
analysis of 32-36 High Street, which had also produced a figure for the subject
premises of £295,000 on the investment basis because in that instance he had
chosen to make adjustments from the agreed £10.25 psf zone A figure, and had made
a 30% quantum allowance which he had not used on No. 25. This, therefore,
indicated the lack of consistency to which he had referred.
44.
Mr Harries vehemently disagreed with Mr Church’s assertion that there
was a premium for owner occupation. He said it was impossible to quantify
depriving oneself of rental income whilst gaining the opportunity to trade from
the premises. Indeed, he said that in a poor market, as an investment, it
might be considered more valuable to have a secure income stream from a tenant rather
than the ability to trade. There was certainly no evidence to support the
implied difference (between the £526,000 valuation figure claimed [adjusted to
£440,000 during the hearing] under the capital value per sq ft basis and the £295,000
that he had said was indicated by the investment basis analysis of Nos. 25 and
36-39 High Street).
Submissions
45.
For the acquiring authority, Mr Williams submitted that Mr Church’s chosen methodology failed to reflect any inconsistencies such as the comparable
properties’ size, configuration, condition and location, whereas Mr Harries’
zoning approach eliminated them. This was well illustrated by the changes to
the valuation brought about by the valuers’ late agreement on floor areas.
The principal change in the agreed areas was, it was submitted, in relation to
the “remainder zone” which gave rise to a negligible increase in Mr Harries’
valuation (less than £2,000 or 0.85%) whereas the adjustments created a
reduction in Mr Church’s valuation (pre-repair costs) from c. £525,000 to
£440,000 – some 16%. It was also suggested that Mr Church had set too much
store by the scheme related comparable capital value transactions and had
failed to take proper account of no-scheme world transactions. Thus he had not
acted correctly within the compensation code.
46.
In submissions for the claimants, Mr Pereira pointed out that Mr Harries
methodology seemed to disavow an important part of the acquiring authority’s
pleaded case in that, in its statement of case at paragraph 15, the first
sentence read:
“It is
accepted that adjoining properties were generally occupied by speculators and
developers and that this type of property is rarely traded on an investment
basis, since what tenants there are do not offer sufficient covenant strength
to make investment viable.”
He said that although Mr Harries had admitted
that he had been involved in the original drafting of the acquiring authority’s
statement of case, he had clearly stated in cross-examination that he disagreed
with the above statement. He said that Mr Harries had accepted that the type
of purchaser for the subject premises would be a speculator or developer, that
there was no great choice of tenants in the market place and that those that
were would have insufficient covenant strength to warrant the investment method
being the sole basis upon which to make a purchase decision. It was submitted
that Mr Harries’ dogmatic adherence to the investment method, which he had said
needed to be used for consistency and to accord with the RICS codes of
practice, failed to reflect any premium or additional value which the potential
for redevelopment or owner occupation would provide.
Conclusions – valuation methodology
47.
Firstly, In respect of Mr Pereira’s reference to Mr Harries’ alleged concession,
I have carefully checked my note of Mr Harries’ replies in cross examination.
He said that he disagreed with the statement that the properties were “occupied”
by speculators and developers – the word should have been “owned”. The
concession was not, as I understand it, that the investment method of valuation
was inappropriate in these circumstances. Indeed, he went on to say that
valuers always use the investment basis on retail properties even where
premises are not let. The assumption would be made that a tenant would be
found and the valuation would be based upon the rent that a tenant would be expected
to pay. The fact that it was not let would be reflected in the yield. So,
whilst it was acknowledged that this type of property would not be attractive
to pension funds and the like, the investment method of valuation would still
be used. When pressed on the question, he gave the example of a valuer for a
bank or finance company who might be looking at a prospective purchaser’s
application for funding. He would use the investment method rather than Mr Church’s preferred route, and would make the necessary adjustments. Valuation
methodology, Mr Harries said, had to be consistent. If there was any material
development value (which in this case it had been agreed there was not), he
said that a residual valuation would be adopted to establish whether the
development potential exceeded that investment value. Mr Harries was also
adamant that there was no value premium for the ability of the purchaser to
occupy and trade from the premises himself.
48.
