Ford-Camber Ltd v Deanminster Ltd & Anor

This appeal concerns a right of way. In practical terms, it concerns the basis on which the Claimant is to be compensated for the forced diversion of its right of way from its present route to an alternative. The Second Defendant claims that it can lawfully obstruct the Claimant’s present right of way, and offer it an alternative route, by the use of statutory powers which are in the nature of compulsory purchase, with specific provisions for compensation. If it is not so entitled then it is likely that, in the light of the offer of an alternative way, the court would not grant an injunction to restrain the Second Defendant from obstructing the right of way, but would leave the Claimant to its remedy in damages, including damages in lieu of an injunction to cover its loss for the future. The measure of such damages might be more generous to the Claimant than the statutory compensation. Although, in these circumstances, the dispute is about money rather than about access, the caution with which the law has always regarded compulsory purchase provisions makes it appropriate to consider with some care the Second Defendant’s contention that the Claimant’s rights can be overridden statutorily.

The events on which the Second Defendant relies for saying that the Claimant’s rights over the existing access route can be overridden happened in 1995. However, the actual overriding of those rights (if the Second Defendant is correct) has not yet happened, and at the time of the hearing before the judge (and, we understand, of the appeal) the original access remained open and unobstructed.

The Claimant brought its proceedings in 2005. The appeal is from an order refusing it permission to amend the basis of its claim. That order was made on the ground that the proposed amendments were not seriously arguable, with an alternative basis that it was far too late to raise the points. It is therefore necessary to examine not only whether the points have any legal substance, but also the relevance and the circumstances of the delay. The last point will also require attention to be given to the question whether the issues arising, or any of them, are essentially points of public law, properly to be raised by way of judicial review, and if so whether they can now be raised in private litigation.

The case involves a consideration of some rather unfamiliar statutory provisions, as they apply to the facts, so far as they are known to have been. A crucial part in the history was played by the Land Authority of Wales (the Authority), a public body set up by the Community Land Act 1975, Part II, and continued by the Local Government, Planning and Land Act 1980 (the 1980 Act, or the Act) which was in force at the time of the transactions relevant to this case. It was abolished by the Government of Wales Act 1998, its property, rights and liabilities being transferred to the Welsh Development Agency. The functions of that agency were later transferred to the National Assembly for Wales, and the agency in turn was abolished. I will set out the relevant statutory provisions, on whose application to the facts this case turns, but I will first set out the relevant facts.

In summarising the facts at this stage I will focus on the matters directly relevant to the main issues on the appeal. Two other areas of fact are relevant to particular points taken, including the question of delay, but I will leave them until later, in order not to distract attention from the most material parts of the history.

The Claimant owns, and uses for its business, land to the west of Caerphilly Road, Cardiff. This land does not abut the highway. Access to and from the highway is obtained over a strip of land which I will call the Service Road, running eastwards to Caerphilly Road. The Claimant’s registered title includes a full right of way over the Service Road. The site of the Service Road forms part of what has been called the Phoenix site, a large area of land to the south of the Claimant’s property, which stretches eastwards as far as Caerphilly Road. The Service Road runs along part of its northern boundary. The site includes land which was once a brick works and later was used for dumping or landfill purposes. The soil became contaminated. Its possible development was problematical because of the cost of eliminating environmental hazards. Eventually, in 1993, planning permission was obtained for the development of the Phoenix site, largely for retail use. The planning permission required new roads to be laid out to provide access to and from Caerphilly Road, and would have required the Service Road to be stopped up and not used any more. The Claimant would have been granted an alternative right of way over the new estate roads. The Claimant has not agreed to its right of way being diverted in this way. In 1995 the Phoenix site changed hands in circumstances such that the Second Defendant, which is now the owner of the site of the Service Road and of the new estate roads, contends that it is entitled to block the Service Road at the point where it leads out to Caerphilly Road, although this would otherwise be an actionable interference with the Claimant’s right of way. It offers the Claimant a right of way over the new estate roads which have been constructed in accordance with the terms of a planning permission granted in 2003, mainly for residential housing.

In 1993 the registered proprietor of the Phoenix site was Tarian Developments Ltd. On 21 July 1993 it obtained planning permission for the development of the Phoenix site. It also entered into an agreement under section 106 of the Town and Country Planning Act 1990 which, among other things, provided for the stopping up of the Service Road. On 26 August 1993 Thomas Bailey Investments plc (TBI) became registered as proprietor of the land. In 1995 the Phoenix site passed to Tesco Stores Ltd (Tesco). Originally the Claimant believed that TBI had sold the land to the Authority and the Authority had then sold to Tesco. In fact, as became clear from documents later disclosed, TBI transferred the land to Tesco on 10 March 1995, for £3,259,261 plus VAT and interest. On the same day TBI, the Authority and Tesco entered into an agreement which is at the heart of this appeal. It recited that TBI had used its best endeavours to acquire the Claimant’s right of way, that the proposed development would not be able to proceed without the alternative right of way being provided, and that the Authority and Tesco wished to secure the development. By recital 1.3.4 it recorded that the Authority, pursuant to its statutory powers “will assist in securing the Development by the acquisition of the Relevant Interests” [i.e. the rights of way over the Service Road] on the terms and conditions appearing from the agreement. It provided for Tesco to transfer the Phoenix site to the Authority for a consideration of £1,725,000, by clause 2.2 for the Authority to use all reasonable endeavours to acquire the Relevant Interests, by agreement or by overriding under paragraph 7 of Schedule 20, and then, on the 20^th working day after the date of the transfer by Tesco to the Authority, for the Authority to transfer the land back to Tesco for a consideration of £1,765,000.

Pursuant to this agreement, Tesco executed a transfer of the Phoenix site to the Authority on 19 April 1995, in consideration of the payment of £1,725,000. The Authority thereby became entitled to be registered as proprietor of the Phoenix site, but it did not apply for such registration. On 18 May 1995 it executed a transfer back to Tesco, in consideration of £1,765,000. Between the two transfers, the sum paid on the occasion of the first was held by Tesco’s solicitors as stakeholders, pursuant to a provision in the agreement dated 10 March 1995, and it was used in part payment of the price for the transfer back to Tesco.

On 27 April 1995, the Authority wrote to the Claimant’s solicitors, informing them that the Authority had acquired the Phoenix site, and giving notice under Schedule 20 to the 1980 Act. That notice stated that the right of way over the Service Road might be interfered with by development of the Phoenix site in accordance with planning permission, but that this interference was authorised under the 1980 Act. Before the Service Road was interfered with, the Authority proposed that the Claimant be offered an alternative right of way in a form then supplied. The Authority enquired whether the Claimant would wish to take up the offer of the alternative right of way. On 1 May 1995 the Claimant’s solicitors, then Messrs Walsh Lawson, replied asking a number of questions. There had been previous correspondence between them (to which I will refer below) so the issues arising were not new on either side. The Authority replied on 26 May, by which time it no longer owned the Phoenix site. It stated in that letter that the land had been acquired by agreement, on terms which were commercially confidential, and that the land had by then been transferred to Tesco. Tesco became registered as proprietor on 1 June 1995. The entries on the register show that this was on the basis of the transfer by the Authority to Tesco, and the prior dealings with the title, not merely of the transfer from TBI in March 1995. A copy of the agreement dated 10 March 1995 had been filed (as is recorded in a note on the register).

