| LANDS TRIBUNAL — Compulsory acquisition — Compensation — Land in use as public open space — Victorian houses standing on land destroyed by war — Refusal of planning permission for development — Whether valuation on assumption that permission granted — Land Compensation Act 1961, ss 14(1), 15 (3)
Greenweb Ltd v Wandsworth London Borough Council; [2008] WLR (D) 286
CA: Buxton, Thomas and Stanley Burnton LJJ: 31 July 2008
On the proper interpretation of ss 14(1) and 15 (3) of the Land Compensation Act 1961 the amount of compensation payable for compulsory acquisition of vacant land on which Victorian houses had stood prior to their destruction during the Second World War should be based on the assumption that planning permission had been granted for specified development even though planning permission for such development had in fact been refused.
The Court of Appeal so stated when dismissing an appeal by the defendant, Wandsworth London Borough Council, from the decision of the Lands Tribunal [2007] EW Lands LCA 118 2006, given on 17 September 2007, by which it assessed the compensation payable by the Council to the claimant, Greenweb Ltd, at £1.6 m on the assumption that the relevant planning permission existed.The parties agreed that the open market value of the land was £15,000.
S 15 (1) so far relevant provided: “... In a case where — (a) the relevant interest is to be acquired for purposes which involve the carrying out of proposals of the acquiring authority for development of the relevant land or part thereof, and (b) on the date of service of the notice to treat there is not in force planning permission for that development, it shall be assumed that planning permission would be granted ... such as would permit development thereof in accordance with the proposals of the acquiring authority.”
STANLEY BURNTON LJ said that ss 14 and 15, like other provisions of Part II of the Act, contained a number of provisions expressed in mandatory terms. Thus, s 14(1) provided that certain determinations “shall be made on the following assumptions”. The verb “shall” meant that the making of the assumption was mandatory. The use of the word “assumption” itself indicated that what was to be assumed might not be factual. The consequences of the application of the clear statutory words in the present case were not so absurd that one could see that Parliament must have made a drafting mistake. The mandatory directions must have been given by Parliament quite deliberately. Furthermore, if s 15(3) was to be read as merely directory, in accordance with normal rules of statutory interpretation so should the same words elsewhere. That would defeat, not carry out, the legislative intention as expressed in the Act. There was no ambiguity in the word “shall”, or in the phrase “it shall be assumed that …” The assumption was mandatory. The phrase did not and could not mean “it may be assumed that”. Moreover, if it could be read as “may”, one would have to read into the section the criteria or guidance to enable the compensating authority or the Tribunal to know when it was, and when it was not, to make the assumption in question. That would be to add to the statute words that were not there. It would be to legislate, not to interpret. Moreover, if the assumption was only to be made when supported by the facts, it ceased to be an assumption, and the express provision became otiose. S 14(20 and (3A)(b) confirmed his Lordship’s construction. The number of anomalies created by the statutory provisions to which this appeal related should therefore be small. Unfortunately for Wandsworth, this case concerned one of them. His Lordship reached his conclusion most reluctantly; he would endorse the recommendation of the Law Commission in its Final Report on Compensation for Compulsory Purchase, Law Com No 286, para 8.39, that s 15(3) and (4) of the 1961 Act should be repealed without replacement.
THOMAS and BUXTON LJJ agreed.
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