Swansea City & County Of v Griffiths & Anor

This is an appeal from a determination of the Lands Tribunal dated the 22^nd August 2003. The reference was to determine the compensation payable to the respondents by the appellant, which is the successor to the acquiring authority under a compulsory purchase order made on the 3^rd May 1994 and confirmed by the Secretary of State for Wales on the 4^th October 1995. It related to two freehold parcels of land at Llansamlet, Swansea which vested in the appellant’s predecessors as the acquiring authority on the 27^th February 1996, the agreed valuation date for the purposes of the reference. The member valued the land at £500,000 on the basis, leaving aside immaterial matters, that the land had the benefit of planning permission for residential development capable of being implemented within two years. He rejected the appellant’s argument that no development would have been likely within ten years. The appellant appeals on the single ground that in coming to his conclusion, the member wrongly took into account matters which post dated the date of valuation.

The land which was the subject of the compulsory purchase order consisted of two separate parcels of land in an area known as Tawe Vale to the north east of Swansea City centre. The two parcels of land were separated by a railway embankment. The smaller parcel, of just of 0.42 hectares (1.04 acres) had no development potential. The larger parcel was 5.31 hectares (13.12 acres) in extent. It had a frontage of about 340 metres to a road, Walters Road, which provided ready access for development. It was approximately half a mile north of the residential settlement of Llansamlet. At the valuation date, both areas of the land were laid to grazing and were used for agricultural purposes.

The structure plan covering the land at the time of the valuation date was the West Glamorgan Structure Plan (No 2). So far as relevant, the County Council’s housing strategy as set out in the statement contained the following element:

The relevant polices were as follows:

The local plan was the Swansea Local Plan adopted by the appellant in December 1989. It covered the period to the end of 1991, but made it clear that many polices would continue thereafter. The relevant policies were E2 and H1.

Policy E2 provided:

Policy H1 provided:

The south west part of the land was identified as subject to Policy H1; and the majority of the remainder of the land was shown as subject to policy E2. The explanatory text to policy H1 that stated:

The Local Plan Review was published by the Director of Planning in April 1995, and was subject to consultation at the valuation date. It identified the land as part of the area it described as Swansea Vale which was subject to a development scheme involving the provision of housing, employment and leisure facilities.

Originally described as the Tawe Vale Development Strategy, it was described in the appellant’s proposals of August 1991 as being a key element in the appellant’s strategy for the east of the city. It set out proposals for a mixed development of business, housing, and a golf course together with a new infra structure of roads necessary to service the proposed development. As far as housing was concerned in the area near Llansamlet it said:

The scheme proposed that the land with which we are concerned should be used for golf and other leisure uses. This was the scheme which formed the basis of the application for outline planning permission for the whole of the land covered by the scheme which was granted to the Welsh Development Agency on the 17^th March 1994. It gave outline permission for “mixed development for residential, leisure, commercial, industrial, hotel and community usage”. It included the following conditions:

It was on the basis of this planning permission that the compulsory purchase order was made and confirmed.

The three relevant issues identified by the member were:

The evidence relevant to the appeal can be relatively shortly stated. The respondent’s expert Mr Muir and the appellant’s expert Mr Scoot essentially agreed that if the valuation of the land was to be on the basis of either actual or deemed planning permission for residential development, up to 60 houses could be accommodated, the constraining feature being the width and alignment of Walters Road. The dispute between them which is relevant to this appeal was as to the time scale within which such development could be implemented. Mr Muir was of the view that the land was the most suitable land in the vicinity for development. On the assumption that it already had outline planning permission, detailed approval would have been received for such a development within twelve months; if the assumption was that a fresh application had to be made, then detailed permission would have been granted within 18 months. Mr Scoot considered that the emphasis throughout all the planning documents was on phased development and that, accordingly, it would be unlikely that the land could have been developed for at least 10 years. It was a site outside the envelope of any existing community and would therefore have not have been an appropriate site for development until other land closer to Llansamlet had been developed so that the land did not produce an isolated development.

As far as the first issue which the member had identified was concerned, he took the view that the assumptions to be made under sections 15 and 16 of the Land Compensation Act 1961 did not apply; and he took the view that section 14(2) of the Act required him to take into account the planning permission which had in fact been granted. There is no appeal against his conclusions in this respect.