I am persuaded by the arguments that, under normal circumstances, the
investment method is the orthodox approach, and is the one to which valuers normally
adhere – that principle being, as pointed out by the acquiring authority in
closing, set out clearly in the relevant valuation textbooks. For example, in
Valuation: Principles into Practice (6th Ed) Chapter 7, Mr J
C Hill FRICS (a former Member of the Lands Tribunal) said:
“With few
exceptions, retail outlets, whether freehold or leasehold, owner occupied or
held as an investment, are normally valued on an investment basis, i.e. by
the capitalisation of rents and rental values, and it is the assessment of
rental value to which the valuer has initially to apply his mind.” [my
emphasis].
The acquiring
authority then went on to quote from Modern Methods of Valuation (11th
Ed;2011) (Eric Shapiro, David Mackmin and Gary Sams) regarding the adoption
of zoning and the need for adjustments such as quantity allowance – which had
been used by both Mr Harries and the Valuation officer when carrying out the
non-domestic rating assessment on the subject premises.
49.
On the question of zoning, in my view Mr Church’s assertion, set out at
paragraph 4.3(b) and (c) of his rebuttal report, was not relevant. He said
that the zoning approach is not one that the claimants (as confirmed by Mr
James), or others looking to purchase property of this type would be aware of
and that this supported his arguments as to the inappropriateness of the
investment method. Knowledge of the precise workings and methodology adopted
by a purchaser’s professional adviser is not something that is necessarily required
by the client – it is the result that matters, and it is only right that in achieving
a correct result, valuers adopt the same basic and approved platform for so
reaching it. Further, a valuation under Rule (2) of section 5 of the Land
Compensation Act 1961, is not to be made by reference to the subjective value
to the owner, but rather, objectively, by reference to the amount which the
land might be expected to realise if sold in the open market by a willing
seller. (See The Law of Compulsory Purchase (2nd Ed; 2011) (Barry
Denyer-Green)).
50.
Nevertheless, in spite of what I have said above regarding the
traditional and accepted approach, I see no reason at all why in respect of
vacant freeholds like the subject premises, an analysis on the basis of Mr Church’s approach should not be used in limited and appropriate circumstances. Indeed,
it could reasonably be argued that a straightforward analysis based upon a
capital value psf might be more reliable as there are fewer imponderables -
especially for instance where yield rate evidence is particularly volatile or
limited. If there was actual evidence that a similar vacant freehold property,
in a similar location, in similar condition with no development potential and
untainted by any scheme influence had been sold (and the type of typical
purchaser really does not matter) then of course that evidence can, and should,
be taken into account. If, on an analysis of what the rental value would be and
adopting an appropriate yield, the price achieved was higher than that which
would result from the traditional investment valuation, then a premium for
vacant possession is proved. If there is no such premium, then the two methods
should produce the same result, provided the correct variables are used.
51.
As will be seen under “Valuation” below, for the reasons set out, I am
not persuaded that Mr Church’s evidence and arguments prove that the subject
premises enjoy a premium over and above the value established by adopting the investment
method. The difference between his valuations carried out on the capital value
psf basis, and those he undertook on the investment basis imply a vacant
possession premium of some 67% more than the investment value.
52.
In my judgment there would be little point in a purchaser paying anything
more than a most limited premium for the right to occupy and trade from his own
premises when he could simply go and rent premises elsewhere, at the
appropriate market rate. In other words, he would be paying more for no return
where, as has been agreed in this case, there is no additional value attaching
to the development potential for the upper floors. Any additional value that
might be perceived such as the hope of being able to incorporate an adjoining
or neighbouring property, as argued by Mr Church could, as Mr Harries said, be
reflected by an adjustment to the yield.
53.
I really am not convinced that those in the market for this type of
property – the type of buyer who, as Mr Church said, would be looking for a
longer term investment with opportunities for development and enhancement –
would be prepared to speculate over 60% more than its value as an investment
where there is certainly no immediate prospect of said enhancement. The
returns on that basis would not make economic sense. There is also no evidence
that the purchase price paid by the claimants when they acquired the subject
premises was significantly above its investment value.
54.
Finally, in deciding that Mr Church’s approach is inappropriate in this
case, I find the huge effect that the adjustment to floor areas had on the
resultant value (see paragraph 45 above) proves the point beyond doubt.
Valuation
55.
Having concluded that it is not possible to say that, in every single
case, one method of valuation must be adopted to the total exclusion of
the other, in this case the evidence clearly suggests the investment approach
to be the most reliable.