In addition to the £40,000 which the Authority gained, through the difference between its purchase price from, and its sale price to, Tesco, it also received £40,000 (plus VAT) from TBI, covered by an invoice dated 7 March 1995 (though it had by then already been paid) and there described as “fee as per agreement”.

The Phoenix site was later the subject of an agreement for sale by Tesco to the First Defendant, in 2002. A new planning application followed, and planning permission was granted on 18 April 2003. This permission was primarily for residential, rather than retail, use. It was subject to conditions as regards access similar to those previously imposed. In December 2003 the Phoenix site was transferred as to part to the First Defendant and as to the rest to Westbury Homes (Holdings) Ltd. The First Defendant entered into an agreement under sections 38 and 278 of the Highways Act 1980 with Cardiff City Council. Later, in May 2005, the First Defendant transferred the Service Road (and the estate roads) to the Second Defendant. We were told that the development is well under way, and that the estate roads have been constructed, but that the Service Road has not yet been blocked up. At the date of the hearing before us, therefore, the Claimant was still able to exercise its rights of way over the Service Road. The time will have to come, however, if the Phoenix site is to be used in accordance with the planning permission, when the Service Road has to be blocked up and the Claimant will then have to use the estate roads to pass between Caerphilly Road and its own property.

The statutory basis on which it is said that the Second Defendant will be entitled to block up the Service Road, in these circumstances, is to be found in various provisions of the 1980 Act.

The functions of the Authority were provided for by section 103, as follows:

“103(1) The Authority shall have the function of acquiring land in Wales which in its opinion needs to be made available for development, and of disposing of it to other persons (for development by them) at a time which is in the Authority’s opinion appropriate to meet the need.

(2)

Before it acquires the land, the Authority shall

(a)

consider whether the land would or would not in its opinion be made available for development if the Authority did not act,

(b)

consider the fact that planning permission has or has not been granted in respect of the land or is likely or unlikely to be granted,

(c)

(in a case where no planning permission has been granted in respect of the land) consult county and district councils in whose area the land is situated and consider their views,

(d)

consider the needs of those engaged in building, agriculture and forestry and of the community in general.

(3)

Where the Authority acquires land, then, before it is disposed of

(a)

the Authority may (with the Secretary of State’s consent) execute works in respect of the land where it is of opinion that it is expedient to do so with a view to the subsequent disposal of the land to other persons for development by them, and

(b)

the Authority shall manage and turn to account the land pending its disposal to other persons for development by them.

(4)

The works mentioned in subsection (3) above include engineering works and works for the installation of roads, drains, sewers, gas supplies and electricity supplies, but do not include works consisting of the erection of buildings.

(5)

If requested to do so by a public authority (within the meaning of Schedule 19 below) the Authority may advise the authority about disposing of any of the authority’s land in Wales to other persons (for development by them), and may assist the authority to dispose of the land.

(6)

The Authority may assist county and district councils in Wales in any assessment such a council makes of land which is in its area and which is in its opinion available and suitable for development.

(7)

The Authority may charge a reasonable fee for any advice or assistance under subsection (5) or (6) above.

(8)

A county or district council in Wales shall have power to enter into, and carry out, an agreement with the Authority whereby the council will, as agents of the Authority, perform any service or execute any works which the Authority could perform or execute by virtue of this Act.

(9)

The Authority shall, without prejudice to its powers apart from this subsection, have power to do anything to facilitate, or anything which is conducive or incidental to, the performance of any of the Authority’s functions.”

Section 104 gave the Authority power to acquire land:

“104(1) The Authority

(a)

shall have power to acquire by agreement, or

(b)

on being authorised to do so by the Secretary of State shall have power to acquire compulsorily,

any land which, in the Authority’s opinion, is suitable for development.

(2)

Where the Authority exercises or has exercised its power under subsection (1) above in relation to any land, it shall have power to acquire by agreement or on being authorised to do so by the Secretary of State shall have power to acquire compulsorily –

(a)

any land adjoining that land which is required for the purpose of executing works for facilitating its development or use;

(b)

where that land forms part of a common or open space or fuel or field garden allotment, any land which is required for the purpose of being given in exchange therefor;

(c)

new rights over land (that is, rights not previously in existence) required for the purpose of exercising the Authority’s functions.

(3)

The 1946 Act shall apply in relation to the compulsory acquisition of land in pursuance of this section as if –

(a)

this section were contained in an Act in force immediately before the commencement of that Act;

(b)

the Authority were a local authority.

(4)

Schedule 20 below, in which –

(a)

Part I modifies the 1946 Act as applied by subsection (3) above,

(b)

Part II deals with the acquisition of land by agreement, and

(c)

Part III contains supplemental provisions as respects land acquired under this section,

shall have effect.”

The other provision of the Act which is central to this appeal is paragraph 7 of Schedule 20, in Part II of that Schedule, as follows:

“7(1) The erection, construction or carrying out, or maintenance, of any building or work on land which has been acquired by the Authority under section 104 above, whether done by the Authority or by a person deriving the title under it, is authorised by virtue of this paragraph if it is done in accordance with planning permission notwithstanding that it involves interference with an interest or right to which this paragraph applies, or involves a breach of a restriction as to the user of land arising by virtue of a contract.

(2)

Nothing in this paragraph shall authorise interference with any right of way or right of laying down, erecting, continuing or maintaining apparatus on, under or over land, being a right vested in or belonging to statutory undertakers for the purpose of the carrying on of their undertaking.

(3)

This paragraph applies to the following interests and rights, that is to say, any easement, liberty, privilege, right or advantage annexed to land and adversely affecting other land, including any natural right to support.

(4)

In respect of any interference or breach in pursuance of sub-paragraph (1) above, compensation shall be payable under section 7 or 10 of the Compulsory Purchase Act 1965, and shall be assessed in the same manner and subject to the same rules as in the case of other compensation under those sections in respect of injurious affection where the compensation is to be estimated in connection with a purchase to which the said Act of 1965 applies, or the injury arises from the execution of works on land acquired by such a purchase.

(5)

Where a person deriving title under the Authority is liable to pay compensation by virtue of sub-paragraph (4) above, and fails to discharge that liability, the liability shall, subject to sub-paragraph (6) below, be enforceable against the Authority.

(6)

Nothing in sub-paragraph (5) above shall be construed as affecting any agreement between the Authority and any other person for indemnifying the Authority against any liability under that sub-paragraph.

(7)

Nothing in this paragraph shall be construed as authorising any act or omission on the part of any person which is actionable at the suit of any person on any grounds other than such an interference or breach as is mentioned in sub-paragraph (1) above.

(8)

In this paragraph -

(a)

a reference to a person deriving title from another person includes a reference to any successor in title of that other person;

(b)

a reference to deriving title is a reference to deriving title either directly or indirectly.”