His conclusions in relation to the second issue are what give rise to the appeal in this case. Having recorded the evidence of the experts, he found that, as was essentially agreed on the basis of his conclusions on the first issue that the land should be valued on the basis that it had outline permission for 60 houses. The question he had to determine, therefore, was when that permission could be implemented. Having set out the respective arguments of the parties based on their experts’ evidence, he expressed his conclusions as follows:

The member then turned to in the third issue, which was the alternative basis for valuing the land with planning permission for residential development, and he concluded:

The appeal is based simply upon the ground that the member wrongly took into account as what he described as the “key to the question” the fact that Wimpey Homes had been given permission in 1998 for residential development of Tregof Farm. Mr Jarman submits that he was wrong for three reasons. First, the valuation had to be made ignoring the scheme in accordance with Point Gourde Quarrying and Transport Ltd –v- Sub-Intendant of Crown Lands [1947] AC 565. The member was accordingly not entitled to use as part of the material for his valuation an event which occurred by reason of the scheme. Second, the member could not properly take into account what happened in 1998 in order to determine what value the land would have had to a prospective developer in 1996. Third, it was irrational to use as support for the proposition that the appellant would have permitted isolated development of the respondent’s land the fact that isolated development of Tregof Farm had been permitted, bearing in mind that the local plan had, as the member himself recorded, specifically identified the site as appropriate for what was described as a self contained “village”. That provided no support for the proposition that the land in question could be so regarded.

The rules for assessing compensation in respect of any compulsory acquisition are contained in Section 5 of the Land Compensation Act 1961. The relevant rule is Rule (2), which provides:

In the present case, on the basis of the members conclusion on issue 1, the valuation task was to determine what a potential developer would have been prepared to pay for the land on the basis that it had an extant outline planning permission for residential development, alternatively that planning permission for residential development would have been granted at some future time. The question which the member therefore had to answer was what a potential developer would, at the valuation date, have been prepared to anticipate as the timescale within which the detailed permission was likely to have been granted. That required the member to consider what planning judgment the potential developer would be likely to have made on the 27^th February 1996.

If, therefore, the member, when assessing what that planning judgment might have been, took into account the development at Tregof Farm, there is no doubt that he was wrong. That was not because of any breach of the Pointe Gourde principal. That principal relates to process of evaluation, and not the exercise of planning judgment. It requires the valuer to leave out account any enhanced value of the land due to the underlying scheme justifying the compulsory purchase order. The member did not use the development of Tregof Farm for that purpose. The reason is, quite simply, that the events of 1998 would have been unknown to the putative potential developer in 1996, and could therefore form no part of any planning judgment made at the valuation date.

Mr Blackmore on behalf of the respondents, submits that on a fair reading of the decision, the member did not fall into that error. The opening sentence of paragraph 117 and the final sentence of paragraph 118 set out the member’s conclusions in relation to the planning judgment that would have been made at the time. It was composed of three essential elements. The Structure Plan and the Local Plan set out the clear need for housing development in Swansea, and identified the land as falling within an area suitable for such development; none of the alternative sites identified by the appellant were as readily developable as the subject land; the presumption against piecemeal development, which the member acknowledged, would have been overridden in planning terms by those two considerations. He submits that that judgment is essentially repeated in paragraph 126. That judgment was not informed by the later development of Tregof Farm, but that development was used simply by the member as a means of confirming that his conclusion as to the planning judgment which would have been made at the valuation date was soundly based. He further submits that although Tregof Farm had been identified specifically in the proposals as being the site for a self contained “village”, the member was still entitled to use it for the purpose that he did. That was an exercise of judgment on his part which was not irrational: the member himself had specifically referred to the passage in the proposals, so that he was well aware that Tregof Farm could be said to have that special characteristic.

I have come to the conclusion that Mr Blackmore is correct. I consider that the member’s reasoning in relation to the issue of planning judgment is set out in paragraphs 117 and 118 of the determination. Were it not for the words “This is, in my view, key to the question” in paragraph 119, there could be little doubt that he was merely using the development at Tregof Farm as emphasising or confirming the conclusion that he had reached, in the same way as the development at Fford Scott was used by him in paragraph 120. Mr Jarman acknowledges that he could not, and does not, complain about the latter.

