Law report: Compensation for compulsory purchase

19 June 1998 Secretary of State for the Environment v Fletcher Estates (Harlescott Ltd); Secretary of State for the Environment v Newell and others (executors of Longmore deceased) Court of Appeal (Lord Justice Nourse, Lord Justice Peter Gibson and Lord Justice Buxton) 11 June 1998

WHEN CONSIDERING the grant of a certificate of appropriate alternative development under section 17(4) of the Land Compensation Act 1961, the land should be valued as at the date of publication of notice of the compulsory purchase order, and, in valuing the land, only the compulsory acquisition and the proposal underlying it should be discounted.

The Court of Appeal allowed the appeal of the Secretary of State for the Environment against the decision of Mr Justice Dyson, on applications to quash certificates of negative appropriate alternative development in respect of two parcels of land proposed for compulsory purchase by the Secretary of State for Transport.

The notice required by section 22(2)(a) of the Land Compensation Act 1961 to be published in connection with the acquisition was dated 30 January 1986. In late 1992 the applicant landowners had applied for certificates of alternative development under section 17 of the Act, and the local authority had issued certificates for residential and industrial development. On the Secretary of State for Transport's appeal, the Secretary of State for the Environment had substituted negative certificates under section 17(4)(b).

Duncan Ouseley QC and Rabinder Singh (Treasury Solicitor) for the Secretary of State; Robin Purchas QC and Timothy Comyn (Manby & Steward) for the applicants.

Lord Justice Buxton said that Section 17(4) of the Act provided:

Where an application is made to

the local planning authority for a certificate under this section in respect of an interest in land, the local authority shall . . . issue . . . a certificate stating either of the following to be the opinion of the local planning authority regarding the grant of planning permission in respect of the land in question, if it were not proposed to be acquired by an authority possessing compulsory purchase powers, that is to say

(a) that planning permission would have been granted for development of one or more classes specified in the certificate . . . and for any development for which the land is to be acquired, but would not have been granted for any other development; or

(b) that planning permission would have been granted for any development for which the land is to be acquired, but would not have been granted for any other development.

The applicants had challenged the negative certificates in the High Court, and the judge had found (i) that the relevant date on which the decision under section 17(4) had to be made was the date of the notice under section 22(2)(a); and (ii) that in making that decision, the words "if it were not proposed to be acquired" in section 17(4) meant that there should be discounted in valuing the land not only the section 22(2)(a) compulsory acquisition and the proposal underlying that acquisition as it stood at the relevant date, but, additionally, the facts and policies that resulted from the underlying scheme which culminated in the compulsory acquisition.

The Secretary of State contended (i) that the relevant date it which the decision under section 17(4) had to be made was the date of entry on the land; and (ii) that only the compulsory acquisition and the proposal underlying it as it stood on the date of the notice should be discounted in valuing the land.

The first of those issues was concluded as a matter of authority by the decision of the Court of Appeal in Jelson v Minister of Housing and Local Government [1970] QB 243, in which it had been held that under section 17(4) the planning authority must form an opinion as to what planning permission might reasonably have been expected to be granted at the date of the notice. The judge had correctly decided the first issue.

There was, however, no escape from the conclusion that as a matter of statutory construction, what had to be disregarded under section 17 was the proposal for acquisition and that alone, and the judge's decision on the second issue could not, therefore, be upheld.

Kate O'Hanlon, Barrister