The Claimant issued the Claim Form, under Part 8, on 1 July 2005. Evidence was put in by both sides. The Claimant took the view that some of the information disclosed by the Defendants, of which it had not previously been aware, would provide an arguable basis for formulating its claim differently. In December 2005 it applied for permission to amend its Claim in a number of respects. That application came before Peter Smith J on 28 June 2006 and then, after an adjournment for more documents to be sought, on 21 July 2006. The judge gave judgment on 27 July 2006, dismissing the Claimant’s application. The principal basis for his decision was that the proposed amendments gave the Claimant no prospect of success, so that it would be pointless to allow the amendment to be made. He also considered that it was far too late for the amendments to be made, even if they had been arguable points. He did, however, give permission to appeal.

The argument in favour of the Second Defendant being able to block the Service Road runs as follows. The Authority acquired the Phoenix site from Tesco, being land which it could, and did, regard as suitable for development, in exercise of its power under section 104. That being so, paragraph 7 of Schedule 20 applies to the land. Accordingly, so long as the obstruction of the Service Road is done in accordance with planning permission, the carrying out of that work on the land, being done by a person who derives title under the Authority, is authorised by paragraph 7 despite it involving an interference with the Claimant’s right of way, which is a right to which paragraph 7 applies. Compensation is provided for under paragraph 7(4).

The Claimant seeks to challenge those propositions on a number of grounds. In the details of its claim as they were originally prepared (and as they still stand, the judge having refused permission to amend) the Claimant accepted that the Authority had acquired the Phoenix site under section 104, but took two points: the first was that the First Defendant was not a person deriving title under the Authority, but rather a person deriving title from the Authority. This is a point on the somewhat inept drafting of paragraph 7. Secondly, it was said that the works proposed to be done to block up the Service Road would not be done in accordance with a planning permission. That is an entirely separate point, depending on the facts.

By the proposed amendment, the Claimant would withdraw its acceptance that the Authority had acquired the Phoenix site under section 104. Mr Laurence Q.C., for the Claimant, submitted, correctly, that it would be for the Second Defendant to justify its obstruction under paragraph 7, not for the Claimant to show that the paragraph does not apply. However, since the issue arises on the Claimant’s application for permission to amend, the Claimant’s contentions have to be examined to see if they are arguable. Several points are taken:

In its Response to the Claimant’s original Details of Claim (what would have been its Defence, had the Claim Form been issued under Part 7), the Second Defendant took four points. First it challenged the Claimant’s point on the construction of paragraph 7, about deriving title under or from the Authority. Secondly it asserted that the work would be done under a planning permission. Thirdly it asserted a right to divert an existing right of way. Lastly it defended on the basis of laches, relying on unreasonable delay by the Claimant since 1995, unreasonable objection on the Claimant’s part to what it terms a “re-alignment” of its access and on the redevelopment being for the public benefit.

The appeal is not concerned with the question of whether the work would be done under a planning permission. That is a pure question of fact. If there turns out to be a real issue on that, it is for trial. The appeal is also not concerned with whether the servient owner has a right to divert the route of a right of way. The cases on this are rather unpromising for the Defendants: see Greenwich Healthcare NHS Trust v London and Quadrant Housing Trust [1998] 1 W.L.R. 1749. But if the Defendants wish, and need, to argue that point, it too is for trial. The point of construction on deriving title from or under the Authority is not in issue on the appeal either. The question of delay and its relevance does have to be considered because it is said to be a reason why at least some of the points sought to be taken by way of amendment could not succeed. For that purpose I will need to say more about the communications between the relevant parties up to, in and after 1995. I also need to set out the facts as known which are relevant to the Claimant’s point about authorisation.

The facts relevant to this point appear from a sequence of documents. A report was put before a meeting of the Board of the Authority in October 1993. This recorded a request by TBI for assistance in bringing the Phoenix site forward for development, given that “current negotiations with the beneficial users [of the Service Road] have proved difficult”. The proposal was that the ownership of the site be transferred to the Authority, which would then use its rights under Schedule 20 to override the existing rights of access and create the new access for the existing users, and then transfer the land back to TBI. TBI was to pay all costs incurred by the Authority and a fee in addition. The members of the Board were concerned that negotiations with the parties may not have been fully exhausted. That led to further dealings, and to direct contact between the Authority and the Claimant’s solicitors, but the Claimant was considered still to be unwilling to enter into an agreement, despite genuine efforts. At a Board meeting in January 1994, the report was that the Authority’s involvement would assist in resolving the difficulty, and the recommendation was that the Authority enter into a transaction such as had been suggested in the earlier report. The Board decided to agree in principle to acquire the site, on terms to be agreed. Those terms were considered at a meeting on 11 March 1994. The report for that meeting proposed that TBI should pay the Authority a fee of £80,000 plus all external and third party costs, and that the Authority should take a transfer of the site and, using its Schedule 20 powers, override the existing access rights, create the new access and transfer the site back to TBI or their nominee. The Board decided to visit the site, and to consider the proposal thereafter at a special Board meeting on 17 March. At that meeting, the Board passed a resolution “that the Authority enter into an agreement with TBI plc on the terms set out in” the report for the meeting, the terms and conditions of the transaction to be approved by the chief executive.

In support of its arguments based on delay the Defendants rely on matters going back to before the transactions in 1995.

As a result of the exchange of letters in 1995, the Claimant knew that the Authority had acquired the land and had disposed of it to Tesco. It thought that the Authority had acquired it from TBI rather than from Tesco, but that point would only be material if the Claimant’s argument that Tesco is not an “other person” were right. It did not know the terms on which the transaction had proceeded, including the provision for a fee payable by TBI. It did know that the Authority’s acquisition and disposal was on the basis that it would entitle a subsequent purchaser of the relevant land to block up the Service Road, on payment of no more than the statutory compensation provided for under the Schedule, which the Claimant considered to be inadequate.

The correspondence rested there for some time. In 1997 Tesco applied for planning permission. On 15 September 1997 the Claimant’s then solicitors wrote to agents acting for Tesco making a point about Schedule 20 of the Act, to the effect that the Claimant’s right of way over the Service Road could not be extinguished, so that the planning permission, even if granted, could not be implemented. In April 1998 the same point was reiterated to the same agents.

In 2001, negotiations proceeded for a sale of the site by Tesco to Templar Properties Ltd. In one of the replies to pre-contract enquiries, Tesco’s solicitors referred to the agreement dated 10 March 1995 between TBI, Tesco and the Authority, and the transfers pursuant to that agreement. They also said that the seller had approached the Claimant but that it did not “acknowledge the validity of the process for the acquisition of their rights over the [Service Road] and have declined to negotiate with the seller”. In the eventual agreement for sale, from Tesco to the First Defendant, which resulted from these negotiations in April 2002, clause 20 dealt with the right of way over the Service Road. It referred to the sequence of events involving the Authority, and the prospective entitlement of the Claimant to compensation, and provided for Tesco to settle any such liability for compensation, and to indemnify the buyer in respect of legal fees incurred in defending any action for interference with the right of way brought by the owner of the right, up to a stated maximum, and subject to claims being notified within a defined period. After the First Defendant’s acquisition of the site, the Claimant’s solicitors wrote to agents for the First Defendant on 22 September 2003 pointing out that the Claimant did not agree to the closure of the right of way over the Service Road, and asking for an assurance that it would not be obstructed. In October 2003 the same solicitors sent to the First Defendant’s solicitors a copy of the letter of 12 May 1994 to the Authority, in which the arguments were most fully set out.