However, the use of the phrase “This is, in my view, key to the question” was unfortunate. It undoubtedly raises a question mark as to whether the member’s judgment had indeed been infected by ex post facto events. But I am persuaded that he was not. First, it seems to me that paragraphs 119 and 120 need to be read together. Their context is that of confirmation, and not evaluation. Second, the member expressly acknowledged that it was subsequent to the valuation date. It seems to me that, in so doing, he was making it clear that he was using what happened merely as showing that the judgment that he had expressed in 117 and 118 was soundly based. Thirdly, the member reiterated in paragraph 126 the basis of his planning judgment set out in paragraphs 117 and 118. I acknowledge that that could not, of itself, be a secure argument for my conclusion, as the view he expressed in that paragraph as to the local planning authorities probable attitude could have been coloured by what happened at Tregof Farm; he did not expressly exclude it from consideration. But it seems to me that reading paragraphs 117, 118 and 126 together, not as a statute but with a degree of common sense, they properly reflect his reasoning process on the planning judgment issue. The use of the troublesome phrase is, in my view, merely an indication, by way of emphasis, that the conclusion that he had come to was clearly correct.

On the basis that the Member was merely using Tregof Farm for the purpose of confirming or checking the soundness of the conclusion he had reached, the fact that it may have been an inappropriate comparison, as submitted by \Mr Jarman, would not in itself vitiate the decision. But I am not persuaded that the member was wrong to use it as he did. As I have already said, he expressly acknowledged the clear difference between Tregof Farm and the land in question. Whether or not others who had to make the same planning judgment would have felt that the Tregof Farm development would have provided so clear a confirmation of the member’s conclusion as the member considered it to be, may be a matter of debate. But I do not consider that the member could be said to have acted irrationally when using as he did.

I would accordingly dismiss the appeal.

I gratefully adopt the summary and analysis of the factual and legal background to this appeal as set out in paragraphs 1 - 18 of Latham LJ’s judgment. I respectfully agree with his view as to the proper approach to the centrally relevant issue for the purposes of this appeal, as set out in paragraphs 19 - 22 of his judgment. The issue (which I shall call “the Issue”) with which this appeal is concerned was the extent, if any, to which the fact that the residential development of the land represented “piecemeal” development would have resulted in prospective developers in 1996 anticipating a delay in the grant of detailed planning permission for such development. In reaching his conclusion on the Issue, in particular when accepting the respondents’ case that the “piecemeal” nature of such development would not have been perceived as likely to cause any significant delay in obtaining planning permission, the member was therefore expressing a view as to the market perception as at February 1996.

When reaching that conclusion, the member would not have been entitled to rely (at least directly) on the fact that planning permission was granted for such “piecemeal” residential development of Tregof Farm, in 1998, given that he was assessing the value of the land as at 27 February 1996. This is not because of some subtle or technical principle applicable only because this was an assessment of compensation for compulsory purchase valuation, in light of the Pointe Gourde case. It is because of the more general and fundamental principle that, when assessing the open market value of a property as at a particular date, one cannot, really by definition, take into account events which occurred after that date. It is self-evident that subsequent events could not have been in the minds of the hypothetical parties to the open market transaction.

However, it appears to me that it may have been legitimate to rely on the Tregof Farm planning permission (“the 1998 permission”) on a slightly more indirect basis, along the following lines. A prospective purchaser of the land, when considering the likely attitude of the local planning authority to its residential development in 1996, might well have approached the planning officer for his assessment and advice. If evidence had been given to the member that that is the course that would have been taken by a prospective purchaser, then there may well have been a dispute as to what the reaction of the planning officer would have been. In my view, it would not, at least in principle, have been illegitimate in the circumstances for the respondents to have sought to rely upon the fact that, some two years later, the local planning authority was prepared to entertain, indeed to grant, residential planning permission for “piecemeal” development on another site, namely Tregof Farm. The member would have been entitled, to conclude that, in the absence of any evidence to the contrary, the actual attitude of the planning authority in 1998 to housing development in the area was no different from the attitude which would have been communicated in 1996. Of course, whether or not such a conclusion would have been justified would have depended on the factual and expert evidence.

