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AN ARTICLE by Peter Scrafton FIRRV, FCIArb, MRSA(Hon) Solicitor (Non-Practising)

June 2009.

The original tale of that name was as to the difference between libel and slander.  This case has now been decided by a particularly strong Court of Appeal, comprising the Chairman of the Law Commission who lead the  compulsory purchase project, Carnwath LJ, the present Chairman, Etherton LJ and a member of the Court in Greenweb Thomas LJ.  The issues concerned the assumptions to be made as to planning permission in the assessment of compensation in compulsory purchase.


I have written in these pages on this subject before; and now not only has the Lands Tribunal made a very clear decision after a five-day hearing, but the Court of Appeal has weighed in, with what I might have thought some of the strongest advice to government to take early action in the area of compulsory purchase reform.  I will return to this particular point, at the end of this article.


The problem arose following the acquisition by what is now Transport for London, of a site in Holywell Lane, near its junction with Shoreditch High Street.  The acquisition, in 2001, was for underground railway purposes. 


The claimant’s case was that at the valuation date, 3 December 2001, planning permission could reasonably have been expected, and should be assumed, for redevelopment of the land with a building consisting of basement, ground and first floor offices and two floors of flats above, and that the value of the land should be assessed, accordingly.  The acquiring authority said that it was wrong in law to assume the grant of planning permission in the absence of an assumption that fell to be made under sections 14 to 17 of the Land Compensation Act 1961 and, at the most, only hope value could be claimed. They said, however, that under the planning policies that then applied the local planning authority would not have permitted any element of residential use in an application for development and that, even if it had done so, the highest value in the land was its then current use value.


The Lands Tribunal (George Bartlett QC, President, and Paul Francis FRICS) decided that, on the application of the no-scheme world hypothesis, under the Pointe Gourde principle, the claimant had proved on a balance of probabilities that planning permission for a mixed-use development of the subject property would have been granted by the valuation date.  The claimant was not confined to hope value.


Although an application had been made under section 17 of the Land Compensation Act 1961 for a certificate of appropriate alternative development, such a certificate was never issued. The Tribunal had before it evidence that, by the valuation date (many years after the relevant date for section 17 purposes), a series of planning policy guidance notes had put fresh emphasis on “mixed-use development”, and that, coupled with two recent successful appeal decisions in the locality, led the Tribunal to conclude that the claimant’s mixed-use development proposal would have been regarded as acceptable in the no-scheme world.  These factors were to be of importance in the reasoning of the Court of Appeal


Transport for London took the matter forward to the Court of Appeal, which upheld the Lands Tribunal, holding that the Tribunal had concluded on the evidence before it that, on the valuation date, planning permission would have been granted for mixed-use development.


The Court of Appeal understood the Tribunal to be saying that, on the facts before it, if there were a reasonable prospect of a planning permission at the valuation date, then it was also probable, applying the civil standard of proof, that permission would have been granted. That was because in the no-scheme world, the owner would have been expected to do what was necessary to advance his own interests, by preparing and submitting a suitable planning application; and he would have been entitled to assume that the planning authority would decide it in accordance with the applicable planning policies.


There are important issues of law which are considered in this judgment, and these will be looked at in a later article; but, as far as this particular case is concerned, it should be borne firmly in mind that the Tribunal was entitled to find on the evidence before it, and that it should not be assumed that, where there was a prospect that planning permission would have been granted before the relevant valuation date, then such permission would have been granted: the evidence must be lead and the argument proved, in every case.


The decision itself will repay close study. It is available on the Lands Tribunal’s website under file ACQ/41/2005, the decision having been published on 16th November 2007


©J.P. Scrafton, 2009

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