Before coming to the detail of the Claimant’s contentions, I must address a point which featured significantly in the judge’s judgment and in the submissions before us, namely to what extent the points sought to be taken are points which raise public law issues and would ordinarily fall to be decided on an application for judicial review. That bears both on the question whether the point can be taken in these private law proceedings at all, and on the relevance of delay.

If the Second Defendant’s contention is correct, it can lawfully do that which it could not otherwise do, namely obstruct the Claimant’s exercise of its right of way over the Service Road, because the conditions laid down in paragraph 7 of Schedule 20 have been satisfied: the land was acquired by the Authority under section 104, and the work will be done by a person acquiring title under the Authority (subject to the point already taken by the Claimant), and in accordance with planning permission. It would be up to the Second Defendant to establish as a fact any element in that which is not admitted. The Claimant wishes to challenge the proposition that the land was acquired by the Authority. If what happened in the course of the relevant transaction did not amount to an acquisition by the Authority, then the Claimant would have made out that challenge successfully. That would not be a public law question, in the sense of depending on judicial review. The same is true of the Claimant’s argument that Tesco was not an “other person” for the purposes of section 103. It seems to me that there is no doubt that the Claimant can seek to deploy these arguments in this private litigation, as it could in a later claim if it had waited until after the Service Road had been obstructed and had then sued for an injunction or damages. Nor do I see how delay on the Claimant’s part in raising these points could have prevented the Claimant from taking them in such proceedings. The Claimant’s cause of action for interference with its right of way would not have accrued until the date of the obstruction. It could, of course, bring proceedings in advance on a quia timet or declaratory basis, but its failure to do so could not preclude it from taking points of that kind after the obstruction, subject to the expiry of the period relevant under the Limitation Act. As regards these two points, I agree with the judge’s observation at paragraph 43 of his judgment that they do not raise public law issues. He said that the points could have been raised in litigation in 1995; as to that I also agree. On the other hand I disagree, in relation to these points, with his conclusion in paragraph 60 that, if it had been necessary, permission to amend could have been refused on the ground of delay. These arguments could, it seems to me, be raised by the Claimant even in proceedings brought against the Second Defendant after it had blocked up the Service Road.

The other grounds which the Claimant seeks to add to its claim are different in kind. Mr Laurence disavowed any intention to challenge any act of the Authority on grounds for which judicial review would be the appropriate procedure, in particular on any Wednesbury grounds, but it seems to me that two of his points are in their nature in the realm of public law and appropriate to judicial review. The argument that the transaction was not properly authorised by the Authority’s own board resolution involves a matter internal to the Authority’s processes. The suggestion that the transaction was vitiated by the Authority’s seeking to take a fee from TBI and Tesco, which it is said it had no power to do, would on the face of it only undermine the Authority’s entitlement to the fee, unless it is said that it entered into the transaction for an improper purpose.

Where a particular legal result depends on showing that facts A, B and C have occurred, and where A is an act of a public statutory body, there seems to me to be a difference of principle between arguing, on the one hand, that A did not happen, on the basis that, whatever the body did, it did not amount to A and, on the other hand, that even though apparently A did happen, the transaction was ultra viresunder the doctrine summarised by Lord Browne-Wilkinson in R v Hull University Visitor, ex parte Page [1993] AC 682, 701, and repeated by Lord Steyn in Boddington v British Transport Police [1999] 2 AC 143, 171-2:

“The fundamental principle [of judicial review] is that the courts will intervene to ensure that the powers of public decision-making are exercised lawfully. In all cases … this intervention … is based on the proposition that such powers have been conferred on the decision maker on the underlying assumption that the powers are to be exercised only within the jurisdiction conferred, in accordance with fair procedures and, in a Wednesbury sense … reasonably. If the decision maker exercises his powers outside the jurisdiction conferred, in a manner which is procedurally irregular or is Wednesbury unreasonable, he is acting ultra vires his powers and therefore unlawfully…”

As Lord Steyn went on to recognise in Boddington, at page 172, an act of a statutory body which is potentially open to challenge on such grounds may nevertheless have legal consequences, a point also alluded to by Lord Browne-Wilkinson at page 164 and Lord Slynn at page 165.

To take as an example the argument about the terms of the board resolution, it amounts to saying that, although the Authority did in fact enter into the transaction, by taking the transfer of the land, paying the price for it, and then executing the transfer back to Tesco and receiving the price, it should not have done so, because it had not authorised its officers to do any of these things. Nevertheless, the Authority did so and the land has been transferred by Tesco to the First Defendant.

I would not deny the possibility of the court having jurisdiction to declare the Authority’s acts to have been ultra vires on public law grounds, because the powers of the court in the exercise of its supervisory jurisdiction over public bodies are wide, but the exercise of those powers contains a large discretionary element and is always tailored to the facts. Whether a declaration of that kind would have the consequence of undoing the transfer of property as a legal fact is another matter, which does not arise for argument at this stage, but the question does arise as to the proper means of advancing such a challenge. There is a large body of case law on the question when a challenge to the lawfulness of an act of a public body on public law grounds should be made by judicial review. The rule enunciated by Lord Diplock in O’Reilly v Mackman [1983] 2 AC 237, which even when laid down was subject to exceptions (see page 285), does not provide a straitjacket, and in Mercury Communications Ltd v Director General of Communications [1996] 1 WLR 48 the House of Lords emphasised that the overriding question is whether the proceedings constitute an abuse of the process of the court: see Lord Slynn at page 57. The distinctive features of the present case are that public law challenges to the validity of acts of a public body law are sought to be raised (a) many years after the acts in question and (b) in proceedings to which the public body is not a party and could not be joined as a party.

To revert to the point about the terms of the Board resolution, if that point had been taken as a ground of judicial review at the outset, and if anyone had thought there was any substance to it, it seems certain that the Board of the Authority would have passed a new resolution, drafted by its lawyers, by which the acts of its officers would have been ratified. That would have been the end of the point.

The argument that the Authority could not properly exact fees, and that because it did so, the transaction was entered into, in part at least, for an improper purpose is rather different. It could not have been overcome by ratification. However, if the point had been taken promptly by way of judicial review, the court would then have been able to investigate the facts and determine what order, if any (by way of injunction or declaration), was appropriate in all the circumstances. That has long since ceased to be possible in relation to the Authority.

However, Mr Laurence showed us cases on the interface between public and private law on the basis of which he suggested that it is still open to his client to take this point, in effect in defence of its right of way against the Second Defendant’s prospective obstruction. He relied in particular on Clark v. University of Lincolnshire and Humberside [2000] 1 W.L.R. 1988 and Rhondda Cynon Taff County Borough Council v Watkins [2003] EWCA Civ 129. In the former, a claim brought in 1998 by a former student at the university complaining of the university’s having given her no marks in an examination in 1995, on the grounds of plagiarism, and asserting breach of contractual rules under the university’s student regulations, was held by the Court of Appeal to have been properly struck out as originally formulated, but was allowed to proceed on the breach of contract claim even though judicial review would have been available and might have been more appropriate. Lord Woolf MR, following explicitly the guidance laid down in R v Hull University Visitor, already mentioned, said, at paragraph 35:

“While in the past, it would not be appropriate to look at delay of a party commencing proceedings other than by judicial review within the limitation period in deciding whether the proceedings are abusive this is no longer the position. While to commence proceedings within a limitation period is not in itself an abuse, delay in commencing proceedings is a factor which can be taken into account in deciding whether the proceedings are abusive. If proceedings of a type which would normally be brought by judicial review are instead brought by bringing an ordinary claim, the court in deciding whether the commencement of the proceedings is an abuse of process can take into account whether there has been unjustified delay in initiating the proceedings.”