56.
Mr Church, in his initial valuation based upon capital value psf ,
relied upon Nos. 25 and 212-214 High Street as his principal evidence to
support his capital value psf based upon the overall area of the subject
premises at £36 psf giving £526,320 which he rounded to £500,000 in lettable
condition. He acknowledged that caution needed to be exercised in respect of
No. 25 as it was very much smaller than the subject premises, was differently
configured and likely to appeal to a different type of user. As to Nos.
212-214, they were sold to Swansea Housing Association (predecessor to the
eventual scheme developer, Coastal Housing) some 5 years prior to the valuation
date. Allowing for a 20% adjustment in value to reflect the fall in the market
between the sale date and the valuation date, and a further 20% adjustment for
quantum, Mr Church analysed that transaction also at the equivalent of £36
psf.
57.
Consideration was also given to the purchase by Coastal Housing of Nos.
218 and 219 High Street in December 2008 at £400,000. He said that making the
required allowances, this produced a figure for the subject premises of over £1
million and he acknowledged therefore that, having been acquired directly in
relation to the scheme, it should be accorded little if any weight. However,
he did say that it had been valued by the District Valuer as being at open
market value, and in accordance with the RICS Valuation Standards Practice
Statement. There was, he said, no suggestion in the DV’s valuation that the
property was being acquired by a special purchaser (as part of the wider
regeneration scheme) whereas that had been specifically mentioned in his
valuation of the adjacent No. 222 High Street which was acknowledged to have
been acquired at a price significantly out of step with the market.
58.
It was pointed out in submissions for the acquiring authority that Mr Church had sent an email to Tim Raine of WAG on 14 October 2008 where he said “in any
event, this comp [218-219] is scheme related – the [Lands Tribunal] has shown,
on many occasions, a preference for market transactions.” It was submitted
that whilst the DV’s report on 222 High Street may have needed an express
reference to the evident fact that Coastal Housing Group was a special
purchaser (as 222 High Street was technically just outside the specific CPO
area) it did not need to be expressly stated in relation to 218-219 for it to
be equally true. Indeed, Mr Church had said in his rebuttal report that the
price paid for 218-219 and 222 High Street were out of step with each other,
and there is a general lack of consistency between these transactions, the
suggested investment values and the transactions of other properties purchased
by Coastal Housing Group and validated by independent valuers.
59.
I agree that the limited amount of transactional evidence that Mr Church has identified, and the fact that all but No. 25 High Street were scheme related
in that they were purchased by agreement by the council’s development partner
suggests that little weight should be given to them. I also note that Mr Church conceded in cross-examination that the actual valuation placed upon 218-219 High Street supported neither methodology. It was submitted for the claimants that
the purchase price of 218-219 High Street at £485,000 for properties that were
smaller and in worse condition proved that the acquiring authority’s valuation
of £225,000 for the subject premises was far too low. Whilst that would on
the face of it appear to be a reasonable argument, I am mindful of the
negotiations that took place between Mr James, Mr Church and Mr Raine in the
early stages of this saga whereby the offers that were made were very
significantly higher than the value which is now being argued for. That,
along with the fact that the acquiring authority has refused to reveal details
of the methodology it used in valuing those other properties that it purchased
prior to the CPO, reinforces my conclusion that no weight should be given to the
comparables upon which Mr Church relied.
60.
Turning then to the evidence relating to the investment method, during
the course of the hearing the floor areas were eventually agreed, as were the
rental values to be attributed to the upper floors. The principal issues
between them were the rental value of the retail ground floor in terms of zone
A and whether or not any value should be attributed to the basement. Mr Church
said that if the investment approach was to be the preferred valuation
methodology, his analysis of the comparables suggested a figure of £17.50 psf
ITZA and £1.00 psf should be applied to the basement area giving a rental value
for the subject premises of £23,856 pa. At his chosen yield of 8.5% the
valuation became £281,000 from which the cost of repairs should be deducted. Mr
Harries’ view was £15 psf ITZA with nil for the basement giving a rental value
of £21,588 pa and at 9.5% yield, the resultant value before repair costs became
£227,235.
61.
The valuers agreed the analysis of 7 comparables: Nos. 25, 32-36, 71,
212-214, 218-219, 222 and 227 High Street, Swansea.