While, in my view at least, that would have been an appropriate basis upon which the member could have relied on the 1998 permission, I do not consider that it is open to us to conclude that this was, in fact, the basis upon which he relied on it. Mr Blackmore did not suggest that either of the planning expert witnesses, whether in their proofs of evidence or in their cross-examinations, cited the 1998 permission for this purpose. We have seen the written submissions made to the member, and although reference was made therein to the 1998 permission, it was not suggested that it should be relied on by the member as a reason for determining the Issue as he did, namely in favour of the respondents.

In these circumstances, I consider that it would not have been legitimate for the member to rely on the 1998 permission as a reason for concluding that a prospective purchaser of the land in February 1996 would have decided that planning permission for its residential development would have been forthcoming relatively quickly. I turn, then, to the next question to be considered, namely whether the member did rely on the 1998 for that purpose.

I cannot accept Mr Blackmore’s primary submission on this question, namely that the member did not rely upon the 1998 permission as a reason for arriving at his conclusion that, as at 1996, residential planning permission for the land would have been expected to be granted within a relatively short time frame, and, in particular, would not have been expected to be impeded by the fact that it would lead to “piecemeal” development. In my judgment, in paragraphs 117 - 120 of his decision, the member gave his reasons for reaching this conclusion. It is plain that what he stated in paragraphs 117 and 118 was at least part of his reasoning for reaching this conclusion. Equally, what he said in paragraph 120 in relation to the planning permission granted in respect of the Fford Scott land (which was granted before 1996) appears to me to represent another part of his reasoning; indeed, I believe that the opening words of the paragraph make that point clear.

In those circumstances, it seems to me difficult to conclude that what he said in the intermediate paragraph 119 was not similarly part of his reasoning: in my view, it must have been. Although the member there referred to the permission as supportive of the prospect of planning permission being granted for residential development of the land (rather than the market perception of the prospect) that was also true of the way in which he expressed himself in paragraph 118.

That view is supported by the first two sentences of paragraph 119, which also appear clearly to represent part of his reasoning, and do not appear to be related to the subsequent parts of the paragraph, which is where he dealt with the 1998 permission. It is further supported by the way in which the member expressed himself when considering the effect of the 1998 permission, namely as being “key to the question of whether the subject land could be developed in isolation”.

It is very tempting to conclude that this experienced member, who has in all other respects, so far as I can see, produced a full, careful, considered and irreproachable decision, did not misdirect himself on this point. However, I consider that, in light of the way he expressed himself in the last four sentences of paragraph 119, and in light of the context of those four sentences, the only fair conclusion is that he took the 1998 permission into account when deciding whether the “piecemeal” effect of the residential development of the land would have been regarded as an impediment to the grant of planning permission for such development.

I accept, however, what I think is inherent in Mr Blackstone’s second submission (to which I will turn), namely that the member was relying on the 1998 permission as a confirmatory or secondary factor for coming to his conclusion on the Issue. As Latham LJ has pointed out, his principal or primary reasons are contained in paragraph 117 and 118: they come first, and they resulted in a conclusion, as expressed at the end of paragraph 118. The fact that 1998 permission was described as “key” merely served to emphasise, I think, that it was the best piece of hard evidence as to whether planning permission for the land would actually have been granted in 1996 (particularly as the 1998 permission was said to be “key to the question of whether the subject land could be developed in isolation”).

However, the fact that an inadmissible factor is taken into account as a confirmatory or secondary, rather than a principal or primary, ground does not somehow render it permissible to take it into account. When it comes to admissibility or relevance, a factor is either admissible or relevant, or it is not. Sometimes, I accept, a tribunal can merely take comfort from an inadmissible fact, which cannot as a matter of law or logic, be taken into account when arriving at its conclusion. However, I do not think that one can fairly read the member’s reference to the 1998 permission in such a way. If a tribunal refers to a fact in the course of its reasoning, particularly in a part of its decision headed “Conclusions”, it would require, in my opinion, clear words before it could be fairly concluded that the fact did not form one of the reasons for the conclusions.