In the Rhondda Cynon Taff Council case the facts were striking. In 1965 the council confirmed a compulsory purchase order entitling it to purchase land from the Defendant for the purpose of providing public open space. Later that year it served notice to treat and then notice of entry. In March 1966 it took possession of the land, but very soon afterwards the Defendant re-entered and remained in occupation continuously thereafter. In 1988, after procedures under the Lands Clauses Consolidation Act, the council executed a deed poll vesting the land in itself. The Defendant refused to vacate and, just less than 12 years after the date of the deed poll, the council brought proceedings for possession. The Defendant defended on the basis of his adverse possession for 34 years, and asserted that the deed poll was of no effect because by then the council had abandoned its intention to use the land as open space. In the county court and on appeal to the High Court it was held that the contention that the deed poll was of no effect was properly struck out because it was a public law act which should have been challenged, if at all, by a judicial review application within the appropriate time limits. In the Court of Appeal, however, the Defendant’s appeal was allowed. Aikens J, with whom Schiemann and Arden LJJ agreed on this point, dealt with the argument at paragraphs 80 to 96.

He proceeded on the basis that there was an arguable case on the facts and that, if the factual allegations were made out, the court would have jurisdiction to declare the deed poll null and void or to set it aside. The challenge to the deed poll was a public law point, as a challenge to the validity of an act of a public authority done pursuant to a statute. The council accepted that such a challenge could have been made, within due time, by a judicial review application, but said that it was by then too late. So far as the circumstances of the delay were concerned, Aikens J noted that the Defendant had been in possession for 34 years, and asked why, before any challenge to his possession, Mr Watkins should have been expected to take the initiative to challenge the deed poll. Once the council did challenge that possession by issuing its proceedings, the judge considered that decisions of the House of Lords showed that the point, albeit of a public law nature, could be taken by way of defence. He referred to Wandsworth LBC v Winder [1985] AC 461 and read from Lord Hutton’s speech in that case. He then referred to Clark’s case, which was relied on for the council. He distinguished that, at paragraphs 95-6, as follows:

“95.

I have concluded that Clark does not help Mr Harper. In the present case Mr Watkins is not bringing a claim based on a “public law” point. He is raising it as a defence. Sedley LJ specifically notes in his judgment [at [2000] 1 W.L.R. 1993F-H] that the House of Lords decided in Winder that where the issue of a private law right depending on a prior public law decision is raised as a defence to a claim, then the point does not have to be dealt with by judicial review. This must mean that it can be raised as a defence to a claim. Therefore the only reason for not permitting the issue to be raised as a defence would be if the Court, exercising its power under CPR Part 3.4, concluded that it was otherwise an abuse of process or concluded under CPR Part 24 that the point had no reasonable prospect of success. So that leads back to the question of whether the defence would be an abuse or could not have a reasonable prospect of success just because, as a public law point, it is raised so long after the Deed Poll was executed. Mr Harper did not point to any other part of the CPR that gave the court a power to rule out a public law defence on the ground that it was raised long after the relevant event had occurred.

96.

In my view the position remains as stated by Lord Fraser of Tullybelton in Winder. I have concluded, with respect, that the judge erred in law by holding that CPR Part 24 gave him a discretion to decide whether this public law point could be run as a defence at all. In my view the law does not give a judge such a discretion. It is accepted that the defence, if it can be run, raises substantive issues of both fact and law. Therefore, it should not be struck out.”

Given that, on an application for permission to amend, it is in any event necessary to consider whether the point does or does not have a reasonable prospect of success, the only additional element is whether, because of the public law aspect, it would be an abuse of process to raise the point in the civil proceedings at the time when it is sought to be raised. I will address that point in relation to each of the Claimant’s arguments to which it is relevant in turn, but I would note at this stage that in both Clark and the Rhonda Cynon Taff Council case the authority whose acts were impugned was a party to the action. It is a very different matter to raise, in a property dispute between A and B, a claim or defence based on public law matters alleged to have vitiated some act of A’s predecessor in title, C, where C was a public body whose act had not been challenged by direct judicial review.

Did the Authority acquire the land?

Mr Laurence submitted that the transaction is a very odd one, if it was really intended to be an acquisition by the Authority for the purposes set out in the 1980 Act. Tesco had just bought the land for £3.2 million. It agreed to sell it to the Authority for £1.725 million, but on terms under which it would get it back, on paying an additional £40,000, about a month later. In the meantime, it would not have the use of the Authority’s money, which had to be held by Tesco’s solicitors as stakeholders. The Authority would not apply for registration – not because it was not entitled to but because there was no point in doing so, or incurring the fees that would be payable to the Land Registry. The Authority would not own the land (in whatever sense) for long enough to do anything with it. It would not have time to do anything meaningful in pursuance of its obligation under section 103(3)(b) to “manage and turn to account the land pending its disposal to other persons for development by them”. As he put it, the analysis justified the allegation in paragraph 15AAA(5) of the proposed amended Details of Claim that what occurred in 1995 was not an acquisition within the meaning of section 104 of the 1980 Act but a transaction involving a transfer and retransfer to which the Authority merely lent its name, thereby earning a fee of £80,000.

It is important to note, however, that section 104 provides the only power that the Authority had to acquire land. It is not a question of saying that this was not a section 104 acquisition but was some other kind of acquisition. No other power of acquisition was open to the Authority. If this was an acquisition at all, it was under that section. Thus, the Claimant’s first argument has to be that the Authority never acquired the land at all, despite having taken a transfer of it for which real money was paid, which entitled it to apply for its registration as proprietor, and enabled it to effect dealings with the land which would be effective in equity pending registration (albeit that such dealings would be likely to have been a breach of its agreement with Tesco): Land Registration Act 1925 section 37.

The Authority never did become the legal owner of the land, for which registration was necessary. Although it was entitled to be registered it must always have been contemplated and expected that it would not apply for registration. Mr Laurence submitted that it never became the beneficial owner of the land either, because, being contractually bound to resell the land, it held the land as trustee for the purchaser. It did not even part with the purchase price in any real sense, since that was held by Tesco’s solicitors as stakeholders pending it being repaid to the Authority on the retransfer. If, therefore, it was never either legal or beneficial owner of the land, he asked rhetorically, how can it be said to have acquired the land?

He made a further point, namely that, on the face of paragraph 7 of Schedule 20, the effect which it provides for appears to be capable of arising many years after the Authority has disposed of the land. If the Authority does not even need to have been registered as proprietor of the land, how, he asked, could someone whose rights might be at risk of being affected under paragraph 7 check whether this risk is real? As to that, although there is now open access to the register, I do not know whether the identities of previous proprietors would be ascertainable by inspection. Certainly they would by no means always be apparent from office copy entries.