62.
Mr Harries firstly considered three properties on which rental evidence
was available. On Nos. 25 and 32-36 he had personally negotiated the rent
reviews. No. 25 had originally been let on an internal repairing lease, and
the review rent from February 2004 equated to a rental value of £15 ITZA for
the retail area, with £3 psf applied to ancillary first floor areas and £1.50
psf to the basement. He said that that property was in similar condition to
the subject premises, but smaller and better located. There had been little
movement in values between 2004 and the valuation date, and taking all factors
into account, including allowing for the internal repairing only basis of the
lease, thought the evidence supported a £15 ITZA rental value for the subject
premises. He said that a useful check was the fact that the property had sold
at auction in May 2009 for £90,000 – that supporting his estimate of freehold
value of c. £130,000 for No. 221.
63.
No. 32-36, a ground floor retail unit within a modern five-storey
residential courtyard development on the opposite side of the High Street was
let in 1999 on effectively full repairing and insuring terms. The rent was
reviewed in March 2005 to £25,000 pa which equated to £10.25 psf ITZA. The
premises were in a slightly inferior position to the subject premises, did not
have a conventional shop-front and were a little further (north) along the
street and on the quieter side in terms of trading potential.
64.
No. 227 was on the same side of the street as the subject premises but
in a slightly better trading position, being south of the Kings Lane junction
which, Mr Harries said, forms a natural pedestrian barrier to the pedestrian
flow from the busier southern end of the High Street. This was another ground
floor retail unit in an otherwise residentially occupied property. It was let
on a new 20 year lease on standard terms at £17,000 pa from July 2010, just 10
months after the valuation date. The figure equated to £17.94 psf ITZA with £2
psf applied to ancillary accommodation and it was Mr Harries’ view that there
was no movement in rental values in the intervening period.
65.
Mr Harries said (and Mr Church agreed) that No. 227 was a particularly
good comparable in that there was clear evidence of an open market letting less
than a year after the valuation date at a time when values were not moving, and
the property was relatively close by. However, Mr Harries considered that a
discount from the £17.94 psf ITZA would need to be made to the subject premises
to reflect No. 227’s superior trading position, whereas Mr Church said there was no evidence to support that adjustment.
66.
Summarising his thoughts on the above comparables, Mr Harries said that
taking into account the more favourable lease terms (to the tenant) on No. 25,
and matters such as trading location, an appropriate rental value could be
anywhere within the range of £11 to £15 psf for the subject premises and he had
applied the highest figure. However, he went on to say that the size of the
unit had to be considered against the size of the comparables and, being much
larger, the subject premises should be subject to a 20% discount for quantum.
He said he noted that the VO had applied a 30% reduction for size in his
assessment of the premises for the 2005 rating list. The resulting rental
valuation (revised during the hearing from the £21,406 he adopted in his
original report following the late agreement on floor areas) became £21,588.
67.
Mr Harries said he had based his opinion of value upon those properties
upon which rental evidence was available and, apart from the auction sale price
of No. 25 as referred to above which, he said, supported his freehold value
opinion, did not utilise the information from the other freehold sales not only
because there was no rental value evidence within them, but several were
acquired by Coastal Housing Group and were, at least in some cases, clearly scheme
related. Indeed, as was submitted by the acquiring authority, Mr Church had expressly acknowledged that the acquisition of Nos. 218-219 were clearly
scheme related. Further, whilst No. 222 was technically just outside the CPO
area, it was immediately adjacent and the acquisition price by Coastal Housing appeared
well above the market rate.
68.
As set out in paragraphs 43 and 44 above, Mr Church’s analyses of Nos.
25 and 32-36 High Street produced figures of just short of £300,000 for the
subject premises based upon his alternative rental value opinion and his
adopted yield (to which I turn below). He acknowledged that if Nos. 25 (which
he agreed was a good comparable) and 32-36 (which, “on reflection”, he
concluded should have less weight attached), produced figures when valued on
the investment basis markedly below the results achieved by his valuation
methodology. He also accepted that he had not applied a quantum allowance to
the subject premises, but had done so on the comparables that he had analysed. As
to his conclusion that the rental value in terms of zone A was £17.50 psf at
the valuation date, he said this was particularly supported by No.227 High
Street (£17.94). There had been movement in the market since 2004, and
therefore Mr Harries’ £15 psf was too low.
