Peart v Secretary of State for Transport, Local Government & the Regions

This is an application for permission to appeal from an order made on 19 December 2002 by Maurice Kay J on an appeal by the applicant, Mr Terry Peart, against a decision by the Secretary of State to confirm a compulsory purchase order made by the London Borough of Newham in respect of property known as 72 Cranmer Road in that borough.

The property is owned by Mr Peart; but it is vacant and derelict. The purpose of the compulsory purchase order, made pursuant to section 17 of the Housing Act 1985, was to acquire a house which could be returned to residential use, thereby meeting a local housing need. The compulsory purchase order was made on 20 July 2001. The inquiry opened on 20th November 2001; but was adjourned for three months to enable discussions to take place between the parties. No agreement was reached and the inquiry resumed on 19 February 2002. The Inspector reported on 28 February 2002. The Secretary of State's decision confirming the compulsory purchase order is dated 4 July 2002. The Secretary of State accepted the Inspector's recommendations and his reasons.

The applicant applied to the High Court under section 23(2) of the Acquisition of Land Act 1981. The subsection is in these terms:

“If any person aggrieved by -

(a)

a compulsory purchase order ...

desires to question the validity thereof on the ground that any relevant requirement has not been complied with in relation to the order ... he may make an application to the High Court.”

Subsection (3) defines “relevant requirement”, in that context, as any requirement of the 1981 Act or of any regulation made under section 7(2), or any requirement of the Tribunals and Inquiries Act 1992 or of any rules made, or having effect as if made, under that Act. On its face, therefore, the challenge is a challenge to the procedure by which the decision-making process has taken place and the reasoning.

The grounds upon which the applicant sought to challenge the validity of the Secretary of State's decision confirming the compulsory purchase order is that the Secretary of State failed to consider material issues. These can be identified in the claim form issued on 12 September 2002 as: (1) failure to appreciate that the applicant's own proposals for the development of the property into residential accommodation would be likely to lead to the alleviation of the acute housing need in the borough of Newham much more quickly than development by the local authority following compulsory purchase; and (2) failure to consider whether the order would contravene the applicant's Convention rights under Article 8 of the European Convention on Human Rights and Freedoms. At the hearing before the judge the first of those grounds was expanded by a complaint that the Secretary of State had failed to give proper weight to the probability that if no compulsory purchase order was made the applicant's proposals would actually be carried into effect; and the second ground was enlarged by a complaint that the Secretary of State's decision was flawed on the grounds of proportionality.

The judge rejected each of those grounds. In relation to Article 8 of the Convention he said this, at paragraph 8:

“On behalf of the claimant, Mr Oakley seeks to challenge the confirmation of the compulsory purchase order on four grounds. First he submits that the Inspector and the Secretary of State erred by not considering Article 8 of the European Convention on Human Rights and fundamental freedoms.”

He then set out the text of that Article and went on:

“Mr Oakley put his submission in this way in his skeleton argument:

`... private and family life ought to include a person's right to invest for their retirement in the way they think fit. Further, although it is correct to say that Mr Peart will be compensated by monies representing the market value of the property, this can only be capital compensation. If the CPO is not quashed, he will not be compensated for future loss in respect of rental income.'“

Then at paragraph 10 the judge said this:

“It is clear that the Inspector and the Secretary of State had this well in mind and considered Mr Peart's human rights in the context of Article 1 of the First Protocol, to which I shall return later. It is equally clear that neither the Inspector nor the Secretary of State considered Article 8. Was this an error? In my judgment it was not. It is common ground that the property is not the claimant's home. The somewhat vague way in which the case for the claimant seeks to squeeze a person's `right to invest for retirement in the way he thinks fit' into Article 8 is unsustainable.”

In relation to the second and third grounds which the judge identified - that is to say, whether the claimant would be likely to bring the house into residential use within an acceptable timescale - the judge said this, at paragraphs 13 to 15 of his judgment:

“13.The second ground of challenge seeks to take issue with the conclusion of the Inspector that the claimant could not be relied upon to carry out the necessary works of refurbishment within a reasonable timescale. I have already set out the paragraphs from the Inspector's report which deal with that issue. Those paragraphs were expressly accepted by the Secretary of State. The complaint here is that the approach is unfairly punitive and backward looking, and that since the claimant was treated as a truthful witness by the Inspector, this distrust of his ability to transform the property within a reasonable time was misplaced.

14.I do not accept this submission. It is not a matter of the claimant's truthfulness, which may have been full of good intentions. The question is whether it was permissible for the Inspector and the Secretary of State to conclude that he was unlikely to implement them within a reasonable time. On the material before me, there can be no doubt that that was a permissible conclusion.

15.Thirdly, Mr Oakley criticises the decision to confirm the compulsory purchase order in circumstances where it would take 12 to 18 months for Newham to bring the property back into residential use, whereas the claimant could achieve that in a much shorter time. This submission falls with the previous one. If, as I have held, it was permissible to conclude that the claimant could not be relied upon to carry out the necessary works within a reasonable time, the fact that private contractors could do them more quickly than the London Borough of Newham would take, is neither here nor there.”

The judge addressed proportionality in paragraphs 17 to 19 of his judgment. At paragraph 19 he said this:

“In my judgment, there are two answers to Mr Oakley's submission concerning proportionality. The first is that it is put in a rather vague and unparticularised way. The second is that the Inspector and the Secretary of State were well aware that Article 1 of the First Protocol required them to carry out a proportionality balancing exercise on the material before them. I am quite satisfied from the passages which I have quoted that this they did in an appropriate manner. In my judgment, they reached entirely permissible (indeed virtually inevitable) conclusions in the circumstances of the case.”