In theory this is a valid point, and the effect of the provision could be far-reaching and unpredictable. However, in practice, given that any disposal of land by the Authority had to be at a time appropriate to meet the need that it be made available for development (see section 103), it seems to me that it would be very likely that ownership by the Authority of land subject to a right of way or other relevant right would be known at the time to those concerned, including those with the benefit of the right in question.

I return to the first main point, namely the Claimant’s contention that the transactions which I have described did not amount to an acquisition of the relevant land by the Authority. Mr Laurence submitted that, in order that the Authority can be said to have acquired land, it must have both the legal and the beneficial ownership of the land, and that on the facts of this case it had neither. I do not accept the first part of that submission. It seems to me that it was sufficient for the Authority to acquire either the legal title to the land (as it would have done on the execution of the conveyance, if the land had not been registered) or, in the case of registered land, the right to that title, which it obtained on the execution of the transfer. As a matter of statutory construction, I see no case for saying that the terms of sections 103 and 104 require attention to be given to anything other than the legal title to the land, except to the extent that the procedures involved in relation to registered land make it necessary to consider the position after a transfer of the land has been executed, even if the transferee has not become registered as proprietor.

Mr Laurence’s arguments based on the position as regards the beneficial interest in the land do not amount to a contention that the transaction was a sham. The proposed amendments to the Details of Claim do include an allegation that the transaction was a sham, in certain respects, but not that the transfers were shams. I will deal with that argument later.

The proposed amendments to paragraph 15 set out the case which the Claimant wishes to advance as regards the need for both legal and beneficial ownership to pass to the Authority. The proposition is that “acquisition of land within the meaning of section 104(1)(a) of the 1980 Act meant acquisition of legal and beneficial ownership of the land.” In my judgment that is not correct. It was sufficient for the Authority either to acquire the legal title (on a conveyance of unregistered land or on registration as proprietor of registered land) or, in the case of registered land, to become entitled to be registered as proprietor, as it did on the execution of the transfer to it by Tesco. The underlying position as regards the beneficial interest in the land is irrelevant to whether the Authority acquired the land or not.

Mr Laurence had another supporting argument, namely that the terms of section 103(3)(b), with its obligation on the Authority to “manage and turn to account the land pending its disposal to other persons for development by them”, is incompatible with a transaction under which the Authority acquired land and immediately sold it back to the vendor, without having time to do anything by way of managing the land or turning it to account in the meantime.

I do not accept that either. It seems to me that what is necessary to comply with this obligation would depend on the circumstances of the particular case. The Authority ought not to let land in its ownership lie fallow, and can use it beneficially, but I do not see that this obligation can be read as limiting the width of the Authority’s freedom of acquisition and disposition conferred by sections 103 and 104. There is no reason why this obligation on the Authority, as regards what it does with land while in its ownership, should be understood as dictating to the Authority anything as regards the circumstances in which it may acquire, hold or dispose of land.

Accordingly I consider that the judge was right to reject the application for permission to amend on this point. I agree with his conclusion on the substance of the point at paragraph 47 of his judgment.

Was Tesco an “other person” acquiring the land from the Authority?

The next point is the Claimant’s contention that Tesco was not an “other person” within the meaning of section 103(1), so that the Authority could not have disposed of the land to it. I can see no sensible basis for this argument. It would produce an entirely artificial constraint on the Authority’s freedom of action. It could acquire land from A, and could dispose of it to anyone other than A, but it could never dispose of it to A, whatever the circumstances might be, though it could dispose of it to an associated company of A, which in turn might pass it on to A. It seems to me plain that “other persons” means no more and no less than “persons other than itself”. In some circumstances it might be said to be unnecessary to include any mention of “other persons”, since if the land is to be disposed of by the Authority, it must necessarily be disposed of to someone other than the Authority. However, first of all that is a question of drafting style, to which it would be wrong to attach too much importance, and secondly the inclusion of the phrase “(for development by them)” after the words “other persons” (and the similar phrases in section 103(3)(a) and (b), and (5)), provides an explanation for the use of this form of words. In its proposed new paragraph 15A the Claimant wishes to assert this point, which it formulates as follows: “as the party from whom the Authority was purportedly acquiring the Phoenix site, Tesco could not also be an “other person” to whom the Authority could dispose of it within the meaning of section 103(1) of the 1980 Act.” It seems to me that this is not correct as a matter of the construction of the Act.

The point is also put in a varied form: “sections 103 and 104 did not contemplate or authorise a transaction whereby the Authority took a transfer of land from a person on terms that it would re-transfer the land to that same person”. It seems to me that the answer to that proposition is the same. On the basis that, for an acquisition, the Authority has to acquire the legal title (or the ability to become registered, in the case of registered land), and that the beneficial title is irrelevant, then there is nothing in the statute which would limit the Authority’s legal capacity so that it cannot enter into a transaction of this kind, if it considers that it is an appropriate thing to do for its statutory purposes. The judge did not deal with this argument in terms, though his comment in paragraph 57: “the fact that Tesco transferred to it is in my view irrelevant” may have been prompted by this argument. In any event he was right to refuse permission to amend to the extent that the amendments would raise this hopeless point.

Those are the arguments which Mr Laurence relies on to show that the transaction was altogether outside the terms of the 1980 Act. His other arguments depend on showing that, although the transaction was, on the face of it, within the Act, it ought to be set aside or disregarded, either because it was not properly authorised, or because it was entered into for a fee, which the Authority was not allowed to require, and then the arguments that the transaction was, in part, a sham.

Was the transaction properly authorised by the Authority?

As regards authorisation, the point sought to be taken is this. The only resolution which has been produced as the basis of the decision by the Authority to enter into this series of transactions was dated 17 March 1994. In terms it was “that the Authority enter into an agreement with TBI plc on the terms set out in” a report for the relevant meeting. Mr Laurence therefore submits that there was no decision to enter into any transaction with Tesco. Moreover, he says, the transaction authorised was not the same as that which was entered into, even apart from the identity of the parties. I have set out the facts relevant to this argument above, at paragraph [22]. I have also made some observations on this point at paragraphs [31] to [33] above. I will now deal with the merits of the point.

The actual transaction was not entered into until February 1995. By then it involved an acquisition from Tesco, though under an agreement to which TBI was also a party. It also involved the payment of £80,000 being divided, as I have described, between an apparent profit of £40,000 on the resale of the land and £40,000 by way of a fee from TBI. Mr Laurence argued that the resolution that the Authority enter into a transaction with TBI on the terms set out in the report simply did not authorise entry into a transaction with TBI and Tesco, on the terms actually agreed. He also relied on the fact that the Claimant was not aware of the terms of the resolution until after disclosure of documents in the course of these proceedings, so that it could not have been expected to take the point earlier.