69.
On the final day of the hearing, Mr Church produced a revised investment
based valuation following the late agreement on floor areas, and this included
a quantum allowance. The valuation was set out thus:
Area Sq
ft psf £ total
£
Zone A 605 17.50 10,587.50
Zone B 592 8.75
5,180.00
Zone C 568 4.38
2,485.00
Zone D 533 2.19
1,165.94
Remainder 1,968 1.00
1,968.00
4,266
Basement 1041 1.00
1,041.00
1st floor 4,355 1.25
5,443.75
2nd floor 1,949 1.00
1,949.00
3rd floor 625 Nil
Nil
29,820.19
Less 20% quantum allowance
5,964.04
Rental value 23,856.15
YP in perpetuity @ 8.5% 11.77 280,660.59
From this, it is then necessary to deduct
the cost of repairs.
70.
In terms of yields, Mr Harries said that his experience of the local
market place at the relevant time suggested a wide range of between 10% and
15%, but his adoption of 9.5% for the subject premises had erred in favour of
the claimants in order to promote a settlement. He accepted that, especially
with the scheme transactions, it was difficult to establish an accurate yield
rate from the comparable evidence. Mr Church, who had used 9% for his
alternative valuation on the alternative investment basis in his original report
(paragraph 3.12), but subsequently argued for 8.5% based upon the valuation
undertaken by Mr Raine of the acquiring authority in respect of the adjoining
premises, No. 222 High Street, admitted that there was, in reality, no
conclusive yield evidence within the immediate vicinity.
Conclusions
71.
Although in written closing the claimants sought compensation in the
revised (from the original claim) sum of £390,000 in accordance with Mr
Church’s preferred methodology, it was submitted that if the Tribunal were to
find that the investment basis was the correct method, then Mr Church’s revised
value of £281,000 less his suggested £50,000 for repairs, leaving £231,000 should
be preferred to Mr Harries’ £132,000.
72.
As I have found the evidence on the investment method to be the most
reliable, the only remaining valuation issues are the rental value ITZA,
whether or not anything should be applied to the basement, and the yield. I
concentrate upon the evidence and argument on Nos. 25, 32-36 and 227 High Street as those were the principal comparables relied upon for the investment based
valuation. As to rental value, I agree with Mr Church that the analysis of No.
227 High Street provides support for a rental value closer to the £17.94 than
the £15 applicable to No. 25 and the £10.25 psf for Nos. 32-36. I also agree
that there must be a rental value for the basement, and conclude that Mr Church’s assessment at £1 psf for that area is appropriate. However, from my inspection
of the subject premises’ location, I do not agree with Mr Church’s suggestion
that there is no difference in terms of trading location and do concur with Mr
Harries’ view that there should be a deduction to reflect the subject
property’s lightly inferior position. A reduction of between 5 and 10% from
the No. 227 figure would, I think, be appropriate and I therefore determine the
rental value at £17 psf ITZA.
73.
On the question of yields, doing the best that I can in the light of the
acknowledged paucity of evidence, I conclude that the fairest result in respect
of this element is to “split the difference” at 9% - that in fact being the
figure that Mr Church had initially opted for.
74.
The valuation becomes:
Area Sq
ft psf £ total
£
Zone A 605 17.00
10,285
Zone B 592 8.50
5,032
Zone C 568 4.25
2,414
Zone D 533 2.12
1,130
Remainder 1,968 1.00
1,968
4,266
Basement 1041 1.00
1,041
1st floor 4,355 1.25
5,444
2nd floor 1,949 1.00
1,949
3rd floor 625 Nil
Nil
29,263
Less 20% quantum allowance
5,853
Rental value
23,410
YP in perpetuity @ 9% 11.11
260,085
Less essential repairs 60,000
Valuation
200,085
Say £200,000
75.
I therefore determine compensation for the subject premises as at 16
September 2009 at £200,000, to which shall be added disturbance (£15,000),
occupier’s loss (£25,000) and basic loss at 7.5% of the freehold value
(£15,000) making a total of £255,000.
76.
This decision will become final when the question of costs is
determined, and not before. A letter setting out the procedure for making
written submissions on costs is enclosed.
Dated
5 September 2013
P
R Francis FRICS