Having decided that the member made an error in his otherwise sound decision, it seems to me that the next question to be considered is whether that error could have made a difference to his ultimate conclusion. In other words, one has to ask oneself whether the member would have reached a different conclusion, as to the perception of the market as at 1996 with regard to the time frame within which planning permission for residential development of the land would be obtained, and in particular the extent if any to which the “piecemeal” nature of such development would impede the grant of such planning permission, if he had not taken into account the 1998 permission. In most cases where it can be shown that a tribunal carrying out an open market valuation, has taken into account a factor which ought not to have been taken into account, an appellate court will conclude that the appeal should be allowed, on the basis that there is at least a risk that the ultimate decision would have been different if the factor concerned had not been taken into account.

In this connection it plainly is not for the appellant to satisfy the appellate court that it is more likely than not that the result would have been different: that would be an unrealistic and unfair burden to place on an appellant. Unless the appellate court is satisfied that there is no realistic prospect of the tribunal having reached a different decision if it had not taken into account the factor concerned, then the appellant must be entitled to some relief. The nature of such relief will inevitably depend upon the particular case. The appellate court might in some cases be able to substitute its own figure; in some cases, it might order a complete rehearing; in some cases, it might remit the determination on all or some of the issues to the original tribunal; in some cases, it might even remit all of some of the issues to a different member of the same tribunal.

However, once it has been decided that the decision appealed from involved an error of law, the question which must be considered, before deciding what relief to afford the appellant, is whether the appellant is nonetheless disentitled from obtaining any such relief on the ground that, if the error had not been made, that would not have altered the eventual outcome. In that connection, Mr Blackmore’s second submission is that it is clear that the member would have reached the same conclusion on the Issue as he did, even if he had not taken the 1998 permission into account.

I have no hesitation in concluding that the decision of the member on the Issue would have been unlikely to have been any different if he had not taken the 1998 permission into account. As Latham LJ has pointed out, the reasoning in paragraphs 117 and 118 of the decision makes it clear that the member considered that the factors there referred to were, to put it at its lowest, strongly supportive of the conclusion he reached. That conclusion was also supported, in his view, by the planning permission granted for the Fford Scott land as referred to in paragraph 120, a planning permission upon which he was undoubtedly entitled to rely as a matter of principle. It is true that he referred to the 1998 permission as “key to the question”. However, one must be careful of placing too much emphasis on such an expression. It was said to be key to the question of whether permission was likely to have been granted. It was not suggested to be the only key. It was not put forward as the first factor of relevance. One must look at all the factors he took into account.

However, the conclusion that it is unlikely that the member’s decision would have been any different if he had taken into account the 1998 permission is not enough to dispose of this appeal. As already mentioned, the correct, and indeed more difficult, question is whether one can be confident that the member would have reached the same decision as he did on the Issue if the 1998 permission had not been taken into account. Like many questions of this sort, the answer can to a substantial degree be said to be based on impression, after reading carefully the relevant parts of the decision. The extent to which re-reading the decision and revisiting the various possibilities can assist may be questionable. Indeed, there is a risk of going beyond the point where detailed consideration may result in individual trees replacing the overall wood in the mind of the reader.

I have come to the conclusion that, if the member had put out of his mind any consideration of the 1998 permission, he would nonetheless have come precisely the same conclusion as he did in relation to the perception of the market in 1996 as to the likelihood of obtaining planning permission for the residential development of the land, and the time frame within which such permission would be obtained.

First, as already mentioned, the reasons put forward in paragraphs 117 and 118 were the primary reasons for the member’s conclusion, as is demonstrated by the fact that that conclusions is at the end of paragraph 118. There were three supplementary reasons, which are contained in (a) the first two sentences of paragraph 119, (b) the last four sentences of paragraph 119, and (c) paragraph 120. Only one of these supplementary reasons is flawed, namely (b).

Secondly, the member was plainly aware that the 1998 permission suffered from problems as relevant evidence. He expressly referred to it as “part of the scheme” and “subsequent to the valuation date”, in terms which indicated that these were defects. While the latter factor should have ruled out the 1998 permission as evidence, it is at least clear that it reduced its value in the member’s mind.

Thirdly, when discussing the evidence on the Issue, the member put forward a number of factors, all of which pointed firmly in the same direction, namely that there would have been no real concern about the time frame within which residential planning permission would be obtained. While he concluded, in paragraph 123, that the precise time frame put forward by the respondents was somewhat optimistic, even that was for reasons unconnected with any of the reasons put forward by the appellant on this issue: it was due, I think, to his perception of general delays in the planning process, and to a site-specific problem about power lines.