It seems to me that there is no substance in the point. The identity of the party with whom the Authority was to deal depended entirely on who owned the land. By the time that the actual transaction came about, Tesco had taken a transfer of the land, so that it was entitled to be registered as proprietor of the land in place of TBI. Nothing else had changed that was relevant to the Authority: the same problem as regards the right of way existed, so as to justify the Authority assisting in making the land available for development. Thus, the fact that instead of an agreement just with TBI, the Authority entered into an agreement with Tesco and TBI, under which the land was acquired from Tesco, and would be re-transferred to Tesco, is neither here nor there.

As for the other respect in which it is said that the transaction was not authorised, the resolution referred to the report for the meeting, which spoke of the Authority, having taken the transfer, using its Schedule 20 powers to override the existing access rights, and to create the new access, before transferring it back. Mr Laurence submits that this is not what happened, nor was it ever intended to happen under the transaction as undertaken. The Authority did raise the question of overriding with the Claimant at a time when it owned the land itself, and thereby put the Claimant on notice that the Schedule 20 powers might be used eventually. But the Authority did not wait, and was never going to wait, before transferring the land back to Tesco to do that which was necessary to override the rights, or to create the new access. That was necessarily to be done in implementation of the planning permission which already existed, or some other planning permission for the land. So, Mr Laurence submitted, the resolution authorised a transaction which was not only with a different party from that actually entered into, but would have been on different terms. If the Authority had been intended to retain the land long enough to implement the planning permission, to create the new access route and to obstruct the Service Road, thereby overriding the existing right of way, it would have been a very different transaction indeed, and there would not have been a great deal of point in providing for the land to be sold back to TBI or Tesco, let alone at the price actually provided for. It is plain from the tenor of the reports to the Board which I have mentioned, in particular from what is said in them about the financial terms of the proposed transactions, that the Authority never contemplated undertaking the actual development. It had no power to undertake the development, because it was not allowed to construct buildings: see section 103(3)(a) and (4). The reference to using the Schedule 20 powers must be seen in that context. It seems to me plain that the Board resolution of 17 March did authorise entry into the actual transaction, not merely as regards the parties but also as regards the structure of the transaction, notwithstanding the passage in the report about using the Schedule 20 powers, overriding the existing access and creating the new access. Accordingly I regard the Claimant’s proposed contention, that the transaction was not a valid acquisition by the Authority because it was not properly authorised internally, as bound to fail, quite apart from the separate point that it should have been raised, if it was going to be, by judicial review and promptly. I agree with the judge on this point, as regards what he said at paragraphs 52 and 53 of his judgment.

Was the transaction vitiated by the provision for the Authority to take a fee?

The Authority was a statutory body, entitled to act only in such ways as the relevant provisions of the 1980 Act allowed. It was not a local authority, and it had no express power to raise money except by borrowing (for which see Schedule 21, paragraph 1). Section 103(7) gave it an express power to charge a reasonable fee for advice and assistance given under sub-sections (5) and (6) to other public authorities. Section 103(9) gave it a general power to do “anything to facilitate, or anything which is conducive or incidental to, the performance of” any of its functions.

In McCarthy & Stone (Developments) Ltd v Richmond-upon-Thames London Borough Council [1992] 2 AC 48 the House of Lords held that the very similar provision in section 111 of the Local Government Act 1972 did not entitle a local authority to impose charges to persons who wished to consult with officials of the authority about prospective planning applications. A planning authority has an express power to charge for dealing with planning applications, under section 87 of the 1980 Act. The general words of section 111 were held to be inadequate to allow the council to charge for something which was itself at best incidental to the function of dealing with planning applications.

In Hazell v Hammersmith and Fulham London Borough Council [1992] 2 AC 1, section 111 of the 1972 Act was held not to afford power to local authorities to enter into interest-rate swap contracts, because although the functions of the local authority, for the purposes of section 111, meant all the duties and powers of the authority, the section only (relevantly) allowed things to be done which were calculated to facilitate, or conducive or incidental, to the function of borrowing, having regard to the terms of the legislation governing the exercise of that power, and interest-rate swaps were held not to fall within the scope of that power.

On the basis of the Richmond case there may be a tenable basis for arguing that the Authority had no power to charge a fee for its services generally, though I can see ample scope for arguments to the contrary, especially given the different nature of this particular public body. The Authority’s functions included acquiring and disposing of land. It needed money to discharge its duties and functions, and had no equivalent of a tax-raising power, unlike local authorities. Clearly it could obtain money, according to circumstances, by the disposal of land at a price exceeding that which it had paid. While it was set up in the public interest, to make land available for development which might not otherwise become so available, private parties would make a profit from the development process. It does not seem to me to be by any means clear that it could not properly exact a consideration from those parties, or some of them, for providing its assistance.

The question is not as to its entitlement to a fee as such: neither Tesco nor TBI seeks to recover the sums paid on the basis that they were fees which the Authority had no power to charge, and it would be far too late for either of them to do so, even if they wished to. The question is whether what was (on this assumption) otherwise a valid transaction by which the Authority acquired land from Tesco, and later sold it back to Tesco, is to be treated as set aside, or as if it had not happened, because of the arguably invalid demand for a fee. I can see no ground for that contention unless it is put on the basis that the Authority entered into the transaction for a collateral and illegitimate purpose, namely to obtain a fee, and that, although the transaction was, hypothetically, within the Authority’s statutory powers, it was not entered into for proper purposes. If that were the basis of the challenge, then it seems to me that it would be a point for which the proper remedy would be judicial review. It is a variant of a challenge on Wednesbury unreasonableness grounds, contending that the Authority took into account improper factors, namely its desire for a fee, in deciding whether or not to enter into the transaction.

I will take it as arguable, for this purpose, that the Authority had no power to take a fee, though I have serious doubts about that. It would by no means necessarily follow that the Authority entered into the transaction for an illegitimate purpose. On the material which we have seen I regard that as improbable, but it would be difficult to describe it as unarguable. The question is whether it should be open to the claimant to raise it at this stage in these proceedings.

I have set out the facts relevant to the debate about delay at paragraphs [23] to [26] above. Different points were asserted at different times, but the essence of the Claimant’s position at the outset was that it would be an unlawful exercise of the Authority’s functions to acquire the land in the circumstances which then existed. It also took an incorrect argument as to the effect of paragraph 7 of Schedule 20. Mr Laurence does not rely on either of these points as such. The former would have had to have been a judicial review point, based on Wednesbury irrationality. The Claimant did not know the terms of the Authority’s board resolution, nor the terms of the transaction, including the provision for a fee, nor the fact that the Authority acquired the land from Tesco and transferred it back to Tesco. Mr Laurence therefore says that it could not be expected to challenge the Authority on such grounds at that time. However, to judge by the terms of the 1994 and 1995 correspondence, the Claimant considered that it did have the basis for a judicial review challenge at that time. On that basis, it ought to have realised that, by not asserting such a challenge, it faced at least a risk that it would not be allowed to raise the same point, or any variation of it, later, because of the requirement of prompt action for any challenge to a public body’s acts by judicial review.

If the Claimant had issued judicial review proceedings in 1995 asserting a case on the lines of the letter of 12 May 1994, it seems likely that the matters now known about the nature and details of the transaction would have become apparent at that time. If the points now taken are valid, they could therefore have been relied on at that time.