The grounds of appeal set out in section 7 of the appellant's notice reflect the grounds on which the challenge was advanced in the court below. They are these:

“The decision of the learned judge was wrong in law.

He failed to consider adequately or at all Article 1 of the First Protocol of the European Convention on Human Rights, Article 8 and the overlap between the two.

He erred in finding that the Inspector and the Secretary of State had properly carried out a balancing exercise with reference to the provision of housing in the borough by the Council's activities as against the serious adverse effect on Mr Peart's pension plans if the Compulsory Purchase Order were confirmed.

Further, the case raises issues of general public importance in that there are no reported cases dealing with the protection of future property rights, i.e. pension income, and its effect on private and family life.”

Those grounds are elaborated in the skeleton argument put before the court and in the oral argument advanced at this hearing. In relation to Article 8 it is said again that the compulsory purchase order constitutes interference with private and family life, in that it interferes with whatever private arrangements the applicant thinks fit to make to provide for an income in his retirement. It is said, at paragraph 8 of the skeleton argument, that:

“Although it is open to British citizens to rely on the small state pension alone for their retirement, it is reasonable and indeed eminently sensible not to do so. Mr Peart is close to retirement age now. If the CPO stands, he has no other means of ensuring that he has a regular retirement income at a reasonable level.”

I find it impossible to understand or accept that submission. Neither the local authority nor the Secretary of State has sought to deny the applicant the right to make arrangements for an income in his retirement. If the applicant takes the view that the best way of ensuring that he has a regular retirement income is to invest in residential property, then he is free to do that. But to suggest that that is the only way in which that object can be achieved is nonsense. There are many ways in which the capital sum which the applicant will receive on the compulsory purchase of his property - coupled with the capital sum which he would otherwise have had to lay out in refurbishing the property (if it had not been the subject of a compulsory purchase order) so as to make it capable of producing rental income - could be invested so as to provide a regular income in retirement. One obvious course would be to use the monies which become available to him on compulsory purchase, and the monies which he does not have to outlay in refurbishment, to purchase another residential property for letting. The issue is not whether the applicant should be free to invest his money so as to provide a retirement income. The issue is whether he should be allowed to insist that his investment be in this particular property, in circumstances in which there are good reasons why this property should be acquired by the local authority in the public interest to meet an immediate housing need. In my view Article 8 of the Convention has no application independently of Article 1 of the First Protocol. The judge was right to describe the attempt to advance the argument before him, and in this Court, as an attempt to squeeze a person's right to invest for retirement in the way he thinks fit into Article 8. The Article 8 point, to my mind, is unsustainable. It is important to have well in mind that this is not a case in which the property is the applicant's home.

The relevant question for the Secretary of State under the Convention was whether the public interest to be served by the proposed purchase under compulsory powers outweighed the applicant's private interest as a property owner. To put that question in the familiar language of the Strasbourg Court - does the compulsory purchase of the applicant's property pursue a legitimate aim; and are the means employed in pursuit of that aim proportionate to the aim sought to be realised. The judge had that well in mind when, after citing the relevant passages from the Inspector's report, he made the observations at paragraph 19 of his judgment to which I have already referred. As the judge found, the Inspector and the Secretary of State had directed their minds to the relevant question and had reached a conclusion which they were plainly entitled to reach. Indeed, on the facts of this case it is difficult to conceive how they could have reached any other conclusion. There is no prospect that an appeal could succeed in this Court on the grounds of lack of proportionality.

The second main criticism is that the Secretary of State and the Inspector took into account the applicant's past history of inactivity in relation to this property when deciding whether the immediate need for residential housing in the borough of Newham would best be met by leaving it in the hands of the applicant to do the conversions which he asserted he would do or whether the time had come when the property had to be taken into local authority ownership. As the judge pointed out, correctly, that was not a matter which turned on the truthfulness of the applicant when describing his intentions. The question was the objective one - which course was most likely to bring this property into residential use. In addressing that question the Secretary of State and the Inspector were plainly entitled to look at the past history and to ask themselves whether that was a useful indication of what would be likely to happen if a compulsory purchase order was not made. They reached the conclusion that the past history was a useful indication of what would happen if this property was left with the applicant. That was a conclusion they were plainly entitled to reach. It cannot be challenged under section 23(2) of the 1981 Act on the basis that some relevant requirement within the meaning of that subsection has not been complied with. The question was addressed; and it is no basis for challenge that the answer to it was not the answer which the applicant would have wished the Secretary of State to reach.

Treating this application as an application to which the test set out in CPR 52.3(6) applies, I would refuse the application. There is no prospect that an appeal would succeed and there is no compelling reason why an appeal should be heard by the Court of Appeal.

I should, perhaps, add that I am not at all sure that the test set out in CPR 52.3(6) is the appropriate test in a case where the matter has come before the High Court under section 23(2) of the Acquisition of Land Act 1981. It seems to me arguable that it may well be right to treat an application to the High Court under that section as an appeal for the purposes of section 55(1) of the Access to Justice Act 1999 - see the observations of this Court in Clark v Perks [2001] 1 WLR 17, p.22 at para 13. If that is a correct analysis, then the test applicable on an application for permission to appeal is the more stringent test set out in CPR 52.13(2). But we have not thought it necessary to invite argument on the point. And, in the circumstances that I would hold that the application does not surmount the more modest hurdle posed by CPR 52.3(6), I do not find it necessary to decide whether it needs to surmount the greater hurdle posed by CPR 52.13(2). Whichever is the applicable test, this application fails to meet it.

I agree. The application is therefore refused.