Fourthly, the determination of the Issue was one more of judgment than of arithmetic. The member was not concerned, for instance, with assessing the value of the land per hectare by making precise adjustments to precise figures on comparables, where the wrong taking into account of a factor may often self-evidently mean that the ultimate figure was wrong. He was assessing the likely perception of the market with regard to the alleged difficulty of obtaining residential planning permission for the land, which involves more of an overall appraisal. To that extent, it seems to me that the deletion of a specific factor from his reasoning, when there were a number of other factors all of which pointed the same way, would have been very unlikely to result in his ultimate decision being any different.

Fifthly, the member was reaching a decision on the basis of evidence, and that evidence did not only include the facts to which he referred in paragraphs 117 - 120, but also the opinion of the expert witnesses, Mr Muir (for the respondent) and Mr Scoot (for the appellant). It seems clear that on all issues on which they disagreed, the member was more favourably impressed by Mr Muir, whose conclusions he appears to have accepted almost in their entirety (subject to the small adjustment mentioned in paragraph 123). When referring to these expert opinions in relation to the Issue, it is noteworthy that, in paragraph 117, the member accepted Mr Muir’s evidence over that of Mr Scoot in relation to certain “alternative sites” therein referred to, and he only referred to Mr Scoot’s evidence in the last sentence of that paragraph. Mr Scoot is there recorded as acknowledging factors which, as the member clearly and rightly thought, supported the conclusion that the market, in 1996, would have been optimistic about the prospect of obtaining planning permission for the residential development of the land, a view which Mr Muir clearly held.

In all these circumstances, therefore, despite the attractive submissions of Mr Jarman, I consider that this is one of those relatively exceptional cases where this court can, indeed should, conclude that, notwithstanding the fact that the decision appealed from involved an error of law, it can be said with confidence that the ultimate decision would have been no different if the error of law had not been made.

Accordingly, albeit for perhaps slightly different reasons from those expressed by Latham LJ, I agree that this appeal should be dismissed.

I have read the draft judgments of Latham LJ and Neuberger LJ. There is a point of difference between the two judgments as to whether the member took into account an inadmissible factor in paragraph 119 of his reasons.

In my view, a proper reading of the member’s reasons show that paragraph 119 was simply confirmatory. The view previously expressed is encapsulated in the sentence at the end of paragraph 118 in the following words:

What the member was addressing was the argument on behalf of the Council that the presumption against piecemeal developers was a strong one. The subject land was in open countryside and so it was being argued that there were other sites nearer the existing built up settlements, which would have been more likely to be granted permission before the subject land. The argument against the individual sites is set out fully in paragraphs 116, 117 and 118 as the argument, which the member ultimately accepted.

The point made in paragraph 119 reflects, first of all, the evidence of Mr Andrew Muir, an expert called on behalf of the respondents. In his supplementary proof of evidence [paragraph 3.1.22] he said this:

That point was reflected in the written closing submissions on behalf of the respondents at paragraph 1.38 [see page 188 of the bundle] in the following terms:

It is right to say that the supplemental closing submissions of the acquiring authority, at paragraph 10, said:

The paragraph, in one sense, points up the problem. It does not suggest that it would be illegitimate to crosscheck what the Council’s planning policy would have been in 1996 by reference to something that occurred during the scheme. What it does object to and quite rightly, is use of the scheme to establish whether planning consent would be given. There is, as I see it, a distinction to be drawn between use of Tregof Farm for those different purposes.

Provided the member was asking himself what the relevant planning policy would have been in 1996, I see no objection to him crosschecking that by what appeared to be their policy at a later date, albeit in connection with the scheme.

This proposition is, I think, accepted by Neuberger LJ in paragraph 3 of his judgment. He, however, concludes that that is not the purpose for which the member can be said to be referring to Tregof Farm.

It seems to me that the proof of evidence of Mr Muir and the written submissions of the respondents do support the view that this is precisely the way in which Tregof Farm was being used by them and confirms that it was for this purpose that the member relied on Tregof Farm in paragraph 119.

I also agree with Neuberger LJ that even if it was illegitimate to use Tregof Farm in the way that the member did, this would be a case in which the view of the member was so clear without that factor that it would be wrong to interfere with his conclusion.

For these reasons I also agree that this appeal should be dismissed.