Mr Laurence’s answer to the arguments based on delay was first that the Claimant did not know the facts and secondly that it did not need to raise the issue unless and until a planning permission was granted and sought to be implemented. He also said that his arguments do not involve challenging or questioning any act of the Authority. On that last point, I cannot agree with him. On my view of the case, his arguments about authorisation and about fees do involve challenging acts of the Authority, in the sense of saying that the transaction ought to be set aside, disregarded or treated as having an effect other than that which it appears to have. The Authority would have been a necessary party to the proceedings, and judicial review would have been the obvious and appropriate way to raise the challenge against it. If the court had been satisfied that there had been some irregularity or impropriety, it would then have had to consider what relief, if any, was appropriate in all the circumstances. A declaration that the transaction was void may have been one option, but it would not have been the only option.

As to Mr Laurence’s other answers on delay, it seems to me that the Claimant’s ignorance of the details of the transaction does not help it, nor does the fact that its right of way was not threatened until recently. Of course a party in that situation can choose not to raise the issue, but if it takes that line, it risks not being able run points which are vulnerable to delay, as judicial review arguments are. That is so whether or not it knows the facts on which the particular argument would be based. The Claimant knew that it was not being told the terms of the transaction: it is not as if it made an incorrect assumption as to those terms (except, perhaps, as to the identity of the vendor to the Authority, which is not relevant for these purposes).

Accordingly, it seems to me that, even if the Claimant might have been able to establish a case for judicial review of the Authority’s act in 1995, based on its receipt of a fee, it would be an abuse of the process for the Claimant to be allowed to raise that point now in these proceedings. By deciding not to challenge the Authority’s act on Wednesbury grounds in 1995, it seems to me that the Claimant precluded itself from taking any point of that kind later. I would distinguish the present case from the Rhondda Cynon Taff Council case on the grounds to which I have referred in paragraph [38], and also because in that case the asserted invalidity of the deed poll did not depend on Wednesbury grounds, but rather on asserting that a fact on which the deed’s validity depended did not exist at the time (namely the council’s continuing intention to use the land for the relevant purpose). That is a quite different kind of point from saying that the Authority entered into a transaction for improper reasons, on a Wednesbury unreasonable basis. In principle it seems to me that the latter type of point is one which is likely to be barred by delay, even where it is sought to be raised by way of, in effect, defence or rebuttal in civil proceedings.

Accordingly, I would reject the argument based on the Authority’s having taken fees, but not on the ground that it did have power to take fees; I rather think it did, but would not decide the point on that basis. Instead I reject it on the ground that it is a point which had to be taken by way of judicial review, and promptly, and it would be an abuse of the process to take it now, more than 10 years after the event, in proceedings against other parties. That is so even though the Claimant did not until recently know the full facts on which the argument is based. It decided not to mount a prompt challenge to the Authority’s acts on judicial review grounds; having taken that position I regard it as precluded from raising points now that should have been taken in such proceedings.

Was the transaction a sham, in any relevant sense?

By paragraph 15AAA(5) of the proposed amended Details of Claim, the Claimant would assert that the transaction which occurred in 1995 was not an acquisition within the meaning of section 104(1)(a) but a transaction involving a transfer and retransfer to which the Authority “merely lent its name”. That is not, in terms, an allegation of a sham, but it does involve saying that the transaction is not what it appears to be. However, it does not seem to me to be different in substance from the point which I have already dealt with and rejected, that the Authority did not acquire the land because it had neither the legal nor the beneficial interest.

Paragraphs 15AAA(6) to (8) assert in terms that the transaction was a sham, in certain respects. The essence of this point is, first, that provisions of the agreement dated 10 March 1995 imposed on the Authority obligations which the parties never contemplated that the Authority would in fact fulfil or seek to fulfil, and that thereby the parties sought to give the transaction a false appearance, inconsistent with that which was in reality intended.

This point turns on clause 1.3.4 and clause 2.2 of the agreement, which I have quoted at paragraph [7] above. The Claimant says, no doubt realistically, that there was no intention that the Authority should do anything during the short period between the transfer of the land to it by Tesco and its retransfer to Tesco which would involve interfering with the Claimant’s right of way over the Service Road. Therefore the Authority could never have achieved an actual overriding of the rights of way over the Service Road under paragraph 7 of Schedule 20 during that time. Moreover, it contends, the Authority never made any attempt to acquire the Claimant’s right of way by agreement during that short period, and it suggests, by inference, that it was never intended that it should.

It is a fair point that the Authority was never going to do anything which amounted to the actual overriding of the Claimant’s right of way, since that required works pursuant to a planning permission. To that extent the terms of clause 2.2 were either misconceived, or were not intended to operate effectively. It could also be said that, since the premise of the Authority’s intervention was that the attitude of the Claimant was rendering development impossible, it was hardly likely that, in the short time between the Authority’s acquisition and disposal of the land, it would procure a complete reversal of the Claimant’s position, so that the right of way would be acquired by agreement. Nor could the Authority seek to do anything much in that respect in the time: in practice it could not do more than it did, by writing the letter dated 25 April 1995. I dare say that the parties realised this, and therefore knew that the Authority would at best be able to attempt little, and achieve less, in pursuance of its obligation under clause 2.2.

What, however, is the consequence of that? In particular, can it lead to a conclusion that what appears to be an acquisition by the Authority within its statutory powers under section 104, and a subsequent disposal to Tesco, are not to be regarded as having the effect which they appear to have under the Act? I do not see that it can. It is not suggested in the proposed amendments that the agreement as a whole was a sham, nor that the transfers by Tesco to the Authority, and by the Authority back to Tesco, were shams. Accordingly, even if the Claimant could succeed in establishing at a trial that the parties to the 10 March 1995 agreement did not intend the Authority to do anything, despite the terms of the recital in clause 1.3.4 and the obligation in clause 2.2, and that therefore the inclusion of those provisions in the agreement was designed to give a false appearance in that respect, it does not follow that the agreement as a whole was a sham, nor that the transfers executed in pursuance of it were not intended by the parties to have the effect that they appear to have. I can understand why the Claimant does not put forward the latter contention; it seems to me that it would be extremely unpromising. Plainly Tesco and the Authority did intend the transaction to have the legal effect that it purports to have, because otherwise it would not achieve the objective which was the sole justification for the involvement of the Authority. Nor did Mr Laurence pray in aid cases such as Furniss v Dawson [1984] AC 474, concerned with pre-arranged schemes aimed at avoiding or mitigating fiscal liabilities, which was applied in the realm of private law to a sequence of transactions designed to avoid the application of mandatory statutory protection for agricultural tenants in Gisborne v Burton [1989] QB 390. Again, I can well understand why he did not take such a point.

In my judgment there is no prospect that, even if the Claimant could prove the matters of fact asserted in the proposed new paragraph 15AAA(6) and (7), this would lead to the conclusion that action taken by the Second Defendant to block up the Service Road, if done pursuant to a planning permission, would not have the effect provided for by paragraph 7 of Schedule 20 to the Act.

Accordingly, I consider that the judge was right to refuse permission to amend, on the ground that none of the points which the Claimant seeks to take by the amendment offers it any prospect of succeeding in its claim. I would dismiss the appeal.

I agree

I also agree