| Planning — Compulsory purchase — Compensation — Basis of valuation — Whether tribunal to treat hypothetical permission as certainty to be assessed at full value — Whether tribunal to award only “hope value” to reflect degree of probability as perceived by market
Spirerose Ltd (In Administration) v Transport for London [2008] EWCA Civ 1230; [2008] WLR (D) 358
CA: Carnwath, Thomas, Etherton LJJ; 13 November 2008
In concluding that a valuation of the claimant’s land on the basis that at the date of valuation there would have been a determined planning application granting permission , the Lands Tribunal had not erred. In the absence of an actual planning permission or a permission that was required to be assumed under the Land Compensation Act 1961, the tribunal was not limited to assessing the value by reference to the view that the market would have taken as to the prospects of achieving planning permission, the hope value.
The Court of Appeal so held dismissing the appeal of the defendant, Transport for London, from the Land Tribunal (Mr George Bartlett QC , President, and Mr PR Francis ) who, on 5 July 2007 valued land which had been compulsorily purchased from the claimant, Spirerose Ltd, in the sum of £608,000 on the basis of the full value of the assumed permission. The defendant contended that the correct value of the land, assessed on the hope value basis, was £400,000.
CARNWATH LJ, giving the judgment of the court, said that the resolution of the issue depended upon the correct application of the so-called Pointe-Gourde or “no-scheme” rule [ Pointe Gourde Quarrying and Transport Co Ltd v SubIntendant of Crown Lands [1947] AC 565 ] that compensation for the compulsory acquisition of land must be assessed in a “no-scheme world”, that is, excluding any increase or decrease in the value of the land that was wholly due to the scheme underlying the acquisition. S 17 of the 1961 Act allowed a claimant to apply for a “certificate of appropriate alternative development”. In deciding whether planning permission “would have” been granted, the local planning authority would apply the civil standard of proof, ie on the balance of probabilities. If that test was satisfied, s 15(5) required the tribunal to value on the basis that the permission “would be granted”. In other words, a finding that planning permission was more probable than not was converted into the equivalent of a certainty that planning permission would be granted in relation to that land: see Porter v Secretary of State [1996] 3 All ER 693, 704c. The claimant had not been able to take advantage of this useful regime because of a statutory anomaly relating to the date of assessment which had the surprising effect that the planning determination had to be made by reference to circumstances in 1993, eight years before the valuation date. The tribunal considered that if there was 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. This was because in the no-scheme world, the owner would have been expected to submit 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. In support of the “ hope value” approach, the view that the market would have taken as to the prospects of achieving planning permission, Mr Barnes relied upon the Porter case but did not argue that it was binding . In the court’s view it was plainly distinguishable. It was accepted that, where statutory assumptions applied, probability of a permission was converted into full value for valuation purposes. The claimant had been unable to take advantage of the statutory assumptions because of the anomaly in the provisions fixing the date of consideration. As far as possible the court would interpret the no-scheme rule so as to remedy the anomaly rather than extend it. The policy considerations in favour of the tribunal’s conclusions were powerful. There was no authority or good reason for not giving effect to them. |
